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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________
FORM 10-Q
______________________________________________________________
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 001-37875
_____________________________________________________________
FB FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
______________________________________________________________
Tennessee62-1216058
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
1221 Broadway, Suite 1300
Nashville, Tennessee
37203
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (615) 564-1212
___________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s)  Name of each exchange on which registered 
Common Stock, Par Value $1.00 Per Share FBK  New York Stock Exchange 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒  Accelerated filer ☐
Non-accelerated filer ☐  Small reporting company ☐
Emerging growth company ☐    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of registrant’s Common Stock outstanding as of April 30, 2024 was 46,987,655.

1

Table of Contents
Page
PART I.
Item 1.
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.


2

PART I
GLOSSARY OF ABBREVIATIONS AND ACRONYMS
As used in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, references to “we,” “our,” “us,” “FB Financial,” or “the Company” refer to FB Financial Corporation, a Tennessee corporation, and our wholly-owned banking subsidiary, FirstBank, a Tennessee state-chartered bank, unless otherwise indicated or the context otherwise requires. References to “Bank” or “FirstBank” refer to FirstBank, our wholly-owned banking subsidiary.
The acronyms and abbreviations identified below are used in the Notes to the consolidated financial statements (unaudited) as well as in the Management’s discussion and analysis of financial condition and results of operations. You may find it helpful to refer to this page as you read this Report.


ACLAllowance for credit lossesFHLBFederal Home Loan Bank
AFSAvailable-for-saleGAAPU.S. generally accepted accounting principles
ALCOAsset Liability Management CommitteeGDPGross domestic product
ASCAccounting Standard CodificationGNMAGovernment National Mortgage Association
ASUAccounting Standard UpdateHFIHeld for investment
BankFirstBank, subsidiary bankHFSHeld for sale
CDCertificate of DepositNIMNet interest margin
CECLCurrent expected credit lossesOREOOther real estate owned
CompanyFB Financial CorporationPSUPerformance-based restricted stock units
CPRConditional prepayment rateReportForm 10-Q for the quarterly period ended March 31, 2024
CRECommercial real estateROAAReturn on average assets
EPSEarnings per shareROAEReturn on average common equity
ESPPEmployee Stock Purchase PlanROATCEReturn on average tangible common equity
EVEEconomic value of equityRSURestricted stock units
FASBFinancial Accounting Standards BoardSECU.S. Securities and Exchange Commission
FDICFederal Deposit Insurance CorporationSOFRSecured overnight financing rate
FDMFinancial Difficulty ModificationTDFITennessee Department of Financial Institutions
Federal ReserveBoard of Governors of the Federal Reserve
   System
3

FB Financial Corporation and subsidiaries
Consolidated balance sheets
(Amounts are in thousands except share and per share amounts) 

 March 31,December 31,
 2024 (Unaudited)2023 
ASSETS  
Cash and due from banks$124,772 $146,542 
Federal funds sold and reverse repurchase agreements
100,785 83,324 
Interest-bearing deposits in financial institutions645,173 581,066 
Cash and cash equivalents870,730 810,932 
Investments:
Available-for-sale debt securities, at fair value1,464,682 1,471,973 
Federal Home Loan Bank stock, at cost33,948 34,190 
Loans held for sale (includes $61,828 and $46,618 at fair value, respectively)
82,704 67,847 
Loans held for investment9,288,909 9,408,783 
Less: allowance for credit losses on loans HFI151,667 150,326 
Net loans held for investment9,137,242 9,258,457 
Premises and equipment, net155,271 155,731 
Operating lease right-of-use assets51,421 54,295 
Interest receivable53,506 52,715 
Mortgage servicing rights, at fair value165,674 164,249 
Bank-owned life insurance76,574 76,143 
Other real estate owned, net3,613 3,192 
Goodwill242,561 242,561 
Core deposit and other intangibles, net7,920 8,709 
Other assets202,474 203,409 
Total assets$12,548,320 $12,604,403 
LIABILITIES
Deposits
Noninterest-bearing$2,182,121 $2,218,382 
Interest-bearing checking2,421,487 2,504,421 
Money market and savings4,298,938 4,204,851 
Customer time deposits1,471,190 1,469,811 
Brokered and internet time deposits131,192 150,822 
Total deposits10,504,928 10,548,287 
Borrowings360,821 390,964 
Operating lease liabilities64,562 67,643 
Accrued expenses and other liabilities138,390 142,622 
Total liabilities11,068,701 11,149,516 
SHAREHOLDERS' EQUITY
Common stock, $1 par value per share; 75,000,000 shares authorized;
    46,897,378 and 46,848,934 shares issued and outstanding, respectively
46,897 46,849 
Additional paid-in capital866,803 864,258 
Retained earnings698,310 678,412 
Accumulated other comprehensive loss, net(132,484)(134,725)
Total FB Financial Corporation common shareholders' equity1,479,526 1,454,794 
Noncontrolling interest93 93 
Total equity1,479,619 1,454,887 
Total liabilities and shareholders' equity$12,548,320 $12,604,403 
See the accompanying notes to the consolidated financial statements.
4

FB Financial Corporation and subsidiaries
Consolidated statements of income
(Unaudited)
(Amounts are in thousands, except per share amounts)

5
 Three Months Ended March 31,
 2024 2023 
Interest income:  
Interest and fees on loans$155,606 $140,356 
Interest on investment securities
Taxable9,105 6,570 
Tax-exempt1,442 1,804 
Other9,975 10,750 
Total interest income176,128 159,480 
Interest expense:
Deposits72,625 52,863 
Borrowings4,013 2,957 
Total interest expense76,638 55,820 
Net interest income99,490 103,660 
Provision for credit losses on loans HFI1,852 4,997 
Reversal of credit losses on unfunded commitments(1,070)(4,506)
Net interest income after provision for credit losses98,708 103,169 
Noninterest income:
Mortgage banking income12,585 12,086 
Service charges on deposit accounts3,141 3,053 
Investment services and trust income3,230 2,378 
ATM and interchange fees2,944 2,396 
(Loss) gain from investment securities, net(16,213)69 
Gain (loss) on sales or write-downs of other real estate owned and other assets565 (183)
Other income1,710 3,550 
Total noninterest income7,962 23,349 
Noninterest expenses:
Salaries, commissions and employee benefits44,618 48,788 
Occupancy and equipment expense6,614 5,909 
Data processing 2,408 2,113 
Legal and professional fees1,919 3,108 
Advertising1,171 2,133 
Amortization of core deposit and other intangibles789 990 
Other expense14,901 17,399 
Total noninterest expense72,420 80,440 
Income before income taxes34,250 46,078 
Income tax expense6,300 9,697 
Net income applicable to FB Financial Corporation and noncontrolling interest27,950 36,381 
Net income applicable to noncontrolling interest— — 
Net income applicable to FB Financial Corporation$27,950 $36,381 
Earnings per common share:
Basic$0.60 $0.78 
Diluted0.59 0.78 
See the accompanying notes to the consolidated financial statements.
5

FB Financial Corporation and subsidiaries
Consolidated statements of comprehensive income
(Unaudited)
(Amounts are in thousands)

 Three Months Ended March 31,
 2024 2023 
Net income$27,950 $36,381 
Other comprehensive income, net of tax:
   Net unrealized (loss) gain in available-for-sale securities, net of tax (benefit) expense
      of $(3,432) and $7,059
(9,573)20,064 
   Reclassification adjustment for loss on sale of securities included in net
      income, net of tax benefit of $4,225 and $—
11,988 — 
   Net unrealized loss in hedging activities, net of tax benefit
      of $62 and $70
(174)(197)
         Total other comprehensive income, net of tax2,241 19,867 
Comprehensive income applicable to FB Financial Corporation
    and noncontrolling interest 		30,191 56,248 
Comprehensive income applicable to noncontrolling interest— — 
Comprehensive income applicable to FB Financial Corporation$30,191 $56,248 
See the accompanying notes to the consolidated financial statements.
6

FB Financial Corporation and subsidiaries
Consolidated statements of changes in shareholders’ equity
(Unaudited)
(Amounts are in thousands except per share amounts)


Common
stock		Additional
paid-in
capital		Retained
earnings		Accumulated
other
comprehensive
loss, net		Total common
shareholders' equity		Noncontrolling interestTotal shareholders' equity
Balance at December 31, 2022:$46,738 $861,588 $586,532 $(169,433)$1,325,425 $93 $1,325,518 
Net income attributable to FB Financial
Corporation and noncontrolling interest		— — 36,381 — 36,381 — 36,381 
  Other comprehensive income, net of
taxes		— — — 19,867 19,867 — 19,867 
  Repurchase of common stock(136)(4,808)— — (4,944)— (4,944)
  Stock based compensation expense1 2,284 — — 2,285 — 2,285 
Restricted stock units vested, net of
taxes		92 (1,544)— — (1,452)— (1,452)
Performance-based restricted stock
units vested, net of taxes		60 (1,205)— — (1,145)— (1,145)
   Shares issued under employee stock
purchase program		8 313 — — 321 — 321 
   Dividends declared and paid ($0.15 per
      share)
— — (7,042)— (7,042)— (7,042)
Balance at March 31, 2023:$46,763 $856,628 $615,871 $(149,566)$1,369,696 $93 $1,369,789 
Balance at December 31, 2023:$46,849 $864,258 $678,412 $(134,725)$1,454,794 $93 $1,454,887 
Net income attributable to FB Financial
Corporation and noncontrolling interest		— — 27,950 — 27,950 — 27,950 
Other comprehensive income, net of
taxes		— — — 2,241 2,241 — 2,241 
Stock based compensation expense1 2,819 — — 2,820 — 2,820 
Restricted stock units vested, net of
taxes		11 (292)— — (281)— (281)
Performance-based restricted stock
units vested, net of taxes		25 (370)— — (345)— (345)
Shares issued under employee stock
purchase program		11 388 — — 399 — 399 
Dividends declared and paid ($0.17 per
   share)
— — (8,052)— (8,052)— (8,052)
Balance at March 31, 2024$46,897 $866,803 $698,310 $(132,484)$1,479,526 $93 $1,479,619 
See the accompanying notes to the consolidated financial statements.

7
FB Financial Corporation and subsidiaries
Consolidated statements of cash flows
(Unaudited)
(Amounts are in thousands)
Three Months Ended March 31,
2024 2023 
Cash flows from operating activities:
Net income applicable to FB Financial Corporation and noncontrolling interest$27,950 $36,381 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of fixed assets and software2,841 2,228 
Amortization of core deposit and other intangibles789 990 
Amortization of issuance costs on subordinated debt 96 97 
Capitalization of mortgage servicing rights(1,131)(1,788)
Net change in fair value of mortgage servicing rights(294)5,274 
Stock-based compensation expense2,820 2,285 
Provision for credit losses on loans HFI1,852 4,997 
Reversal of credit losses on unfunded commitments(1,070)(4,506)
Provision for mortgage loan repurchases50 (250)
Accretion of discounts and premiums on acquired loans, net(387)(319)
Amortization of premiums and discounts on securities, net1,356 1,382 
Loss (gain) from investment securities, net16,213 (69)
Originations of loans held for sale(258,352)(295,760)
Proceeds from sale of loans held for sale251,548 340,108 
Gain on sale and change in fair value of loans held for sale(8,279)(8,635)
Net (gain) loss on write-downs of other real estate owned and other assets(565)183 
Provision for deferred income taxes207 1,396 
Earnings on bank-owned life insurance(431)(605)
Changes in:
Operating lease assets and liabilities, net(207)580 
Other assets and interest receivable(665)62,512 
Accrued expenses and other liabilities1,927 (48,099)
Net cash provided by operating activities36,268 98,382 
Cash flows from investing activities:
Activity in available-for-sale securities:
Sales207,882 — 
Maturities, prepayments and calls66,627 26,827 
Purchases(281,579)(660)
Net change in loans117,904 (52,540)
Proceeds from sales of FHLB stock, net242 15,272 
Purchases of premises and equipment(1,620)(9,450)
Proceeds from the sale of premises and equipment137 — 
Proceeds from the sale of other real estate owned 389 2,031 
Proceeds from the sale of other assets161 — 
Proceeds from bank-owned life insurance— 236 
Net cash provided by (used in) investing activities110,143 (18,284)
Cash flows from financing activities:
Net (decrease) increase in deposits(47,856)325,965 
Net decrease in securities sold under agreements to repurchase and federal funds
   purchased		(30,535)(48,815)
Net decrease in short-term FHLB advances — (50,000)
Share based compensation withholding payments(626)(2,597)
Net proceeds from sale of common stock under employee stock purchase program399 321 
Repurchase of common stock— (4,944)
Dividends paid on common stock(7,965)(6,994)
Dividend equivalent payments made upon vesting of equity compensation(30)(135)
Net cash (used in) provided by financing activities(86,613)212,801 
Net change in cash and cash equivalents59,798 292,899 
Cash and cash equivalents at beginning of the period810,932 1,027,052 
Cash and cash equivalents at end of the period$870,730 $1,319,951 
8
FB Financial Corporation and subsidiaries
Consolidated statements of cash flows (continued)
(Unaudited)
(Amounts are in thousands)
Three Months Ended March 31,
2024 2023 
Supplemental cash flow information:
Interest paid$74,943 $52,634 
Taxes paid (refunded), net277 (904)
Supplemental noncash disclosures:
Transfers from loans to other real estate owned$753 $235 
Transfers from loans to other assets1,031 — 
Transfers from loans to loans held for sale167 7,126 
Transfers from loans held for sale to loans40 776 
Loans provided for sales of other assets65 — 
Decrease in rebooked GNMA loans under optional repurchase program(353)(5,683)
Trade date payable - securities— 245 
Dividends declared not paid on restricted stock units87 48 
Right-of-use assets obtained in exchange for operating lease liabilities— 3,375 
See the accompanying notes to the consolidated financial statements.

9
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)

Note (1)—Basis of presentation
Overview and presentation
FB Financial Corporation (the "Company") is a financial holding company headquartered in Nashville, Tennessee. The Company operates primarily through its wholly-owned subsidiary bank, FirstBank (the "Bank") and its subsidiaries. As of March 31, 2024, the Bank had 76 full-service branches throughout Tennessee, Alabama, Kentucky and North Georgia, and a mortgage business with office locations across the Southeast, which primarily originates loans to be sold to third party private investors or government sponsored agencies in the secondary market.
The unaudited consolidated financial statements, including the notes thereto, have been prepared in accordance with U.S. GAAP interim reporting requirements and general banking industry guidelines, and therefore, do not include all information and notes included in the annual consolidated financial statements in conformity with GAAP. These interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K.
The unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year.
In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported results of operations for the reporting periods and the related disclosures. Although management's estimates contemplate current conditions and how they are expected to change in the future, it is reasonably possible that actual conditions could vary from those anticipated, which could cause the Company's financial condition and results of operations to vary significantly from those estimates.
Certain prior period amounts have been reclassified to conform to the current period presentation without any impact on the reported amounts of net income or shareholders’ equity.
Earnings per share
Basic EPS excludes dilution and is computed by dividing earnings attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS includes the dilutive effect of additional potential common shares issuable under the restricted stock units granted but not yet vested and distributable. Diluted EPS is computed by dividing earnings attributable to common shareholders by the weighted average number of common shares outstanding for the year, plus an incremental number of common-equivalent shares computed using the treasury stock method.
Certain restricted stock awards granted by the Company include non-forfeitable dividend equivalent rights and are considered participating securities for the purposes of computing EPS. Accordingly, the Company is required to calculate basic and diluted EPS using the two-class method. Calculations of EPS under the two-class method (i) exclude from the numerator any dividends paid or owed on participating securities and any undistributed earnings considered to be attributable to participating securities and (ii) exclude from the denominator the dilutive impact of the participating securities.
10
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following is a summary of the basic and diluted earnings per common share calculations for each of the periods presented:
 Three Months Ended March 31,
 20242023
Basic earnings per common share:
Net income applicable to FB Financial Corporation$27,950 $36,381 
Dividends paid on and undistributed earnings allocated to participating securities— — 
Earnings available to common shareholders$27,950 $36,381 
Weighted average basic shares outstanding46,874,882 46,679,618 
Basic earnings per common share$0.60 $0.78 
Diluted earnings per common share:
Earnings available to common shareholders$27,950 $36,381 
Weighted average basic shares outstanding46,874,882 46,679,618 
Weighted average diluted shares contingently issuable(1)
123,991 85,536 
Weighted average diluted shares outstanding46,998,873 46,765,154 
Diluted earnings per common share$0.59 $0.78 
(1) Excludes 2,949 and 159,946 restricted stock units outstanding considered to be antidilutive for the three months ended March 31, 2024 and 2023, respectively.
Recently adopted accounting standards:
In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” The FASB issued this update to clarify the guidance in ASC 820, “Fair Value Measurement,” when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, to amend a related illustrative example, and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The Company adopted this update effective January 1, 2024. The adoption did not have an impact on the Company's consolidated financial statements or related disclosures.
In March 2023, the FASB issued ASU 2023-01, “Leases (Topic 842): Common Control Arrangements” as part of the Post-Implementation Review process of ASC 842, “Leases,” around related party arrangements between entities under common control. Under previous guidance, a lessee is generally required to amortize leasehold improvements that it owns over the shorter of the useful life of those improvements or the lease term. However, due to the nature of leasehold improvements made under leases between entities under common control, ASU 2023-01 requires a lessee in a common-control arrangement to amortize such leasehold improvements that it owns over the improvements' useful life to the common control group, regardless of the lease term. The Company adopted this standard on January 1, 2024 on a prospective basis. The adoption of this standard did not have a material impact on the Company's consolidated financial statements or related disclosures.
Additionally, in March 2023, the FASB issued ASU 2023-02, “Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.” The amendments in this update permit reporting entities to elect to account for tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. The Company adopted this standard effective January 1, 2024. The adoption of this accounting pronouncement did not have an impact on the Company's historical consolidated financial statements but could influence the Company's decisions with respect to investments in certain tax credits prospectively.
Newly issued not yet effective accounting standards:
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The amendments in this update are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker, a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the chief operating decision maker when deciding how to allocate resources. The ASU also requires all annual disclosures currently required by Topic 280, “Segment Reporting,” to be included in interim periods. This update is effective for fiscal years
11
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and retrospective application is required for all periods presented. The Company is evaluating the impact this will have on the Company's consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-08, “Intangibles – Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets.” This update requires entities to present crypto assets measured at fair value separately from other intangible assets on the balance sheet and reflect changes from remeasurement in the net income. Additionally, an entity that receives crypto assets as noncash consideration in the ordinary course of business and converts them nearly immediately into cash is required to classify those cash receipts as cash flows from operating activities. Lastly, the update requires entities to provide interim and annual disclosures about the types of crypto assets they hold and any changes in their holdings of crypto assets. While the Company does not currently hold or facilitate transactions with crypto assets, the Company is evaluating the potential future financial statement and disclosure impact from adopting this guidance when it becomes applicable based on the Company's crypto asset activities.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The amendments in this update enhance the transparency and decision usefulness of income tax disclosures. This ASU requires disclosures of specific categories and disaggregation of information in the rate reconciliation table. The ASU also requires disclosure of disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The requirements of the ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the effect that ASU 2023-09 will have on its disclosures.
Subsequent events
The Company has evaluated, for consideration of recognition or disclosure, subsequent events that occurred through the date of issuance of these financial statements. The Company has determined that there were no subsequent events that occurred after March 31, 2024, but prior to the issuance of these financial statements that would have a material impact on the Company’s consolidated financial statements.
12
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (2)—Investment securities
The following tables summarize the amortized cost, allowance for credit losses and fair value of the AFS debt securities and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive loss at March 31, 2024 and December 31, 2023:  
March 31, 2024
 Amortized cost Gross unrealized gains Gross unrealized losses Allowance for credit losses for investments Fair Value
Investment Securities    
AFS debt securities  
U.S. government agency securities$416,953 $145 $(1,171)$— $415,927 
Mortgage-backed securities - residential984,473 — (158,259)— 826,214 
Mortgage-backed securities - commercial 17,899 — (1,284)— 16,615 
Municipal securities194,470 45 (22,843)— 171,672 
U.S. Treasury securities30,985 — (128)— 30,857 
Corporate securities3,500 — (103)— 3,397 
Total$1,648,280 $190 $(183,788)$— $1,464,682 
December 31, 2023
 Amortized costGross unrealized gains Gross unrealized losses Allowance for credit losses for investmentsFair Value
Investment Securities    
AFS debt securities    
U.S. government agency securities$204,663 $470 $(1,177)$— $203,956 
Mortgage-backed securities - residential1,057,389 — (160,418)— 896,971 
Mortgage-backed securities - commercial18,186 — (1,225)— 16,961 
Municipal securities263,312 370 (21,419)— 242,263 
U.S. Treasury securities111,729 — (3,233)— 108,496 
Corporate securities3,500 — (174)— 3,326 
Total$1,658,779 $840 $(187,646)$— $1,471,973 
The components of amortized cost for AFS debt securities on the consolidated balance sheets excludes accrued interest receivable since the Company elected to present accrued interest receivable separately on the consolidated balance sheets. As of March 31, 2024 and December 31, 2023, total accrued interest receivable on AFS debt securities was $5,409 and $7,212, respectively.
Securities pledged at March 31, 2024 and December 31, 2023 had carrying amounts of $949,958 and $929,546, respectively, and were pledged to secure a Federal Reserve Bank line of credit, Bank Term Funding Program borrowings, public deposits and repurchase agreements.
There were no holdings of AFS debt securities of any one issuer, other than U.S. Government sponsored enterprises, in an amount greater than 10% of shareholders' equity during any period presented.
Investment securities transactions are recorded as of the trade date. At March 31, 2024 and December 31, 2023, there were no trade date receivables nor payables that related to sales or purchases settled after period end.
13
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following tables show gross unrealized losses for which an allowance for credit losses has not been recorded at March 31, 2024 and December 31, 2023, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
March 31, 2024
 Less than 12 months12 months or moreTotal
 Fair ValueGross Unrealized Loss Fair ValueGross Unrealized LossFair ValueGross Unrealized Loss
U.S. government agency securities$203,870 $(484)$7,251 $(687)$211,121 $(1,171)
Mortgage-backed securities - residential— — 776,208 (158,259)776,208 (158,259)
Mortgage-backed securities - commercial— — 16,615 (1,284)16,615 (1,284)
Municipal securities9,131 (41)155,959 (22,802)165,090 (22,843)
U.S. Treasury securities— — 30,857 (128)30,857 (128)
Corporate securities— — 3,397 (103)3,397 (103)
Total$213,001 $(525)$990,287 $(183,263)$1,203,288 $(183,788)
 December 31, 2023
 Less than 12 months12 months or moreTotal
 Fair ValueGross Unrealized LossFair ValueGross Unrealized LossFair ValueGross Unrealized Loss
U.S. government agency securities$25,923 $(21)$14,040 $(1,156)$39,963 $(1,177)
Mortgage-backed securities - residential— — 896,971 (160,418)896,971 (160,418)
Mortgage-backed securities - commercial— — 16,961 (1,225)16,961 (1,225)
Municipal securities14,480 (148)188,669 (21,271)203,149 (21,419)
U.S. Treasury securities— — 108,496 (3,233)108,496 (3,233)
Corporate securities— — 3,326 (174)3,326 (174)
Total$40,403 $(169)$1,228,463 $(187,477)$1,268,866 $(187,646)
As of March 31, 2024 and December 31, 2023, the Company’s AFS debt securities portfolio consisted of 340 and 439 securities, 316 and 370 of which were in an unrealized loss position, respectively.
The majority of the investment portfolio was either government guaranteed, an issuance of a government sponsored entity or highly rated by major credit rating agencies, and the Company has historically not recorded any credit losses associated with these investments. Municipal securities with market values below amortized cost at March 31, 2024 were reviewed for material credit events and/or rating downgrades with individual credit reviews performed. The issuers of these AFS debt securities continue to make timely principal and interest payments under the contractual terms of the securities and the issuers will continue to be observed as a part of the Company’s ongoing credit monitoring. As such, as of March 31, 2024 and December 31, 2023, it was determined that all AFS debt securities that experienced a decline in fair value below amortized cost basis were due to noncredit-related factors. Further, it is not likely that the Company will be required to sell these securities before recovery of their amortized cost basis. Therefore, there was no allowance for credit losses recognized on AFS debt securities as of March 31, 2024 or December 31, 2023. Periodically, AFS debt securities may be sold or the composition of the portfolio realigned to improve yields, quality or marketability, or to implement changes in investment or asset/liability strategy, including maintaining collateral requirements and raising funds for liquidity purposes or preparing for anticipated changes in market interest rates.
14
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The amortized cost and fair value of AFS debt securities by contractual maturity as of March 31, 2024 and December 31, 2023 are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
March 31,December 31,
 2024 2023 
 Available-for-saleAvailable-for-sale
 Amortized costFair valueAmortized costFair value
Due in one year or less$34,073 $33,910 $64,776 $64,279 
Due in one to five years10,851 10,080 75,996 71,801 
Due in five to ten years40,939 39,932 51,162 49,630 
Due in over ten years560,045 537,931 391,270 372,331 
645,908 621,853 583,204 558,041 
Mortgage-backed securities - residential984,473 826,214 1,057,389 896,971 
Mortgage-backed securities - commercial17,899 16,615 18,186 16,961 
Total AFS debt securities$1,648,280 $1,464,682 $1,658,779 $1,471,973 
Sales and other dispositions of AFS debt securities were as follows:
 Three Months Ended March 31,
 2024 2023 
Proceeds from sales$207,882 $— 
Proceeds from maturities, prepayments and calls66,627 26,827 
Gross realized gains90 — 
Gross realized losses16,303 — 
Equity Securities
The Company had equity securities without readily determinable market value included in other assets on the consolidated balance sheets with carrying amounts of $25,589 and $25,191 at March 31, 2024 and December 31, 2023, respectively. Additionally, the Company had $33,948 and $34,190 of FHLB stock carried at cost at March 31, 2024 and December 31, 2023, respectively, included separately from the other equity securities discussed above.

15
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (3)—Loans and allowance for credit losses on loans HFI
Loans outstanding as of March 31, 2024 and December 31, 2023, by class of financing receivable are as follows:
 March 31,December 31,
 2024 2023 
Commercial and industrial$1,621,611 $1,720,733 
Construction1,268,883 1,397,313 
Residential real estate:
1-to-4 family mortgage1,577,824 1,568,552 
Residential line of credit549,306 530,912 
Multi-family mortgage615,081 603,804 
Commercial real estate:
Owner-occupied1,236,007 1,232,071 
Non-owner occupied1,991,526 1,943,525 
Consumer and other428,671 411,873 
Gross loans9,288,909 9,408,783 
Less: Allowance for credit losses on loans HFI(151,667)(150,326)
Net loans$9,137,242 $9,258,457 
As of March 31, 2024 and December 31, 2023, $950,787 and $1,030,016, respectively, of qualifying residential mortgage loans (including loans held for sale) and $1,563,819 and $1,984,007, respectively, of qualifying commercial mortgage loans were pledged to the FHLB system securing advances against the Bank’s line of credit. Additionally, as of March 31, 2024 and December 31, 2023, qualifying commercial and industrial, construction and consumer loans, of $2,982,391 and $3,107,495, respectively, were pledged to the Federal Reserve under the Borrower-in-Custody program.
The amortized cost of loans HFI on the consolidated balance sheets exclude accrued interest receivable as the Company presents accrued interest receivable separately on the balance sheet. As of March 31, 2024 and December 31, 2023, accrued interest receivable on loans HFI amounted to $45,840 and $43,776, respectively.
Credit Quality - Commercial Type Loans
The Company categorizes commercial loan types into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans that share similar risk characteristics collectively. Loans that do not share similar risk characteristics are evaluated individually.
The Company uses the following definitions for risk ratings:
Pass.
Loans rated Pass include those that are adequately collateralized performing loans which management believes do not have conditions that have occurred or may occur that would result in the loan being downgraded into an inferior category. The Pass category also includes commercial loans rated as Watch, which include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category.

Special Mention.
Loans rated Special Mention are those that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Management does not believe there will be a loss of principal or interest. These loans require intensive servicing and may possess more than normal credit risk.
Classified.
Loans included in the Classified category include loans rated as Substandard and Doubtful. Loans rated as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful loans have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weakness or weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable.
Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes.

16
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following tables present the credit quality of the Company's commercial type loan portfolio as of March 31, 2024 and December 31, 2023 and the gross charge-offs for the three months ended March 31, 2024 and the year ended December 31, 2023 by year of origination. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination.

As of and for the three months
    ended March 31, 2024
2024 2023 2022 2021 2020 PriorRevolving Loans Amortized Cost BasisTotal
Commercial and industrial
Pass$16,449 $202,050 $237,139 $72,725 $36,876 $129,057 $864,065 $1,558,361 
Special Mention— 3,675 17,572 2,913 — 247 4,521 28,928 
Classified— 457 4,328 3,017 2,987 6,350 17,183 34,322 
Total16,449 206,182 259,039 78,655 39,863 135,654 885,769 1,621,611 
            Current-period gross
               charge-offs		— — — 14 — 7 22 43 
Construction
Pass39,360 193,203 551,909 124,878 36,531 86,713 187,955 1,220,549 
Special Mention— 711 4,689 2,508 — 657 12,000 20,565 
Classified— — 3,986 2,590 6,877 — 14,316 27,769 
Total39,360 193,914 560,584 129,976 43,408 87,370 214,271 1,268,883 
            Current-period gross
               charge-offs		— — — — — — 92 92 
Residential real estate:
Multi-family mortgage
Pass— 29,861 193,591 244,770 54,744 68,104 22,953 614,023 
Special Mention— — — — — — — — 
Classified— — — — — 1,058 — 1,058 
Total— 29,861 193,591 244,770 54,744 69,162 22,953 615,081 
             Current-period gross
                charge-offs		— — — — — — — — 
Commercial real estate:
Owner occupied
Pass24,636 112,168 253,377 231,354 113,481 428,182 53,516 1,216,714 
Special Mention— — 1,283 1,811 — 2,547 — 5,641 
Classified— — 6,281 16 65 6,228 1,062 13,652 
Total24,636 112,168 260,941 233,181 113,546 436,957 54,578 1,236,007 
            Current-period gross
              charge-offs		— — — — — — — — 
Non-owner occupied
Pass3,755 45,516 533,649 468,553 122,699 750,943 43,090 1,968,205 
Special Mention— — — 3,966 — 83 — 4,049 
Classified— — — 998 — 18,274 — 19,272 
Total3,755 45,516 533,649 473,517 122,699 769,300 43,090 1,991,526 
             Current-period gross
                charge-offs		— — — — — — — — 
Total commercial loan types
Pass84,200 582,798 1,769,665 1,142,280 364,331 1,462,999 1,171,579 6,577,852 
Special Mention— 4,386 23,544 11,198 — 3,534 16,521 59,183 
Classified— 457 14,595 6,621 9,929 31,910 32,561 96,073 
Total$84,200 $587,641 $1,807,804 $1,160,099 $374,260 $1,498,443 $1,220,661 $6,733,108 
            Current-period gross
                charge-offs		$— $— $— $14 $— $7 $114 $135 
17
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
As of and for the year ended
  December 31, 2023 		2023 2022 2021 2020 2019 PriorRevolving Loans Amortized Cost BasisTotal
Commercial and industrial
Pass$225,734 $255,921 $151,492 $39,897 $70,302 $73,415 $839,918 $1,656,679 
Special Mention— 17,947 3,083 — 151 108 7,549 28,838 
Classified457 4,253 3,075 3,027 254 6,129 18,021 35,216 
Total226,191 278,121 157,650 42,924 70,707 79,652 865,488 1,720,733 
              Current-period gross
                 charge-offs		14 7 201 22 — 87 131 462 
Construction
Pass179,929 677,387 148,312 46,697 39,140 49,954 208,491 1,349,910 
Special Mention1 4,659 2,943 1,202 — 690 12,000 21,495 
Classified— 2,349 1,484 6,620 — — 15,455 25,908 
Total179,930 684,395 152,739 54,519 39,140 50,644 235,946 1,397,313 
              Current-period gross
                  charge-offs		— — — — — — — — 
Residential real estate:
Multi-family mortgage
Pass29,982 151,495 223,889 92,745 29,933 43,479 31,209 602,732 
Special Mention— — — — — — — — 
Classified— — — — — 1,072 — 1,072 
Total29,982 151,495 223,889 92,745 29,933 44,551 31,209 603,804 
             Current-period gross
                 charge-offs		— — — — — — — — 
Commercial real estate:
Owner occupied
Pass118,030 261,196 231,241 115,397 151,146 281,253 53,970 1,212,233 
Special Mention— 1,297 1,827 — 154 2,617 — 5,895 
Classified— 6,305 16 — 760 5,789 1,073 13,943 
Total118,030 268,798 233,084 115,397 152,060 289,659 55,043 1,232,071 
              Current-period gross
                  charge-offs		— — 144 — — — — 144 
Non-owner occupied
Pass47,026 474,560 478,878 117,429 178,448 580,16843,577 1,920,086 
Special Mention— — 3,975 — — 10,435— 14,410 
Classified— — 1,001 — 381 7,647— 9,029 
Total47,026 474,560 483,854 117,429 178,829 598,250 43,577 1,943,525 
               Current-period gross
                   charge-offs		— — — — — — — — 
Total commercial loan types
Pass600,701 1,820,559 1,233,812 412,165 468,969 1,028,269 1,177,165 6,741,640 
Special Mention1 23,903 11,828 1,202 305 13,850 19,549 70,638 
Classified457 12,907 5,576 9,647 1,395 20,637 34,549 85,168 
Total$601,159 $1,857,369 $1,251,216 $423,014 $470,669 $1,062,756 $1,231,263 $6,897,446 
              Current-period gross
                  charge-offs		14 7 345 22 — 87 131 606 







18
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Credit Quality - Consumer Type Loans
For consumer and residential loan classes, the Company primarily evaluates credit quality based on delinquency and accrual status of the loan, credit documentation and by payment activity. The performing or nonperforming status is updated on an on-going basis dependent upon improvement and deterioration in credit quality.
The following tables present the credit quality by classification (performing or nonperforming) of the Company's consumer type loan portfolio as of March 31, 2024 and December 31, 2023 and the gross charge-offs for the three months ended March 31, 2024 and the year ended December 31, 2023 by year of origination. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination.
As of and for the three months
     ended March 31, 2024
2024 2023 2022 2021 2020 PriorRevolving Loans Amortized Cost BasisTotal
Residential real estate:
1-to-4 family mortgage
Performing$43,291 $187,203 $492,643 $393,806 $143,618 $298,828 $— $1,559,389 
Nonperforming— 325 5,027 3,237 4,421 5,425 — 18,435 
Total43,291 187,528 497,670 397,043 148,039 304,253 — 1,577,824 
          Current-period gross
             charge-offs		— — — — — — — — 
Residential line of credit
Performing— — — — — — 547,097 547,097 
Nonperforming— — — — — — 2,209 2,209 
Total— — — — — — 549,306 549,306 
          Current-period gross
             charge-offs		— — — — — — 20 20 
Consumer and other
Performing25,887 109,013 87,312 42,673 33,415 114,071 5,849 418,220 
Nonperforming— 561 909 2,293 1,849 4,839 — 10,451 
       Total25,887 109,574 88,221 44,966 35,264 118,910 5,849 428,671 
           Current-period gross
             charge-offs		155 344 31 96 36 110 — 772 
Total consumer type loans
Performing69,178 296,216 579,955 436,479 177,033 412,899 552,946 2,524,706 
Nonperforming— 886 5,936 5,530 6,270 10,264 2,209 31,095 
        Total$69,178 $297,102 $585,891 $442,009 $183,303 $423,163 $555,155 $2,555,801 
            Current-period gross
             charge-offs		$155 $344 $31 $96 $36 $110 $20 $792 


19
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
As of and for the year ended
  December 31, 2023 		2023 2022 2021 2020 2019 PriorRevolving Loans Amortized Cost BasisTotal
Residential real estate:
1-to-4 family mortgage
Performing$198,537 $500,628 $399,338 $145,484 $81,905 $226,587 $— $1,552,479 
Nonperforming76 2,565 4,026 3,846 690 4,870 — 16,073 
Total198,613 503,193 403,364 149,330 82,595 231,457 — 1,568,552 
           Prior-period gross
               charge-offs		— 18 — 4 — 24 — 46 
Residential line of credit
Performing— — — — — — 528,439 528,439 
Nonperforming— — — — — — 2,473 2,473 
Total— — — — — — 530,912 530,912 
           Prior-period gross
               charge-offs		— — — — — — — — 
Consumer and other
Performing104,399 91,557 45,187 34,928 24,040 93,833 6,890 400,834 
Nonperforming528 1,025 2,562 1,819 1,264 3,841 — 11,039 
       Total104,927 92,582 47,749 36,747 25,304 97,674 6,890 411,873 
            Prior-period gross
               charge-offs		1,463 564 139 201 110 372 2 2,851 
Total consumer type loans
Performing302,936 592,185 444,525 180,412 105,945 320,420 535,329 2,481,752 
Nonperforming604 3,590 6,588 5,665 1,954 8,711 2,473 29,585 
       Total$303,540 $595,775 $451,113 $186,077 $107,899 $329,131 $537,802 $2,511,337 
             Prior-period gross
                 charge-offs		1,463 582 139 205 110 396 2 2,897 
Nonaccrual and Past Due Loans
Nonperforming loans include loans that are no longer accruing interest (nonaccrual loans) and loans past due ninety or more days and still accruing interest.
The following tables represent an analysis of the aging by class of financing receivable as of March 31, 2024 and December 31, 2023:
March 31, 202430-89 days
past due and accruing
interest		90 days or 
more and accruing
interest 		Nonaccrual
loans		Loans current
on payments
and accruing
interest 		Total
Commercial and industrial$1,606 $— $24,643 $1,595,362 $1,621,611 
Construction1,474 585 5,077 1,261,747 1,268,883 
Residential real estate:
1-to-4 family mortgage17,881 9,610 8,825 1,541,508 1,577,824 
Residential line of credit1,717 1,097 1,112 545,380 549,306 
Multi-family mortgage— — 31 615,050 615,081 
Commercial real estate:
Owner occupied465 — 3,069 1,232,473 1,236,007 
Non-owner occupied3,631 — 3,250 1,984,645 1,991,526 
Consumer and other10,699 1,566 8,885 407,521 428,671 
Total$37,473 $12,858 $54,892 $9,183,686 $9,288,909 
 
20
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
December 31, 202330-89 days
past due and accruing
interest		90 days or 
more and accruing
interest 		Nonaccrual
loans		Loans current on payments and accruing interest Total
Commercial and industrial$732 $— $21,730 $1,698,271 $1,720,733 
Construction6,579 165 2,872 1,387,697 1,397,313 
Residential real estate:
1-to-4 family mortgage21,768 9,355 6,718 1,530,711 1,568,552 
Residential line of credit2,464 1,337 1,136 525,975 530,912 
Multi-family mortgage— — 32 603,772 603,804 
Commercial real estate:
Owner occupied480 — 3,188 1,228,403 1,232,071 
Non-owner occupied4,059 — 3,351 1,936,115 1,943,525 
Consumer and other10,961 1,836 9,203 389,873 411,873 
Total$47,043 $12,693 $48,230 $9,300,817 $9,408,783 
The following tables provide the amortized cost basis of loans on non-accrual status, as well as any related allowance as of March 31, 2024 and December 31, 2023 by class of financing receivable.
March 31, 2024Nonaccrual
with no
related
allowance		Nonaccrual
with
related
allowance		Related
allowance
Commercial and industrial$14,465 $10,178 $3,946 
Construction3,152 1,925 293 
Residential real estate:
1-to-4 family mortgage3,336 5,489 167 
Residential line of credit812 300 5 
Multi-family mortgage— 31 1 
Commercial real estate:
Owner occupied1,935 1,134 145 
Non-owner occupied3,219 31 1 
Consumer and other— 8,885 463 
Total$26,919 $27,973 $5,021 
December 31, 2023
Nonaccrual
with no
related
allowance		Nonaccrual
with
related
allowance		Related
allowance
Commercial and industrial$3,678 $18,052 $5,011 
Construction2,267 605 59 
Residential real estate:
1-to-4 family mortgage1,444 5,274 103 
Residential line of credit685 451 8 
Multi-family mortgage— 32 1 
Commercial real estate:
Owner occupied2,920 268 15 
Non-owner occupied3,316 35 1 
Consumer and other— 9,203 498 
Total$14,310 $33,920 $5,696 





21
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following presents interest income recognized on nonaccrual loans for the three months ended March 31, 2024 and 2023:
Three Months Ended March 31,
20242023
Commercial and industrial$224 $20 
Construction61 6 
Residential real estate:
1-to-4 family mortgage— 79 
Residential line of credit16 24 
Multi-family mortgage— 1 
Commercial real estate:
Owner occupied49 58 
Non-owner occupied35 82 
Consumer and other— 173 
Total$385 $443 
Accrued interest receivable written off as an adjustment to interest income amounted to $201 and $181 for the three months ended March 31, 2024 and 2023, respectively.
Loan Modifications to Borrowers Experiencing Financial Difficulty
Occasionally, the Company may make certain modifications of loans to borrowers experiencing financial difficulty. These modifications may be in the form of an interest rate reduction, a term extension, principal forgiveness, payment deferral or a combination thereof. Upon the Company's determination that a modified loan has subsequently been deemed uncollectible, the portion of the loan deemed uncollectible is charged off against the allowance for credit losses on loans HFI. The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.
There were no modifications of loans to borrowers experiencing financial difficulty during the three months ended March 31, 2023.
The following table presents the amortized cost of FDM loans as of March 31, 2024 by class of financing receivable and type of concession granted that were modified during the three months ended March 31, 2024.
Term extensionPayment deferral and term extensionTotal% of total class of financing receivables
Construction$— $14,316 $14,316 1.1 %
Commercial real estate:
Non-owner occupied10,351 — 10,351 0.5 %
Consumer and other22 — 22 — %
     Total$10,373 $14,316 $24,689 0.3 %
No financing receivables that were modified in the prior twelve months had a payment default during the three months ended March 31, 2024. Defaults are defined as the earlier of the FDM being placed on non-accrual status or reaching 90 days past due with respect to principal and/or interest payments. As of March 31, 2024, there were no commitments to lend a material amount of additional funds to any borrower whose loan was classified as a FDM.
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficultly:
Three Months Ended
March 31, 2024		Weighted average term extension
(in months)		Weighted average payment deferral
(in months)
Construction63
Commercial real estate:
Non-owner occupied6—
Consumer and other42—
22
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The table below depicts the performance of loans held for investment as of March 31, 2024 made to borrowers experiencing financial difficulty that were modified in the prior twelve months.
March 31, 202430-89 days
past due and accruing
interest		90 days or 
more and accruing
interest
Nonaccrual
loans(1)
Loans current
on payments
and accruing
interest 		Total
Commercial and industrial$— $— $179 $— $179 
Construction— — — 14,316 14,316 
Residential real estate:
1-to-4 family mortgage— — 65 — 65 
Commercial real estate:
Non-owner occupied— — — 10,351 10,351 
Consumer and other— — — 22 22 
Total$— $— $244 $24,689 $24,933 
1) Loans were on non-accrual when modified and subsequently classified as FDM.
Collateral-Dependent Loans
For loans for which the repayment (based on the Company's assessment) is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, the following tables present the loans and the corresponding individually assessed allowance for credit losses by class of financing receivable. Significant changes in individually assessed reserves are due to changes in the valuation of the underlying collateral in addition to changes in accrual and past due status.
March 31, 2024
Type of Collateral
Real EstateFarmlandBusiness AssetsTotalIndividually assessed allowance for credit loss
Commercial and industrial$86 $363 $23,660 $24,109 $3,883 
Construction24,744 1,653 — 26,397 265 
Residential real estate:
1-to-4 family mortgage3,893 — — 3,893 58 
Residential line of credit1,384 — — 1,384 12 
Multi-family mortgage— — — — — 
Commercial real estate:
Owner occupied1,969 7,478 9,447 131 
Non-owner occupied14,731 — — 14,731 — 
Total$46,807 $9,494 $23,660 $79,961 $4,349 
23
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
December 31, 2023
Type of Collateral
Real EstateFarmlandBusiness AssetsTotalIndividually assessed allowance for credit loss
Commercial and industrial$— $363 $20,599 $20,962 $4,946 
Construction8,224 — — 8,224 30 
Residential real estate:
1-to-4 family mortgage5,317 — — 5,317 129 
Residential line of credit1,245 — — 1,245 10 
Commercial real estate:
Owner occupied1,975 1,160 — 3,135 — 
Non-owner occupied3,316 — — 3,316 — 
Consumer and other112 — — 112 21 
Total$20,189 $1,523 $20,599 $42,311 $5,136 
Allowance for Credit Losses on Loans HFI
The Company performed evaluations within its established qualitative framework, assessing the impact of the current economic outlook, including: continued actions taken by the Federal Reserve with regard to monetary policy, interest rates and the potential impact of those actions, potential impact of persistent high inflation on economic growth, potential negative economic forecasts, and other considerations. The increase in the allowance for credit losses on loans HFI as of March 31, 2024 compared with December 31, 2023 is primarily the result of expected deterioration in the CRE portfolio which was adjusted upward qualitatively to address risks not captured by the model. These adjustments factor in the possibility that the economy may be nearing a recession, reflected through deterioration in asset quality projected over life of the loan portfolio. As of March 31, 2024, all CRE asset classes are expected to be negatively impacted by slowing demand coupled with refinancing risk in the current rate environment.
The following tables provide the changes in the allowance for credit losses on loans HFI by class of financing receivable for the three months ended March 31, 2024 and 2023:
 Commercial
and industrial 		Construction1-to-4
family
residential
mortgage 		Residential
line of credit 		Multi-family
residential
mortgage 		Commercial
real estate
owner
occupied 		Commercial
real estate
non-owner
occupied 		Consumer
and other 		Total
Three Months Ended March 31, 2024
Beginning balance -
December 31, 2023
$19,599 $35,372 $26,505 $9,468 $8,842 $10,653 $22,965 $16,922 $150,326 
(Reversal of) provision for
    credit losses on loans
    HFI		(2,298)2,028 (433)470 131 56 984 914 1,852 
Recoveries of loans
previously charged-off
14 — 56 — — 40 — 306 416 
Loans charged off(43)(92)— (20)— — — (772)(927)
Ending balance -
March 31, 2024
$17,272 $37,308 $26,128 $9,918 $8,973 $10,749 $23,949 $17,370 $151,667 
 Commercial
and industrial 		Construction1-to-4
family
residential
mortgage 		Residential
line of credit 		Multi-family
residential
mortgage 		Commercial
real estate
owner
occupied 		Commercial
real estate
non-owner
occupied 		Consumer
and other 		Total
Three Months Ended March 31, 2023 
Beginning balance -
December 31, 2022
$11,106 $39,808 $26,141 $7,494 $6,490 $7,783 $21,916 $13,454 $134,192 
(Reversal of) provision for
    credit losses on loans
    HFI		(10)1,217 1,073 1,540 129 103 (48)993 4,997 
Recoveries of loans
previously charged-off
67 — 15 — — 66 — 239 387 
Loans charged off(46)— (16)— — — — (705)(767)
Ending balance -
March 31, 2023		$11,117 $41,025 $27,213 $9,034 $6,619 $7,952 $21,868 $13,981 $138,809 
24
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (4)—Other real estate owned
The amount reported as other real estate owned includes property acquired through foreclosure in addition to excess facilities held for sale and is carried at the lower of the carrying amount of the underlying loan or the fair value of the real estate less costs to sell. The following table summarizes the other real estate owned for the three months ended March 31, 2024 and 2023: 
Three Months Ended March 31,
 20242023
Balance at beginning of period$3,192 $5,794 
Transfers from loans753 235 
Proceeds from sale of other real estate owned(389)(2,031)
Gain on sale of other real estate owned57 87 
Balance at end of period$3,613 $4,085 
Included within the other real estate owned balance above, foreclosed residential real estate properties totaled $2,344 and $2,414 as of March 31, 2024 and December 31, 2023, respectively.
The recorded investment in residential mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process totaled $4,330 and $3,377 as of March 31, 2024 and December 31, 2023, respectively.
Note (5)—Leases
As of March 31, 2024, the Company was the lessee in 48 operating leases and 1 finance lease of certain branch, mortgage and operations locations with original terms greater than one year.
Many leases include options to renew, with terms that can extend the lease up to an additional 20 years or more. Certain lease agreements contain provisions to periodically adjust rental payments for inflation. Renewal options that management is reasonably certain to renew and fixed rent escalations are included in the right-of-use asset and lease liability.
Information related to the Company's leases is presented below as of March 31, 2024 and December 31, 2023:
March 31,December 31,
Classification20242023
Right-of-use assets:
Operating leasesOperating lease right-of-use assets$51,421$54,295
Finance leasesPremises and equipment, net1,2281,256
Total right-of-use assets$52,649$55,551
Lease liabilities:
Operating leasesOperating lease liabilities$64,562$67,643
Finance leasesBorrowings 1,3021,326
Total lease liabilities $65,864$68,969
Weighted average remaining lease term (in years) -
    operating		11.511.6
Weighted average remaining lease term (in years) -
    finance		11.111.4
Weighted average discount rate - operating3.40 %3.39 %
Weighted average discount rate - finance1.76 %1.76 %
25
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The components of total lease expense included in the consolidated statements of income were as follows:
Three Months Ended March 31,
Classification2024 2023 
Operating lease costs:
Amortization of right-of-use assetOccupancy and equipment$1,927 $1,815 
Short-term lease costOccupancy and equipment97 121 
Variable lease costOccupancy and equipment336 298 
Gain on lease modifications and
    terminations
Occupancy and equipment— (72)
Finance lease costs:
Interest on lease liabilitiesInterest expense on borrowings6 6 
Amortization of right-of-use assetOccupancy and equipment28 28 
Sublease income Occupancy and equipment(172)(281)
Total lease cost$2,222 $1,915 
The Company does not separate lease and non-lease components and instead elects to account for them as a single lease component. Variable lease cost primarily represents variable payments such as common area maintenance, utilities, and property taxes.
A maturity analysis of operating and finance lease liabilities and a reconciliation of undiscounted cash flows to lease liabilities as of March 31, 2024 is as follows:
OperatingFinance
Leases Lease
Lease payments due:
March 31, 2025$6,358 $90 
March 31, 20268,454 121 
March 31, 20278,314 123 
March 31, 20287,864 125 
March 31, 20296,939 127 
Thereafter44,094 850 
     Total undiscounted future minimum lease payments82,023 1,436 
Less: imputed interest(17,461)(134)
     Lease liabilities$64,562 $1,302 
26
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (6)—Mortgage servicing rights
Changes in the Company’s mortgage servicing rights were as follows for the three months ended March 31, 2024 and 2023:
 Three Months Ended March 31,
 2024 2023 
Carrying value at beginning of period$164,249 $168,365 
Capitalization1,131 1,788 
Change in fair value:
    Due to payoffs/paydowns
(2,724)(2,520)
    Due to change in valuation inputs or assumptions3,018 (2,754)
        Carrying value at end of period$165,674 $164,879 
The following table summarizes servicing income and expense, which are included in mortgage banking income and other noninterest expense, respectively, in the consolidated statements of income for the three months ended March 31, 2024 and 2023: 
 Three Months Ended March 31,
 2024 2023 
   Servicing income$7,347 $7,768 
   Change in fair value of mortgage servicing rights294 (5,274)
   Change in fair value of derivative hedging instruments(3,335)1,867 
Servicing income
4,306 4,361 
Servicing expenses1,947 1,883 
          Net servicing income
$2,359 $2,478 
Data and key economic assumptions related to the Company’s mortgage servicing rights as of March 31, 2024 and December 31, 2023 are as follows: 
 March 31,December 31,
 20242023
Unpaid principal balance of mortgage loans sold and serviced for others$10,651,075 $10,762,906 
Weighted-average prepayment speed (CPR)6.06 %6.19 %
Estimated impact on fair value of a 10% increase$(4,383)$(4,616)
Estimated impact on fair value of a 20% increase$(8,490)$(8,924)
Discount rate10.2 %9.62 %
Estimated impact on fair value of a 100 bp increase$(7,633)$(7,637)
Estimated impact on fair value of a 200 bp increase$(14,617)$(14,624)
Weighted-average coupon interest rate3.50 %3.47 %
Weighted-average servicing fee (basis points)2727
Weighted-average remaining maturity (in months)335334
The Company economically hedges the mortgage servicing rights portfolio with various derivative instruments to offset changes in the fair value of the related mortgage servicing rights. See Note 9, “Derivatives” for additional information on these hedging instruments.
As of March 31, 2024 and December 31, 2023, mortgage escrow deposits totaled $92,350 and $63,591, respectively.
27
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (7)—Income taxes
The following table presents a reconciliation of income taxes for the three months ended March 31, 2024 and 2023:
 Three Months Ended March 31,
 2024 2023 
Federal taxes calculated at statutory rate$7,192 21.0 %$9,676 21.0 %
  Increase (decrease) resulting from:
State taxes, net of federal benefit133 0.4 %251 0.6 %
Expense from equity based compensation55 0.2 %115 0.3 %
Municipal interest income, net of interest
  disallowance		(373)(1.1)%(456)(1.0)%
Bank-owned life insurance(90)(0.3)%(127)(0.3)%
Section 162(m) limitation160 0.5 %127 0.2 %
Other(777)(2.3)%111 0.2 %
Income tax expense, as reported$6,300 18.4 %$9,697 21.0 %
Note (8)—Commitments and contingencies
Commitments to extend credit and letters of credit
The Company issues certain financial instruments to meet customer financing needs, including loan commitments, credit lines and letters of credit. The agreements associated with these type of unfunded loan commitments provide credit or support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates.
The same credit and underwriting policies the Company uses to evaluate and underwrite loans are also used to originate unfunded loan commitments, including obtaining collateral at exercise of the commitment. These unfunded loan commitments are only recorded in the consolidated financial statements when drawn upon and many expire without being used. The Company's maximum off-balance sheet exposure to credit loss from these unfunded loan commitments is represented by the contractual amount of these instruments.
March 31,December 31,
 2024 2023 
Commitments to extend credit, excluding interest rate lock commitments$2,771,611 $2,906,016 
Letters of credit85,487 77,055 
Balance at end of period$2,857,098 $2,983,071 
As of March 31, 2024 and December 31, 2023, unfunded loan commitments included above with floating interest rates totaled $2,388,134 and $2,459,669, respectively.
As part of its credit loss process, the Company estimates expected credit losses on its unfunded loan commitments under the CECL methodology. When applying this methodology, the Company considers the likelihood that funding will occur, the contractual period of exposure to credit loss, the risk of loss, historical loss experience, and current conditions along with expectations of future economic conditions.
The table below presents activity within the allowance for credit losses on unfunded loan commitments included in accrued expenses and other liabilities on the Company's consolidated balance sheets:
Three Months Ended March 31,
2024 2023 
Balance at beginning of period$8,770 $22,969 
Reversal of credit losses on unfunded commitments(1,070)(4,506)
Balance at end of period$7,700 $18,463 
Loan repurchases or indemnifications
In connection with the sale of mortgage loans to third-party private investors or government sponsored agencies, the Company makes representations and warranties as to the propriety of its origination activities, which are typical and customary to these types of transactions. Occasionally, the investors require the Company to repurchase loans sold to
28
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
them under the terms of the warranties. When this happens, the loans are recorded at fair value in loans held for investment. The total principal amount of loans repurchased (or indemnified for) was $2,078 and $3,326 for three months ended March 31, 2024 and 2023, respectively. The Company has established a reserve associated with potential loan repurchases.
The following table summarizes the activity in the repurchase reserve included in accrued expenses and other liabilities on the Company's consolidated balance sheets:
Three Months Ended March 31,
 2024 2023 
Balance at beginning of period$899 $1,621 
Provision for (reversal of) loan repurchases or indemnifications50 (250)
Losses on loans repurchased or indemnified(19)(13)
Balance at end of period$930 $1,358 
Legal Proceedings
Various legal claims arise from time to time in the normal course of business, which, in the opinion of management, will not have a material effect on the Company’s consolidated financial statements.
Note (9)—Derivatives
The Company utilizes derivative financial instruments as part of its ongoing efforts to manage its interest rate risk exposure as well as interest rate exposure for its customers. Derivative financial instruments are included in the consolidated balance sheets line items other assets or other liabilities at fair value in accordance with ASC 815, “Derivatives and Hedging.” See Note 1, “Basis of presentation” in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 for additional information on the Company’s accounting policies related to derivative instruments and hedging activities.
Derivatives designated as fair value hedges
The Company enters into fair value hedging relationships using interest rates swaps to mitigate the Company’s exposure to losses in market value as interest rates change. Derivative instruments that are used as part of the Company’s interest rate risk management strategy include interest rate swaps that relate to pricing of specific balance sheet assets and liabilities. Interest rate swaps generally involve the exchange of fixed and variable rate interest payments between two parties, based on a common notional principal amount and maturity date. The critical terms of the interest rate swaps match the terms of the corresponding hedged items. All components of each derivative instrument’s gain or loss are included in the assessment of hedge effectiveness. Any initial and ongoing assessment of expected hedge effectiveness is based on regression analysis.
At March 31, 2024, the Company did not have any interest rate swaps that were designated as fair value hedges. At December 31, 2023, the Company had interest rate swaps designated as fair value hedges to convert fixed rate money market deposits to variable with notional values totaling $200,000 and market values totaling $(4,497) recorded in other liabilities on the consolidated balance sheets. Additionally at December 31, 2023, the Company had an interest rate swap designated as a fair value hedge on subordinated debt with a notional value of $100,000 and market value of $(673) recorded in other liabilities on the consolidated balance sheets.
During the three months ended March 31, 2024, the Company terminated interest rate swaps that were designated as fair value hedges on fixed rate money market deposits and the interest rate swaps covering subordinated debt matured. For the terminated swaps, notional values totaled $200,000 and market values totaled $(4,588) at termination. The remaining fair value adjustment on the terminated hedging relationships will be amortized into interest expense over the respective contract terms of the original hedges. For the matured swap, the notional value totaled $100,000 prior to maturity. The swap involved the receipt of fixed rate amounts from a counterparty in exchange for the Company making variable rate payments over the life of the agreement.
29
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following discloses the amount of expense included in interest expense on deposits and borrowings, related to the Company's fair value hedging instruments:
Three Months Ended March 31,
20242023
Designated fair value hedge:
     Interest expense on deposits$— $(1,508)
     Interest expense on borrowings(645)(760)
       Total$(645)$(2,268)

During the three months ended March 31, 2024, amortization expense totaling $1,843 related to the terminated fair value hedges was recognized as an increase to interest expense on deposits. As of March 31, 2024, the remaining fair value adjustment related to the terminated fair value hedges of $(2,745) is included in money market and savings deposits on the consolidated balance sheets.
The following amounts were recorded on the balance sheet related to cumulative adjustments of fair value hedges as of December 31, 2023:
December 31, 2023
Line item on the balance sheetCarrying amount of the hedged itemCumulative decrease in fair value hedging adjustment included in the carrying amount of the hedged item
Money market and savings deposits$198,143 
(1)
$(4,497)
Borrowings98,715 
(2)
(673)
      Total$296,858 $(5,170)
(1) The carrying value also includes an unaccreted purchase accounting fair value premium of $2,640 as of December 31, 2023.
(2) The carrying value also includes unamortized subordinated debt issuance costs of $612 as of December 31, 2023.
Derivatives designated as cash flow hedges
The Company enters into cash flow hedging relationships using interest rate swaps to mitigate the exposure to the variability in future cash flows or other forecast transactions associated with its floating rate assets and liabilities. The Company uses interest rate swap agreements to hedge the repricing characteristics of its floating rate subordinated debt. All components of each derivative instrument’s gain or loss are included in the assessment of hedge effectiveness. Any initial and ongoing assessment of expected hedge effectiveness is based on regression analysis. The ongoing periodic measures of hedge ineffectiveness are based on the expected change in cash flows of the hedged item caused by changes in the benchmark interest rate.
The following presents a summary of the Company's designated cash flow hedges as of the dates presented:
March 31, 2024December 31, 2023
Notional AmountEstimated fair valueBalance sheet locationEstimated fair valueBalance sheet location
Interest rate swap agreements-
   subordinated debt		$30,000 $343 Other assets$579 Other assets
The Company's consolidated statements of income included income of $247 and $197 for the three months ended March 31, 2024 and 2023, respectively, in interest expense on borrowings related to these cash flow hedges. The cash flow hedges were highly effective during the periods presented and as a result qualified for hedge accounting treatment. As such, no amounts were reclassified from accumulated other comprehensive loss into earnings as a result of hedge ineffectiveness during any period presented.



30
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following discloses the amount included in other comprehensive loss, net of tax, for derivative instruments designated as cash flow hedges for the periods presented:
Three Months Ended March 31,
20242023
Amount of loss recognized in other comprehensive loss, net of tax benefit of $62 and $70
$(174)$(197)
Derivatives not designated as hedging instruments
Derivatives not designated under hedge accounting rules include those that are entered into as either economic hedges as part of the Company’s overall risk management strategy or to facilitate client needs. Economic hedges are those that are not designated as a fair value or cash flow hedge for accounting purposes but are necessary to economically manage the risk exposure associated with the assets and liabilities of the Company.
The Company enters into derivative instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with customer contracts, the Company enters into an offsetting derivative contract. The Company manages its credit risk, or potential risk of default by its commercial customers through credit limit approval and monitoring procedures.
The Company enters into interest rate-lock commitments on residential loan commitments that will be held for resale. These are considered derivative instruments with no hedge accounting designation, and the interest rate exposure on these commitments is economically hedged primarily with forward contracts. Gains and losses arising from changes in the valuation of the interest rate-lock commitments and forward commitments are recognized currently in earnings and are reflected under the line item mortgage banking income in the consolidated statements of income.
The Company also enters into forwards, futures and option contracts to economically hedge the change in fair value of mortgage servicing rights. Gains and losses associated with these instruments are included in earnings and are reflected under the line item mortgage banking income in the consolidated statements of income.
The following tables provide details on the Company’s non-designated derivative financial instruments as of the dates presented:
March 31, 2024
Notional AmountAssetLiability
  Interest rate contracts$551,095 $35,925 $35,954 
  Forward commitments226,500 — 261 
  Interest rate-lock commitments130,315 2,073 — 
  Futures contracts235,500 — 189 
    Total$1,143,410 $37,998 $36,404 
 December 31, 2023
 Notional AmountAssetLiability
  Interest rate contracts$569,865 $32,179 $32,184 
  Forward commitments159,000 — 861 
  Interest rate-lock commitments69,217 1,203 — 
  Futures contracts254,000 777 — 
    Total$1,052,082 $34,159 $33,045 







31
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Gains (losses) included in the consolidated statements of income related to the Company’s non-designated derivative financial instruments were as follows:
Three Months Ended March 31,
 2024 2023 
Included in mortgage banking income:
  Interest rate lock commitments$869 $1,207 
  Forward commitments100 (295)
  Futures contracts(2,997)1,937 
  Option contracts— (664)
    Total$(2,028)$2,185 
Netting of Derivative Instruments
Certain financial instruments, including derivatives, may be eligible for offset on the consolidated balance sheets when the “right of offset” exists or when the instruments are subject to an enforceable master netting agreement, which includes the right of the non-defaulting party or non-affected party to offset recognized amounts, including collateral posted with the counterparty, to determine a net receivable or net payable upon early termination of the agreement. Certain of the Company’s derivative instruments are subject to master netting agreements, however the Company has not elected to offset such financial instruments on the consolidated balance sheets. The following table presents the Company's gross derivative positions as recognized on the consolidated balance sheets as well as the net derivative positions, including collateral pledged to the extent the application of such collateral did not reduce the net derivative liability position below zero, had the Company elected to offset those instruments subject to an enforceable master netting agreement:
Gross amounts not offset on the consolidated balance sheets
Gross amounts recognizedGross amounts offset on the consolidated balance sheetsNet amounts presented on the consolidated balance sheetsFinancial instrumentsFinancial collateral pledgedNet Amount
March 31, 2024
Derivative financial assets$36,145 $— $36,145 $123 $— $36,022 
Derivative financial liabilities$5,386 $— $5,386 $123 $5,263 $— 
December 31, 2023
Derivative financial assets$31,468 $— $31,468 $6,502 $— $24,966 
Derivative financial liabilities$11,330 $— $11,330 $6,502 $4,828 $— 
Collateral Requirements
Most derivative contracts with customers are secured by collateral. Additionally, in accordance with the interest rate agreements with derivative counterparties, the Company may be required to post collateral with these derivative counterparties. As of March 31, 2024 and December 31, 2023, the Company had collateral posted of $13,585 and $14,042, respectively, against its obligations under these agreements. Cash pledged as collateral on derivative contracts is recorded in other assets on the consolidated balance sheets.







32
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (10)—Fair value of financial instruments
FASB ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a framework for measuring the fair value of assets and liabilities according to a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that are derived from assumptions based on management’s estimate of assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances.
The hierarchy is broken down into the following three levels, based on the reliability of inputs:
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.
Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data.
Level 3: Significant unobservable inputs for assets or liabilities that are derived from assumptions based on management’s estimate of assumptions that market participants would use in pricing the assets or liabilities.
33
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The Company records the fair values of financial assets and liabilities on a recurring and nonrecurring basis using the following methods and assumptions:
Investment securities
Investment securities are recorded at fair value on a recurring basis. Fair values for securities are based on quoted market prices, where available. If quoted prices are not available, fair values are based on quoted market prices of similar instruments or are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the pricing relationship or correlation among other benchmark quoted securities. Investment securities valued using quoted market prices of similar instruments or that are valued using matrix pricing are classified as Level 2.
Loans held for sale
Mortgage loans held for sale are carried at fair value determined using current secondary market prices for loans with similar characteristics, that is, using Level 2 inputs. GNMA optional repurchase loans recorded as held for sale loans are carried at their principal balance. For commercial loans held for sale, fair value is determined using an income approach with various assumptions including expected cash flows, market discount rates, credit metrics and collateral value when appropriate. As such, these are considered Level 3.
Derivatives
The fair value of the Company's interest rate swap agreements to facilitate customer transactions are based upon fair values provided from entities that engage in interest rate swap activity and is based upon projected future cash flows and interest rates. The fair value of interest rate lock commitments associated with the mortgage pipeline is based on fees currently charged to enter into similar agreements, and for fixed-rate commitments, the difference between current levels of interest rates and the committed rates is also considered. The fair values of the Company's designated cash flow and fair value hedges are determined by calculating the difference between the discounted fixed rate cash flows and the discounted variable rate cash flows. The fair values of both the Company's hedges, including designated cash flow hedges and designated fair value hedges are based on pricing models that utilize observable market inputs. These financial instruments are classified as Level 2.
OREO
OREO is comprised of properties obtained in partial or total satisfaction of loan obligations and excess land and facilities held for sale. OREO acquired in settlement of indebtedness is recorded at the lower of the carrying amount of the loan or the fair value of the real estate less costs to sell. Fair value is determined on a nonrecurring basis based on appraisals by qualified licensed appraisers and is adjusted for management’s estimates of costs to sell and holding period discounts. OREO valuations are classified as Level 3.
Mortgage servicing rights
MSRs are carried at fair value. Fair value is determined using an income approach with various assumptions including expected cash flows, market discount rates, prepayment speeds, servicing costs, and other factors. As such, MSRs are considered Level 3.
Collateral- dependent loans
Collateral-dependent loans are loans for which, based on current information and events, the Company has determined foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral and it is probable that the creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. Collateral-dependent loans are classified as Level 3.



34
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The balances and levels of the assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 are presented in the following tables:
At March 31, 2024Quoted prices
in active
markets for
identical assets
(liabilities)
(level 1)		Significant
other
observable
inputs
(level 2) 		Significant unobservable
inputs
(level 3) 		Total
Recurring valuations:    
Financial assets:     
Available-for-sale securities:    
U.S. government agency securities$— $415,927 $— $415,927 
Mortgage-backed securities - residential— 826,214 — 826,214 
Mortgage-backed securities - commercial— 16,615 — 16,615 
Municipal securities— 171,672 — 171,672 
U.S. Treasury securities— 30,857 — 30,857 
Corporate securities— 3,397 — 3,397 
Total securities$— $1,464,682 $— $1,464,682 
Loans held for sale, at fair value$— $61,828 $— $61,828 
Mortgage servicing rights— — 165,674 165,674 
Derivatives— 38,341 — 38,341 
Financial Liabilities:
Derivatives— 36,404 — 36,404 
At December 31, 2023Quoted prices
in active
markets for
identical assets
(liabilities)
(level 1)		Significant
other
observable
inputs
(level 2) 		Significant unobservable
inputs
(level 3) 		Total
Recurring valuations:    
Financial assets:     
Available-for-sale securities:    
U.S. government agency securities$— $203,956 $— $203,956 
Mortgage-backed securities - residential— 896,971 — 896,971 
Mortgage-backed securities - commercial— 16,961 — 16,961 
Municipal securities — 242,263 — 242,263 
U.S. Treasury securities— 108,496 — 108,496 
Corporate securities— 3,326 — 3,326 
Total securities$— $1,471,973 $— $1,471,973 
Loans held for sale, at fair value$— $46,618 $— $46,618 
Mortgage servicing rights— — 164,249 164,249 
Derivatives— 34,738 — 34,738 
Financial Liabilities:
Derivatives— 38,215 — 38,215 
The balances and levels of the assets measured at fair value on a nonrecurring basis as of March 31, 2024 and December 31, 2023 are presented in the following tables: 
35
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
At March 31, 2024Quoted prices
in active
markets for
identical assets
(liabilities
(level 1)		Significant
other
observable
inputs
(level 2) 		Significant unobservable
inputs
(level 3) 		Total
Nonrecurring valuations:    
Financial assets:    
Other real estate owned$— $— $644 $644 
Collateral-dependent net loans held for
   investment:
Commercial and industrial— — 5,303 5,303 
Construction— — 1,288 1,288 
Residential real estate:
1-4 family mortgage— — 499 499 
Residential line of credit— — 561 561 
Commercial real estate:
Owner occupied— — 752 752 
Total collateral-dependent loans$— $— $8,403 $8,403 
 
At December 31, 2023Quoted prices
in active
markets for
identical assets
(liabilities)
(level 1)		Significant
other
observable
inputs
(level 2)		Significant unobservable
inputs
(level 3)		Total
Nonrecurring valuations:    
Financial assets:    
Other real estate owned$— $— $2,400 $2,400 
Collateral-dependent net loans held for
    investment:
Commercial and industrial$— $— $12,338 $12,338 
Construction— — 203 203 
Residential real estate:
1-4 family mortgage— — 429 429 
Consumer and other— — 71 71 
Total collateral-dependent loans$— $— $13,041 $13,041 














36
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Commercial loans held for sale
Historically, the Company had a portfolio of acquired commercial loans. There were no such loans outstanding as of March 31, 2024 as the last relationship was exited during the year ended December 31, 2023. These commercial loans were measured at fair value. As such, these loans were excluded from the ACL.
The following table sets forth the changes in fair value associated with this portfolio for the three months ended March 31, 2023:
Three Months Ended March 31, 2023
Principal balanceFair Value discountFair Value
Carrying value at beginning of period$34,357 $(3,867)$30,490 
Change in fair value:
   Paydowns and payoffs(21,890)— (21,890)
   Changes in valuation included in other noninterest income— 910 910 
      Carrying value at end of period$12,467 $(2,957)$9,510 
The significant unobservable inputs (Level 3) used in the valuation and changes in fair value associated with the Company's mortgage servicing rights for the three months ended March 31, 2024 and 2023 are detailed at Note 6, “Mortgage servicing rights.”
The following tables present information as of March 31, 2024 and December 31, 2023 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a nonrecurring basis:
March 31, 2024
Financial instrumentFair ValueValuation techniqueSignificant 
unobservable inputs		Range of
inputs
Collateral-dependent net loans
   held for investment		$8,403 Valuation of collateralDiscount for comparable sales
9%-58%
Other real estate owned$644 Appraised value of property less costs to sellDiscount for costs to sell
0%-15%
December 31, 2023
Financial instrumentFair ValueValuation techniqueSignificant 
unobservable inputs		Range of
inputs
Collateral-dependent net loans
    held for investment		$13,041 Valuation of collateralDiscount for comparable sales
10%-61%
Other real estate owned$2,400 Appraised value of property less costs to sellDiscount for costs to sell
0%-15%
Fair value for collateral-dependent loans is determined based on appraisals performed by qualified appraisers and reviewed by qualified personnel. Fair value of the loan's collateral is determined by third-party appraisals, which are then adjusted for estimated selling and closing costs related to liquidation of the collateral. Collateral-dependent loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on changes in market conditions from the time of valuation and management's knowledge of the borrower and borrower's business. As of March 31, 2024 and December 31, 2023, total amortized cost of collateral-dependent loans measured on a nonrecurring basis amounted to $12,754 and $18,166, respectively. The allowance for credit losses is calculated as the amount for which the loan’s amortized cost basis exceeds fair value.
Other real estate owned acquired in settlement of indebtedness is recorded at fair value of the real estate less estimated costs to sell. Subsequently, it may be necessary to record nonrecurring fair value adjustments for declines in fair value. Any write-downs based on the asset's fair value at the date of foreclosure are charged to the allowance for credit losses.
Appraisals for both collateral-dependent loans and other real estate owned are performed by certified appraisers whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the lending administrative department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry wide statistics. Collateral-dependent loans that are dependent on recovery through sale of equipment, such as farm equipment, automobiles and aircrafts are generally valued based on public source pricing or subscription services while more complex assets are valued through leveraging brokers who have expertise in the collateral involved.
37
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Fair value option
The following table summarizes the Company's loans held for sale as of the dates presented:
March 31,December 31,
20242023
Loans held for sale under a fair value option:
  Mortgage loans held for sale61,828 46,618 
Loans held for sale not accounted for under a fair value option:
  Mortgage loans held for sale - guaranteed GNMA repurchase option20,876 21,229 
               Total loans held for sale$82,704 $67,847 
Mortgage loans held for sale
Net gain of $203 and net loss of $51 resulting from fair value changes of mortgage loans held for sale were recorded in income during the three months ended March 31, 2024 and 2023, respectively. The amount does not reflect changes in fair values of related derivative instruments used to hedge exposure to market-related risks associated with these mortgage loans held for sale. The net change in fair value of these loans held for sale and derivatives resulted in net gain of $1,821 and net loss of $421 for the three months ended March 31, 2024 and 2023, respectively. The change in fair value of both mortgage loans held for sale and the related derivative instruments are recorded in “Mortgage banking income” in the consolidated statements of income. Election of the fair value option allows the Company to reduce the accounting volatility that would otherwise result from the asymmetry created by accounting for the financial instruments at the lower of cost or fair value and the derivatives at fair value.
The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these mortgage loans held for sale, valuation adjustments attributable to instrument-specific credit risk is nominal.
The following table summarizes the differences between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of March 31, 2024 and December 31, 2023: 
March 31,December 31,
20242023
Aggregate fair value$61,828 $46,618 
Aggregate unpaid principal balance60,516 45,509 
     Difference$1,312 $1,109 














38
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following table contains the estimated fair values and the related carrying values of the Company's financial instruments. Non-financial instruments are excluded from the table below.
 
 Fair Value
March 31, 2024Carrying amount Level 1Level 2Level 3Total
Financial assets:     
Cash and cash equivalents$870,730 $870,730 $— $— $870,730 
Investment securities1,464,682 — 1,464,682 — 1,464,682 
Net loans held for investment9,137,242 — — 8,809,892 8,809,892 
Loans held for sale, at fair value61,828 — 61,828 — 61,828 
Interest receivable53,506 892 6,774 45,840 53,506 
Mortgage servicing rights165,674 — — 165,674 165,674 
Derivatives38,341 — 38,341 — 38,341 
Financial liabilities: 
Deposits: 
Without stated maturities$8,902,546 $8,902,546 $— $— $8,902,546 
With stated maturities1,602,382 — 1,594,332 — 1,594,332 
Securities sold under agreements to
repurchase and federal funds purchased
78,229 78,229 — — 78,229 
Bank Term Funding Program 130,000 — 129,462 — 129,462 
Subordinated debt, net130,414 — — 123,284 123,284 
Interest payable20,504 4,187 15,942 375 20,504 
Derivatives36,404 — 36,404 — 36,404 
 
 Fair Value
December 31, 2023Carrying amount Level 1Level 2Level 3Total
Financial assets:     
Cash and cash equivalents$810,932 $810,932 $— $— $810,932 
Investment securities1,471,973 — 1,471,973 — 1,471,973 
Net loans held for investment9,258,457 — — 9,068,518 9,068,518 
Loans held for sale, at fair value46,618 — 46,618 — 46,618 
Interest receivable52,715 388 8,551 43,776 52,715 
Mortgage servicing rights164,249 — — 164,249 164,249 
Derivatives34,738 — 34,738 — 34,738 
Financial liabilities: 
Deposits: 
Without stated maturities$8,927,654 $8,927,654 $— $— $8,927,654 
With stated maturities1,620,633 — 1,614,400 — 1,614,400 
Securities sold under agreements to
repurchase and federal funds purchased
108,764 108,764 — — 108,764 
Bank Term Funding Program130,000 — 130,000 — 130,000 
Subordinated debt, net129,645 — — 122,671 122,671 
Interest payable18,809 4,104 13,205 1,500 18,809 
Derivatives38,215 — 38,215 — 38,215 
39
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (11)—Segment reporting
The Company and the Bank are engaged in the business of banking and provide a full range of financial services. The Company determines reportable segments based on the significance of the segment’s operating results to the overall Company, the products and services offered, customer characteristics, processes and service delivery of the segments and the regular financial performance review and allocation of resources by the Chief Executive Officer, the Company’s chief operating decision maker. The Company has identified two distinct reportable segments—Banking and Mortgage. The Company’s primary segment is Banking, which provides a full range of deposit and lending products and services to corporate, commercial and consumer customers. The Company also originates conforming residential mortgage loans through its Mortgage segment, whose activities also include the servicing of residential mortgage loans and securitization of loans to third party private investors or government sponsored agencies.
Beginning in 2024, the Company began assigning a transfer rate to allocate net interest income to products and business segments. The intent of the transfer rate methodology is to transfer interest rate risk among the segments and allow management to better measure the net interest margin contribution of its assets/liabilities by segment. Prior period results have been adjusted to conform to the current methodology.
The following tables present selected financial information with respect to the Company's reportable segments for the three months ended March 31, 2024 and 2023.
Three Months Ended March 31, 2024BankingMortgageConsolidated
Net interest income$97,094 $2,396 $99,490 
Provisions for (reversal of) credit losses 838 (56)782 
Mortgage banking income— 15,626 15,626 
Change in fair value of mortgage servicing rights, net of hedging(1)
— (3,041)(3,041)
Other noninterest (loss) income(4,794)171 (4,623)
Depreciation and amortization2,708 133 2,841 
Amortization of intangibles789 — 789 
Other noninterest expense56,847 11,943 68,790 
Income before income taxes$31,118 $3,132 $34,250 
Income tax expense6,300 
Net income applicable to FB Financial Corporation and noncontrolling
interest
27,950 
Net income applicable to noncontrolling interest— 
Net income applicable to FB Financial Corporation$27,950 
Total assets$11,979,904 $568,416 $12,548,320 
Goodwill242,561 — 242,561 
(1) Change in fair value of mortgage servicing rights, net of hedging is included in Mortgage banking income in the Company's consolidated statements of income.


Three Months Ended March 31, 2023BankingMortgageConsolidated
Net interest income$101,287 $2,373 $103,660 
Provisions for credit losses 212 279 491 
Mortgage banking income— 15,493 15,493 
Change in fair value of mortgage servicing rights, net of hedging(1)
— (3,407)(3,407)
Other noninterest income (loss)11,493 (230)11,263 
Depreciation and amortization2,049 179 2,228 
Amortization of intangibles990 — 990 
Other noninterest expense63,713 13,509 77,222 
Income before income taxes$45,816 $262 $46,078 
Income tax expense9,697 
Net income applicable to FB Financial Corporation and noncontrolling
interest
36,381 
Net income applicable to noncontrolling interest— 
Net income applicable to FB Financial Corporation$36,381 
Total assets$12,534,348 $566,799 $13,101,147 
Goodwill242,561 — 242,561 
(1)Change in fair value of mortgage servicing rights, net of hedging is included in mortgage banking income in the Company's consolidated statements of income.
40
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (12)—Minimum capital requirements
Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action.
Under regulatory guidance for non-advanced approach institutions, the Bank and Company are required to maintain minimum capital ratios as outlined in the table below. Minimum risk-based capital adequacy ratios below include a capital conservation buffer of 2.50%. As of March 31, 2024 and December 31, 2023, the Bank and Company met all capital adequacy requirements to which they are subject. Additionally, under U.S. Basel III Capital Rules, the Bank and Company opted out of including accumulated other comprehensive income in regulatory capital.
The Company elected to phase-in the impact related to adopting ASU 2016-13 over the permissible five-year transition relief period and delayed the initial impact of CECL adoption plus 25% of the quarterly increases in ACL in the first two years after adoption. As of January 1, 2022, the cumulative amount of the transition adjustments became fixed and are being phased out of regulatory capital calculations evenly over a three-year period, with 75% of the transition provision’s impact being recognized in 2022, 50% recognized in 2023, and 25% recognized in 2024.
Actual and required capital amounts and ratios are included below as of the dates indicated.

March 31, 2024
ActualMinimum Requirement for Capital Adequacy with
Capital Buffer		To Qualify as Well-Capitalized Under Prompt Corrective Action Provisions
AmountRatioAmountRatioAmountRatio
Total Capital (to risk-weighted assets)      
FB Financial Corporation$1,657,500 15.0 %$1,161,748 10.5 %N/AN/A
FirstBank1,622,562 14.7 %1,159,716 10.5 %$1,104,491 10.0 %
Tier 1 Capital (to risk-weighted assets)
FB Financial Corporation$1,419,546 12.8 %$940,462 8.5 %N/AN/A
FirstBank1,384,847 12.5 %938,818 8.5 %$883,593 8.0 %
Tier 1 Capital (to average assets)
FB Financial Corporation$1,419,546 11.3 %$500,450 4.0 %N/AN/A
FirstBank1,384,847 11.1 %499,885 4.0 %$624,857 5.0 %
Common Equity Tier 1 Capital
(to risk-weighted assets)
FB Financial Corporation$1,389,546 12.6 %$774,498 7.0 %N/AN/A
FirstBank1,384,847 12.5 %773,144 7.0 %$717,919 6.5 %
December 31, 2023ActualMinimum Requirement for Capital Adequacy with
Capital Buffer		To Qualify as Well-Capitalized Under Prompt Corrective Action Provisions
AmountRatioAmountRatioAmountRatio
Total Capital (to risk-weighted assets)      
FB Financial Corporation$1,635,848 14.5 %$1,182,028 10.5 %N/AN/A
FirstBank1,600,950 14.2 %1,179,886 10.5 %$1,123,701 10.0 %
Tier 1 Capital (to risk-weighted assets)
FB Financial Corporation$1,405,890 12.5 %$956,880 8.5 %N/AN/A
FirstBank1,370,991 12.2 %955,145 8.5 %$898,960 8.0 %
Tier 1 Capital (to average assets)
FB Financial Corporation$1,405,890 11.3 %$496,485 4.0 %N/AN/A
FirstBank1,370,991 11.1 %495,761 4.0 %$619,701 5.0 %
Common Equity Tier 1 Capital
(to risk-weighted assets)
FB Financial Corporation$1,375,890 12.2 %$788,018 7.0 %N/AN/A
FirstBank1,370,991 12.2 %786,590 7.0 %$730,405 6.5 %
41
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (13)—Stock-based compensation
Restricted Stock Units
The Company grants RSUs under compensation arrangements for the benefit of certain employees and directors. RSU grants are subject to time-based vesting with associated compensation recognized on a straight-line basis based on the grant date fair value of the awards. The total number of RSUs granted represents the number of awards eligible to vest based upon the service conditions set forth in the grant agreements.
The following table summarizes changes in RSUs for the three months ended March 31, 2024:
 Restricted Stock
Units
Outstanding		Weighted
Average Grant
Date
Fair Value
Balance at beginning of period (unvested)323,520 $37.52 
Granted155,047 35.60 
Vested(18,777)35.55 
Forfeited(853)40.19 
Balance at end of period (unvested)458,937 $36.95 
The total fair value of RSUs vested was $668 and $4,591 for the three months ended March 31, 2024 and 2023, respectively. The compensation cost related to the grants and vesting of RSUs was $2,706 and $1,706 for the three months ended March 31, 2024 and 2023, respectively. This includes amounts paid related to grants and compensation for directors elected to be settled in stock amounting to $199 and $175 for the three months ended March 31, 2024 and 2023, respectively.
As of March 31, 2024, there was $10,614 of total unrecognized compensation cost related to unvested RSUs which is expected to be recognized over a weighted-average period of 2.24 years. Additionally, as of March 31, 2024, there were 1,459,258 shares available for issuance under the Company's stock compensation plans. As of March 31, 2024 and December 31, 2023, there was $410 and $353, respectively, accrued in other liabilities related to dividend equivalent units declared to be paid upon vesting and distribution of the underlying RSUs.
Performance-Based Restricted Stock Units
The Company awards PSUs to certain employees. Under the terms of the awards, the number of units that will vest and convert to shares of common stock will be based on the Company's achievement of certain performance metrics over a fixed three-year performance period. The number of shares issued upon vesting can range from 0% to 200% of the PSUs granted.
For PSUs granted prior to December 31, 2023, performance factors will be based on the Company’s achievement of non-GAAP core return on average tangible common equity over the performance period relative to a predefined peer group.     
Beginning with awards issued during the first quarter of 2024, performance factors will be based on a combination of the same metric discussed above as well as the Company’s adjusted tangible book value over the performance period.
Compensation expense for PSUs is estimated each period based on the fair value of the Company's stock at the grant date and the most probable outcome of the performance condition, adjusted for the passage of time within the performance period of the awards.








42
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
The following table summarizes information about the changes in PSUs as of and for the three months ended March 31, 2024:
Performance Stock
Units
Outstanding		Weighted
Average Grant
Date
Fair Value
Balance at beginning of period (unvested)176,163 $40.86 
Granted97,738 35.60 
Performance adjustment (1)
(12,356)43.20 
Vested(34,915)43.20 
Forfeited or expired(969)40.00 
Balance at end of period (unvested)225,661 $38.09 
(1) PSUs are presented as outstanding, granted and forfeited in the table above assuming targets are met and the awards pay out at 100%. PSU
    awards are settled with payouts ranging from 0% and 200% of the target award value based on the Company's performance relative to a predefined
    peer group over a fixed three-year performance period. The performance adjustment represents the difference in shares ultimately awarded due to
    performance attainment above or below target.
The following table summarizes data related to the Company's outstanding PSUs as of March 31, 2024:
Grant Year(1)
Grant PricePerformance PeriodPSUs Outstanding
2022$44.44 2022 to 202449,836
2023$37.17 2023 to 202578,087
2024$35.60 2024 to 202697,738
(1)Vesting factor will be interpolated between 0% and 200% of PSUs outstanding based on the Company's performance relative to a predefined peer
    group over a fixed three-year performance period.
The Company recorded compensation cost associated with PSUs of $114 and $579 for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, maximum unrecognized compensation cost at 200% payout related to the unvested PSUs was $14,786, and the weighted average remaining performance period over which the cost could be recognized was 2.39 years.
Employee Stock Purchase Plan
The Company maintains an employee stock purchase plan under which employees, through payroll deductions, are able to purchase shares of Company common stock. The employee purchase price is 95% of the lower of the market price on the first or last day of the offering period. The maximum number of shares issuable during any offering period is 200,000 shares, limited to 725 shares for each participating employee. There were 10,606 and 8,214 shares of common stock issued under the ESPP with proceeds from employee payroll withholdings of $388 and $305 during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there were 2,283,620 shares available for issuance under the ESPP.







43
FB Financial Corporation and subsidiaries
Notes to consolidated financial statements
(Unaudited)
(Dollar amounts are in thousands, except share and per share amounts)
Note (14)—Related party transactions
Loans
The Bank has made and expects to continue to make loans to the directors, certain management, significant shareholders, and executive officers of the Company and their related interests in the ordinary course of business, in compliance with regulatory requirements.
An analysis of loans to executive officers, certain management, significant shareholders and directors of the Bank and their related interests is presented below:
Loans outstanding at January 1, 2024$49,073 
New loans and advances1,894 
Change in related party status— 
Repayments(1,474)
Loans outstanding at March 31, 2024$49,493 
Unfunded commitments to certain executive officers, certain management and directors and their related interests totaled $54,212 and $44,206 at March 31, 2024 and December 31, 2023, respectively.
Deposits
The Bank held deposits from related parties totaling $338,935 and $316,141 as of March 31, 2024 and December 31, 2023, respectively.
Leases
The Bank leases various office spaces from entities owned by certain directors of the Company under varying terms. Lease expense for these properties totaled $90 for both the three months ended March 31, 2024 and 2023.
Aviation lease
Through a wholly-owned subsidiary, FBK Aviation, LLC, the Company owns and maintains an aircraft. FBK Aviation, LLC maintains a non-exclusive aircraft lease with an entity owned by one of the Company's directors. The Company recognized income of $24 and $7 during the three months ended March 31, 2024 and 2023, respectively, under this agreement.
Subsequent to March 31, 2024, the Company renegotiated the lease agreement with the existing director and executed a non-exclusive aircraft lease with an entity owned by another one of the Company's directors.
Equity investment in preferred stock and master loan purchase agreement
During the year ended December 31, 2022, the Company invested in preferred stock of a privately held entity of which an executive officer of the Company is on the Board of directors of the investee. This investment is included in other assets on the consolidated balance sheets with a carrying amount of $10,000 as of both March 31, 2024 and December 31, 2023, and is being accounted for as an equity security without readily determinable market value. No gains or losses have been recognized to date associated with this investment.
Concurrently, the Company also entered a separate master loan purchase agreement with the entity to purchase up to $250,000 in manufactured loan housing production over an initial five-year term. During the three months ended March 31, 2024, the Company purchased $9,225 of loans HFI under this agreement. No such loans were purchased during the three months ended March 31, 2023. As of March 31, 2024 and December 31, 2023, the amortized cost of these loans HFI amounted to $41,048 and $32,154, respectively.






44

ITEM 2 – Management’s discussion and analysis of financial condition and results of operations
The following is a discussion of our financial condition as of March 31, 2024 and December 31, 2023, and our results of operations for the three months ended March 31, 2024 and 2023, and should be read in conjunction with our audited consolidated financial statements set forth in our Annual Report on Form 10-K for the year ended December 31, 2023, that was filed with the SEC on February 27, 2024, and with the accompanying unaudited notes to the condensed consolidated financial statements set forth in this Report.
Forward-looking statements
Certain statements contained in this Report that are not historical in nature may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding the Company’s future plans, results, strategies, and expectations, including expectations around changing economic markets. These statements can generally be identified by the use of the words and phrases “may,” “will,” “should,” “could,” “would,” “goal,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target,” “aim,” “predict,” “continue,” “seek,” and other variations of such words and phrases and similar expressions. These forward-looking statements are not historical facts, and are based upon management's current expectations, estimates, and projections, many of which, by their nature, are inherently uncertain and beyond the Company’s control. The inclusion of these forward-looking statements should not be regarded as a representation by the Company or any other person that such expectations, estimates, and projections will be achieved. Accordingly, the Company cautions shareholders and investors that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements including, without limitation, (1) current and future economic conditions, including the effects of inflation, interest rate fluctuations, changes in the economy or global supply chain, supply-demand imbalances affecting local real estate prices, and high unemployment rates in the local or regional economies in which the Company operates and/or the US economy generally, (2) changes in government interest rate policies and its impact on the Company’s business, net interest margin, and mortgage operations, (3) any continuation of the recent turmoil in the banking industry, including the associated impact to the Company and other financial institutions of any regulatory changes or other mitigation efforts taken by government agencies in response, (4) increased competition for deposits, (5) the Company’s ability to effectively manage problem credits, (6) any deterioration in commercial real estate market fundamentals, (7) the Company’s ability to identify potential candidates for, consummate, and achieve synergies from, potential future acquisitions, (8) the Company’s ability to successfully execute its various business strategies, (9) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, including legislative developments, (10) the effectiveness of the Company’s cybersecurity controls and procedures to prevent and mitigate attempted intrusions, (11) the Company's dependence on information technology systems of third party service providers and the risk of systems failures, interruptions, or breaches of security, and (12) the impact of natural disasters, pandemics, and/or acts of war or terrorism, (13) events giving rise to international or regional political instability, including the broader impacts of such events on financial markets and/or global macroeconomic environments, and (14) general competitive, economic, political, and market conditions. Further information regarding the Company and factors which could affect the forward-looking statements contained herein can be found in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and in any of the Company’s subsequent filings with the SEC. Many of these factors are beyond the Company’s ability to control or predict. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from the forward-looking statements. Accordingly, shareholders and investors should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date of this Report, and the Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. The Company qualifies all forward-looking statements by these cautionary statements.



45


Critical accounting policies
Our financial statements are prepared in accordance with GAAP and general practices within the banking industry. Within our financial statements, certain financial information contains approximate measurements of financial effects of transactions and impacts at the consolidated balance sheet dates and our results of operations for the reporting periods. We monitor the status of proposed and newly issued accounting standards to evaluate the impact on our financial condition and results of operations. Our accounting policies, including the impact of any newly issued accounting standards if applicable, are discussed in further detail in Note 1, "Basis of presentation," in the notes to our consolidated financial statements in our Annual Report.
46

Financial highlights
The following table presents certain selected historical consolidated income statement and balance sheet data and key performance indicators and other measures as of the dates or for the periods indicated. Our historical results for any prior period are not necessarily indicative of results to be expected in any future period.
As of or for the three months endedAs of or for the year-ended
March 31,December 31,
(dollars in thousands, except share data)2024 2023 2023 
Selected Balance Sheet Data
Cash and cash equivalents$870,730 $1,319,951 $810,932 
Loans HFI9,288,909 9,365,996 9,408,783 
Allowance for credit losses on loans HFI(151,667)(138,809)(150,326)
Loans held for sale82,704 82,515 67,847 
Investment securities, at fair value1,464,682 1,474,064 1,471,973 
Total assets12,548,320 13,101,147 12,604,403 
Interest-bearing deposits (non-brokered)8,191,962 8,693,515 8,179,430 
Brokered deposits130,845 251 150,475 
Noninterest-bearing deposits2,182,121 2,489,149 2,218,382 
Total deposits10,504,928 11,182,915 10,548,287 
Borrowings360,821 312,131 390,964 
Allowance for credit losses on unfunded commitments7,700 18,463 8,770 
Total common shareholders' equity1,479,526 1,369,696 1,454,794 
Selected Statement of Income Data
Total interest income$176,128 $159,480 $678,410 
Total interest expense76,638 55,820 271,193 
Net interest income99,490 103,660 407,217 
Provisions for credit losses782 491 2,539 
Total noninterest income7,962 23,349 70,543 
Total noninterest expense72,420 80,440 324,929 
Income before income taxes34,250 46,078 150,292 
Income tax expense6,300 9,697 30,052 
Net income applicable to noncontrolling interest— — 16 
Net income applicable to FB Financial Corporation $27,950 $36,381 $120,224 
Net interest income (tax-equivalent basis)$100,199 $104,493 $410,562 
Per Common Share
Basic net income$0.60 $0.78 $2.57 
Diluted net income0.59 0.78 2.57 
Book value(1)
31.55 29.29 31.05 
Tangible book value(2)
26.21 23.86 25.69 
Cash dividends declared0.17 0.15 0.60 
Selected Ratios
Return on average:
Assets(3)
0.89 %1.15 %0.95 %
Common shareholders' equity(3)
7.70 %11.0 %8.74 %
Tangible common equity(2)
9.29 %13.6 %10.7 %
Efficiency ratio67.4 %63.3 %68.0 %
Core efficiency ratio (tax-equivalent basis)(2)
58.1 %63.4 %62.9 %
Loans HFI to deposit ratio88.4 %83.8 %89.2 %
Noninterest-bearing deposits to total deposits 20.8 %22.3 %21.0 %
Net interest margin (tax-equivalent basis)3.42 %3.51 %3.44 %
Yield on interest-earning assets6.03 %5.38 %5.72 %
Cost of interest-bearing liabilities3.56 %2.61 %3.16 %
Cost of total deposits2.76 %1.94 %2.39 %
47

As of or for the three months endedAs of or for the year ended
March 31,December 31,
2024 2023 2023 
Credit Quality Ratios
Allowance for credit losses on loans HFI as a percentage of loans HFI1.63 %1.48 %1.60 %
Net charge-offs as a percentage of average loans HFI(0.02)%(0.02)%(0.01)%
Nonperforming loans HFI as a percentage of loans HFI0.73 %0.49 %0.65 %
Nonperforming assets as a percentage of total assets(4)
0.75 %0.61 %0.69 %
Capital Ratios (Company)
Total common shareholders' equity to assets11.8 %10.5 %11.5 %
Tangible common equity to tangible assets(2)
9.99 %8.68 %9.74 %
Tier 1 leverage11.3 %10.4 %11.3 %
Tier 1 risk-based capital12.8 %11.6 %12.5 %
Total risk-based capital15.0 %13.6 %14.5 %
Common Equity Tier 112.6 %11.3 %12.2 %
(1)Book value per share equals our total common shareholders’ equity divided by the number of shares of our common stock outstanding as of the date presented.
(2)Non-GAAP financial measure; See "GAAP reconciliation and management explanation of non-GAAP financial measures” and non-GAAP reconciliations herein.
(3)ROAA and ROAE is calculated by dividing annualized net income or loss for that period by our average assets or average equity for the same period.
(4)Includes $20,876, $20,528 and $21,229 of optional rights to repurchase delinquent GNMA loans as of March 31, 2024, March 31, 2023 and December 31, 2023, respectively.

GAAP reconciliation and management explanation of non-GAAP financial measures
We identify certain financial measures discussed in this Report as being “non-GAAP financial measures.” The non-GAAP financial measures presented in this Report are adjusted efficiency ratio (tax-equivalent basis), tangible book value per common share, tangible common equity to tangible assets and return on average tangible common equity.
In accordance with the SEC's rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our consolidated statements of income, balance sheets or statements of cash flows.
The non-GAAP financial measures that we discuss in this Report should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate the non-GAAP financial measures that we discuss in our selected historical consolidated financial data may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar or with names similar to the non-GAAP financial measures we have discussed in our selected historical consolidated financial data when comparing such non-GAAP financial measures. The following reconciliation tables provide a more detailed analysis of these, and reconciliation for, each of non-GAAP financial measures.











48

Core efficiency ratio (tax-equivalent basis)
The core efficiency ratio (tax-equivalent basis) is a non-GAAP measure that excludes certain gains, losses and other selected items. Our management uses this measure in its analysis of our performance. Our management believes this measure provides a greater understanding of ongoing operations and enhances comparability of results with prior periods, as well as demonstrates the effects of significant gains and charges. The most directly comparable financial measure calculated in accordance with GAAP is the efficiency ratio.
The following table presents a reconciliation of our core efficiency ratio (tax-equivalent basis) to our efficiency ratio for the periods below:
(dollars in thousands)Three Months Ended March 31,Year Ended December 31,
2024 2023 2023 
Core efficiency ratio (tax-equivalent basis)
Total noninterest expense$72,420 $80,440 $324,929 
Less early retirement and severance costs— — 8,449 
Less (gain) loss on lease terminations— (72)1,770 
Less FDIC special assessment500 — 1,788 
Core noninterest expense$71,920 $80,512 $312,922 
Net interest income$99,490 $103,660 $407,217 
Net interest income (tax-equivalent basis)100,199 104,493 410,562 
Total noninterest income7,962 23,349 70,543 
Less (loss) gain from securities, net(16,213)69 (13,973)
Less gain (loss) on sales or write-downs of other real estate owned and other
    assets		565 (183)(27)
Less gain (loss) on change in fair value of commercial loans held for sale
   acquired in previous business combination		— 910 (2,114)
Core noninterest income23,610 22,553 86,657 
Total revenue$107,452 $127,009 $477,760 
Core revenue (tax-equivalent basis)$123,809 $127,046 $497,219 
Efficiency ratio 67.4 %63.3 %68.0 %
Core efficiency ratio (tax-equivalent basis)58.1 %63.4 %62.9 %


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Tangible book value per common share and tangible common equity to tangible assets
Tangible book value per common share and tangible common equity to tangible assets are non-GAAP measures that exclude the impact of goodwill and other intangibles used by management to evaluate capital adequacy. Because intangible assets, such as goodwill and other intangibles, vary extensively from company to company, we believe that the presentation of this information allows investors to more easily compare our capital position to other companies. The most directly comparable financial measure calculated in accordance with GAAP is book value per common share and our total shareholders’ equity to total assets.
The following table presents, as of the dates set forth below, tangible common equity compared with total common shareholders' equity, tangible book value per common share compared with our book value per common share and common equity to tangible assets compared to total common shareholders' equity to total assets:
March 31,
December 31,
(dollars in thousands, except share data)2024 2023 2023 
Tangible assets
Total assets$12,548,320 $13,101,147 $12,604,403 
Adjustments:
Goodwill(242,561)(242,561)(242,561)
Intangibles, net(7,920)(11,378)(8,709)
Tangible assets$12,297,839 $12,847,208 $12,353,133 
Tangible common equity
Total common shareholders' equity$1,479,526 $1,369,696 $1,454,794 
Adjustments:
Goodwill(242,561)(242,561)(242,561)
Intangibles, net(7,920)(11,378)(8,709)
Tangible common equity$1,229,045 $1,115,757 $1,203,524 
Common shares outstanding46,897,378 46,762,626 46,848,934 
Book value per common share$31.55 $29.29 $31.05 
Tangible book value per common share$26.21 $23.86 $25.69 
Total common shareholders' equity to total assets11.8 %10.5 %11.5 %
Tangible common equity to tangible assets9.99 %8.68 %9.74 %
Return on average tangible common equity
Return on average tangible common equity is a non-GAAP measure that uses average shareholders' equity and excludes the impact of goodwill and other intangibles. This measurement is used by management to provide a depiction of the our profitability without being impacted by its intangible assets, as intangible assets are not directly managed to generate earnings. The following table presents, as of the dates set forth below, reconciliations of total average tangible common equity to average shareholders' equity and return on average tangible common equity to return on average shareholders' equity:
Three Months Ended March 31,Year Ended December 31,
(dollars in thousands)2024 2023 2023 
Return on average tangible common equity
Total average common shareholders' equity$1,460,736 $1,343,227 $1,374,831 
Adjustments:
Average goodwill(242,561)(242,561)(242,561)
Average intangibles, net(8,299)(11,862)(10,472)
Average tangible common equity$1,209,876 $1,088,804 $1,121,798 
Net income applicable to FB Financial Corporation$27,950 $36,381 $120,224 
Return on average common shareholders' equity7.70 %11.0 %8.74 %
Return on average tangible common equity9.29 %13.6 %10.7 %


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Company overview
We are a financial holding company headquartered in Nashville, Tennessee. We operate primarily through our wholly-owned subsidiary bank, FirstBank, and its subsidiaries. FirstBank provides a comprehensive suite of commercial and consumer banking services to clients in select markets in Tennessee, Kentucky, Alabama and North Georgia. As of March 31, 2024, our footprint included 76 full-service branches serving the following Tennessee Metropolitan Statistical Areas: Nashville, Chattanooga (including North Georgia), Knoxville, Memphis, and Jackson in addition to Bowling Green, Kentucky and Birmingham, Florence and Huntsville, Alabama. Our banking services extend to 17 community markets throughout Tennessee and North Georgia. FirstBank also provides retail mortgage banking services utilizing its bank branch network and mortgage banking offices strategically located throughout the southeastern United States.
We operate through two segments, Banking and Mortgage. We generate most of our revenue in our Banking segment from interest on loans and investments, loan-related fees, trust and investment services and deposit-related fees. Our primary source of funding for our loans is customer deposits, however we have other sources of funds including unsecured credit lines, brokered CDs, and other borrowings. We generate most of our revenue in our Mortgage segment from origination fees and gains on sales in the secondary mortgage loan market, as well as from mortgage servicing revenues.
Overview of recent financial performance
Results of operations
Three months ended March 31, 2024 compared to the three months ended March 31, 2023
Our net income decreased during the three months ended March 31, 2024 to $28.0 million from $36.4 million for the three months ended March 31, 2023. Diluted earnings per common share were $0.59 and $0.78 for the three months ended March 31, 2024 and 2023, respectively. Our net income represented a ROAA of 0.89% and 1.15% for the three months ended March 31, 2024 and 2023, respectively, and a ROAE of 7.70% and 11.0% for the same periods. Our ROATCE for the three months ended March 31, 2024 and 2023 were 9.29% and 13.6%, respectively. See “GAAP reconciliation and management explanation of non-GAAP financial measures” in this Report for a discussion of tangible common equity and return on average tangible common equity.
During the three months ended March 31, 2024, our net interest income decreased to $99.5 million compared with $103.7 million in the three months ended March 31, 2023. Our net interest margin, on a tax-equivalent basis, decreased to 3.42% for the three months ended March 31, 2024 as compared to 3.51% for the three months ended March 31, 2023. The decrease in net interest margin was primarily driven by our volume of interest-earnings assets decreasing compared to an increase in our interest-bearing liabilities partially offset by higher interest rates.
Noninterest income for the three months ended March 31, 2024 decreased by $15.4 million to $8.0 million, down from $23.3 million for the three months ended March 31, 2023. The decrease in noninterest income was primarily due to a $16.2 million net loss on investment securities primarily related to the sale of $207.9 million of available-for-sale securities. Refer to the section “Other earnings assets” for additional information on the sale of the available-for sale securities.
Noninterest expense decreased to $72.4 million for the three months ended March 31, 2024, compared with $80.4 million for the three months ended March 31, 2023. The decrease in noninterest expense is due to decreases in salaries, commissions and employee benefits of $4.2 million primarily related to the Company's efficiency and scalability initiatives and updated methodology of deferrals for loan fees and loan origination expenses. Additionally, the decrease is reflective of decreases in legal and professional expenses, advertising and franchise tax expense.
Business segment highlights
We operate our business in two business segments: Banking and Mortgage. See Note 11, “Segment reporting” in the notes to our unaudited consolidated financial statements contained herein for a description of these business segments.
Banking
Three months ended March 31, 2024 compared to the three months ended March 31, 2023
Income before taxes from the Banking segment decreased for the three months ended March 31, 2024 to $31.1 million, compared to $45.8 million for the three months ended March 31, 2023. Net interest income decreased by $4.2 million to $97.1 million during the three months ended March 31, 2024 compared to $101.3 million during the three months ended March 31, 2023. Provisions for credit losses on loans HFI and unfunded loan commitments resulted in $0.8 million of
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provision expense during the three months ended March 31, 2024 compared to $0.2 million during the three months ended March 31, 2023. Noninterest income decreased to a loss of $4.8 million in the three months ended March 31, 2024 as compared to income of $11.5 million in the three months ended March 31, 2023. Similar to the discussion above, the decrease includes a net loss on investment securities of $16.2 million primarily associated with the sale of $207.9 million available-for-sale securities during the three months ended March 31, 2024 compared with a net gain on investment securities of $0.1 million for the three months ended March 31, 2023. Noninterest expense decreased to $60.3 million for three months ended March 31, 2024 compared to $66.8 million for the three months ended March 31, 2023 due to decreases in salaries, legal and professional fees, advertising and franchise tax expense.
Mortgage
Three months ended March 31, 2024 compared to the three months ended March 31, 2023
Activity in our Mortgage segment resulted in a pre-tax net contribution of $3.1 million for the three months ended March 31, 2024 compared to $0.3 million for the three months ended March 31, 2023. Net interest income was $2.4 million for both the three months ended March 31, 2024 and 2023. Provisions for credit losses on loans HFI and unfunded loan commitments resulted in a reversal of $0.1 million of provision expense during the three months ended March 31, 2024 compared to $0.3 million of provision expense during the three months ended March 31, 2023. Mortgage banking income increased $0.5 million to $12.6 million during the three months ended March 31, 2024 compared to $12.1 million for the three months ended March 31, 2023. Mortgage banking income primarily includes origination fees and realized gains and losses on the sale of mortgage loans, unrealized change in fair value of mortgage loans and derivatives, and mortgage loan servicing fees, which includes the net change in fair value of MSRs and related derivatives. Mortgage banking income is initially driven by the recognition of interest rate lock commitments at fair value at inception of the IRLCs. This is subsequently adjusted for changes in the overall interest rate environment offset by derivative contracts entered into to mitigate the interest rate exposure. Upon sale of the loan, the net fair value gain is reclassified as a realized gain on sale.
The components of mortgage banking income for the three months ended March 31, 2024 and 2023 were as follows:
Three Months Ended March 31,
(dollars in thousands)2024 2023 
Mortgage banking income  
Gains and fees from origination and sale of mortgage
   loans held for sale		$6,458 $8,146 
Net change in fair value of loans held for sale and derivatives1,821 (421)
Change in fair value on MSRs, net of hedging(3,041)(3,407)
Mortgage servicing income7,347 7,768 
Total mortgage banking income$12,585 $12,086 
Interest rate lock commitment volume$377,166 $375,042 
Interest rate lock commitment volume by purpose (%):
Purchase84.9 %86.2 %
Refinance15.1 %13.8 %
Mortgage sales$243,461 $332,307 
Mortgage sale margin2.65 %2.45 %
Closing volume$258,352 $295,760 
Outstanding principal balance of mortgage loans serviced$10,651,075 $11,028,420 
Noninterest expense for the three months ended March 31, 2024 and 2023 was $12.1 million and $13.7 million, respectively. This decrease is reflective of a decrease in salaries associated with our efficiency and scalability initiatives.
Results of operations
Throughout the following discussion of our operating results, we present our net interest income, net interest margin and efficiency ratio on a fully tax-equivalent basis. The fully tax-equivalent basis adjusts for the tax-favored status of net interest income from certain loans and investments.
Our tax-exempt income is converted to a tax-equivalent basis by adjusting for the combined federal and blended state statutory income tax rate of 26.06% for the three months ended March 31, 2024 and 2023.
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Net interest income
Net interest income is the most significant component of our earnings, generally comprising over 50% of our total revenues in a given period. Net interest income and margin are shaped by many factors, primarily the volume, term structure and mix of earning assets, funding mechanisms, and interest rate fluctuations. Other factors include accretion or amortization of discounts or premiums on purchased loans, prepayment risk on mortgage and investment–related assets, and the composition and maturity of earning assets and interest-bearing liabilities. Loans typically generate more interest income than investment securities with similar maturities. Funding from client deposits generally costs less than wholesale funding sources. Factors such as general economic activity, Federal Reserve monetary policy, and price volatility of competing alternative investments, can also exert significant influence on our ability to optimize the mix of assets and funding, net interest income and margin.
During the three months ended March 31, 2024, the U.S. Treasury yield curve became less inverted as long-term note and bond rates increased at a faster pace than shorter-term note rates. The curve remained inverted as of March 31, 2024, which is in contrast to the more normalized upward sloping U.S. Treasury yield curve exhibited during the three months ended March 31, 2023. The Federal Funds Target Rate range was 5.25% - 5.50% as of both March 31, 2024 and December 31, 2023. The target range for the federal funds rate has remained at 5.25% to 5.50% since the Federal Open Market Committee’s July 26, 2023 meeting.
On a tax-equivalent basis, net interest income decreased $4.3 million to $100.2 million for the three months ended March 31, 2024 as compared to $104.5 million for the three months ended March 31, 2023. Interest income, on a tax-equivalent basis, was $176.8 million for the three months ended March 31, 2024, compared to $160.3 million for the three months ended March 31, 2023, an increase of $16.5 million, which was primarily driven by increases in interest rates on loans HFI, taxable investment securities and interest-bearing deposits with other financial institutions, partially offset by a decrease in average interest-bearing deposits with other financial institutions. Total interest income represents an increase in yield on interest-earning assets to 6.03% for the three months ended March 31, 2024 compared with 5.38% for the three months ended March 31, 2023.
Interest income on loans HFI, on a tax-equivalent basis, increased $15.5 million to $155.0 million for the three months ended March 31, 2024 from $139.5 million for the three months ended March 31, 2023 due primarily to increasing interest rates. The average yield on loans HFI increased by 59 basis points period-over-period to 6.64% for the three months ended March 31, 2024 from 6.05% for the three months ended March 31, 2023. Our estimated contractual loan interest yield was 6.55% in the three months ended March 31, 2024 compared with 5.90% in the three months ended March 31, 2023.
The components of our loan yield for the three months ended March 31, 2024 and 2023 were as follows:
Three Months Ended March 31,
2024 2023 
(dollars in thousands)Interest
income		Average
yield		Interest
income		Average
yield
Loans HFI yield components:
Contractual interest rate on loans HFI(1)
$152,875 6.55 %$135,872 5.90 %
Origination and other loan fee income1,436 0.06 %3,101 0.13 %
Accretion on purchased loans387 0.02 %319 0.01 %
Nonaccrual interest collections258 0.01 %175 0.01 %
Total loans HFI yield$154,956 6.64 %$139,467 6.05 %
(1)Includes tax equivalent adjustment using combined marginal tax rate of 26.06%.
Origination and other loan fees impacted our NIM by 5 basis points and 10 basis points for the three months ended March 31, 2024 and 2023, respectively. The decrease was due to an updated methodology for deferrals.
Interest income on taxable investment securities increased $2.5 million to $9.1 million for the three months ended March 31, 2024 from $6.6 million for the three months ended March 31, 2023 due to the reinvestment of proceeds from the sale of AFS debt securities that were sold during the second half of 2023 to higher yielding U.S. government agency securities. The yield on taxable investment securities increased 72 basis points to 2.62% for the three months ended March 31, 2024 compared to 1.90% for the three months ended March 31, 2023.
Interest income on interest-bearing deposits with other financial institutions decreased to $7.1 million for the three months ended March 31, 2024 from $8.0 million for the three months ended March 31, 2023 due to a decrease in volume of
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interest-bearing deposits with other financial institutions partially offset by higher interest rates. The average balance of interest-bearing deposits with other financial institutions decreased $198.2 million to $530.4 million for the three months ended March 31, 2024 from $728.6 million for the three months ended March 31, 2023. The yield on interest-bearing deposits with other financial institutions increased 90 basis points to 5.36% for the three months ended March 31, 2024 compared to 4.46% for the three months ended March 31, 2023.
Interest expense was $76.6 million for the three months ended March 31, 2024, an increase of $20.8 million as compared to $55.8 million for the three months ended March 31, 2023. The increase was largely attributed to a rise in interest rates in interest-bearing deposit accounts, and specifically on money market and customer time deposit products. Interest expense on money market deposits increased $13.1 million to $37.6 million for the three months ended March 31, 2024 compared to $24.5 million for the three months ended March 31, 2023. Interest expense on customer time deposits increased $4.9 million to $14.1 million for the three months ended March 31, 2024 from $9.2 million for the three months ended March 31, 2023. The average rate on money market deposits increased 98 basis points from 2.95% for the three months ended March 31, 2023 to 3.93% for the three months ended March 31, 2024. The average rate on customer time deposits increased 136 basis points from 2.54% for the three months ended March 31, 2023 to 3.90% for the three months ended March 31, 2024. Total cost of interest-bearing deposits was 3.49% for the three months ended March 31, 2024 compared to 2.53% for the three months ended March 31, 2023.
The average balance of other borrowings increased $129.6 million to $131.3 million for the three months ended March 31, 2024 compared to $1.7 million for the three months ended March 31, 2023. As a result, interest expense on other borrowings increased to 4.83% for the three months ended March 31, 2024 compared to for the three months ended March 31, 2023. The increase is due primarily of borrowings from the Bank Term Funding Program. Refer to the section “Borrowings” for additional information on the BTFP.
The volume of our interest-earning assets decreased compared to an increase in our interest-bearing liabilities which resulted in our NIM, on a tax-equivalent basis, decreasing to 3.42% for the three months ended March 31, 2024 from 3.51% for the three months ended March 31, 2023. The shift in volume was partially offset by the effect of interest rates rising faster within our interest-earning assets compared to our interest-bearing liabilities.
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Average balance and interest yield/rate analysis
The table below shows the average balances, income and expense and yield and rates of each of our interest-earning assets and interest-bearing liabilities on a tax equivalent basis, if applicable, for the periods indicated.
Three Months Ended March 31,
2024 2023 
(dollars in thousands on a tax-equivalent basis)Average balancesInterest
income/
expense		Average
yield/
rate		Average balancesInterest
income/
expense		Average
yield/
rate
Interest-earning assets:
Loans HFI (1)(2)
$9,386,794 $154,956 6.64 %$9,346,708 $139,467 6.05 %
Mortgage loans held for sale48,566 851 7.05 %56,204 927 6.69 %
Commercial loans held for sale— — — %16,608 159 3.88 %
Investment securities:
Taxable1,399,237 9,105 2.62 %1,402,535 6,570 1.90 %
Tax-exempt (2)
241,379 1,950 3.25 %294,652 2,440 3.36 %
Total investment securities (2)
1,640,616 11,055 2.71 %1,697,187 9,010 2.15 %
Federal funds sold and reverse repurchase
   agreements		155,380 2,126 5.50 %188,013 1,855 4.00 %
Interest-bearing deposits with other financial
   institutions		530,390 7,066 5.36 %728,576 8,008 4.46 %
FHLB stock34,051 783 9.25 %47,094 887 7.64 %
Total interest earning assets (2)
11,795,797 176,837 6.03 %12,080,390 160,313 5.38 %
Noninterest Earning Assets:
Cash and due from banks167,732 154,270 
Allowance for credit losses on loans HFI(150,605)(134,803)
Other assets (3)(4)
777,155 761,757 
Total noninterest earning assets794,282 781,224 
Total assets$12,590,079 $12,861,614 
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing checking$2,539,084 $19,016 3.01 %$3,165,058 $19,060 2.44 %
Money market deposits3,849,080 37,570 3.93 %3,369,953 24,510 2.95 %
Savings deposits377,963 62 0.07 %458,023 64 0.06 %
Customer time deposits1,457,377 14,124 3.90 %1,472,221 9,221 2.54 %
Brokered and internet time deposits140,292 1,853 5.31 %1,607 8 2.02 %
Time deposits1,597,669 15,977 4.02 %1,473,828 9,229 2.54 %
Total interest-bearing deposits8,363,796 72,625 3.49 %8,466,862 52,863 2.53 %
Other interest-bearing liabilities:
Securities sold under agreements to
    repurchase and federal funds purchased		24,219 149 2.47 %27,139 46 0.69 %
Federal Home Loan Bank advances— — — %41,389 499 4.89 %
Subordinated debt129,718 2,286 7.09 %126,161 2,402 7.72 %
Other borrowings 131,318 1,578 4.83 %1,688 10 2.40 %
Total other interest-bearing liabilities285,255 4,013 5.66 %196,377 2,957 6.11 %
Total interest-bearing liabilities8,649,051 76,638 3.56 %8,663,239 55,820 2.61 %
Noninterest-bearing liabilities:
Demand deposits2,227,175 2,588,756 
Other liabilities(4)
253,024 266,299 
Total noninterest-bearing liabilities2,480,199 2,855,055 
Total liabilities11,129,250 11,518,294 
FB Financial Corporation common
   shareholders' equity		1,460,736 1,343,227 
Noncontrolling interest93 93 
         Shareholders' equity1,460,829 1,343,320 
Total liabilities and shareholders' equity$12,590,079 $12,861,614 
Net interest income (tax-equivalent basis)(2)
$100,199 $104,493 
Interest rate spread (tax-equivalent basis)(2)
2.47 %2.77 %
Net interest margin (tax-equivalent basis) (2)(5)
3.42 %3.51 %
Cost of total deposits2.76 %1.94 %
Average interest-earning assets to average
    interest-bearing liabilities		136.4 %139.4 %
(1)Average balances of nonaccrual loans and overdrafts are included in average loan balances.
(2)Interest income includes the effects of taxable-equivalent adjustments using a U.S. federal income tax rate and, where applicable, state income tax to increase tax-exempt interest income to a tax-equivalent basis. The net tax-equivalent adjustment amounts included in income were $0.7 million and $0.8 million for three months ended March 31, 2024 and 2023, respectively.
(3)Includes average net unrealized losses on investment securities available for sale of $194.1 million and $222.8 million for the three months ended March 31, 2024 and 2023, respectively.
(4)Includes average of optional rights to repurchase government guaranteed GNMA mortgage loans previously sold that have become past due greater than 90 days of $20.8 million and $23.2 million for the three months ended March 31, 2024 and 2023, respectively.
(5)The NIM is calculated by dividing annualized net interest income, on a tax-equivalent basis, by average total earning assets.
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Yield/rate and volume analysis
The tables below present the components of the changes in net interest income for the three months ended March 31, 2024 and 2023. For each major category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes due to average volume and changes due to interest rates, with the changes in both volume and interest rates allocated to these two categories based on the proportionate absolute changes in each category.
Three months ended March 31, 2024 compared to three months ended March 31, 2023 due to changes in
(dollars in thousands on a tax-equivalent basis)VolumeYield/rateNet increase
(decrease)
Interest-earning assets:
Loans HFI(1)(2)
$662 $14,827 $15,489 
Loans held for sale - mortgage(134)58 (76)
Loans held for sale - commercial— (159)(159)
Investment securities:
   Taxable(21)2,556 2,535 
   Tax-exempt(2)
(430)(60)(490)
Federal funds sold and reverse repurchase agreements
(447)718 271 
Interest-bearing deposits with other financial institutions(2,640)1,698 (942)
FHLB stock(300)196 (104)
Total interest income(2)
(3,310)19,834 16,524 
Interest-bearing liabilities:
Interest-bearing checking deposits(4,688)4,644 (44)
Money market deposits4,677 8,383 13,060 
Savings deposits(13)11 (2)
Customer time deposits(144)5,047 4,903 
Brokered and internet time deposits1,832 13 1,845 
Securities sold under agreements to repurchase and federal funds
   purchased		(18)121 103 
Federal Home Loan Bank advances(499)— (499)
Subordinated debt63 (179)(116)
Other borrowings1,558 10 1,568 
Total interest expense2,768 18,050 20,818 
Change in net interest income(2)
$(6,078)$1,784 $(4,294)
(1)Average loans are presented gross, including nonaccrual loans and overdrafts.
(2)Interest income includes the effects of the tax-equivalent adjustments to increase tax-exempt interest income to a tax-equivalent basis. The net taxable-equivalent adjustment amounts included was $0.7 million and $0.8 million for the three months ended March 31, 2024 and 2023, respectively.


Provision for credit losses
The provision for credit losses charged to operating expense is an amount which, in the judgment of management, is necessary to maintain the allowance for credit losses at an appropriate level under the current expected credit loss model. The determination of the amount of the allowance is complex and involves a high degree of judgment and subjectivity. Refer to Note 1, “Basis of presentation” in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 for a detailed discussion regarding ACL methodology.
Our allowance for credit losses calculation as of March 31, 2024 resulted from management’s best estimate of losses over the life of loans and unfunded commitments in our portfolio in accordance with the CECL approach. Our calculation included qualitative adjustments for projected slower GDP growth over the next two to three years and expected elevated unemployment levels. We also considered the current global economic environment, including continued pressures on supply chains (and more specifically, oil and energy) and increased uncertainty due to geopolitical turmoil and its impact
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on the U.S. economy. These factors may continue to lead to increased volatility in forecasted macroeconomic variables, a key input to our calculated level of allowance for credit losses.
We recognized a provision for credit losses on loans HFI for the three months ended March 31, 2024 and 2023 of $1.9 million and $5.0 million, respectively. The current period provision on loans HFI resulted from management’s best estimate of losses over the life of loans in our portfolio in accordance with the CECL approach and was impacted by projected deterioration in the CRE portfolio which was adjusted qualitatively. For the three months ended March 31, 2023, the increase in the provision for credit losses on loans HFI was driven by an increase in loans HFI outstanding period-over-period and the increased possibility of a future recession and inflationary pressures.
We also estimate expected credit losses on off-balance sheet loan commitments that are not accounted for as derivatives. When applying the CECL methodology to estimate expected credit loss, we consider the likelihood that funding will occur, the contractual period of exposure to credit loss, the risk of loss, historical loss experience, and current conditions along with expectations of future economic conditions. For the three months ended March 31, 2024, we recorded a reversal of provision for credit losses on unfunded commitments of $1.1 million compared to $4.5 million during the three months ended March 31, 2023. The reversal of provision for credit losses on unfunded commitments for the three months ended March 31, 2024 and 2023 is primarily due to management's concentrated effort to reduce unfunded loan commitments during the periods indicated including a $135.3 million and a $298.8 million decrease in our construction category as these projects moved to permanent financing for the three months ended March 31, 2024 and 2023. As such, this resulted in a $1.0 million and $4.5 million decrease in required ACL related to the unfunded commitments in our construction portfolio for the three months ended March 31, 2024 and 2023.
During the three months ended March 31, 2024 and 2023, it was determined that all AFS debt securities that experienced a decline in fair value below amortized cost basis were due to noncredit-related factors. Therefore, there was no provision for credit losses recognized on AFS debt securities during the three months ended March 31, 2024 or 2023.
Noninterest income
The following table sets forth the components of noninterest income for the periods indicated:
 Three Months Ended March 31,
(dollars in thousands)2024 2023 
Mortgage banking income$12,585 $12,086 
Service charges on deposit accounts3,141 3,053 
Investment services and trust income3,230 2,378 
ATM and interchange fees2,944 2,396 
(Loss) gain from investment securities, net(16,213)69 
Gain (loss) on sales or write-downs of other real estate owned and other assets565 (183)
Other income1,710 3,550 
Total noninterest income$7,962 $23,349 
Noninterest income amounted to $8.0 million for the three months ended March 31, 2024, a decrease of $15.4 million, or 66%, as compared to $23.3 million for the three months ended March 31, 2023. Changes in selected components of noninterest income in the above table are discussed below.
Net loss from investment securities was $16.2 million for the three months ended March 31, 2024 compared to a $0.1 million net gain for the three months ended March 31, 2023. The net loss from investment securities during the three months ended March 31, 2024 is the result of management's election to sell $207.9 million of AFS debt securities to reinvest the proceeds into higher yielding AFS securities. Refer to the section “Other earning assets” for additional information on the sale of the AFS debt securities.
Other income decreased $1.8 million to $1.7 million during the three months ended March 31, 2024 as compared to $3.6 million during the three months ended March 31, 2023. This decrease is primarily related to a $0.9 million gain associated with the change in fair value of the commercial loans held for sale portfolio during the three months ended March 31, 2023. No such gain or loss was recorded during the three months ended March 31, 2024 as the final relationship was exited during the year ended December 31, 2023. Additionally, swap fees decreased $0.4 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to fewer swap trades in the current year due most notably to the conversion to SOFR during the three months ended March 31, 2023.
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Noninterest expense
The following table sets forth the components of noninterest expense for the periods indicated:
 Three Months Ended March 31,
(dollars in thousands)2024 2023 
Salaries, commissions and employee benefits$44,618 $48,788 
Occupancy and equipment expense6,614 5,909 
Data processing 2,408 2,113 
Legal and professional fees1,919 3,108 
Advertising1,171 2,133 
Amortization of core deposit and other intangibles789 990 
Other expense14,901 17,399 
Total noninterest expense$72,420 $80,440 
Noninterest expense decreased by $8.0 million during the three months ended March 31, 2024 to $72.4 million as compared to $80.4 million in the three months ended March 31, 2023. Changes in selected components of noninterest expense in the above table are discussed below.
Salaries, commissions and employee benefits expense was the largest component of noninterest expense representing 62% and 61% of total noninterest expense for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, salaries, commissions and employee benefits expense decreased $4.2 million, or 9%, to $44.6 million as compared to $48.8 million for the three months ended March 31, 2023. This change was attributable to a $2.5 million decrease stemming from the Company's efficiency and scalability initiatives, as well as a $2.1 million decrease from the Company applying an updated deferral methodology for loan fees and loan origination expenses.
Legal and professional expense decreased by $1.2 million during the three months ended March 31, 2024 to $1.9 million as compared to $3.1 million during the three months ended March 31, 2023. The decrease in legal and professional expenses was caused by decreases in consulting and other professional fees as these were increased during the three months ended March 31, 2023 due to internal projects.
Advertising expense includes expenses related to sponsorships, advertising, marketing, customer relations and business development, and public relations. During the three months ended March 31, 2024, advertising expense decreased $1.0 million to $1.2 million compared to $2.1 million during the three months ended March 31, 2023. This decrease is primarily attributable to marketing rebate activity with partners earned through higher transaction volumes during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Other noninterest expense primarily includes mortgage servicing expenses, regulatory fees and deposit insurance assessments, software license and maintenance fees and various other miscellaneous expenses. Other noninterest expense decreased $2.5 million during the three months ended March 31, 2024 to $14.9 million compared to $17.4 million during the three months ended March 31, 2023. The decrease was primarily related to a $2.8 million decrease in franchise tax expense which was partially offset by $0.5 million expense related to the FDIC special assessment.
Efficiency ratio
The efficiency ratio is one measure of productivity in the banking industry. This ratio is calculated to measure the cost of generating one dollar of revenue. That is, the ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue. This ratio is calculated by dividing noninterest expense by the sum of net interest income and noninterest income. For a core efficiency ratio, we exclude certain gains, losses and expenses we do not consider core to our business.
Our efficiency ratio was 67.4% and 63.3% for the three months ended March 31, 2024 and 2023, respectively. Our core efficiency ratio, on a tax-equivalent basis, was 58.1% and 63.4% for the three months ended March 31, 2024 and 2023, respectively. See “GAAP reconciliation and management explanation of non-GAAP financial measures” in this Report for a discussion of the core efficiency ratio.

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Income taxes
Income tax expense was $6.3 million and $9.7 million for the three months ended March 31, 2024 and 2023, respectively. This represents effective tax rates of 18.4% and 21.0% for the three months ended March 31, 2024 and 2023, respectively. The primary differences from the enacted rates are applicable state income taxes and certain expenses that are not deductible reduced for non-taxable income and additional deductions for equity-based compensation upon vesting of restricted stock units. Refer to Note 7 “Income taxes” in the notes to the consolidated financial statements for additional information regarding the Company's income tax expense and effective tax rates.
Financial condition
The following discussion of our financial condition compares balances as of March 31, 2024 and December 31, 2023.
Loan portfolio
The following table sets forth the balance and associated percentage of each class of financing receivable in our loan portfolio as of the dates indicated:
March 31,December 31,
 2024 2023 
(dollars in thousands)CommittedAmount Outstanding% of total outstandingCommittedAmount Outstanding% of total outstanding
Loan Type:    
Commercial and industrial
$2,877,020 $1,621,611 17 %$2,982,967 $1,720,733 18 %
Construction1,859,458 1,268,883 14 %2,123,177 1,397,313 15 %
Residential real estate:
1-to-4 family mortgage1,579,309 1,577,824 17 %1,569,525 1,568,552 17 %
Residential line of credit1,252,245 549,306 6 %1,231,038 530,912 6 %
Multi-family mortgage640,128 615,081 7 %627,387 603,804 6 %
Commercial real estate:
Owner-occupied1,313,407 1,236,007 13 %1,305,503 1,232,071 13 %
Non-owner occupied2,073,896 1,991,526 21 %2,026,491 1,943,525 21 %
Consumer and other453,729 428,671 5 %437,382 411,873 4 %
Total loans$12,049,192 $9,288,909 100 %$12,303,470 $9,408,783 100 %
Our loans HFI portfolio is our most significant earning asset, comprising 74% and 75% of our total assets at March 31, 2024 and December 31, 2023, respectively. Our strategy is to grow our loan portfolio by originating quality commercial and consumer type loans that comply with our credit policies and that produce revenues consistent with our financial objectives. Our overall lending approach is primarily focused on providing credit to our customers directly in the markets we serve, but we are also party to loan syndications and participations from other banks (collectively, “participated loans”). As of March 31, 2024 and December 31, 2023, loans held for investment included approximately $217.1 million and $254.6 million, respectively, related to participated loans. We also sell loan participations to unaffiliated third-parties as part of our credit risk management and balance sheet management strategy. During the three months ended March 31, 2024 and 2023, we sold $8.0 million and $4.4 million in loan participations, respectively. All loans, whether or not we act as a participant, are underwritten to the same standards as all other loans we originate. We believe our loan portfolio is well-balanced, which provides us with the opportunity to grow while monitoring our loan concentrations.
Loan concentrations are considered to exist when there are amounts loaned to a number of borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. Our lending activity is heavily concentrated in the geographic market areas we serve, with the highest concentration in Tennessee. This geographic concentration subjects our loan portfolio to the general economic conditions within the state. The risks created by this concentration have been considered by management in the determination of the appropriateness of the allowance for credit losses on loans HFI. As of March 31, 2024 and December 31, 2023, there were no concentrations of loans exceeding 10% of total loans other than our exposure to Tennessee, Alabama and the categories of loans disclosed in the table above. We believe our loan portfolio is diversified relative to industry concentrations across the various loan portfolio categories.
Banking regulators have established guidelines of less than 100% of tier 1 capital plus allowance for credit losses in construction lending and less than 300% of tier 1 capital plus allowance for credit losses in commercial real estate lending that management monitors as part of the risk management process. The construction concentration ratio is a percentage
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of the outstanding construction and land development loans to total tier 1 capital plus allowance for credit losses. The commercial real estate concentration ratio is a percentage of the outstanding balance of non-owner occupied commercial real estate, multifamily, and construction and land development loans to tier 1 capital plus allowance for credit losses. Management strives to operate within the thresholds set forth above. When our ratios are in excess of one or both of these guidelines, banking regulators generally require an increased level of monitoring in these lending areas by management.
The table below shows concentration ratios for the Bank and Company as of March 31, 2024 and December 31, 2023.
As a percentage (%) of tier 1 capital plus allowance for credit losses
FirstBankFB Financial Corporation
March 31, 2024
Construction83.2 %81.4 %
Commercial real estate255.3 %249.6 %
December 31, 2023
Construction93.3 %91.2 %
Commercial real estate265.1 %259.0 %
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Loan categories:
The principal categories of our loans held for investment portfolio are discussed below:
Commercial and industrial loans.
Commercial and industrial loans are typically made to small and medium-sized manufacturing, wholesale, retail and service businesses, and farmers for working capital and operating needs and business expansions. This category also includes loans secured by manufactured housing receivables made primarily to manufactured housing communities. Commercial and industrial loans generally include lines of credit and loans with maturities of five years or less. Commercial and industrial loans are generally made with operating cash flows as the primary source of repayment, but may also include collateralization by inventory, accounts receivable, equipment and personal guarantees.
Construction loans.
Construction loans include commercial construction, land acquisition and land development loans and single-family interim construction loans to small and medium-sized businesses and individuals. These loans are generally secured by the land or the real property being built and are made based on our assessment of the value of the property on an as-completed basis and repayment depends upon project completion and sale, refinancing, or operation of the real estate.
1-4 family mortgage loans.
Our residential real estate 1-4 family mortgage loans are primarily made with respect to and secured by single family homes, including manufactured homes with real estate, which are both owner-occupied and investor owned. Repayment depends primarily upon the cash flow of the borrower as well as the value of the real estate collateral.
Residential line of credit loans.
Our residential line of credit loans are primarily revolving, open-end lines of credit secured by 1-4 residential properties. Repayment depends primarily upon the cash flow of the borrower as well as the value of the real estate collateral.
Multi-family residential loans.
Our multi-family residential loans are primarily secured by multi-family properties, such as apartments and condominium buildings. Repayment depends primarily upon the cash flow of the borrower as well as the value of the real estate collateral.
Commercial real estate owner-occupied loans.
Our commercial real estate owner-occupied loans include loans to finance commercial real estate owner occupied properties for various purposes including use as offices, warehouses, production facilities, health care facilities, retail centers, restaurants, churches and agricultural based facilities. Commercial real estate owner-occupied loans are typically repaid through the ongoing business operations of the borrower.
Commercial real estate non-owner occupied loans.
Our commercial real estate non-owner occupied loans include loans to finance commercial real estate investment properties for various purposes including use as offices, warehouses, health care facilities, hotels, mixed-use residential/commercial, manufactured housing communities, retail centers, multifamily properties, assisted living facilities and agricultural based facilities. Commercial real estate non-owner occupied loans are typically repaid with the funds received from the sale or refinancing of the property or rental income from such property.
Consumer and other loans. 
Consumer and other loans include loans to individuals for personal, family and household purposes, including car, boat and other recreational vehicle loans, manufactured homes (without real estate) and personal lines of credit. Consumer loans are generally secured by vehicles and other household goods, with repayment depending primarily on the cash flow of the borrower. Other loans also include loans to states and political subdivisions in the U.S. and are repaid through tax revenues or refinancing.






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As part of our lending policy and risk management activities, we track lending exposure of commercial and industrial and owner-occupied commercial real estate by industry classification (as defined by the North American Industry Classification System) and type to determine potential risks associated with industry concentrations, and if any risk issues could lead to additional credit loss exposure. The table below provides a summary of our commercial and industrial and owner-occupied commercial real estate portfolios by industry classification.
March 31, 2024
(dollars in thousands)CommittedAmount OutstandingNonperforming
Commercial and industrial
Real estate rental and leasing$539,837 $320,040 $163 
Finance and insurance473,762 326,585 53 
Construction399,154 112,145 4,899 
Manufacturing258,171 172,763 4,479 
Wholesale trade162,511 91,737 189 
Professional, scientific and technical services162,051 92,749 2,332 
Information153,478 64,878 — 
Retail trade104,926 65,643 9,146 
Other services (except public administration)99,885 60,412 — 
Administrative and support and waste management and
   remediation services		94,555 56,621 2,313 
Health care and social assistance90,024 56,614 554 
Transportation and warehousing89,537 77,029 136 
Educational services66,010 29,328 — 
Arts, entertainment and recreation40,068 29,268 — 
Accommodation and food services27,292 19,906 50 
Agriculture, forestry, fishing and hunting24,316 16,794 315 
Other 91,443 29,099 14 
Total $2,877,020 $1,621,611 $24,643 
Commercial real estate owner-occupied
Real estate rental and leasing$243,473 $231,380 $— 
Other services (except public administration)192,527 188,429 126 
Retail trade158,327 153,250 — 
Health care and social assistance127,183 125,808 237 
Accommodation and food services109,422 108,358 — 
Manufacturing86,451 83,047 75 
Construction69,407 63,152 — 
Wholesale trade64,765 61,597 — 
Transportation and warehousing62,632 34,734 — 
Professional, scientific and technical services39,954 38,027 199 
Arts, entertainment and recreation36,669 35,093 — 
Agriculture, forestry, fishing and hunting27,743 25,527 989 
Educational services23,193 21,352 — 
Finance and insurance17,934 17,668 — 
Management of companies and enterprises16,375 14,505 — 
Information16,041 14,165 883 
Other 21,311 19,915 560 
Total $1,313,407 $1,236,007 $3,069 
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Additionally, we track our lending exposure of non-owner occupied commercial real estate and construction by collateral property type to determine potential risks associated with collateral types, and if any risk issues could lead to additional credit loss exposure.
The following table provides a summary of our non-owner occupied commercial real estate and construction loan portfolios by collateral property type:
March 31, 2024
(dollars in thousands)CommittedAmount OutstandingNonperforming
Commercial real estate non-owner occupied
Retail$505,335 $494,932 $368 
Office378,401 355,977 31 
Warehouse and industrial332,295 304,516 — 
Hotel317,053 315,435 2,851 
Self-storage141,051 134,022 — 
Land-mobile home park108,353 102,419 — 
Assisted living and special care facilities89,714 89,295 — 
Healthcare facility74,125 73,454 — 
Restaurants, bars and event venues38,417 36,552 — 
Recreation, sports and entertainment29,842 29,842 — 
Other 59,310 55,082 — 
Total $2,073,896 $1,991,526 $3,250 
Construction
Consumer:
Construction$190,832 $133,034 $2,436 
Land38,102 36,172 75 
Commercial:
Multi-family346,380 162,305 — 
Land276,234 238,255 — 
Retail25,936 20,191 — 
Convenience store and gas station19,523 14,787 — 
Recreation, sports and entertainment18,252 3,013 — 
Office15,380 12,876 — 
Self-storage13,393 5,379 — 
Car wash10,309 8,119 — 
Healthcare facility9,300 9,074 — 
Other26,739 12,075 — 
Residential Development:
Construction698,016 484,705 — 
Land127,881 91,686 3,151 
Lots43,181 37,212 — 
Total $1,859,458 $1,268,883 $5,662 



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Loan maturity and sensitivities
The following table presents the contractual maturities of our loan portfolio as of March 31, 2024. Loans with scheduled maturities are reported in the maturity category in which the payment is due. Demand loans with no stated maturity and overdrafts are reported in the “due in 1 year or less” category. Loans that have adjustable rates are shown as amortizing to final maturity rather than when the interest rates are next subject to change. The tables do not include prepayment assumptions or scheduled repayments.
March 31, 2024
Loan type (dollars in thousands)Maturing in one
year or less		Maturing in one
to five years		Maturing in
five to fifteen years		Maturing after
fifteen years		Total
Commercial and industrial$748,303 $763,058 $109,285 $965 $1,621,611 
Construction808,279 390,654 61,427 8,523 1,268,883 
Residential real estate:
1-to-4 family mortgage66,691 444,912 230,419 835,802 1,577,824 
Residential line of credit47,730 97,403 403,917 256 549,306 
Multi-family mortgage50,308 420,460 124,714 19,599 615,081 
Commercial real estate:
Owner-occupied129,691 685,765 396,763 23,788 1,236,007 
Non-owner occupied195,992 1,032,690 746,649 16,195 1,991,526 
Consumer and other21,908 72,428 75,499 258,836 428,671 
Total ($)$2,068,902 $3,907,370 $2,148,673 $1,163,964 $9,288,909 
Total (%)22.3 %42.1 %23.1 %12.5 %100.0 %
For loans due after one year or more, the following table presents the interest rate composition for loans outstanding as of March 31, 2024.
March 31, 2024
Loan type (dollars in thousands)Fixed
interest rate		Floating
interest rate		Total
Commercial and industrial$400,452 $472,856 $873,308 
Construction118,998 341,606 460,604 
Residential real estate:
1-to-4 family mortgage1,146,882 364,251 1,511,133 
Residential line of credit2,088 499,488 501,576 
Multi-family mortgage337,724 227,049 564,773 
Commercial real estate:
Owner-occupied800,520 305,796 1,106,316 
Non-owner occupied968,326 827,208 1,795,534 
Consumer and other380,172 26,591 406,763 
Total ($)$4,155,162 $3,064,845 $7,220,007 
Total (%)57.6 %42.4 %100.0 %
The following table presents the contractual maturities of our loan portfolio segregated into fixed and floating interest rate loans as of March 31, 2024.
March 31, 2024
Contractual maturity (dollars in thousands)Fixed
interest rate		Floating
interest rate		Total
One year or less$578,700$1,490,202$2,068,902
One to five years2,278,3331,629,0373,907,370
Five to fifteen years1,064,0451,084,6282,148,673
Over fifteen years812,784351,1801,163,964
Total ($)$4,733,862$4,555,047$9,288,909
Total (%)51.0 %49.0 %100.0 %


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Of the loans shown above with floating interest rates as of March 31, 2024, many have interest rate floors as follows:
Loans with interest rate floors (dollars in thousands)Maturing in one year or less Weighted average level of support (bps) Maturing in one to five years Weighted average level of support (bps) Maturing in five years to fifteen years Weighted average level of support (bps) Maturing after
fifteen years		Weighted average level of support (bps)TotalWeighted average level of support (bps)
Loans with
   current rates
   above floors:
1-25 bps$225 24 $— — $405 21.00 $134 21.00 $764 22 
26-50 bps3,638 50 — — — — — — 3,638 50 
51-75 bps4,501 75 2,086 63 — — — — 6,587 71 
76-100 bps14,483 100 2,955 99 3,120 100 1,969 96 22,527 100 
101-200 bps45,503 164 95,812 165 18,578 156 12,371 160 172,264 163 
201-300 bps98,946 269 140,215 255 96,690 246 18,325 251 354,176 256 
301-400 bps176,052 370 146,996 369 160,278 347 35,141 358 518,467 362 
401-500 bps536,124 459 255,390 467 361,409 473 44,915 465 1,197,838 465 
501-600 bps235,335 530 379,666 530 232,546 537 200,742 536 1,048,289 533 
601 bps and
   above		543 678 21,223 747 18,488 694 7,485 678 47,739 715 
Total loans with
    current rates
    above floors		$1,115,350 424 $1,044,343 423 $891,514 439 $321,082 476 $3,372,289 433 
Loans at interest
    rate floors
    providing
    support:
26-50 bps— — 684 29 — — — — 684 29 
51-75 bps— — 456 55 — — — — 456 55 
76-100 bps— — 35 94 — — 262 79 297 81 
Total loans at
    interest rate
    floors
    providing
    support		$— — $1,175 41 $— — $262 79 $1,437 48 
Asset quality
In order to operate with a sound risk profile, we focus on originating loans that we believe to be of high quality. We have established loan approval policies and procedures to assist us in maintaining the overall quality of our loan portfolio. When delinquencies in our loans exist, we rigorously monitor the levels of such delinquencies for any negative or adverse trends. From time to time, we may modify loans to extend the term or make other concessions, including interest rate reduction, a term extension, principal forgiveness, payment deferral, or a combination thereof, to help a borrower with a deteriorating financial condition stay current on their loan and to avoid foreclosure. Furthermore, we are committed to collecting on all of our loans. This practice leads to higher recoveries in the long-term.
Nonperforming assets
Our nonperforming assets consist of nonperforming loans, other real estate owned and other repossessed non-earning assets. As of March 31, 2024 and December 31, 2023, we had $94.1 million and $86.5 million, respectively, in nonperforming assets. Nonperforming loans are those on which the accrual of interest has stopped, as well as loans that are contractually 90 days past due on which interest continues to accrue. Accrued interest receivable written off as an adjustment to interest income amounted to $0.2 million for both the three months ended March 31, 2024 and 2023. Additionally, we had net interest recoveries on nonperforming assets previously charged off of $0.3 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively.
Nonperforming loans HFI increased by $6.8 million to $67.8 million as of March 31, 2024 compared to $60.9 million as of December 31, 2023. The increase in nonperforming loans primarily occurred in our commercial and construction portfolios.
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As of March 31, 2024 and December 31, 2023, we had $20.9 million and $21.2 million, respectively, of delinquent GNMA optional repurchase loans previously sold included on our consolidated balance sheets in loans held for sale. These are considered nonperforming assets as we do not earn any interest on the unexercised option to repurchase these loans.
As of both March 31, 2024 and December 31, 2023, other real estate owned included $0.1 million of excess land and facilities held for sale resulting from our prior acquisitions. Other repossessed assets also included other repossessed non-real estate amounting to $1.8 million and $1.1 million as of March 31, 2024 and December 31, 2023, respectively.
The following table provides details of our nonperforming assets, the ratio of such loans and other nonperforming assets to total assets, and certain other related information as of the dates presented:
March 31,December 31,
(dollars in thousands)2024 20232023 
Loan Type:  
Commercial and industrial$24,643 $2,455 $21,730 
Construction5,662 382 3,037 
Residential real estate:
1-to-4 family mortgage18,435 20,593 16,073 
Residential line of credit2,209 1,082 2,473 
Multi-family mortgage31 39 32 
Commercial real estate:
Owner-occupied3,069 7,211 3,188 
Non-owner occupied3,250 5,802 3,351 
Consumer and other10,451 7,916 11,039 
Total nonperforming loans HFI$67,750 $45,480 $60,923 
Commercial loans held for sale— 9,278 — 
Mortgage loans held for sale(1)
20,876 20,528 21,229 
Other real estate owned3,613 4,085 3,192 
Other repossessed assets1,834 498 1,139 
Total nonperforming assets$94,073 $79,869 $86,483 
Nonperforming loans held for investment as a percentage of total loans HFI0.73 %0.49 %0.65 %
Nonperforming assets as a percentage of total assets0.75 %0.61 %0.69 %
Nonaccrual loans HFI as a percentage of loans HFI0.59 %0.35 %0.51 %
(1) Represents optional right to repurchase government guaranteed GNMA mortgage loans previously sold that have become past due greater than 90 days.
We have evaluated our loans HFI classified as nonperforming and believe all nonperforming loans have been adequately reserved for in the allowance for credit losses on loans HFI as of March 31, 2024 and December 31, 2023. Management also continually monitors past due loans for potential credit quality deterioration. Loans not considered nonperforming include loans 30-89 days past due that continue to accrue interest amounting to $37.5 million at March 31, 2024 as compared to $47.0 million at December 31, 2023. The decrease from December 31, 2023 to March 31, 2024 primarily occurred within our construction and 1-to-4 family mortgage portfolios.
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Allowance for credit losses
The allowance for credit losses represents the portion of the loan's amortized cost basis that we do not expect to collect due to credit losses over the loan's life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions. Loan losses are charged against the allowance when we believe the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for credit losses is based on the loan's amortized cost basis, excluding accrued interest receivable, as we promptly charge off uncollectible accrued interest receivable.
We calculate our expected credit loss using a lifetime loss rate methodology. We utilize probability-weighted forecasts, which consider multiple macroeconomic variables from Moody's that are applicable to each type of loan. See Note 1, "Basis of presentation," in the notes to our consolidated financial statements in our Annual Report that was filed with the SEC on February 27, 2024 for additional information regarding our methodology.
The following table presents the allocation of the allowance for credit losses on loans HFI by loan category as well as the ratio of loans by loan category compared to the total loan portfolio as of the dates indicated: 
March 31,December 31,
20242023
(dollars in thousands)AmountACL
as a % of loans HFI category		AmountACL
as a % of loans HFI category
Loan Type:
Commercial and industrial$17,272 1.07 %$19,599 1.14 %
Construction37,308 2.94 %35,372 2.53 %
Residential real estate:
   1-to-4 family mortgage26,128 1.66 %26,505 1.69 %
   Residential line of credit9,918 1.81 %9,468 1.78 %
   Multi-family mortgage8,973 1.46 %8,842 1.46 %
Commercial real estate:
   Owner-occupied10,749 0.87 %10,653 0.86 %
   Non-owner occupied23,949 1.20 %22,965 1.18 %
Consumer and other17,370 4.05 %16,922 4.11 %
Total allowance for credit losses on loans HFI$151,667 1.63 %$150,326 1.60 %

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The following table summarizes activity in our allowance for credit losses on loans HFI during the periods indicated:
 Three Months Ended March 31,Year Ended December 31,
(dollars in thousands)2024 2023 2023 
Allowance for credit losses on loans HFI at beginning of period$150,326 $134,192 $134,192 
Charge-offs:
Commercial and industrial(43)(46)(462)
Construction(92)— — 
Residential real estate:
1-to-4 family mortgage— (16)(46)
Residential line of credit(20)— — 
Commercial real estate:
Owner-occupied— — (144)
Consumer and other(772)(705)(2,851)
Total charge-offs$(927)$(767)$(3,503)
Recoveries:
Commercial and industrial$14 $67 $273 
Construction— — 10 
Residential real estate:
1-to-4 family mortgage56 15 100 
Residential line of credit— — 1 
Commercial real estate:
Owner-occupied40 66 109 
Non-owner occupied— — 1,833 
Consumer and other306 239 573 
Total recoveries$416 $387 $2,899 
Net charge-offs(511)(380)(604)
Provision for credit losses on loans HFI1,852 4,997 16,738 
Allowance for credit losses on loans HFI at the end of period$151,667 $138,809 $150,326 
Ratio of annualized net charge-offs during the period to average loans outstanding during the
   period		(0.02)%(0.02)%(0.01)%
Allowance for credit losses on loans HFI as a percentage of loans 1.63 %1.48 %1.60 %
Allowance for credit losses on loans HFI as a percentage of nonaccrual loans HFI276.3 %421.9 %311.7 %
Allowance for credit losses on loans HFI as a percentage of nonperforming loans 223.9 %305.2 %246.7 %

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The following tables details our (reversal of) provision for credit losses on loans HFI and net (charge-offs) recoveries to average loans HFI outstanding by loan category during the periods indicated:
 (Reversal of) provision for credit losses on loans HFINet (charge-offs) recoveriesAverage loans HFIRatio of annualized net (charge-offs) recoveries to average loans HFI
(dollars in thousands)
Three Months Ended March 31, 2024
Commercial and industrial$(2,298)$(29)$1,709,052 (0.01)%
Construction2,028 (92)1,323,850 (0.03)%
Residential real estate:
1-to-4 family mortgage(433)56 1,574,970 0.01 %
Residential line of credit470 (20)533,924 (0.02)%
Multi-family mortgage131 — 614,019 — %
Commercial real estate:
Owner-occupied56 40 1,235,782 0.01 %
Non-owner occupied984 — 1,976,451 — %
Consumer and other914 (466)418,746 (0.45)%
Total$1,852 $(511)$9,386,794 (0.02)%
Three months ended March 31, 2023
Commercial and industrial$(10)$21 $1,663,572 0.01 %
Construction1,217 — 1,687,980 — %
Residential real estate:
1-to-4 family mortgage1,073 (1)1,567,471 — %
Residential line of credit1,540 — 497,047 — %
Multi-family mortgage129 — 487,394 — %
Commercial real estate:
Owner-occupied103 66 1,127,738 0.02 %
Non-owner occupied(48)— 1,951,024 — %
Consumer and other993 (466)364,482 (0.52)%
Total$4,997 $(380)$9,346,708 (0.02)%
Year Ended December 31, 2023
Commercial and industrial$8,682 $(189)$1,678,832 (0.01)%
Construction(4,446)10 1,594,317 — %
Residential real estate:
1-to-4 family mortgage310 54 1,558,477 — %
Residential line of credit1,973 1 507,884 — %
Multi-family mortgage2,352 — 519,554 — %
Commercial real estate:
Owner occupied2,905 (35)1,169,680 — %
Non-owner occupied(784)1,833 1,925,759 0.10 %
Consumer and other5,746 (2,278)381,474 (0.60)%
Total$16,738 $(604)$9,335,977 (0.01)%
The ACL on loans HFI was $151.7 million and $150.3 million and represented 1.63% and 1.60% of loans HFI as of March 31, 2024 and December 31, 2023, respectively. For further information related to the change in the ACL refer to “Provision for credit losses” section herein and Note 3, “Loans and allowance for credit losses on loans HFI” in the notes to our consolidated financial statements.
For the three months ended March 31, 2024, we experienced net charge-offs of $0.5 million, or 0.02% of average loans HFI, compared to net charge-offs of $0.4 million, or 0.02% for the three months ended March 31, 2023. Our ratio of total nonperforming loans HFI as a percentage of total loans HFI increased by 8 basis points to 0.73% as of March 31, 2024 compared to December 31, 2023.
As a ratio of ACL to loans HFI by loan type, our construction portfolio incurred the largest increases period-over-period. Our construction portfolio is heavily reliant on the strength of the economy; and therefore, it is adversely affected by inflation and high interest rates.
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We also maintain an allowance for credit losses on unfunded commitments, which decreased to $7.7 million as of March 31, 2024 from $8.8 million as of December 31, 2023 due to an 18.7% annualized or $134.4 million decrease in unfunded loan commitments during the period. Notably, there was a $135.3 million decrease in unfunded loan commitments in our construction loan category pipeline which resulted in a $1.0 million decrease in required ACL related to unfunded commitments. Our unfunded commitments in our construction loan category decreased as a result of management's concentrated effort over the last year to reduce commitments in specific categories judged to be inherently higher risk considering the current and projected economic conditions.
Loans held for sale
Mortgage loans held for sale consisted of $61.8 million of residential real estate mortgage loans in the process of being sold to third-party private investors or government sponsored agencies and $20.9 million of GNMA optional repurchase loans. This compares to $46.6 million of residential real estate mortgage loans in the process of being sold to third-party private investors or government sponsored agencies and $21.2 million of GNMA optional repurchase loans as of December 31, 2023.
Deposits
Deposits represent the Bank’s primary source of funding. We continue to focus on growing core customer deposits through our relationship driven banking philosophy, community-focused marketing programs and our treasury management services.
Total deposits were $10.50 billion and $10.55 billion as of March 31, 2024 and December 31, 2023, respectively. Noninterest-bearing deposits at March 31, 2024 and December 31, 2023 were $2.18 billion and $2.22 billion, respectively, while interest-bearing deposits were $8.32 billion and $8.33 billion at March 31, 2024 and December 31, 2023, respectively.
The decrease in noninterest-bearing deposits of $36.3 million from December 31, 2023 to March 31, 2024 is attributable to migration to interest-yielding products such as money market and savings deposits, which increased by $94.1 million from December 31, 2023. Also included in noninterest-bearing deposits are certain mortgage escrow deposits from our third-party mortgage servicing provider, which amounted to $92.4 million and $63.6 million as of March 31, 2024 and December 31, 2023, respectively.
Interest-bearing checking deposits decreased by $82.9 million from December 31, 2023 due largely to decreases in our deposits from municipal and governmental entities, also known as public funds, which decreased by $44.1 million during the period. The decrease in public funds was due to management's decision to not renew certain maturing public deposits due to rising costs of these deposits.
Additionally, brokered and internet time deposits decreased by $19.6 million to $131.2 million as of March 31, 2024 compared to December 31, 2023, which was a result of our balance sheet and liquidity management strategy in order to decrease our exposure to higher cost deposits.
As a result of the rising interest rate environment and the shift in our deposit composition, we have experienced an increase in our cost of interest-bearing deposits and total deposits. Average deposit balances by type, together with the average rates per period are reflected in the average balance sheet amounts, interest paid, and rate analysis tables included in this management's discussion and analysis under the subheading “Results of operations” discussion.
Our deposit base also includes certain commercial and high net worth individuals that periodically place deposits with the Bank for short periods of time and can cause fluctuations from period to period in the overall level of customer deposits outstanding. These fluctuations may include certain deposits from related parties as disclosed within Note 14, “Related party transactions” in the notes to our consolidated financial statements included in this Report.






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The following table sets forth the distribution by type of our deposit accounts as of the dates indicated:
March 31,December 31,
2024 2023 
(dollars in thousands)Amount% of total deposits
Average rate(1)
Amount% of total deposits
Average rate(1)
Deposit Type
Noninterest-bearing demand$2,182,121 21 %— %$2,218,382 21 %— %
Interest-bearing demand2,421,487 23 %3.01 %2,504,421 24 %2.86 %
Money market3,923,571 37 %3.93 %3,819,814 36 %3.53 %
Savings deposits375,367 4 %0.07 %385,037 4 %0.06 %
Customer time deposits1,471,190 14 %3.90 %1,469,811 14 %3.15 %
Brokered and internet time deposits131,192 1 %5.31 %150,822 1 %5.27 %
Total deposits$10,504,928 100 %2.76 %$10,548,287 100 %2.39 %
Customer Time Deposits(2)
0.00-1.00%$53,059 4 %$62,464 4 %
1.01-2.00%100,296 7 %114,521 8 %
2.01-3.00%48,604 3 %51,346 4 %
3.01-4.00%221,790 15 %268,550 18 %
4.01-5.00%893,113 61 %812,781 55 %
Above 5.00%154,328 10 %160,149 11 %
Total customer time deposits$1,471,190 100 %$1,469,811 100 %
Brokered and Internet Time Deposits(2)
0.00-1.00%$99 — %$99 — %
1.01-2.00%— — %— — %
2.01-3.00%248 — %248 — %
3.01-4.00%— — %— — %
4.01-5.00%— — %— — %
Above 5.00%130,845 100 %150,475 100 %
Total brokered and internet time deposits$131,192 100 %$150,822 100 %
Total time deposits$1,602,382 $1,620,633 
(1) Average rates are presented for the three months ended March 31, 2024 and the year ended December 31, 2023, respectively.
(2) Rates are presented as of period-end.















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Further details related to our deposit customer base is presented below as of the dates indicated:
March 31,December 31,
2024 2023 
(dollars in thousands)Amount% of total deposits Amount% of total deposits
Deposits by customer segment(1)
Consumer$4,866,099 46 %$4,880,890 46 %
Commercial4,085,282 39 %4,069,724 39 %
Public1,553,547 15 %1,597,673 15 %
Total deposits$10,504,928 100 %$10,548,287 100 %
(1) Segments are determined based on the customer account level.
The tables below set forth maturity information on time deposits and amounts in excess of the FDIC insurance limit as of March 31, 2024:
(dollars in thousands)AmountWeighted average interest rate at period end
Time deposits of $250 and less    
Months to maturity:
Three or less$256,159 3.84 %
Over Three to Six183,215 4.05 %
Over Six to Twelve361,826 3.78 %
Over Twelve147,937 3.18 %
Total$949,137 3.75 %
Time deposits of greater than $250
Months to maturity:
Three or less$249,317 4.75 %
Over Three to Six91,362 4.32 %
Over Six to Twelve230,004 4.55 %
Over Twelve82,562 4.02 %
Total$653,245 4.53 %
Further details related to our estimated insured or collateralized deposits and uninsured and uncollateralized deposits is presented below as of the dates indicated:
March 31,December 31,
2024 2023 
Estimated insured or collateralized deposits(1)
$7,372,728 $7,414,224 
Estimated uninsured and uncollateralized deposits(1)
$3,132,200 $3,134,063 
Estimated uninsured and uncollateralized deposits as a % of total deposits(1)
29.8 %29.7 %
Estimated uninsured deposits(2)
$4,718,036 $4,899,349 
(1) Amounts are shown on a fully consolidated basis and exclude deposits of affiliates that are eliminated in consolidation.
(2) Amounts are shown on an unconsolidated basis consistent with regulatory reporting requirements.

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Other earning assets
Securities purchased under agreements to resell (“reverse repurchase agreements”)
We enter into agreements with certain customers to purchase investment securities under agreements to resell at specific dates in the future. This investment deploys some of our liquidity position into an instrument that improves the return on those funds. Securities purchased under agreements to resell totaled $58.5 million and $47.8 million at March 31, 2024 and December 31, 2023, respectively.
Federal Funds Sold
Federal funds may fluctuate from period to period depending upon our liquidity position at the time and our strategy for deploying liquidity. Federal funds sold totaled $42.3 million and $35.5 million at March 31, 2024 and December 31, 2023, respectively.
AFS debt securities portfolio
Our investment portfolio objectives include maximizing total return after other primary objectives are achieved such as, but not limited to, providing liquidity, capital preservation, and pledging collateral for certain deposit types, various lines of credit and other borrowings. The investment objectives guide the portfolio allocation among security types, maturities, and other attributes.
The fair value of our AFS debt securities portfolio was $1.46 billion and $1.47 billion as of March 31, 2024 and December 31, 2023, respectively. Included in the fair value of AFS debt securities were net unrealized losses of $183.6 million and $186.8 million as of March 31, 2024 and December 31, 2023, respectively. Current net unrealized losses are due to interest rate increases.
During the three months ended March 31, 2024, we sold $207.9 million of AFS debt securities with a weighted average yield of 2.14% and reinvested the proceeds of the sales into available-for-sale securities with a weighted average yield of 5.94%. The sales resulted in a pre-tax loss on securities of $16.2 million. We primarily sold agency collateralized mortgage obligations, agency mortgage-backed securities, U.S. Treasury and municipal securities. We reinvested the proceeds from the sales primarily into U.S. government agency AFS debt securities in order increase the effective yield of our portfolio. Including the reinvestment of these proceeds, we purchased $281.6 million of AFS debt securities. Maturities, prepayments and calls of securities totaled $66.6 million for the three months ended March 31, 2024.
During the three months ended March 31, 2023, there were no sales of AFS debt securities. During the same period, we purchased $0.9 million of AFS debt securities. Maturities, prepayments and calls of securities totaled $26.8 million for the three months ended March 31, 2023.
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The following table sets forth the fair value, scheduled maturities and weighted average yields for our AFS debt securities portfolio as of the dates indicated below:
March 31,
December 31,
 2024 2023 
(dollars in thousands)Fair value% of total investment securities
Weighted average yield (1)
Fair value% of total investment securities
Weighted average yield (1)
U.S. Treasury securities:
Maturing within one year$30,857 2.1 %2.76 %$61,466 4.2 %2.50 %
Maturing in one to five years— — %— %47,030 3.2 %1.59 %
Maturing in five to ten years— — %— %— — %— %
Maturing after ten years— — %— %— — %— %
Total U.S. Treasury securities30,857 2.1 %2.76 %108,496 7.4 %2.10 %
U.S. government agency securities:
Maturing within one year— — %— %— — %— %
Maturing in one to five years6,312 0.4 %1.82 %13,094 0.9 %1.96 %
Maturing in five to ten years23,724 1.6 %6.11 %6,000 0.4 %6.40 %
Maturing after ten years385,891 26.3 %6.02 %184,862 12.6 %6.23 %
Total U.S. government agency securities415,927 28.3 %5.96 %203,956 13.9 %5.96 %
Municipal securities:
Maturing within one year3,053 0.2 %2.48 %2,813 0.2 %2.23 %
Maturing in one to five years3,768 0.3 %3.39 %11,677 0.8 %5.85 %
Maturing in five to ten years12,811 0.9 %3.18 %40,304 2.7 %3.60 %
Maturing after ten years152,040 10.4 %2.79 %187,469 12.7 %2.94 %
Total municipal securities171,672 11.8 %2.82 %242,263 16.4 %3.00 %
Mortgage-backed securities - residential and commercial:
Maturing within one year61 — %1.27 %126 — %1.57 %
Maturing in one to five years2,518 0.2 %3.18 %3,239 0.2 %2.91 %
Maturing in five to ten years17,874 1.2 %2.89 %33,121 2.3 %2.97 %
Maturing after ten years822,376 56.2 %2.13 %877,446 59.6 %1.86 %
Total mortgage-backed securities - residential and commercial842,829 57.6 %2.14 %913,932 62.1 %1.90 %
Corporate securities:
Maturing within one year— — %— %— — %— %
Maturing in one to five years— — %— %— — %— %
Maturing in five to ten years3,397 0.2 %4.33 %3,326 0.2 %4.33 %
Maturing after ten years— — %— %— — %— %
Total corporate securities3,397 0.2 %4.33 %3,326 0.2 %4.33 %
          Total AFS debt securities$1,464,682 100.0 %3.32 %$1,471,973 100.0 %2.66 %
(1)Yields on a tax-equivalent basis.

Borrowed funds
Deposits are the primary source of funds for our lending activities and general business purposes. However, we may also obtain advances from the FHLB, borrow from the Federal Reserve’s Discount Window, one-off borrowing programs from the Federal Reserve, purchase federal funds and engage in overnight borrowing with correspondent banks, or enter into client repurchase agreements. We also use these sources of funds as part of our asset liability management process to control our long-term interest rate risk exposure, even if it may increase our short-term cost of funds.
Our level of short-term borrowing can fluctuate on a daily basis depending on funding needs and the sources of funds to satisfy those needs, in addition to the overall interest rate environment and cost of public funds.
Securities sold under agreements to repurchase and federal funds purchased
We enter into agreements with certain customers to sell certain securities under agreements to repurchase the security the following day. These agreements are made to provide customers with comprehensive treasury management products
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as a short-term return for their excess funds. Securities sold under agreements to repurchase totaled $23.2 million and $19.3 million at March 31, 2024 and December 31, 2023, respectively.
We also maintain lines with certain correspondent banks that provide borrowing capacity in the form of federal funds purchased. Federal funds purchased are short-term borrowings that typically mature within one to ninety days. Borrowings against these lines (i.e., federal funds purchased) totaled $55.0 million and $89.4 million as of March 31, 2024 and December 31, 2023, respectively.
FHLB short-term advances
As a member of the FHLB system, we may utilize advances from the FHLB in order to provide additional liquidity and funding. Under these short-term agreements, we maintain a line of credit that as of March 31, 2024 and December 31, 2023 and had total borrowing capacity of $1.47 billion and $1.76 billion, respectively. As of March 31, 2024 and December 31, 2023, we had qualifying loans pledged as collateral securing these lines amounting to $2.51 billion and $3.01 billion, respectively. There were no FHLB advances outstanding as of December 31, 2023 or March 31, 2024.
Bank Term Funding Program
In March 2023, the Federal Reserve established the Bank Term Funding Program to make available funding to eligible depository institutions in order to help assure they have the ability to meet the needs of their depositors following the March 2023 high-profile bank failures. The program allows for advances for up to one year secured by eligible high-quality securities at par value extended at the one-year overnight index swap rate, plus 10 basis points, as of the day the advance is made. The interest rate is fixed for the term of the advance and there are no prepayment penalties. The BTFP ceased extending new borrowings on March 11, 2024. At both March 31, 2024 and December 31, 2023, we had outstanding borrowings of $130.0 million under the BTFP at a borrowing rate of 4.85% with a maturity date of December 26, 2024.
Subordinated debt
During the year ended December 31, 2003, we formed two separate trusts which issued $9.0 million and $21.0 million of floating rate trust preferred securities as part of a pooled offering of such securities. We issued junior subordinated debentures of $9.3 million, which included proceeds of common securities which we purchased for $0.3 million, and junior subordinated debentures of $21.7 million which included proceeds of common securities of $0.7 million. The trusts were created for the sole purpose of issuing 30-year capital trust preferred securities to fund the purchase of junior subordinated debentures issued by us. Both issuances were to the trusts in exchange for the proceeds of the securities offerings, which represent the sole asset of the trusts.
Additionally, during the year ended December 31, 2020, we placed $100.0 million of ten year fixed-to-floating rate subordinated notes, maturing September 1, 2030.
Further information related to our subordinated debt as of March 31, 2024 is detailed below:
(dollars in thousands)Year establishedMaturity Call dateTotal debt outstanding Interest rate Coupon structure
Subordinated debt issued by trust preferred securities:
  FBK Trust I (1)
200306/09/2033
6/09/2008
$9,280 8.81%
3-month SOFR plus 3.51%
  FBK Trust II (1)
200306/26/2033
6/26/2008
21,650 8.72%
3-month SOFR plus 3.41%
Additional subordinated debt:
  FBK subordinated debt I(2)
202009/01/2030
9/1/2025
100,000 4.50%
Semi-annual fixed(3)
      Unamortized debt issuance costs(516)
        Total subordinated debt, net$130,414 
(1)The Company classifies $30.0 million of the Trusts' subordinated debt as Tier 1 capital.
(2)The Company classified the issuance, net of unamortized issuance costs and the associated fair value hedge as Tier 2 capital, which will be phased out 20% per year in
     the final five years before maturity. 
(3)Beginning on September 1, 2025 the coupon structure migrates to the 3-month SOFR plus a spread of 439 basis points through the end of the term of the debenture.



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Other borrowings
Other borrowings on our consolidated balance sheets includes our finance lease liability totaling $1.3 million as of both March 31, 2024 and December 31, 2023. In addition, other borrowings on our consolidated balance sheets include guaranteed rebooked GNMA loans previously sold that have become past due over 90 days and are eligible for repurchase totaling $20.9 million and $21.2 million as of March 31, 2024 and December 31, 2023, respectively. See Note 5, “Leases” and Note 10, “Fair value of financial instruments” within the notes to our consolidated financial statements herein for additional information regarding our finance lease and guaranteed GNMA loans eligible for repurchase, respectively.
Liquidity and capital resources
We are expected to maintain adequate liquidity at the Bank to meet the cash flow requirements of clients who may be either depositors wishing to withdraw funds or borrowers needing assurance that sufficient funds will be available to meet their credit needs. Our Liquidity Policy is intended to cause the Bank to maintain adequate liquidity and, therefore, enhance our ability to raise funds to support asset growth, meet deposit withdrawals and lending needs and otherwise sustain our operations. We accomplish this through management of the maturities of our interest-earning assets and interest-bearing liabilities. We believe that our present position is adequate to meet our current and future liquidity needs.
We continuously monitor our liquidity position to ensure that assets and liabilities are managed in a manner that will meet all of our short-term and long-term cash requirements. We manage our liquidity position to meet the daily cash flow needs of clients, while maintaining an appropriate balance between assets and liabilities to optimize our net interest margin. We also monitor our liquidity requirements in light of interest rate trends, changes in the economy and the scheduled maturity and interest rate sensitivity of the investment and loan portfolios and deposits.
As part of our liquidity management strategy, we focus on minimizing our costs of liquidity and attempt to decrease these costs by growing our noninterest-bearing and other low-cost deposits, while replacing higher cost funding sources. While we do not control the types of deposit instruments our clients choose, we do influence those choices with the rates and the deposit specials we offer. Increasing interest rates generally attracts customers to higher cost interest-bearing deposit products as they seek to maximize their yield.
Our investment portfolio is another alternative for meeting liquidity needs. These assets generally have readily available markets that offer conversions to cash as needed. AFS debt securities within our investment portfolio are used to secure government, public, trust and other deposits and as collateral for short-term borrowings, letters of credit and derivative instruments. As of March 31, 2024 and December 31, 2023, we had pledged securities related to these items with carrying values of $950.0 million and $929.5 million, respectively.
Additional sources of liquidity include federal funds purchased, repurchase agreements, FHLB borrowings, and lines of credit. Interest is charged at the prevailing market rate on federal funds purchased, reverse repurchase agreements and FHLB advances. Overnight advances obtained from the FHLB are used primarily to meet day to day liquidity needs, particularly when the cost of such borrowing compares favorably to the rates that we would be required to pay to attract deposits. There were no FHLB advances outstanding as of March 31, 2024 or December 31, 2023. As of March 31, 2024, there was $1.47 billion available to borrow against with a remaining capacity of $1.24 billion. As of December 31, 2023, there was $1.76 billion available to borrow against with a remaining capacity of $1.30 billion.
We also maintained unsecured lines of credit with other commercial banks totaling $370.0 million as of both March 31, 2024 and December 31, 2023. These are unsecured, uncommitted lines of credit typically maturing at various times within the next twelve months. Borrowings against these lines (i.e., federal funds purchased) totaled $55.0 million and $89.4 million as of March 31, 2024 and December 31, 2023, respectively. As of both March 31, 2024 and December 31, 2023, we also had $50.0 million available through the IntraFi network, which allows us to offer banking customers access to FDIC insurance protection on deposits through our Bank which exceed FDIC insurance limits.





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Our current on-balance sheet liquidity and available sources of liquidity are summarized in the table below:
March 31,December 31,
(dollars in thousands)2024 2023 
Current on-balance sheet liquidity:
   Cash and cash equivalents$870,730 $810,932 
   Unpledged AFS debt securities514,724 542,427 
Total on-balance sheet liquidity$1,385,454 $1,353,359 
Available sources of liquidity:
   Unsecured borrowing capacity(1)
$3,392,255 $3,350,026 
   FHLB remaining borrowing capacity1,237,843 1,297,702 
   Federal Reserve discount window2,382,574 2,431,084 
Total available sources of liquidity$7,012,672 $7,078,812 
On-balance sheet liquidity as a percentage of total assets11.0 %10.7 %
On-balance sheet liquidity and available sources of liquidity as a percentage of estimated
     uninsured and uncollateralized deposits(2)
268.1 %269.0 %
(1)Includes capacity available per internal policy in the form of brokered deposits and unsecured lines of credit.
(2)Amounts are shown on a fully consolidated basis and exclude deposits of affiliates that are eliminated in consolidation.
The Company also maintains the ability to access capital markets to meet its liquidity needs. The Company may utilize various methods to raise capital, including through the sale of common stock, preferred stock, depository shares, AFS debt securities, rights, warrants and units. Specific terms and prices would be determined at the time of any such offering. In the past, the Company has utilized capital markets to generate liquidity in the form of common stock and subordinated debt primarily for the purpose of funding acquisitions.
The Company is a corporation separate and apart from the Bank and, therefore, it must provide for its own liquidity. The Company’s main source of funding is dividends declared and paid by the Bank to the Company. Statutory and regulatory limitations exist that affect the ability of the Bank to pay dividends to the Company. Management believes that these limitations will not impact the Company’s ability to meet its ongoing short-term cash obligations. For additional information regarding dividend restrictions, see the “Item 1. Business - Supervision and regulation,” “Item 1A. Risk Factors - Risks related to our business” and “Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Dividends,” each of which is set forth in our Annual Report.
Due to state banking laws, the Bank may not declare dividends in any calendar year in an amount exceeding the total of its net income for that year combined with its retained net income of the preceding two years, without the prior approval of the TDFI. Based upon this regulation, as of March 31, 2024 and December 31, 2023, $170.2 million and $218.4 million of the Bank’s retained earnings were available for the payment of dividends without such prior approval. In addition, dividends paid by the Bank to the Company would be prohibited if the effect thereof would cause the Bank’s capital to be reduced below applicable minimum capital requirements. During the three months ended March 31, 2024, there were $8.5 million in cash dividends approved by the Board for payment from the Bank to the holding company. During the three months ended March 31, 2023, there were $23.5 million in cash dividends approved by the Board for payment from the Bank to the holding company. None of these required approval from the TDFI. Subsequent to March 31, 2024, the Board approved a dividend from the Bank to the holding company to be paid in the second quarter for $20.0 million that also did not require approval from the TDFI.
During the three months ended March 31, 2024, the Company declared shareholder dividends of $0.17 per share, or $8.1 million. During the three months ended March 31, 2023, the Company declared shareholder dividends of $0.15 per share, or $7.0 million. Subsequent to March 31, 2024, the Company declared a quarterly dividend in the amount of $0.17 per share, payable on May 28, 2024, to stockholders of record as of May 14, 2024.
77

Shareholders’ equity and capital management
Our total shareholders’ equity was $1.48 billion as of March 31, 2024 and $1.45 billion as of December 31, 2023. Book value per common share was $31.55 as of March 31, 2024 and $31.05 as of December 31, 2023. The increase in shareholders’ equity was primarily attributable to an increase in retained net income, net of dividends declared and paid and unrealized loss reclassification adjustment for loss on sale of securities included in net income of $12.0 million (net of tax benefit) from December 31, 2023. The increase in shareholders’ equity as of March 31, 2024 was partially off-set by dividends declared and paid of $8.1 million.
Our capital management consists of providing adequate equity to support our current and future operations. We are subject to various regulatory capital requirements administered by state and federal banking agencies, including the TDFI, Federal Reserve and the FDIC. Failure to meet minimum capital requirements may prompt certain actions by regulators that, if undertaken, could have a direct material adverse effect on our financial condition and results of operations. The Federal Reserve and the FDIC have issued guidelines governing the levels of capital that banks must maintain. As of March 31, 2024 and December 31, 2023, we met all capital adequacy requirements for which we were subject. See additional discussion regarding our capital adequacy and ratios within Note 12, “Minimum capital requirements” in the notes to our consolidated financial statements contained herein.
March 31, 2024FB Financial CorporationFirstBank

To be Well-Capitalized(1)
Total risk-based capital15.0 %14.7 %10.0 %
Tier 1 risk-based capital12.8 %12.5 %8.0 %
Common Equity Tier 1 ratio12.6 %12.5 %6.5 %
Tier 1 leverage11.3 %11.1 %5.0 %
(1) Applicable to Bank level capital.
Capital ratios are well above regulatory requirements for well-capitalized institutions. Management uses risk-based capital ratios in its analysis of the measures to assess the quality of capital and believes that investors may find it useful in their analysis of the Company.
ITEM 3 — Quantitative and Qualitative Disclosures About Market Risk
Interest rate sensitivity
Our market risk arises primarily from interest rate risk inherent in the normal course of lending and deposit-taking activities. Management believes that our ability to successfully respond to changes in interest rates will have a significant impact on our financial results. To that end, management actively monitors and manages our interest rate risk exposure.
The ALCO, which is authorized by our Board of Directors, monitors our interest rate sensitivity and makes decisions relating to that process. The ALCO’s goal is to structure our asset/liability composition to maximize net interest income while managing interest rate risk so as to minimize the adverse impact of changes in interest rates on net interest income and capital in either a rising or declining interest rate environment. Profitability is affected by fluctuations in interest rates. A sudden and substantial change in interest rates may adversely impact our earnings because the interest rates borne by assets and liabilities do not change at the same speed, to the same extent or on the same basis.
We monitor the impact of changes in interest rates on our net interest income and economic value of equity using rate shock analysis. Net interest income simulations measure the short-term earnings exposure from changes in market rates of interest in a rigorous and explicit fashion. Our current financial position is combined with assumptions regarding future business to calculate net interest income under varying hypothetical rate scenarios. EVE measures our long-term earnings exposure from changes in market rates of interest. EVE is defined as the present value of assets minus the present value of liabilities at a point in time. A decrease in EVE due to a specified rate change indicates a decline in the long-term earnings capacity of the balance sheet assuming that the rate change remains in effect over the life of the current balance sheet. For purposes of calculating EVE, a zero percent floor is assumed on discount factors.


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The following analysis depicts the estimated impact on net interest income and EVE of immediate changes in interest rates at the specified levels for the periods presented:
Percentage change in:
Net interest income (1)
Change in interest ratesMarch 31,December 31,
(in basis points)2024 2023 
+40013.9 %8.99 %
+30010.9 %6.81 %
+2007.54 %4.65 %
+1003.93 %2.44 %
-100(4.22)%(2.86)%
-200(8.71)%(6.54)%
 Percentage change in:
Economic value of equity (2)
Change in interest ratesMarch 31,December 31,
(in basis points)2024 2023 
+400(9.66)%(16.6)%
+300(8.50)%(13.6)%
+200(5.18)%(8.05)%
+100(2.23)%(3.29)%
-1001.20 %1.03 %
-2001.14 %(0.63)%
(1)The percentage change represents the projected net interest income for 12 months on a flat balance sheet in a stable interest rate environment versus the projected net interest income in the various rate scenarios.
(2)The percentage change in this column represents our EVE in a stable interest rate environment versus EVE in the various rate scenarios.
The results for the net interest income simulations as of March 31, 2024 and December 31, 2023 resulted in an asset sensitive position. The primary influence of our asset sensitivity is the floating rate structure in many of our loans held for investment as well as the composition of our liabilities which is primarily customer deposits. Our floating-rate loan portfolio is indexed to market rates and timing of repricing of loans and deposits varies in proportion to market rate fluctuations. We actively monitor and perform stress tests on our deposit betas as part of our overall management of interest rate risk. This requires the use of various assumptions based on historical relationships of these variables in reaching any conclusion. Since these correlations are based on competitive pricing in the market, we anticipate that our future results will likely be different from the scenario results presented above and such differences could be material.
The preceding measures assume no change in the size or asset/liability compositions of the balance sheet. Thus, the measures do not reflect the actions the ALCO may undertake in response to such changes in interest rates. The scenarios assume instantaneous movements in interest rates in increments of 100, 200, 300 and 400 basis points. As interest rates are adjusted over a period of time, it is our strategy to proactively change the volume and mix of our balance sheet in order to mitigate our interest rate risk. The computation of the prospective effects of hypothetical interest rate changes requires numerous assumptions regarding characteristics of new business and the behavior of existing positions. These business assumptions are based upon our experience, business plans and published industry experience. Key assumptions employed in the model include asset prepayment speeds, competitive factors, the relative price sensitivity of certain assets and liabilities and the expected life of non-maturity deposits. Because these assumptions are inherently uncertain, actual results may differ from simulated results.
We may utilize derivative financial instruments as part of an ongoing effort to mitigate interest rate risk exposure to interest rate fluctuations and facilitate the needs of our customers. For more information about our derivative financial instruments, see Note 9, “Derivatives” in the notes to our consolidated financial statements. 


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ITEM 4 — CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
An evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this Report was carried out under the supervision and with the participation of the Company’s Chief Executive Officer, Chief Financial Officer and other members of the Company’s senior management. The Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Report, the Company’s disclosure controls and procedures were effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is: (i) accumulated and communicated to the Company’s management (including the Chief Executive Officer and Chief Financial Officer) to allow timely decisions regarding required disclosure; and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
The Company does not expect that its disclosure controls and procedures and internal control over financial reporting will prevent all errors and fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any control procedure also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.

















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PART II
ITEM 1—LEGAL PROCEEDINGS
Various legal proceedings to which we or our subsidiaries are party arise from time to time in the normal course of business. As of the date of this Report, there are no material pending legal proceedings to which we or any of our subsidiaries is a party or of which any of our or our subsidiaries’ properties are subject.
ITEM 1A—RISK FACTORS
There have been no material changes to the risk factors set forth in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2023.
ITEM 2—UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On March 21, 2024, the Company announced that its board of directors re-authorized the Company's stock repurchase program pursuant to which the Company may purchase up to $100 million in shares of the Company’s issued and outstanding common stock. The prior stock repurchase plan expired on January 31, 2024. The current repurchase plan will terminate either on the date on which the maximum dollar amount is repurchased under the new repurchase plan or on January 31, 2026, whichever date occurs earlier. The repurchase plan will be conducted pursuant to a written plan and is intended to comply with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended. The Company did not complete any share repurchases during the three months ended March 31, 2024. Subsequent to March 31, 2024 through May 3, 2024, the Company has bought back 209,737 shares of common stock under this agreement at an average share price of $35.54 and total repurchase amount of $7.5 million.
ITEM 5 — OTHER INFORMATION
Rule 10b5-1 Trading Plans
During the quarter ended March 31, 2024, none of the Company’s directors or executive officers adopted, modified, or terminated any contract, instruction, or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”
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ITEM 6—EXHIBITS
The exhibits listed on the accompanying Exhibit Index are filed, furnished or incorporated by reference (as stated therein) as part of this Report.
EXHIBIT INDEX
Exhibit NumberDescription
101.INSInline XBRL Instance Document*
101.SCHInline XBRL Taxonomy Extension Schema Document*
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document*
101.LABInline XBRL Taxonomy Extension Label Linkbase Document*
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document*
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*Filed herewith.
**Furnished herewith.
†
Represents a management contract or a compensatory plan or arrangement.
82

Signatures

Pursuant to the requirements of the section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
 FB Financial Corporation
 /s/ Michael M. Mettee
May 6, 2024
Michael M. Mettee
Chief Financial Officer
(Principal Financial Officer)
/s/ Jonathan Pennington
May 6, 2024
Jonathan Pennington
Chief Accounting Officer
(Principal Accounting Officer)

83
Exhibit 10.1
Execution Copy
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 23rd day of February 2024 (the “Effective Date”) by and among FB FINANCIAL CORPORATION (“Company”), FIRSTBANK, a Tennessee bank (“Bank”), a wholly owned subsidiary of the Company, and Travis K. Edmondson (“Executive”). Company, Bank, and Executive are sometimes referred to herein collectively as the “Parties,” and each is sometimes referred to herein individually as a “Party.”
BACKGROUND
WHEREAS, Executive is currently engaged as the Chief Banking Officer of Company and Bank;
WHEREAS, the Parties are presently party to that certain Employment Agreement, dated November 27, 2020 (the “Prior Agreement”); and

WHEREAS, the Parties desire to amend and restate the Prior Agreement as of the Effective Date, as defined herein.

WHEREAS, the Parties desire to memorialize the terms and conditions of Executive’s employment.
NOW, THEREFORE, in consideration of the payments, consents, and acknowledgements described below, in consideration of Executive’s employment with Company and Bank, and in consideration of other good and valuable consideration, the receipt and sufficiency of all of which is hereby acknowledged, the Parties agree as follows:
1.Definitions. The following capitalized terms used in this Agreement shall have the meanings assigned to them below, which definitions shall apply to both the singular and the plural forms of such terms:
(a)“Board of Directors” means, collectively, the board of directors of Company and the board of directors of Bank and, where appropriate, any committee or other designee thereof.
(b)“Beneficial Owner” has the meaning given such term in Rule 13d-3 of the General Rules and Regulations promulgated under the Securities Exchange Act of 1934.
(c)“Cause” means, in the context of the termination of this Agreement by Employer, a good faith determination by the Chief Executive Officer of Company that is agreed to by a majority of the members of the Compensation Committee, that any of the following has occurred:
(i)conduct by Executive that amounts to willful misconduct, gross neglect, or a material failure to perform Executive’s duties and responsibilities hereunder,
LEGAL02/43756981v3

including prolonged absences without the consent of the Chief Executive Officer of Company unless otherwise excused by law or under Bank’ s leave policies; provided that the nature of such conduct shall be set forth in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(ii)any willful violation of any material law, rule, or regulation applicable to banks or the banking industry generally (including but not limited to the regulations of the Board of Governors of the Federal Reserve, the FDIC, the Tennessee Department of Financial Institutions, or any other applicable regulatory authority);
(iii)the exhibition by Executive of a standard of behavior within the scope of or related to Executive’s employment that is in violation of any written policy, board committee charter, or code of ethics or business conduct (or similar code) of Company or Bank to which Executive is subject; provided that the nature of such conduct shall be set forth with reasonable particularity in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(iv)any act of fraud, misappropriation, or embezzlement by Executive, whether or not such act was committed in connection with the business of Company and/or Bank;
(v)a material breach of this Agreement, including, without limitation, a breach of Section 7 hereof; provided that the nature of such breach shall be set forth with reasonable particularity in written notice to Executive who shall have 30 business days following delivery of such notice to cure such breach, provided that such breach is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(vi)Executive’s conviction of, or Executive’s pleading guilty or nolo contendere to with respect to (a) a felony or a crime involving moral turpitude (including pleading guilty or nolo contendere to a felony or lesser charge which results from plea bargaining), whether or not such felony, crime, or lesser offense is connected with the business of Company and/or Bank, or (b) any crime in connection with the business of Company or Bank.
(d)“Change in Control” means and includes any one of following events:
(i)any Person becomes a Beneficial Owner, directly or indirectly, of 50% or more of the voting power of the then-outstanding securities of Company eligible to vote for the election of directors (“Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions of Company Voting Securities shall not constitute a Change in Control: (A) an acquisition by a Principal
2
LEGAL02/43756981v3

Shareholder, (B) an acquisition directly or indirectly from the Company, including an acquisition by or through a broker, underwriter, or financial institution acquiring such securities as pan of a firm commitment or similar underwriting or distribution process, (C) an acquisition by Company or Bank, (D) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by Company or Bank, or (E) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (iii) below);
(ii)during any consecutive 12-month period, individuals who, at the beginning of such period, constitute Company’s Board of Directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board of Directors, provided that any person becoming a director after the beginning of such 12-month period and whose election or nomination for election was approved by a vote of at least a maj01ity of the Incumbent Directors then on the Board of Directors shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board of Directors (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or
(iii)the consummation of a reorganization, merger, consolidation, statutory share exchange, or similar form of corporate transaction involving Company or Bank, the sale or other disposition of all or substantially all of Company’s assets, or the acquisition of assets or stock of another corporation or other entity (each, a “Transaction”), unless immediately following such Transaction: (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the outstanding Company Voting Securities immediately prior to such Transaction beneficially own, directly or indirectly, more than 50% of the voting power of the then-outstanding shares of voting securities of the entity resulting from such Transaction (including, without limitation, an entity which as a result of such Transaction owns Company or all or substantially all of Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving Entity”) in substantially the same proportions as their ownership, immediately prior to such Transaction, of the outstanding Company Voting Securities, and (B) no person (other than (x) Company or Bank, (y) the Surviving Entity or its ultimate parent entity, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 50% or more of the total common stock or 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity were Incumbent Directors at the time of the Board of Director’s approval of the execution of the initial agreement providing for such Transaction (any Transaction which satisfies all of the criteria specified in (A), (B), and (C) above shall be deemed to be a “Non-Qualifying Transaction”).
(e)“CIC Severance Multiple” shall mean two and one-half (2.5).
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(f)“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
(g)“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
(h)“Compensation Committee” means the compensation committee of the board of directors of Company.
(i)“Competitive Services” means engaging in the business of commercial and mortgage banking, including, without limitation, originating, underwriting, closing and selling loans, receiving deposits, as well as the business of providing any other activities, products, or services of the type routinely conducted, offered, or provided by Employer as of or during the two years immediately prior to the Date of Termination.
(j)“Confidential Information” means any and all data and information relating to Employer, its activities, business, or clients that (i) is disclosed to Executive or of which Executive becomes aware because of Executive’s employment with Employer; (ii) has value to Employer; and (iii) is not generally known outside of Employer. “Confidential Information” shall include, but is not limited to the following types of information regarding, related to, or concerning Employer: trade secrets (as defined by the Tennessee Uniform Trade Secrets Act); financial plans and data; management planning information; business plans; operational methods; market studies; marketing plans or strategies; pricing information; product development techniques or plans; customer lists; customer files, data, and financial information; details of customer contracts; current and anticipated customer requirements; identifying and other information pertaining to business referral sources; past, current, and planned research and development; computer aided systems, software, strategies, and programs; business acquisition plans; management organization and related information (including, without limitation, data and other information concerning the compensation and benefits paid to officers, directors, employees, and management); personnel and compensation policies; new personnel acquisition plans; and other similar information. “Confidential Information” also includes combinations of information or materials which individually may be generally known outside of Employer, but for which the nature, method, or procedure for combining such information or materials is not generally known outside of Employer. In addition to data and information relating to Employer, “Confidential Information” also includes any and all data and information relating to or concerning a party that otherwise meets the definition set forth above, that was provided or made available to Employer by such party, and that Employer has a duty or obligation to keep confidential. This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the light to disclose such information without violating any right or privilege of Employer.
(k)“Date of Termination” means: (i) if Executive’s employment is terminated other than by reason of death or Disability, the date of delivery of the Notice of Termination, or any later date specified in such Notice of Termination, or (ii) if Executive’ s
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LEGAL02/43756981v3

employment is terminated by reason of death or Disability, the Date of Termination will be the date of death or the Disability Effective Date, as the case may be.
(l)“Disability” means a condition for which benefits would be payable under any long-term disability coverage (without regard to the application of any elimination period requirement) then provided to Executive by Employer or, if no such coverage is then being provided, the inability of the Executive to perform the essential functions of Executive’s job with Employer (as specified in this Agreement), with or without reasonable accommodation, for a period of at least 180 consecutive days as certified by a physician chosen by Executive and reasonably acceptable to the Employer. Notwithstanding the provisions in this Section I (k), Disability for purposes of this Agreement must also be a disability within the meaning of Code Section 409A(a)(2)(A)(ii) and 409A(a)(2)(C) and Treas. Reg. Section I .409A-3(a)(2).
(m)“Effective Date” means February 23, 2024.
(n)“Employer” means Company and Bank, collectively.
(o)“Excise Tax” means any excise tax imposed by Section 4999 of the Code.
(p)“FDIC” means the Federal Deposit Insurance Corporation.
(q)“Good Reason” shall mean, in the context of the termination of this Agreement by Executive:
(i)a material diminution in Executive’s title, authority, duties, or responsibilities which is not consented to by Executive in writing;
(ii)a material diminution in Executive’s base compensation (which includes Executive’s Base Salary and Target Annual Bonus opportunity) which is not consented to by Executive in writing or made as part of across-the-board compensation reductions affecting all or substantially all similarly-situated employees;
(iii)a change in the location of Executive’s primary office such that Executive is required to report regularly to an office located outside of a 50-mile radius from the location of Executive’s primary office as of the Effective Date, which change is not consented to by Executive in writing; or
(iv)a material breach of the terms of this Agreement by Employer.
(r)“Material Contact” means contact between Executive and a customer or potential customer of Company or Bank (i) with whom or which Executive has or had substantive dealings on behalf of Company or Bank; (ii) whose dealings with Company or Bank are or were coordinated or supervised by Executive; (iii) about whom Executive obtains Confidential Information in the ordinary course of business as a result of Executive’s employment with Employer; or (iv) who receives products or services of Company or Bank, the sale or provision of which directly results or resulted in incentive compensation or commissions for Executive within the two years prior to the Date of Termination.
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(s)“Non-CIC Severance Multiple” shall mean two (2.0).
(t)“Notice of Termination” shall mean a written notice delivered by a Party in connection with the termination of this Agreement which (i) indicates the specific termination provision in this Agreement relied upon for such termination, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and (iii) specifies the Date of Termination.
(u)“Parachute Value” of a Payment means the present value as of the date of the Change in Control of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm (as defined in Section 10(b)) for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.
(v)“Payment” shall mean any benefit, payment, or distribution made or given by Employer to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise).
(w)“Person” means any individual or any corporation, partnership, joint venture, limited liability company, association, or other entity or enterprise.
(x)“Principal or Representative” means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative, or consultant.
(y)“Principal Shareholder” means James W. Ayers or his designee(s), and shall include any entity that is directly or indirectly affiliated with the Principal Shareholder.
(z)“Protected Customer” means any Person to whom Company or Bank has sold its products or services or actively solicited to sell its products or services, and with whom Executive has had Material Contact during the last 24 months of his employment with Employer.
(aa)“Protected Work” means any and all ideas, inventions, formulas, Confidential Information, source codes, object codes, techniques, processes, concepts, systems, programs, software, software integration techniques, hardware systems, schematics, flow charts, computer data bases, client lists, trademarks, service marks, brand names, trade names, compilations, documents, data, notes, designs, drawings, technical data, and/or training materials, including improvements thereto or derivatives therefrom, whether or not patentable, and whether or not subject to copyright or trademark or trade secret protection, conceived, developed or produced by Executive, or by others working with Executive or under the direction of Executive, during the period of Executive’s employment, or conceived, produced or used or intended for use by or on behalf of Employer or its customers.
(ab)“Restricted Period” means a period of 12 months following the Date of Termination.
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(ac)“Restricted Territory” means a radius of 50 miles from Executive’s primary office.
(ad)“Restrictive Covenants” means the restrictive covenants contained in Section 7(b) through 7(j) hereof.
(ae)“Severance Formula” means the sum of (A) Executive’s then current Base Salary (or, in the case of a termination for Good Reason as defined in Section 1(q)(ii), the Base Salary in effect immediately prior to the diminution in Base Salary giving rise to termination), plus (B) the greater of Executive’s Target Annual Bonus for the fiscal year in which the Date of Termination occurs or the average Annual Bonus received by Executive for the three fiscal years immediately preceding the fiscal year in which the Date of Termination occurs.
2.Effective Date Term. Upon the terms and subject to the conditions set forth in this Agreement, Employer hereby employs Executive, and Executive hereby accepts such employment, for the term commencing on the Effective Date and, unless otherwise earlier terminated pursuant to Section 5 hereof, the close of business on the third anniversary of the Effective Date (the “Initial Term”). The Initial Term and any and all renewal terms, if any, are referred to together herein as the “Term.” The third anniversary of the Effective Date is referred to herein as the “Term End Date.” Beginning on the initial Term End Date and on each subsequent anniversary of the Term End Date thereafter, the Term shall, without further action by Executive or Employer, be extended by an additional one-year period; provided, however, that either Employer or Executive may cause the Term to cease to extend automatically, by giving written notice to the other not less than 90 days prior to the scheduled expiration of the Term.
3.Employment: Extent of Service. Executive is hereby employed on the Effective Date as the Chief Banking Officer of Company and Bank. Executive shall have the duties, responsibilities, and authority commensurate with such position and such other duties as may be assigned by the Chief Executive Officer. During the Term of this Agreement, and excluding any periods of vacation or sick leave to which Executive is entitled, Executive agrees to (i) devote substantially all of Executive’s business effort, time, energy, and skill to the business of Employer; (ii) faithfully, loyally, and diligently perform such duties; and (iii) diligently follow and implement all lawful management policies and decisions of Employer that are communicated to Executive. During the Term of this Agreement, Executive shall not, without the consent of Employer, be engaged in or provide services to any other business or enterprise (whether engaged in for profit or not) which interferes with his obligations to Employer under this Agreement. Executive will report directly to the Chief Executive Officer of the Company.
4.Compensation and Benefits. For the avoidance of doubt, the compensation and benefits provided under this Section 4 shall be in consideration of services rendered to both Company and Bank.
(a)Base Salary. During the Term, Bank shall pay to Executive a base salary at the rate of $400,000 per year (“Base Salary”), less normal withholdings, payable in
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accordance with Bank’ s payroll practices. The Compensation Committee shall review Executive ‘s Base Salary annually and may increase the Base Salary based on such review but may not decrease the Base Salary unless (i) Executive consents in writing to such decrease, or (ii) such decrease is made as pan of across-the-board salary reductions affecting all or substantially all similarly-situated employees. Such adjusted salary then shall become Executive’s Base Salary for purposes of this Agreement.
(b)Annual Bonus. During the Term, Executive shall have an opportunity to participate in any short-term or cash incentive plans available to other Bank employees similarly situated to Executive (“Peer Executives”) and based upon the achievement of performance goals established from year to year by the Compensation Committee (the “Annual Bonus”). Subject to the vesting and performance requirements as the Compensation Committee may require, effective January 1, 2023, the initial base value of Executive’s potential Annual Bonus shall equal $250,000, with a maximum payout of 150% of such amount, which number shall be reviewed by the Compensation Committee annually and adjusted based on such review. Except as otherwise provided in Section 6(a)(ii) and Section 6(e)(ii) hereof, Executive must be employed by Company and/or Bank on the date the Annual Bonus, if any, is paid in order to receive the Annual Bonus. The Annual Bonus will be paid by March 15 of the year following the year for which it is earned. For purposes of this Agreement, Executive’s target Annual Bonus opportunity for any given fiscal year is referred to as the “Target Annual Bonus.”
(c)Retirement Plans. During the Term, Executive shall be entitled to participate in any retirement plans available to other Bank employees similarly situated to Executive (“Peer Executives”), and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such plans at any time and from time to time.
(d)Long-Term Incentive Plans. During the Term, Executive shall be entitled to participate in any long-term or equity incentive plans available to other Peer Executives, and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Company and/or Bank to amend, modify or terminate any such plans at any time and from time to time. Subject to the vesting and performance requirements as the Compensation Committee may require, effective for grant awards with respect to the performance year commencing January 1, 2023, the initial base value of the Executive’s potential long term incentive plan award shall equal $250,000 (“Target Incentive Award”), with a maximum payout of 200% of such amount, which number shall be reviewed by the Compensation Committee annually and adjusted based on such review.
(e)Welfare Benefit Plans. During the Term, Executive and Executive’s eligible dependents shall be eligible for participation in the welfare benefit plans, practices, policies, and programs provided by Bank, if any, to the extent available to other Peer Executives and subject to eligibility requirements and terms and conditions of each such plan; provided that
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nothing herein shall limit the ability of Bank to amend, modify, or terminate any such benefit plans, policies, or programs at any from and from time to time.
(f)Expenses. During the Term, and subject to Section 12 hereof, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in the course of performing Executive’s duties and responsibilities under this Agreement, in accordance with the policies, practices, and procedures of Bank to the extent available to other Peer Executives with respect to travel and other business expenses.
(g)Disability Insurance. During the Term, Bank shall provide supplemental long-term disability coverage for Executive to the extent necessary’ to provide total long-term disability coverage equal to 60% of Executive’s Base Salary.
5.Termination of Employment. For the avoidance of doubt, if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason, and if Executive ‘s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason.
(a)Termination upon Death. Executive’s employment shall terminate automatically upon Executive’ s death. For the avoidance of doubt, Termination of Executive ‘s employment upon the death of Executive under this Section 5(a) shall not be considered a termination without Cause that would entitle Executive to severance under Section 6(a).
(b)Termination by Employer. Employer may terminate Executive’s employment during the Term with or without Cause on mitten notice to Executive, provided that the written notice of termination with respect to a Termination without Cause shall be provided at least 30 days prior to the effective date of such Termination.
(c)Termination by Executive. Executive’s employment may be terminated by Executive:
(i)at any time for Good Reason, provided that (A) before terminating this Agreement and Executive’s employment for Good Reason, (l) Executive shall give notice to Employer of the existence of Good Reason for Termination, which notice must be given by Executive to Employer within 90 days of Executive’s discovery of the existence of the condition(s) giving rise to Good Reason for Termination and shall state with reasonable detail the condition(s) giving rise to Good Reason for Termination, and (2) Employer shall have 30 days from the date of receipt of such notice to remedy the condition(s) giving rise to Good Reason for Termination; and (B) such Termination must occur within 12 months of the initial existence of the condition(s) giving rise to Good Reason for Termination; or
(ii)at any time without Good Reason, provided that Executive shall give Employer at least 30 days prior written notice of Executive ‘s intent to terminate.
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(d)Notice of Termination. Any Termination by Company and/or Bank with or without Cause and any termination by Executive shall be communicated by Notice of Termination to the other Party(ies) hereto given in accordance with Section 16(e) of this Agreement. The failure by Company and/or Bank to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any light of Company and/or Bank hereunder or preclude the Company and/or Bank from asserting such fact or circumstance in enforcing its lights hereunder. The failure by Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing its rights hereunder.
6.Obligations of Employer upon Termination.
(a)Resignation for Good Reason: Termination Other Than for Cause, Death, or Disability. During the Term if (x) Employer terminates Executive’s employment other than for Cause, death, or Disability, or (y) Executive terminates employment for Good Reason, then, subject to Section 6(f) hereof:
(i)Bank shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank Executive’s Base Salary through the Date of Termination to the extent not theretofore paid (the “Accrued Salary”); and
(ii)Bank shall pay to Executive in a lump sum in cash a prorated Annual Bonus for the year in which the Date of Termination occurs based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned Annual Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Date of Termination, and the denominator shall be twelve (12)) (the “Prorated Annual Bonus”), payable at the same time that annual bonuses are paid to Peer Executives;
(iii)subject to Section 12 hereof, Bank shall pay to Executive an amount equal to the Non-CIC Severance Multiple times the Severance Formula (such aggregate payment, the “Non-CIC Severance Amount”), payable in approximately equal monthly installments during the 24-month period following the Date of Termination, commencing on the first payroll date to occur after the 60th day following the Date of Termination; provided that the first such payment shall consist of all amounts payable to Executive pursuant to this Section 6(a)(iii) between the Date of Termination and the first payroll date to occur after the 60th day following the Date of Termination; and
(iv)if Executive elects to continue participation in any group medical, dental, vision, and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then for a period of 18 months after the Date of Termination (the “Health Benefits Continuation Period”), Bank shall pay to Executive an amount in cash equal to the COBRA cost of such coverage; provided, however, that (l) that if Executive becomes eligible to receive medical benefits
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under a program of a subsequent employer or otherwise (including coverage available to Executive’s spouse through the spouse’s employer), Bank’s obligation to pay any portion of the cost of health coverage as described herein shall cease, except as otherwise provided by law; (2) the Health Benefits Continuation Period shall run concurrently with any period for which Executive is eligible to elect health coverage under COBRA; (3) the Bank-paid portion of the monthly premium for such group health benefits, determined in accordance with Code Section 4980B and the regulations thereunder, shall be treated as taxable compensation by including such amount in Executive’s income in accordance with applicable rules and regulations; (4) during the Health Benefits Continuation Period, the benefits provided in any one calendar year shall not affect the amount of benefits provided in any other calendar year (other than the effect of any overall coverage benefits under the applicable plans); (5) the reimbursement of an eligible taxable expense shall be made as soon as practicable but not later than December 31 of the year following the year in which the expense was incurred; and (6) Executive’s rights pursuant to this Section 6(a)(iv) shall not be subject to liquidation or exchange for another benefit. The benefit described in this Section 6(a)(iv) is referred to as the “Health Coverage Benefit;” and
(v)to the extent not theretofore paid or provided, Bank shall timely pay or provide to Executive any other amounts or benefits required to be paid or provided or which Executive is eligible to receive under any plan, program, policy, practice, contract, or agreement of Bank and its affiliated companies and in accordance with the terms thereof, including, but not limited to, any expense reimbursements and accrued but unused vacation (which shall be paid out, if at all, in accordance with Bank’s then current written policy regarding accrual and payment for unused vacation pay) (such amounts and benefits shall be hereinafter referred to as the “Other Benefits”); and
(vi)unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall remain outstanding and shall vest, in whole, in part, or not at all, on a pro rata basis based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned award by a fraction, the numerator of which shall be the number of months elapsed in the applicable performance period prior to the Date of Termination, and the denominator shall be the number of months in the applicable performance period). The treatment of equity awards described in this Section 6(a)(vi) is hereinafter referred to as the “Non-CIC Equity Award Treatment”.
(b)
(c)Termination for Cause: Resignation by Executive other than Resignation for Good Reason; Death. If during the Term Executive’s employment is terminated by Employer for Cause, by Executive other than for Good Reason, or in the event of Executive ‘s death, then Employer shall have no further obligations to Executive or Executive’s legal representatives
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under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive or Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after the Date of Termination, and payments of Other Benefits, as applicable. Notwithstanding the above, if Executive’s employment is terminated by Executive’ s death, Executive’s then outstanding equity-based awards shall be subject to the Non-CIC Equity Award Treatment as provided Section 6(a)(vi).
(d)Non-Renewal of Agreement.
(i)If Employer elects not to renew the Term pursuant to Section 2 hereof, and within the 12 months following the expiration of such Term, Employer terminates Executive’s employment other than for Cause, death, or Disability, then, notwithstanding the expiration of the Term and subject to Section 6(f) and Section 12 hereof, Bank shall pay or provide to Executive (X) the Non-CIC Severance Amount, payable pursuant to the payment schedule set forth in Section 6(a)(iii) hereof, (Y) the Health Coverage Benefit as set forth in Section 6(a)(iv), and (Z) any unvested equity awards held by Executive shall be subject to the Non-CIC Equity Award Treatment (collectively, the “Non-Renewal Severance”).
(ii)If Executive elects not to renew the Term pursuant to Section 2 hereof, and following the expiration of such Term, Executive’s employment with Employer terminates, then Employer shall have no further obligations to Executive or Executive’ s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination, and payment or provision of Other Benefits, as applicable.
(e)Termination for Disability. During the Term, if Employer terminates Executive’s employment for Disability of Executive, then, subject to Section 6(f) hereof, Employer shall give Executive 30 days’ prior notice of its intent to terminate and Executive’s employment shall terminate on the 30th day after receipt of such notice (the “Disability Effective Date”), in which event, Bank shall pay to Executive a lump sum amount equal to equal to six months of the Executive's then current Base Salary, plus a prorated Target Annual Bonus for the fiscal year in which the Disability Effective Date occurs (with such pro rata portion determined by multiplying the Target Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Disability Effective Date, and the denominator shall be twelve (12)), with such amount payable in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank .
(f)Termination following a Change in Control. If, within 12 months following a Change in Control, (x) Employer (or any successor to Employer) terminates Executive’s employment other than for Cause, or (y) Executive terminates employment for Good Reason, then subject to Section 6(f) hereof and in lieu of any amounts under Section 6(a) hereof:
(i)Bank (or its successor) shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Accrued Salary;
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(ii)Bank shall pay to Executive in a lump sum in cash the Prorated Annual Bonus, payable at the same time that annual bonuses are paid to Peer Executives;
(iii)subject to Section 12 hereof, Bank (or its successor) shall pay to Executive an amount equal to the CIC Multiple times the Severance Formula, payable in a lump sum in cash on the 60th day following the Date of Termination (such aggregate payment, the “CIC Severance Amount”);
(iv)if Executive elects to continue participation in any group medical, dental, vision and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then during the Health Benefits Continuation Period, Bank (or its successor) shall pay to Executive the Health Coverage Benefit;
(v)to the extent not theretofore paid or provided, Bank (or its successor) shall timely pay or provide to Executive any Other Benefits; and
(vi)unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall become vested as soon as possible but not later than the 60th day after the Date of Termination as to the greater of (1) the number of shares that would have vested based upon an assumed achievement of all applicable performance metrics at the target level of performance or (2) the number of shares that would have vested based upon the actual level of achievement of all applicable performance metrics measured as of the Date of Termination. The treatment of equity awards described in this Section 6(e)(vi) is hereinafter referred to as the “CIC Equity Award Treatment.”
(g)
(h)Release of Claims; Restrictive Covenants. Notwithstanding the foregoing, Bank shall be obligated to provide the amounts and benefits in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable, only if (A) within 45 days after the Date of Termination Executive shall have executed a separation and full release of claims/covenant not to sue in substantially the form attached hereto as Exhibit A (the “Release Agreement”) and such Release Agreement shall not have been revoked within the revocation period specified in the Release Agreement, and (B) Executive fully complies with the obligations set forth in Section 7 hereof. For the avoidance of doubt, if Executive does not comply with the obligations set forth in Section 7 hereof, then payment of the amounts and benefits in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable shall cease immediately upon Executive’s breach thereof.
(i)Resignations. If Executive is a member of the board of directors of Company, the board of directors of Bank, or the board of directors of any subsidiary of Company or Bank, then Termination of Executive’s employment hereunder for any reason whatsoever
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shall constitute Executive ‘s resignation from such boards of directors and as resignation as an officer of Bank, Company, and of any of the subsidiaries for which Executive serves as an officer.
(j)Equity Awards Granted Prior to the Effective Date. Notwithstanding anything to the contrary in this Agreement, any equity-based awards granted prior to the Effective Date that remain outstanding as of the Executive’s Date of Termination or a Change in Control, as applicable, shall be governed by the terms of the Prior Agreement.
7.Restrictive Covenants. For the avoidance of doubt, except as expressly set forth herein, the Restrictive Covenants contained in this Section 7, as well as any other provisions of this Agreement necessary to interpret or enforce the Restrictive Covenants, shall survive Termination of this Agreement and/or termination of Executive’s employment for any reason, and shall continue to be in full force and effect in accordance with their terms.
(a)Acknowledgments.
(i)Condition of Employment and Other Consideration. Executive acknowledges and agrees that Executive has received good and valuable consideration for entering into this Agreement.
(ii)Access to Confidential Information, Relationships, and Goodwill. Executive acknowledges and agrees that Executive is being provided and entrusted with Confidential Information, including highly confidential customer information that is subject to extensive measures to maintain its secrecy by Employer, is not known in the trade or disclosed to the public, and would materially harm Employer’s legitimate business interests if it was disclosed or used in violation of this Agreement. Executive also acknowledges and agrees that Executive is being provided and entrusted with access to Employer ‘s customer and employee relationships and goodwill. Executive further acknowledges and agrees that the Employer would not provide access to the Confidential Information, customer and employee relationships, and goodwill in the absence of Executive’s execution of and compliance with this Agreement. Executive further acknowledges and agrees that the Employer’s Confidential Information, customer and employee relationships, and goodwill are valuable assets of Employer and are legitimate business interests that are properly subject to protection through the covenants contained in this Agreement.
(iii)Potential Unfair Competition. Executive acknowledges and agrees that as a result of Executive’s employment with Employer, Executive’s knowledge of and access to Confidential Information, and relationships with Employer ‘s customers and employees, Executive would have an unfair competitive advantage if Executive were to engage in activities in violation of this Agreement.
(iv)Voluntary Execution. Executive acknowledges and affirms that Executive has executed this Agreement voluntarily, has read this Agreement carefully, and had a full and reasonable opportunity to consider this Agreement (including an
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opportunity to consult with legal counsel), and that Executive has not been pressured or in any way coerced, threatened, or intimidated into signing this Agreement.
(b)Restriction on Disclosure and Use of Confidential Information. Executive agrees that Executive shall not, directly or indirectly, use any Confidential Information on Executive’ s own behalf or on behalf of any Person other than Employer, or reveal, divulge, or disclose any Confidential Information to any Person not expressly authorized by Employer to receive such Confidential Information. This obligation shall remain in effect for as long as the information or materials in question retain their status as Confidential Information. Executive further agrees to frilly cooperate with Employer in maintaining the Confidential Information to the extent permitted by law. The Parties acknowledge and agree that this Agreement is not intended to, and does not, alter either Employer’s lights or Executive’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein to the contrary notwithstanding, Executive shall not be restricted from disclosing information that is required to be disclosed by law, court order, or other valid and appropriate legal process; provided, however, that in the event such disclosure is required by law, Executive shall provide Employer with prompt notice of such requirement so that Employer may seek an appropriate protective order prior to any such required disclosure by Executive. Executive understands and acknowledges that nothing in this section limits Executive’s ability to report possible violations of federal, state, or local law or regulation to any governmental agency or entity; to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agencies in connection with any charge or complaint, whether filed by Executive, on Executive’s behalf, or by any other individual; or to make other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation, and Executive shall not need the prior authorization of Employer to make any such reports or disclosures and shall not be required to notify Employer that Executive has made such reports or disclosures. In addition, and anything herein to the contrary notwithstanding, Executive is hereby given notice that Executive shall not be criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (as defined by 18 U.S .C. 1839) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, in either event solely for the purpose of reporting or investigating a suspected violation of law; or disclosing a trade secret (as defined by 18 U.S.C. 1839) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(c)Non-Competition. Except as provided herein, Executive agrees that, during the Restricted Period, Executive will not, without prior mitten consent of Employer, directly or indirectly (i) cany on or engage in Competitive Services within the Restricted Territory on Executive ‘s own behalf or on behalf of any Person or any Principal or Representative of any Person, or (ii) own, manage, operate, control or participate in the ownership, management, operation or control of any business, whether in corporate, proprietorship, or partnership form or otherwise, where such business is engaged in the provision of Competitive Services within the Restricted Territory, provided that nothing herein shall prohibit Executive from (A) working or consulting for, owning, managing, operating or participating in the ownership, management or operation of Clayton Homes (or any successor) so
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long as Executive does not directly engage in lending or other activities that compete with any business of Bank, or (B) being a passive owner of not more than five percent of the outstanding securities of any publicly traded company engaged in the Competitive Services, so long as Executive does not serve on the board of directors of such company and does not engage in the management of such company. The restrictions contained in this Section 7(c) shall not apply in the event that the Date of Termination occurs in connection with or subsequent to a Change in Control.
(d)Non-Solicitation of Protected Customers. Executive agrees that, during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, on Executive’s own behalf or as a Principal or Representative of any Person, solicit, divert, or attempt to solicit or divert a Protected Customer for the purpose of engaging in, providing, or selling Competitive Services.
(e)Non-Recruitment of Employees and Independent Contractors. Executive agrees that during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, whether on Executive’ s own behalf or as a Principal or Representative of any Person, solicit or induce or attempt to solicit or induce any employee or individual independent contractor of Employer to terminate an employment relationship with Employer or to enter into employment or independent contractor relationship with Executive or any such other Person. Notwithstanding the foregoing, the provisions of this Section 7(e) shall not be violated by general advertising or solicitation not specifically targeted at employees or independent contractor of Employer, or actions taken by any person or entity with which Executive is associated if Executive is not personally involved in any manner in the matter and has not identified such employee for soliciting or hiring and has not provided any information regarding the employee ‘s qualifications.
(f)Proprietary Rights.
(i)Ownership and Assignment of Protected Works. Executive agrees that any and all Confidential Information and Protected Works are the sole property of Employer, and that no compensation in addition to Executive’s compensation hereunder is due to Executive for development or transfer of such Protected Works. Executive agrees that Executive shall promptly disclose in writing to Employer the existence of any Protected Works. Executive hereby assigns and agrees to assign all of Executive’s rights, title, and interest in any and all Protected Works, including all patents or patent applications, and all copyrights therein, to Employer. Executive shall not be entitled to use Protected Works for Executive’s own benefit or the benefit of anyone except Employer without written permission from Employer and then only subject to the terms of such permission. Executive further agrees that Executive will communicate to Employer any facts known to Executive and testify in any legal proceedings, sign all lawful papers, make all rightful oaths, execute all divisionals, continuations, continuations-in-part, foreign counterparts, or reissue applications, all assignments, all registration applications, and all other instruments or papers to cany into full force and effect the assignment, transfer, and conveyance hereby made or to be made and generally
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do everything possible for title to the Protected Works and all patents or copyrights or trademarks or service marks therein to be clearly and exclusively held by Employer. Executive agrees that Executive will not oppose or object in any way to applications for registration of Protected Works by Employer or others designated by Employer. Executive agrees to exercise reasonable care to avoid making Protected Works available to any third party and shall be liable to Employer for all damages and expenses, including reasonable attorneys’ fees, if Protected Works are made available to third parties by Executive without the express written consent of Employer.
Anything herein to the contrary notwithstanding, Executive will not be obligated to assign to Employer any Protected Work for which no equipment, supplies, facilities, or Confidential Information of Employer was used and which was developed entirely on Executive ‘ s own time, unless (A) the invention relates (1) directly to the business of Employer, or (2) to the Employer’s actual or demonstrably anticipated research or development; or (B) the invention results from any work performed by Executive for Employer. Executive likewise will not be obligated to assign to Employer any Protected Work that is conceived by Executive after Executive leaves the employ of Employer, except that Executive is so obligated if the same relates to or is based on Confidential Information to which Executive had access by virtue of employment with Employer. Similarly, Executive will not be obligated to assign any Protected Work to Employer that was conceived and reduced to practice prior to Executive’s employment with Employer, regardless of whether such Protected Work relates to or would be useful in the business of Employer. Executive acknowledges and agrees that there are no Protected Works conceived and reduced to practice by Executive prior to his employment with Employer.
(ii)No Other Duties. Executive acknowledges and agrees that there is no other contract or duty on the pan of Executive now in existence to assign Protected Works to anyone other than Employer.
(iii)Works Made for Hire. Employer and Executive acknowledge that in the course of Executive’s employment with Employer, Executive may from time to time create for Employer copyrightable works. Such works may consist of manuals, pamphlets, instructional materials, computer programs, software, software integration techniques, software codes, and data, technical data, photographs, drawings, logos, designs, artwork, or other copyrightable material, or portions thereof, and may be created within or without Employer’s facilities and before, during or after normal business hours. All such works related to or useful in the business of Employer are specifically intended to be works made for hire by Executive, and Executive shall cooperate with Employer in the protection of Employer’s copyrights in such works and, to the extent deemed desirable by Employer, the registration of such copyrights.
(g)Return of Materials. Executive agrees to not retain or destroy (except as set forth below), and to immediately ret-um to Employer on or prior to the Date of Termination, or at any other time Employer requests such return, any and all property of Employer that is the
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possession of Executive or subject to Executive’s control, including, but not limited to, keys, credit and identification cards, equipment, customer files and information, papers, drawings, notes, manuals, specifications, designs, devices, code, email, documents, diskettes, CDs, tapes, keys, access cards, credit cards, identification cards, computers, mobile devices, other electronic media, all other files and documents relating to Employer and its business (regardless of form, but specifically including all electronic files and data of Employer), together with all Protected Works and Confidential Information belonging to Employer or that Executive received from or through his employment with Employer. Executive will not make, distribute, or retain copies of any such information or property. To the extent that Executive has electronic files or information in Executive ‘s possession or control that belong to Employer, contain Confidential Information, or constitute Protected Works (specifically including but not limited to electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), on or prior to the Date of Termination, or at any other time Employer requests, Executive shall (i) provide Employer with an electronic copy of all of such files or information (in an electronic format that readily accessible by Employer); (ii) after doing so, delete all such files and information, including all copies and derivatives thereof, from all non-Employer-owned computers, mobile devices, electronic media, cloud storage, and other media, devices, and equipment, such that such files and information are permanently deleted and irretrievable; and (iii) provide a mitten certification to Employer that the required deletions have been completed and specifying the files and information deleted and the media source from which they were deleted.
(h)Enforcement of Restrictive Covenants. For the avoidance of doubt, nothing in this Section 7(i) limits the remedies available to Employer under Section 14 hereof.
(i)Rights and Remedies Upon Breach. The Parties specifically acknowledge and agree that the remedy at law for any breach of the Restrictive Covenants will be inadequate, and that in the event Executive breaches any of the Restrictive Covenants, Employer shall have the right and remedy, without the necessity of proving actual damage or posting any bond, to enjoin, preliminarily and permanently, Executive from violating the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to Employer and that money damages would not provide an adequate remedy to Employer. Executive understands and agrees that if he materially violates any of the obligations set forth in the Restrictive Covenants, the Restricted Period shall cease to run during the pendency of any litigation over such violation, provided that such litigation was initiated during the Restricted Period. If Employer does not substantially prevail in such litigation, the Restricted Period shall be deemed to have continued to run during the litigation. Such lights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to Employer at law or in equity. Employer’s ability to enforce its rights under the Restrictive Covenants or applicable law against Executive shall not be impaired in any way by the existence of a claim or cause of action on the pan of Executive based on, or arising out of, this Agreement or any other event or transaction.
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(ii)Severability and Modification of Covenants. Executive acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The Parties agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and construed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants, or any other provision of this Section 7, be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of Employer’s legitimate business interests and may be enforced by Employer to that extent in the manner described above and all other provisions of this Agreement shall be valid and enforceable.
(i)Existing Covenants. Executive represents and warrants that Executive’s employment with Employer does not and will not breach any agreement that Executive has with any former employer to keep in confidence proprieta1Y or confidential information or not to compete with any such former employer. Executive will not disclose to Employer or use on its behalf any proprietary or confidential information of any other party required to be kept confidential by Executive.
(j)Disclosure of Agreement. Executive acknowledges and agrees that, during the Restricted Period, Executive will disclose the existence and terms of the Protective Covenants in Section 7 of this Agreement to any prospective employer or business panner, within the Restricted Territory prior to entering into an employment, partnership, or other business relationship with such prospective employer or business panner. Executive further agrees that Employer shall have the right to make any such prospective employer or business panner of Executive within the Restricted Territory aware of the existence and terms of the Protective Covenants in Section 7 of this Agreement.
8.Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any employee benefit plan, program, policy, or practice provided by Employer and for which Executive may qualify, except as specifically provided herein. Amounts that are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice, or program of Employer at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice, or program except as explicitly modified by this Agreement.
9.Full Settlement; No Mitigation. Employer’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which Employer may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to
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Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment. For the avoidance of doubt, nothing in this Section 9 shall impact Employer’s remedy of recoupment set forth in Section 14 hereof.
10.Mandatory Reduction of Payments in Certain Events.
(a)Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any Payment would, if paid, be subject to any Excise Tax, then, prior to the making of any Payments to or for the benefit of Executive, a calculation shall be made comparing (i) the net after-tax benefit to Executive of the Payments after payment by Executive of the Excise Tax, to (ii) the net after-tax benefit to Executive if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of a Change in Control, as determined by the Determination Finn (as defined below). For purposes of this Section 10, present value shall be determined in accordance with Section 280G(d)(4) of the Code.
(b)All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, shall be made by a nationally recognized accounting firm or compensation consulting firm mutually acceptable to Employer and Executive (the “Determination Firm”) which shall provide detailed supporting calculations to Employer and Executive within 15 business days after the receipt of notice from Executive that a Payment is due to be made, or such earlier time as is requested by Employer. All fees and expenses of the Determination Finn shall be borne solely by Employer. Any determination by the Determination Finn shall be binding upon Employer and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder, it is possible that Payments which Executive was entitled to, but did not receive pursuant to Section 10(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Employer to or for the benefit of Executive but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.
(c)In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 10 shall be of no further force or effect. In the event the provisions of Code Section 280G and 4999 are modified, this Section 10 shall be modified accordingly.
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11.Successors.
(a)This Agreement is personal to Executive and shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.
(b)This Agreement can be assigned by Company and/or Bank only to a subsidiary or successor and shall be binding and inure to the benefit of Company and Bank, and their successors and assigns. The Company and/or Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank, expressly and unconditionally to assume and agree to perform the Bank’ s obligations under this Agreement, in the same manner and to the same extent that the Bank would be required to perform if no such succession or assignment had taken place.
12.Code Section 409A.
(a)General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code). Nevertheless, the tax treatment of the benefits provided under the Agreement is not wan-anted or guaranteed. Neither Company nor Bank, nor their directors, officers, employees, or advisers, shall be held liable for any taxes, interest, penalties, or other monetary amounts owed by Executive as a result of the application of Section 409A of the Code.
(b)Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, such Non-Exempt Deferred Compensation will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such payment event meet any description or definition of “change in control event” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not affect the dollar amount or prohibit the vesting of any Non-Exempt Deferred Compensation Termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, or the application of a different form of payment, then, subject to subsection (c) below, such payment or distribution shall be made at the time and in the form that would have applied absent the non-409A-confonning event.
(c)Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt
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Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of Executive ‘ s separation from service during a period in which Executive is a specified employee (as determined by Employer in accordance with Section 409A of the Code and Treasury Regulations 1.409A-3(i)(2)), then, subject to any permissible acceleration of payment by Employer under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes): (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following Executive ‘s separation from service will be accumulated through and paid or provided on the first day of the seventh month following Executive’s separation from service (or, if Executive dies during such period, within 30 days after Executive’s death) (in either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.
(d)Treatment of Installment Payments. Each payment of Termination benefits under this Agreement, including but not limited to Section 6, shall be considered a separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.
(e)Timing of Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on Executive’s execution of a release of claims, such release must be executed and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60ff day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, Employer may elect to make or commence payment at any time during such period.
(f)Timing of Reimbursements and In-kind Benefits. If Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement, and such payments or reimbursements are includible in Executive’s federal gross taxable income, the amount of such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. No right of Executive to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.
(g)Permitted Acceleration. Employer shall have the sole authority to make any accelerated distribution permissible under Treas. Reg. Section 1.409A-3(j)(4) to Executive of deferred amounts, provided that such distribution meets the requirements of Treas. Reg. Section 1.409A-3(j)(4).
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13.Regulatory Action.
(a)If Executive is removed and/or permanently prohibited from participating in the conduct of Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(l) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(l)), all obligations of Employer under this Agreement shall terminate, as of the effective date of such order.
(b)If Executive is suspended and/or temporarily prohibited from participating in the conduct of Bank’s affairs by a notice served under Section 8(e)(3) or 8(g)(1) of the FDIA (12 U.S.C. and (g)(l)), all obligations of Employer under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, Employer shall reinstate (in whole or in part) any of its obligations which were suspended.
(c)If Bank is in default (as defined in Section 3(x)(l) of the FDIA), all obligations under this Agreement shall terminate as of the date of default.
(d)All obligations under this Agreement shall be terminated except to the extent a determination is made that continuation of the Agreement is necessary for the continued operation of Bank (l) by the director of the FDIC or his or her designee (the “Director”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of Bank under the auth01ity contained in 13(c) of the FDIA; or (2) by the Director, at the time the Director approves a supervisory merger to resolve problems related to operation of Bank when Bank is determined by the Director to be in an unsafe and unsound condition.
14.Compensation Recoupment Policy. Any incentive compensation, including, but not limited to, cash-based and equity-based compensation, awarded to Executive by Employer shall be subject to any written compensation recoupment policy that the Compensation Committee may adopt from time to time that is applicable by its terms to Executive, including, but not limited to, the Company’s mandatory recoupment policy as required by the listing rules of The New York Stock Exchange. In addition, the Compensation Committee may specify in any written documentation memorializing an incentive award that Executive’s lights, payments, and benefits with respect to such award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable conditions of such award. Such events may include, but shall not be limited to: (i) Termination of employment for Cause, (ii) violation of material Company or Bank policies, (iii) breach of noncompetition, confidentiality, or other restrictive covenants, (iv) other conduct by Executive that is detrimental to the business or reputation of the Employer, or (v) a later determination that the amount realized from a performance-based award was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, whether or not Executive caused or contributed to such material inaccuracy. The reduction, cancellation, forfeiture, and recoupment lights associated with any equity awards or similar awards granted to Executive, if any, shall be as provided in the award certificate memorializing any such award.
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15.Indemnification. Employer shall indemnify Executive for liabilities incurred by Executive while acting in good faith as an officer to the fullest extent provided for any other officer of Employer. To the extent that Employer maintains director and officer liability insurance, such insurance shall cover Executive to the same extent as any other officer of Employer.
16.Miscellaneous.
(a)Applicable Law: Consent to Arbitration. Employer and Executive agree that this Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Tennessee without giving effect to its conflicts of law principles. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators sitting in a location selected by Executive within fifty (50) miles from the headquarters location of the Bank, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’ s award in any court having jurisdiction.
(b)Non-Duplication. Notwithstanding anything to the contrary in this Agreement, and except as specifically provided below, any severance payments or benefits received by Executive pursuant to this Agreement shall be in lieu of any general severance policy or other severance plan maintained by Employer (other than a stock option, restricted stock, share or unit, performance share or supplemental retirement, deferred compensation, or similar plan or agreement which may contain provisions operative on a Termination of Executive ‘s employment or may incidentally refer to accelerated vesting or accelerated payment upon a termination of employment).
(c)Captions. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
(d)Amendments. This Agreement may not be amended or modified otherwise than-by a written agreement executed by the Party(ies) or their respective successors and legal representatives.
(e)Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other Party(ies) or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:    If to Company and/or Bank:
On file with Bank    1221 Broadway
    Suite 1300
    Nashville, Tennessee 37203
    Attention : General Counsel
or to such other address as a Party shall have furnished to the other Party(ies) in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
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(f)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(g)Withholding. Employer may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(h)Waivers. Failure of any Party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted in this Agreement or of the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the Party making the waiver.
(i)Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and, from and after the date hereof, this Agreement shall supersede any other agreement, written or oral, between the Parties relating to the subject matter of this Agreement, including but not limited to any prior discussions, understandings, letters, and/or agreements between the Parties, written or oral, at any time (expressly including, but not limited to, the Prior Agreement (except to the extent necessary to govern the treatment of outstanding equity-based awards granted prior to the Effective Date as specified in Section 6(h) hereof), any confidentiality, non-solicitation, non-recruitment, and/or non-competition agreements Executive has previously entered into with Bank or Company); provided, however, that the foregoing shall not be construed to limit any restrictive covenants set forth in an equity award agreement entered into by the Executive after the Effective Date.
(j)Construction. The Parties understand and agree that because they have been given the opportunity to have counsel review and revise this Agreement, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Pany shall not be employed in the interpretation of this Agreement. Instead, the language of all pans of this Agreement shall be construed as a whole, and according to its fair meaning, and not strictly for or against any Party.
(k)Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
(l)Survival. The rights and obligations of the Parties under Sections 6, 7, 10, 12, 14, 15, 16 shall survive the expiration and/or Termination of this Agreement and the Termination of Executive ’s employment hereunder for the periods expressly designated in such sections or, if no such period is designated, for the maximum period permissible under applicable law.
[signature page follows]

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IN WITNESS WHEREOF, the Parties hereby signify their agreement to these terms by their signatures below, as of the Effective Date.
TRAVIS K. EDMONDSON
    
Travis K. Edmondson
image_0.jpgFIRSTBANK

    
Christopher T. Holmes
President and Chief Executive Officer
image_1.jpgFB FINANCIAL CORPORATION

    
Christopher T. Holmes
President and Chief Executive Officer

[Edmondson – Employment Agreement Signature Page]
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Exhibit 10.2
Execution Copy
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 23 day of February 2024, by and among FB FINANCIAL CORPORATION (“Company”), FIRSTBANK, a Tennessee bank (“Bank”), a wholly owned subsidiary of the Company, and Aimee T. Hamilton (“Executive”). Company, Bank, and Executive are sometimes referred to herein collectively as the “Parties,” and each is sometimes referred to herein individually as a “Party.”
BACKGROUND
WHEREAS, the Parties are presently party to that certain Employment Agreement, dated November 29, 2021 (the “Prior Agreement”); and
WHEREAS, the Parties desire to amend and restate the Prior Agreement as of the Effective Date (as defined herein).
NOW, THEREFORE, in consideration of the payments, consents, and acknowledgements described below, in consideration of Executive’s employment with Company and Bank, and in consideration of other good and valuable consideration, the receipt and sufficiency of all of which is hereby acknowledged, the Parties agree as follows:
1.Definitions. The following capitalized terms used in this Agreement shall have the meanings assigned to them below, which definitions shall apply to both the singular and the plural forms of such terms:
(a)“Board of Directors” means, collectively, the board of directors of Company and the board of directors of Bank and, where appropriate, any committee or other designee thereof.
(b)“Beneficial Owner” has the meaning given such term in Rule 13d-3 of the General Rules and Regulations promulgated under the Securities Exchange Act of 1934.
(c)“Cause” means, in the context of the termination of this Agreement by Employer, a good faith determination by the Chief Executive Officer of Company that is agreed to by a majority of the members of the Compensation Committee that any of the following has occurred:
(i)conduct by Executive that amounts to willful misconduct, gross neglect, or a material failure to perform Executive’s duties and responsibilities hereunder, including prolonged absences without the consent of the Chief Executive Officer of Company unless otherwise excused by law or under Bank’s leave policies; provided that the nature of such conduct shall be set forth in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
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(ii)any willful violation of any material law, rule, or regulation applicable to banks or the banking industry generally (including but not limited to the regulations of the Board of Governors of the Federal Reserve, the FDIC, the Tennessee Department of Financial Institutions, or any other applicable regulatory authority);
(iii)the exhibition by Executive of a standard of behavior within the scope of or related to Executive’s employment that is in violation of any written policy, board committee charter, or code of ethics or business conduct (or similar code) of Company or Bank to which Executive is subject; provided that the nature of such conduct shall be set forth with reasonable particularity in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(iv)any act of fraud, misappropriation, or embezzlement by Executive, whether or not such act was committed in connection with the business of Company and/or Bank;
(v)a material breach of this Agreement, including, without limitation, a breach of Section 7 hereof; provided that the nature of such breach shall be set forth with reasonable particularity in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such breach, provided that such breach is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure; or
(vi)Executive’s conviction of, or Executive’s pleading guilty or nolo contendere to with respect to (a) a felony or a crime involving moral turpitude (including pleading guilty or nolo contendere to a felony or lesser charge which results from plea bargaining), whether or not such felony, crime, or lesser offense is connected with the business of Company and/or Bank, or (b) any crime in connection with the business of Company or Bank.
(d)“Change in Control” means and includes any one of following events:
(i)any Person becomes a Beneficial Owner, directly or indirectly, of 50% or more of the voting power of the then-outstanding securities of Company eligible to vote for the election of directors (“Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions of Company Voting Securities shall not constitute a Change in Control: (A) an acquisition by a Principal Shareholder, (B) an acquisition directly or indirectly from Company, including an acquisition by or through a broker, underwriter, or financial institution acquiring such securities as part of a firm commitment or similar underwriting or distribution process, (C) an acquisition by Company or Bank, (D) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by Company or Bank, or (E) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (iii) below); or
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(ii)during any consecutive 12-month period, individuals who, at the beginning of such period, constitute Company’s Board of Directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board of Directors, provided that any person becoming a director after the beginning of such 12-month period and whose election or nomination for election was approved by a vote of at least a majority of the incumbent Directors then on the Board of Directors shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board of Directors (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or
(iii)the consummation of a reorganization, merger, consolidation, statutory share exchange, or similar form of corporate transaction involving Company or Bank, the sale or other disposition of all or substantially all of Company’s assets, or the acquisition of assets or stock of another corporation or other entity (each, a “Transaction”), unless immediately following such Transaction: (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the outstanding Company Voting Securities immediately prior to such Transaction beneficially own, directly or indirectly, more than 50% of the voting power of the then-outstanding shares of voting securities of the entity resulting from such Transaction (including, without limitation, an entity which as a result of such Transaction owns Company or all or substantially all of Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving Entity”) in substantially the same proportions as their ownership, immediately prior to such Transaction, of the outstanding Company Voting Securities, and (B) no person (other than (x) Company or Bank, (y) the Surviving Entity or its ultimate parent entity, or any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 50% or more of the total common stock or 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity were Incumbent Directors at the time of the Board of Director’s approval of the execution of the initial agreement providing for such Transaction (any Transaction which satisfies all of the criteria specified in (A), (B), and (C) above shall be deemed to be a “Non-Qualifying Transaction”).
(e)“CIC Severance Multiple” shall mean two and one-half (2.5).
(f)“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
(g)“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
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(h)“Compensation Committee” means the compensation committee of the board of directors of Company.
(i)“Competitive Services” means engaging in the business of commercial and mortgage banking, including, without limitation, originating, underwriting, closing and selling loans, receiving deposits, as well as the business of providing any other activities, products, or services of the type routinely conducted, offered, or provided by Employer as of or during the two years immediately prior to the Date of Termination.
(j)“Confidential Information” means any and all data and information relating to Employer, its activities, business, or clients that (i) is disclosed to Executive or of which Executive becomes aware because of Executive’s employment with Employer; (ii) has value to Employer; and (iii) is not generally known outside of Employer. “Confidential Information” shall include, but is not limited to the following types of information regarding, related to, or concerning Employer: trade secrets (as defined by the Tennessee Uniform Trade Secrets Act); financial plans and data; management planning information; business plans; operational methods; market studies; marketing plans or strategies; pricing information; product development techniques or plans; customer lists; customer files, data, and financial information; details of customer contracts; current and anticipated customer requirements; identifying and other information pertaining to business referral sources; past, current, and planned research and development; computer aided systems, software, strategies, and programs; business acquisition plans; management organization and related information (including, without limitation, data and other information concerning the compensation and benefits paid to officers, directors, employees, and management); personnel and compensation policies; new personnel acquisition plans; and other similar information. “Confidential Information” also includes combinations of information or materials which individually may be generally known outside of Employer, but for which the nature, method, or procedure for combining such information or materials is not generally known outside of Employer. In addition to data and information relating to Employer, “Confidential Information” also includes any and all data and information relating to or concerning a third party that otherwise meets the definition set forth above, that was provided or made available to Employer by such third party, and that Employer has a duty or obligation to keep confidential. This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of Employer.
(k)“Date of Termination” means: (i) if Executive’s employment is terminated other than by reason of death or Disability, the date of delivery of the Notice of Termination, or any later date specified in such Notice of Termination, or (ii) if Executive’s employment is terminated by reason of death or Disability, the Date of Termination will be the date of death or the Disability Effective Date, as the case maybe.
(l)“Disability” means a condition for which benefits would be payable under any long-term disability coverage (without regard to the application of any elimination period requirement) then provided to Executive by Employer or, if no such coverage is then being
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provided, the inability of Executive to perform the essential functions of Executive’s job with Employer (as specified in this Agreement), with or without reasonable accommodation, for a period of at least 180 consecutive days as certified by a physician chosen by Executive and reasonably acceptable to the Employer. Notwithstanding the provisions in this Section l(k), Disability for purposes of this Agreement must also be a disability within the meaning of Code Section 409A(a)(2)(A)(ii) and 409A(a)(2)(C) and Treas. Reg. Section l.409A-3(a)(2).
(m)“Effective Date” means February 23, 2024.
(n)“Employer” means Company and Bank, collectively.
(o)“Excise Tax” means any excise tax imposed by Section 4999 of the Code.
(p)“FDIC” means the Federal Deposit Insurance Corporation.
(q)“Good Reason” shall mean, in the context of the termination of this Agreement by Executive:
(i)a material diminution in Executive’s title, authority, duties, or responsibilities which is not consented to by Executive in writing;
(ii)a material diminution in Executive’s base compensation (which includes Executive’s Base Salary and Target Annual Bonus opportunity) which is not consented to by Executive in writing or made as part of across-the-board compensation reductions affecting all or substantially all similarly-situated employees;
(iii)a change in the location of Executive’s primary office such that Executive is required to report regularly to an office located outside of a 50-mile radius from the location of Executive’s primary office as of the Effective Date, which change is not consented to by Executive in writing; or
(iv)a material breach of the terms of this Agreement by Employer.
(r)“Material Contact” means contact between Executive and a customer or potential customer of Company or Bank (i) with whom or which Executive has or had substantive dealings on behalf of Company or Bank; (ii) whose dealings with Company or Bank are or were coordinated or supervised by Executive; (iii) about whom Executive obtains Confidential Information in the ordinary course of business as a result of Executive’s employment with Employer; or (iv) who receives products or services of Company or Bank, the sale or prov1s1on of which directly results or resulted in incentive compensation or commissions for Executive within the two years prior to the Date of Termination.
(s)“Non-CIC Severance Multiple” shall mean two (2.0).
(t)“Notice of Termination” shall mean a written notice delivered by a Party in connection with the termination of this Agreement which (i) indicates the specific termination provision in this Agreement relied upon for such termination, (ii) to the extent applicable, sets
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forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and specifies the Date of Termination.
(u)“Parachute Value” of a Payment means the present value as of the date of the Change in Control of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm (as defined in Section 10(b)) for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.
(v)“Payment” shall mean any benefit, payment, or distribution made or given by Employer to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise).
(w)“Person” means any individual or any corporation, partnership, joint venture, limited liability company, association, or other entity or enterprise.
(x)“Principal or Representative” means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative, or consultant.
(y)“Principal Shareholder” means James W. Ayers or his designee(s), and shall include any entity that is directly or indirectly affiliated with the Principal Shareholder.
(z)“Protected Customer” means any Person to whom Company or Bank has sold its products or services or actively solicited to sell its products or services, and with whom Executive has had Material Contact during the last 24 months of her employment with Employer.
(aa)“Protected Work” means any and all ideas, inventions, formulas, Confidential Information, source codes, object codes, techniques, processes, concepts, systems, programs, software, software integration techniques, hardware systems, schematics, flow charts, computer data bases, client lists, trademarks, service marks, brand names, trade names, compilations, documents, data, notes, designs, drawings, technical data, and/or training materials, including improvements thereto or derivatives therefrom, whether or not patentable, and whether or not subject to copyright or trademark or trade secret protection, conceived, developed or produced by Executive, or by others working with Executive or under the direction of Executive, during the period of Executive’s employment, or conceived, produced or used or intended for use by or on behalf of Employer or its customers.
(ab)“Restricted Period” means a period of 12 months following the Date of Termination.
(ac)“Restricted Territory” means a radius of 50 miles from Bank’s headquarters office in Nashville, Tennessee.
(ad)“Restrictive Covenants” means the restrictive covenants contained in Section 7(b)through 7(j) hereof.
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(ae)“Severance Formula” means the sum of (A) Executive’s then current Base Salary (or, in the case of a termination for Good Reason as defined in Section 1(q)(ii), the Base Salary in effect immediately prior to the diminution in Base Salary giving rise to termination), plus (B) the greater of Executive’s Target Annual Bonus for the fiscal year in which the Date of Termination occurs or the average Annual Bonus received by Executive for the three fiscal years immediately preceding the fiscal year in which the Date of Termination occurs.
2.Effective Date; Term. Upon the terms and subject to the conditions set forth in this Agreement, Employer hereby employs Executive, and Executive hereby accepts such employment, for the term commencing on the Effective Date and, unless otherwise earlier terminated pursuant to Section 5 hereof, the close of business on the third anniversary of the Effective Date (the “Initial Term”). The Initial Term and any and all renewal terms, if any, are referred to together herein as the “Term.” The third anniversary of the Effective Date is referred to herein as the “Term End Date.” Beginning on the initial Term End Date and on each subsequent anniversary of the Term End Date thereafter, the Term shall, without further action by Executive or Employer, be extended by an additional one-year period; provided, however, that either Employer or Executive may cause the Term to cease to extend automatically, by giving written notice to the other not less than 90 days prior to the scheduled expiration of the Term.
3.Employment; Extent of Service. Executive is hereby employed on the Effective Date as the Chief Risk Officer of Company and Bank. Executive shall have the duties, responsibilities, and authority commensurate with such position and such other duties as may be assigned by the Chief Executive Officer of Company and Bank. During the Term of this Agreement, and excluding any periods of vacation or sick leave to which Executive is entitled, Executive agrees to (i) devote substantially all of Executive’s business effort, time, energy, and skill to the business of Employer; (ii) faithfully, loyally, and diligently perform such duties; and (iii) diligently follow and implement all lawful management policies and decisions of Employer that are communicated to Executive. During the Term of this Agreement, Executive shall not, without the consent of Employer, be engaged in or provide services to any other business or enterprise (whether engaged in for profit or not) which interferes with her obligations to Employer under this Agreement. Executive will report directly to the Chief Executive Officer of Company and Bank.
4.Compensation and Benefits. For the avoidance of doubt, the compensation and benefits provided under this Section 4 shall be in consideration of services rendered to both Company and Bank.
(a)Base Salary. During the Term, Bank shall pay to Executive a base salary at the rate of $362,000 per year (“Base Salary”), less normal withholdings, payable in accordance with Bank’s payroll practices. The Compensation Committee shall review Executive’s Base Salary annually and may increase the Base Salary based on such review but may not decrease the Base Salary unless (i) Executive consents in writing to such decrease, or (ii) such decrease is made as part of across-the-board salary reductions affecting all or
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substantially all similarly-situated employees. Such adjusted salary then shall become Executive’s Base Salary for purposes of this Agreement.
(b)Annual Bonus. During the Term, Executive shall have an opportunity to participate in any short-term or cash incentive plans available to other Peer Executives and based upon the achievement of performance goals established from year to year by the Compensation Committee of Company (the “Annual Bonus”). Subject to the vesting and performance requirements as the Compensation Committee may require, the initial base value of Executive’s potential Annual Bonus shall be $175,000, with a maximum payout of 150% of such amount, which number shall be reviewed by the Compensation Committee annually and adjusted based on such review. Except as otherwise provided in Section 6(a)(ii) and Section 6(e)(ii), Executive must be employed by Company and/or Bank on the date the Annual Bonus, if any, is paid in order to receive the Annual Bonus. The Annual Bonus will be paid by March 15 of the year following the year for which it is earned. For purposes of this Agreement, Executive’s target Annual Bonus opportunity for any given fiscal year is referred to as the “Target Annual Bonus.”
(c)Retirement Plans. During the Term, Executive shall be entitled to participate in any retirement plans available to other Bank employees similarly situated to Executive (“Peer Executives”), and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such plans at any time and from time to time.
(d)Long-Term Incentive Plans. During the Term, Executive shall be entitled to participate in any long-term or equity incentive plans available to other Peer Executives, and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Company and/or Bank to amend, modify or terminate any such plans at any time and from time to time. Subject to the vesting and performance requirements as the Compensation Committee may require, the initial base value of Executive’s potential long-term incentive plan award shall be $176,000 with a maximum payout of 150% of such amount, which number shall be reviewed by the Compensation Committee annually and adjusted based on such review.
(e)Welfare Benefit Plans. During the Term, Executive and Executive’s eligible dependents shall be eligible for participation in the welfare benefit plans, practices, policies, and programs provided by Bank, if any, to the extent available to other Peer Executives and subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such benefit plans, policies, or programs at any time and from time to time.
(f)Expenses. During the Term, and subject to Section 12 hereof, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in the course of performing Executive’s duties and responsibilities under this Agreement, in accordance with the policies, practices, and procedures of Bank to the extent available to other Peer Executives with respect to travel and other business expenses.
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(g)Disability Insurance. During the Term, Bank shall provide supplemental long- term disability coverage for Executive sufficient to provide two-thirds of Executive’s pre-disability Base Salary.
5.Termination of Employment. For the avoidance of doubt, if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason, and if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason.
(a)Termination upon Death. Executive’s employment shall terminate automatically upon Executive’s death. For the avoidance of doubt, termination of Executive’s employment upon the death of Executive under this Section 5(a) shall not be considered termination without Cause that would entitle Executive to severance under Section 6(a).
(b)Termination by Employer. Employer may terminate Executive’s employment during the Term with or without Cause on written notice to Executive; provided that the written Notice of Termination with respect to a termination without Cause shall be provided at least 30 days prior to the effective date of such termination.
(c)Termination by Executive.    Executive’s employment may be terminated by Executive:
(i)at any time for Good Reason, provided that (A) before terminating this Agreement and Executive’s employment for Good Reason, (1) Executive shall give notice to Employer of the existence of Good Reason for termination, which notice must be given by Executive to Employer within 90 days of Executive’s discovery of the existence of the condition(s) giving rise to Good Reason for termination and shall state with reasonable detail the condition(s) giving rise to Good Reason for termination, and (2) Employer shall have 30 days from the date of receipt of such notice to remedy the condition(s) giving rise to Good Reason for termination; and (B) such termination must occur within 12 months of the initial existence of the condition(s) giving rise to Good Reason for termination; or
(ii)at any time without Good Reason, provided that Executive shall give Employer at least 30 days prior written notice of Executive’s intent to terminate.
(d)Notice of Termination. Any termination by Company and/or Bank with or without Cause and any termination by Executive shall be communicated by Notice of Termination to the other Party hereto given in accordance with Section 16(e) of this Agreement. The failure by Company and/or Bank to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of Company and/or Bank hereunder or preclude Company and/or Bank from asserting such fact or circumstance in enforcing its rights hereunder. The failure by Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall
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not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing its rights hereunder.
6.Obligations of Employer upon Termination.
(a)Resignation for Good Reason; Termination Other Than for Cause, Death, or Disability. During the Term, if (x) Employer terminates Executive’s employment other than for Cause, death, or Disability, or (y) Executive terminates employment for Good Reason, then, subject to Section 6(f) hereof:
(i)Bank shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Base Salary through the Date of Termination to the extent not theretofore paid (the “Accrued Salary”);
(ii)Bank shall pay to Executive in a lump sum in cash a prorated Annual Bonus for the year in which the Date of Termination occurs based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned Annual Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Date of Termination, and the denominator shall be twelve (12)) (the “Prorated Annual Bonus”), payable at the same time that annual bonuses are paid to Peer Executives;
(iii)subject to Section 12 hereof, Bank shall pay to Executive an amount equal to the Non-CIC Severance Multiple times Severance Formula (such aggregate payment, the “Non-CIC Severance Amount”), payable in approximately equal monthly installments during the 24-month period following the Date of Termination, commencing on the first payroll date to occur after the 60th day following the Date of Termination; provided that the first such payment shall consist of all amounts payable to Executive pursuant to this Section 6(a)(iii) between the Date of Termination and the first payroll date to occur after the 60th day following the Date of Termination;
(iv)if Executive elects to continue participation in any group medical, dental, vision, and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then for a period of 18 months after the Date of Termination (the “Health Benefits Continuation Period”), Bank shall pay to Executive an amount in cash equal to the COBRA cost of such coverage; provided, however, that (1) that if Executive becomes eligible to receive medical benefits under a program of a subsequent employer or otherwise (including coverage available to Executive’s spouse through the spouse’s employer), Bank’s obligation to pay any portion of the cost of health coverage as described herein shall cease, except as otherwise provided by law; (2) the Health Benefits Continuation Period shall run concurrently with any period for which Executive is eligible to elect health coverage under COBRA; (3) the Bank-paid portion of the monthly premium for such group health benefits, determined in accordance with Code Section 4980B and the regulations thereunder, shall be treated as taxable compensation by including such amount in Executive’s income in accordance
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with applicable rules and regulations; (4) during the Health Benefits Continuation Period, the benefits provided in any one calendar year shall not affect the amount of benefits provided in any other calendar year (other than the effect of any overall coverage benefits under the applicable plans); (5) the reimbursement of an eligible taxable expense shall be made as soon as practicable but not later than December 31 of the year following the year in which the expense was incurred; and (6) Executive’s rights pursuant to this Section 6(a)(iii) shall not be subject to liquidation or exchange for another benefit. The benefit described in this Section 6(a)(iii) is referred to as the “Health Coverage Benefit;”
(v)to the extent not theretofore paid or provided, Bank shall timely pay or provide to Executive any other amounts or benefits required to be paid or provided or which Executive is eligible to receive under any plan, program, policy, practice, contract, or agreement of Bank and its affiliated companies and in accordance with the terms thereof, including, but not limited to, any expense reimbursements and accrued but unused vacation (which shall be paid out, if at all, in accordance with Bank’s then current written policy regarding accrual and payment for unused vacation pay) (such amounts and benefits shall be hereinafter referred to as the “Other Benefits”); and
(vi)unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall remain outstanding and shall vest, in whole, in part, or not at all, on a pro rata basis based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned award by a fraction, the numerator of which shall be the number of months elapsed in the applicable performance period prior to the Date of Termination, and the denominator shall be the number of months in the applicable performance period). The treatment of equity awards described in this clause Section 6(A)(vi) is hereinafter referred to as the “Non-CIC Equity Award Treatment”).
(b)Termination for Cause; Resignation by Executive other than Resignation for Good Reason; Death; If during the Term Executive’s employment is terminated by Employer for Cause, by Executive other than for Good Reason or in the event of Executive’s death, then Employer shall have no further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive or Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after the Date of Termination, and payments of Other Benefits, as applicable. Notwithstanding the above, and unless the applicable equity award agreement expressly provides otherwise, if Executive’s employment is terminated by Executive’s death, Executive’s then outstanding equity awards shall be subject to the Non-CIC Equity Award Treatment as provided Section 6(a)(vi).
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(c)Non-Renewal of Agreement.
(i)If Employer elects not to renew the Term pursuant to Section 2 hereof, and within the 12 months following the expiration of such Term (the “Non-Renewal Hold Period”), Employer terminates Executive’s employment other than for Cause, death, or Disability, then, notwithstanding the expiration of the Term and subject to Sections 6(f) and 12 hereof, Bank shall pay or provide to Executive (X) the Non-CIC Severance Amount, payable pursuant to the payment schedule set forth in Section 6(a)(iii) hereof, (Y) the Health Coverage Benefit as set forth in Section 6(a)(iv) and (Z) any unvested equity awards held by Executive shall be subject to Non-CIC Equity Award Treatment as and to the extent set forth in Section 6(a)(vi) (collectively, the “Non-Renewal Severance”).
(ii)If Executive elects not to renew the Term pursuant to Section 2 hereof, and following the expiration of such Term, Executive’s employment with Employer terminates then Employer shall have no further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination, and payment or provision of Other Benefits, as applicable.
(d)Termination for Disability. During the Term, if Employer terminates Executive’s employment for Disability of Executive, then, subject to Section 6(f) hereof, Employer shall give Executive 30 days’ prior notice of its intent to terminate and Executive’s employment shall terminate on the 30th day after receipt of such notice (the “Disability Effective Date”), in which event, Bank shall pay to Executive a lump sum amount equal to equal to six months of the Executive's then current Base Salary, plus a prorated Target Bonus for the year in which the Disability Effective Date occurs (with such pro rata portion determined by multiplying the Target Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Disability Effective Date, and the denominator shall be twelve (12)), with such amount payable in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank.
(e)Termination following a Change in Control. If, within 12 months following a Change in Control, (x) Employer (or any successor to Employer) terminates Executive’s employment other than for Cause, or (y) Executive terminates employment for Good Reason, then subject to Section 6(f) hereof and in lieu of any amounts under Section 6(a) hereof and in lieu of any amounts under Section 6(a) hereof:
(i)Bank (or its successor) shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Accrued Salary;
(ii)Bank shall pay to Executive in a lump sum in cash the Prorated Annual Bonus, payable at the same time that annual bonuses are paid to Peer Executives;
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(iii)subject to Section 12 hereof, Bank (or its successor) shall pay to Executive the CIC Multiple times the Severance Formula (such aggregate payment, the “CIC Severance Amount”), payable in a lump sum in cash on the 60th day following the Date of Termination;
(iv)if Executive elects to continue participation in any group medical, dental, vision and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then during the Health Benefits Continuation Period, Bank (or its successor) shall pay to Executive the Health Coverage Benefit;
(v)to the extent not theretofore paid or provided, Bank (or its successor) shall timely pay or provide to Executive any Other Benefits; and
(vi)unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall become vested as soon as possible but not later than the 60th day after the Date of Termination as to the greater of (1) the number of shares that would have vested based upon an assumed achievement of all applicable performance metrics at the target level of performance or (2) the number of shares that would have vested based upon the actual level of achievement of all applicable performance metrics measured as of the Date of Termination. The treatment of equity awards described in this Section 6(e)(vi) is hereinafter referred to as the “CIC Equity Award Treatment.”
(f)Release of Claims. Restrictive Covenants. Notwithstanding the foregoing, Bank shall be obligated to provide the amounts and benefits set forth in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable, only if (A) within 45 days after the Date of Termination Executive shall have executed a separation and full release of claims/covenant not to sue in substantially the form attached hereto as Exhibit A (the “Release Agreement”) and such Release Agreement shall not have been revoked within the revocation period specified in the Release Agreement, and (B) Executive fully complies with the obligations set forth in Section 7 hereof. For the avoidance of doubt, if Executive does not comply with the obligations set forth in Section 7 hereof, then payment of the amounts and benefits set forth in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable, shall cease immediately upon Executive’s breach thereof.
(g)Resignations. If Executive is a member of the board of directors of Company, the board of directors of Bank, or the board of directors of any subsidiary of Company or Bank, then termination of Executive’s employment hereunder for any reason whatsoever shall constitute Executive’s resignation from such boards of directors and as resignation as an officer of Bank, Company, and of any of the subsidiaries for which Executive serves as an officer.
(h)Equity Awards Granted Prior to the Effective Date. Notwithstanding anything to the contrary in this Agreement, any equity-based awards granted prior to the
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Effective Date that remain outstanding as of the Executive’s Date of Termination or a Change in Control, as applicable, shall be governed by the terms of the Prior Agreement.
7.Restrictive Covenants. For the avoidance of doubt, the Restrictive Covenants contained in this Section 7, as well as any other provisions of this Agreement necessary to interpret or enforce the Restrictive Covenants, shall survive termination of this Agreement and/or termination of Executive’s employment for any reason, and shall continue to be in full force and effect in accordance with their terms.
(a)Acknowledgments.
(i)Condition of Employment and Other Consideration. Executive acknowledges and agrees that Executive has received good and valuable consideration for entering into this Agreement.
(ii)Access to Confidential Information, Relationships, and Goodwill. Executive acknowledges and agrees that Executive is being provided and entrusted with Confidential Information, including highly confidential customer information that is subject to extensive measures to maintain its secrecy by Employer, is not known in the trade or disclosed to the public, and would materially harm Employer’s legitimate business interests if it was disclosed or used in violation of this Agreement. Executive also acknowledges and agrees that Executive is being provided and entrusted with access to Employer’s customer and employee relationships and goodwill. Executive further acknowledges and agrees that the Employer would not provide access to the Confidential Information, customer and employee relationships, and goodwill in the absence of Executive’s execution of and compliance with this Agreement. Executive further acknowledges and agrees that the Employer’s Confidential Information, customer and employee relationships, and goodwill are valuable assets of Employer and are legitimate business interests that are properly subject to protection through the covenants contained in this Agreement.
(iii)Potential Unfair Competition. Executive acknowledges and agrees that as a result of Executive’s employment with Employer, Executive’s knowledge of and access to Confidential Information, and relationships with Employer’s customers and employees, Executive would have an unfair competitive advantage if Executive were to engage in activities in violation of this Agreement.
(iv)Voluntary Execution. Executive acknowledges and affirms that Executive has executed this Agreement voluntarily, has read this Agreement carefully, and had a full and reasonable opportunity to consider this Agreement (including an opportunity to consult with legal counsel), and that Executive has not been pressured or in any way coerced, threatened, or intimidated into signing this Agreement.
(b)Restriction on Disclosure and Use of Confidential Information. Executive agrees that Executive shall not, directly or indirectly, use any Confidential Information on Executive’s own behalf or on behalf of any Person other than Employer, or reveal, divulge, or
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disclose any Confidential Information to any Person not expressly authorized by Employer to receive such Confidential Information. This obligation shall remain in effect for as long as the information or materials in question retain their status as Confidential Information. Executive further agrees to fully cooperate with Employer in maintaining the Confidential Information to the extent permitted by law. The Parties acknowledge and agree that this Agreement is not intended to, and does not, alter either Employer’s rights or Executive’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein to the contrary notwithstanding, Executive shall not be restricted from disclosing information that is required to be disclosed by law, court order, or other valid and appropriate legal process; provided, however, that in the event such disclosure is required by law, Executive shall provide Employer with prompt notice of such requirement so that Employer may seek an appropriate protective order prior to any such required disclosure by Executive. Executive understands and acknowledges that nothing in this section limits Executive’s ability to report possible violations of federal, state, or local law or regulation to any governmental agency or entity; to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agencies in connection with any charge or complaint, whether filed by Executive, on Executive’s behalf, or by any other individual; or to make other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation, and Executive shall not need the prior authorization of Employer to make any such reports or disclosures and shall not be required to notify Employer that Executive has made such reports or disclosures. In addition, and anything herein to the contrary notwithstanding, Executive is hereby given notice that Executive shall not be criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (as defined by 18 U.S.C. § 1839) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, in either event solely for the purpose of reporting or investigating a suspected violation of law; or disclosing a trade secret (as defined by 18 U.S.C. § 1839) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(c)Non-Competition. Except as provided herein, Executive agrees that, during the Restricted Period, Executive will not, without prior written consent of Employer, directly or indirectly (i) carry on or engage in Competitive Services within the Restricted Territory on Executive’s own behalf or on behalf of any Person or any Principal or Representative of any Person, or (ii) own, manage, operate, control or participate in the ownership, management, operation or control, of any business, whether in corporate, proprietorship or partnership form or otherwise, where such business is engaged in the provision of Competitive Services within the Restricted Territory; provided that nothing herein shall prohibit Executive from being a passive owner of not more than five percent of the outstanding securities of any publicly traded company engaged in the Competitive Services, so long as Executive does not serve on the board of directors of such company, and does not engage in the management of such company. The restrictions contained in this Section 7(c) shall not apply in the event that the Date of Termination occurs in connection with or subsequent to a Change in Control.
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(d)Non-Solicitation of Protected Customers. Executive agrees that, during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, on Executive’s own behalf or as a Principal or Representative of any Person, solicit, divert, or attempt to solicit or divert a Protected Customer for the purpose of engaging in, providing, or selling Competitive Services.
(e)Non-Recruitment of Employees and Independent Contractors. Executive agrees that during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, whether on Executive’s own behalf or as a Principal or Representative of any Person, solicit or induce or attempt to solicit or induce any employee or individual independent contractor of Employer to terminate an employment relationship with Employer or to enter into employment or independent contractor relationship with Executive or any such other Person. Notwithstanding the foregoing, the provisions of this Section 7(e) shall not be violated by general advertising or solicitation not specifically targeted at employees or independent contractor of Employer, or actions taken by any person or entity with which Executive is associated if Executive is not personally involved in any manner in the matter and has not identified such employee for soliciting or hiring and has not provided any information regarding the employee’s qualifications.
(f)Proprietary Rights.
(i)Ownership and Assignment of Protected Works. Executive agrees that any and all Confidential Information and Protected Works are the sole property of Employer, and that no compensation in addition to Executive’s compensation hereunder is due to Executive for development or transfer of such Protected Works. Executive agrees that Executive shall promptly disclose in writing to Employer the existence of any Protected Works. Executive hereby assigns and agrees to assign all of Executive’s rights, title, and interest in any and all Protected Works, including all patents or patent applications, and all copyrights therein, to Employer. Executive shall not be entitled to use Protected Works for Executive’s own benefit or the benefit of anyone except Employer without written permission from Employer and then only subject to the terms of such permission. Executive further agrees that Executive will communicate to Employer any facts known to Executive and testify in any legal proceedings, sign all lawful papers, make all rightful oaths, execute all divisionals, continuations, continuations-in-part, foreign counterparts, or reissue applications, all assignments, all registration applications, and all other instruments or papers to carry into full force and effect the assignment, transfer, and conveyance hereby made or to be made and generally do everything possible for title to the Protected Works and all patents or copyrights or trademarks or service marks therein to be clearly and exclusively held by Employer. Executive agrees that Executive will not oppose or object in any way to applications for registration of Protected Works by Employer or others designated by Employer. Executive agrees to exercise reasonable care to avoid making Protected Works available to any third party and shall be liable to Employer for all damages and expenses, including reasonable attorneys’ fees, if Protected Works are made available to third parties by Executive without the express written consent of Employer.
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Anything herein to the contrary notwithstanding, Executive will not be obligated to assign to Employer any Protected Work for which no equipment, supplies, facilities, or Confidential Information of Employer was used and which was developed entirely on Executive’s own time, unless (A) the invention relates (1) directly to the business of Employer, or (2) to the Employer’s actual or demonstrably anticipated research or development; or (B) the invention results from any work performed by Executive for Employer. Executive likewise will not be obligated to assign to Employer any Protected Work that is conceived by Executive after Executive leaves the employ of Employer, except that Executive is so obligated if the same relates to or is based on Confidential Information to which Executive had access by virtue of employment with Employer. Similarly, Executive will not be obligated to assign any Protected Work to Employer that was conceived and reduced to practice prior to Executive’s employment with Employer, regardless of whether such Protected Work relates to or would be useful in the business of Employer. Executive acknowledges and agrees that there are no Protected Works conceived and reduced to practice by Executive prior to her employment with Employer.
(ii)No Other Duties. Executive acknowledges and agrees that there is no other contract or duty on the part of Executive now in existence to assign Protected Works to anyone other than Employer.
(iii)Works Made for Hire. Employer and Executive acknowledge that in the course of Executive’s employment with Employer, Executive may from time to time create for Employer copyrightable works. Such works may consist of manuals, pamphlets, instructional materials, computer programs, software, software integration techniques, software codes, and data, technical data, photographs, drawings, logos, designs, artwork, or other copyrightable material, or portions thereof, and may be created within or without Employer’s facilities and before, during or after normal business hours. All such works related to or useful in the business of Employer are specifically intended to be works made for hire by Executive, and Executive shall cooperate with Employer in the protection of Employer’s copyrights in such works and, to the extent deemed desirable by Employer, the registration of such copyrights.
(g)Return of Materials. Executive agrees to not retain or destroy (except as set forth below), and to immediately return to Employer on or prior to the Date of Termination, or at any other time Employer requests such return, any and all property of Employer that is the possession of Executive or subject to Executive’s control, including, but not limited to, keys, credit and identification cards, equipment, customer files and information, papers, drawings, notes, manuals, specifications, designs, devices, code, email, documents, diskettes, CDs, tapes, keys, access cards, credit cards, identification cards, computers, mobile devices, other electronic media, all other files and documents relating to Employer and its business (regardless of form, but specifically including all electronic files and data of Employer), together with all Protected Works and Confidential Information belonging to Employer or that Executive received from or through her employment with Employer. Executive will not make, distribute, or retain copies of any such information or property. To the extent that Executive has electronic files or
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information in Executive’s possession or control that belong to Employer, contain Confidential Information, or constitute Protected Works (specifically including but not limited to electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), on or prior to the Date of Termination, or at any other time Employer requests, Executive shall (i) provide Employer with an electronic copy of all of such files or information (in an electronic format that readily accessible by Employer); (ii) after doing so, delete all such files and information, including all copies and derivatives thereof, from all nonEmployer-owned computers, mobile devices, electronic media, cloud storage, and other media, devices, and equipment, such that such files and information are permanently deleted and irretrievable; and (iii) provide a written certification to Employer that the required deletions have been completed and specifying the files and information deleted and the media source from which they were deleted.
(h)Enforcement of Restrictive Covenants. For the avoidance of doubt, nothing in this Section 7(h) limits the remedies available to Employer under Section 14 hereof.
(i)Rights and Remedies Upon Breach. The Parties specifically acknowledge and agree that the remedy at law for any breach of the Restrictive Covenants will be inadequate, and that in the event Executive breaches any of the Restrictive Covenants, Employer shall have the right and remedy, without the necessity of proving actual damage or posting any bond, to enjoin, preliminarily and permanently, Executive from violating the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to Employer and that money damages would not provide an adequate remedy to Employer. Executive understands and agrees that if he materially violates any of the obligations set forth in the Restrictive Covenants, the Restricted Period shall cease to run during the pendency of any litigation over such violation, provided that such litigation was initiated during the Restricted Period. If Employer does not substantially prevail in such litigation, the Restricted Period shall be deemed to have continued to run during the litigation. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to Employer at law or in equity. Employer’s ability to enforce its rights under the Restrictive Covenants or applicable law against Executive shall not be impaired in any way by the existence of a claim or cause of action on the part of Executive based on, or arising out of, this Agreement or any other event or transaction.
(ii)Severability and Modification of Covenants. Executive acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The Parties agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and construed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants, or any other provision of this Section 7, be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or such Restrictive
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Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of Employer’s legitimate business interests and may be enforced by Employer to that extent in the manner described above and all other provisions of this Agreement shall be valid and enforceable.
(i)Existing Covenants. Executive represents and warrants that Executive’s employment with Employer does not and will not breach any agreement that Executive has with any former employer to keep in confidence proprietary or confidential information or not to compete with any such former employer. Executive will not disclose to Employer or use on its behalf any proprietary or confidential information of any other party required to be kept confidential by Executive.
(j)Disclosure of Agreement. Executive acknowledges and agrees that, during the Restricted Period, Executive will disclose the existence and terms of the Restrictive Covenants in Section 7 of this Agreement to any prospective employer or business partner within the Restricted Territory prior to entering into an employment, partnership, or other business relationship with such prospective employer or business partner. Executive further agrees that Employer shall have the right to make any such prospective employer or business partner of Executive within the Restricted Territory aware of the existence and terms of the Restrictive Covenants in Section 7 of this Agreement.
8.Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any employee benefit plan, program, policy, or practice provided by Employer and for which Executive may qualify, except as specifically provided herein. Amounts that are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice, or program of Employer at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice, or program except as explicitly modified by this Agreement.
9.Full Settlement; No Mitigation. Employer’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which Employer may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment. For the avoidance of doubt, nothing in this Section 9 shall impact Employer’s remedy of recoupment set forth in Section 14 hereof.
10.Mandatory Reduction of Payments in Certain Events.
(a)Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any Payment would, if paid, be subject to any Excise Tax, then, prior to the making of any Payments to or for the benefit of Executive, a calculation shall be made comparing (i) the net after-tax benefit to Executive of the Payments after payment by Executive
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of the Excise Tax, to (ii) the net after-tax benefit to Executive if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of a Change in Control, as determined by the Determination Firm (as defined below). For purposes of this Section IO, present value shall be determined in accordance with Section 280G(d)(4) of the Code.
(b)All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, shall be made by a nationally recognized accounting firm or compensation consulting firm mutually acceptable to Employer and Executive (the “Determination Firm”) which shall provide detailed supporting calculations to Employer and Executive within 15 business days after the receipt of notice from Executive that a Payment is due to be made, or such earlier time as is requested by Employer. All fees and expenses of the Determination Firm shall be borne solely by Employer. Any determination by the Determination Firm shall be binding upon Employer and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder, it is possible that Payments which Executive was entitled to, but did not receive pursuant to Section I 0(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Employer to or for the benefit of Executive but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.
(c)In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 10 shall be of no further force or effect. In the event the provisions of Code Section 280G or 4999 are modified, this Section 10 shall be modified accordingly.
11.Successors.
(a)This Agreement is personal to Executive and shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.
(b)This Agreement can be assigned by Company and/or Bank only to a subsidiary or successor and shall be binding and inure to the benefit of Company and Bank, and their successors and assigns. Company and/or Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of Bank, expressly and unconditionally to assume and agree to perform
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Bank’s obligations under this Agreement, in the same manner and to the same extent that Bank would be required to perform if no such succession or assignment had taken place.
12.Code Section 409A.
(a)General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code). Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither Company nor Bank, nor their directors, officers, employees, or advisers, shall be held liable for any taxes, interest, penalties, or other monetary amounts owed by Executive as a result of the application of Section 409A of the Code.
(b)Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, such Non-Exempt Deferred Compensation will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such payment event meet any description or definition of “change in control event” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not affect the dollar amount or prohibit the vesting of any Non-Exempt Deferred Compensation termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, or the application of a different form of payment, then, subject to subsection (c) below, such payment or distribution shall be made at the time and in the form that would have applied absent the non-409A-conforming event.
(c)Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a specified employee (as determined by Employer in accordance with Section 409A of the Code and Treasury Regulations§ 1.409A-3(i)(2)), then, subject to any permissible acceleration of payment by Employer under Treas. Reg. Section l .409A- 3G)(4)(ii) (domestic relations order), G)(4)(iii) (conflicts of interest), or G)(4)(vi) (payment of employment taxes): (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following Executive’s separation from service (or, if Executive dies during such period, within 30 days after Executive’s death) (in
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either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.
(d)Treatment of Installment Payments. Each payment of termination benefits under this Agreement, including but not limited to Section 6, shall be considered a separate payment, as described in Treas. Reg. Section l.409A-2(b)(2), for purposes of Section 409A of the Code.
(e)Timing of Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on Executive’s execution of a release of claims, such release must be executed, and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, Employer may elect to make or commence payment at any time during such period.
(f)Timing of Reimbursements and In-kind Benefits. If Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement, and such payments or reimbursements are includible in Executive’s federal gross taxable income, the amount of such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. No right of Executive to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.
(g)Permitted Acceleration. Employer shall have the sole authority to make any accelerated distribution permissible under Treas. Reg. Section l.409A-3(j)(4) to Executive of deferred amounts, provided that such distribution meets the requirements of Treas. Reg. Section l.409A-3(j)(4).
13.Regulatory Action.
(a)If Executive is removed and/or permanently prohibited from participating in the conduct of Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(l) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(l)), all obligations of Employer under this Agreement shall terminate, as of the effective date of such order.
(b)If Executive is suspended and/or temporarily prohibited from participating in the conduct of Bank’s affairs by a notice served under Section 8(e)(3) or 8(g)(l) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(l)), all obligations of Employer under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, Employer shall reinstate (in whole or in part) any of its obligations which were suspended.
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(c)If Bank is in default (as defined in Section 3(x)(l) of the FDIA), all obligations under this Agreement shall terminate as of the date of default.
(d)All obligations under this Agreement shall be terminated, except to the extent a determination is made that continuation of the Agreement is necessary for the continued operation of Bank (1) by the director of the FDIC or his or her designee (the “Director”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of Bank under the authority contained in 13(c) of the FDIA; or (2) by the Director, at the time the Director approves a supervisory merger to resolve problems related to operation of Bank when Bank is determined by the Director to be in an unsafe and unsound condition.
14.Compensation Recoupment Policy. Any incentive compensation, including, but not limited to, cash-based and equity-based compensation, awarded to Executive by Employer shall be subject to any written compensation recoupment policy that the Compensation Committee may adopt from time to time that is applicable by its terms to Executive, including but not limited to Employer’s mandatory recoupment policy as required by The New York Stock Exchange. ln addition, the Compensation Committee may specify in any written documentation memorializing an incentive award that Executive’s rights, payments, and benefits with respect to such award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable conditions of such award. Such events may include, but shall not be limited to: (i) termination of employment for Cause, (ii) violation of material Company or Bank policies, (iii) breach of noncom petition, confidentiality, or other restrictive covenants, (iv) other conduct by Executive that is detrimental to the business or reputation of the Employer, or (v) a later determination that the amount realized from a performance-based award was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, whether or not Executive caused or contributed to such material inaccuracy. The reduction, cancellation, forfeiture, and recoupment rights associated with any equity awards or similar awards granted to Executive, if any, shall be as provided in the award certificate memorializing any such award.
15.Indemnification. Employer shall indemnify Executive for liabilities incurred by Executive while acting in good faith as an officer to the fullest extent provided for any other officer of Employer. To the extent that Employer maintains director and officer liability insurance, such insurance shall cover Executive to the same extent as any other officer of Employer.
16.Miscellaneous.
(a)Applicable Law; Consent to Arbitration. Employer and Executive agree that this Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Tennessee without giving effect to its conflicts of law principles. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators sitting in a location selected by Executive within fifty (50) miles from the headquarters location of Bank, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
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(b)Non-Duplication. Notwithstanding anything to the contrary in this Agreement, and except as specifically provided below, any severance payments or benefits received by Executive pursuant to this Agreement shall be in lieu of any general severance policy or other severance plan maintained by Employer (other than a stock option, restricted stock, share or unit, performance share or unit, supplemental retirement, deferred compensation, or similar plan or agreement which may contain provisions operative on a termination of Executive’s employment or may incidentally refer to accelerated vesting or accelerated payment upon a termination of employment).
(c)Captions. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
(d)Amendments. This Agreement may not be amended or modified otherwise than- by a written agreement executed by the Parties or their respective successors and legal representatives.
(e)Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other Party(ies) or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:    If to Company and/or Bank:
On file with Bank    1221 Broadway
    Suite 1300
    Nashville, Tennessee 37203
    Attention: General Counsel
or to such other address as a Party shall have furnished to the other Party(ies) in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(f)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(g)Withholding. Employer may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(h)Waivers. Failure of any Party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted in this Agreement or of the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the Party making the waiver.
(i)Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and, from and after the date hereof, this
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Agreement shall supersede any other agreement, written or oral, between the Parties relating to the subject matter of this Agreement, including but not limited to the Prior Agreement (except to the extent necessary to govern the treatment of outstanding equity-based awards granted prior to the Effective Date as specified in Section 6(h) hereof) or any prior discussions, understandings, letters and/or agreements between the Parties, written or oral, at any time.
(j)Construction. The Parties understand and agree that because they have been given the opportunity to have counsel review and revise this Agreement, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall be construed as a whole, and according to its fair meaning, and not strictly for or against any Party.
(k)Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
(l)Survival. The rights and obligations of the Parties under Sections 6, 7, 10, 12, 14, 15, 16 shall survive the expiration and/or termination of this Agreement and the termination of Executive’s employment hereunder for the periods expressly designated in such sections or, if no such period is designated, for the maximum period permissible under applicable law.
[signature page follows]

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Execution Copy
IN WITNESS WHEREOF, the Parties hereby signify their agreement to these terms by their signatures below, as of the Effective Date.
AIMEE HAMILTON
    
Aimee Hamilton
FIRSTBANK    
image_02.jpg
    
Christopher T. Holmes
President and Chief Executive Officer
FB FINANCIAL CORPORATION
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Christopher T. Holmes
President and Chief Executive Officer

[Hamilton – Employment Agreement Signature Page]
LEGAL02/43756997v5
Exhibit 10.3
Execution Copy
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is effective this 23rd day of February 2024 by and among FB FINANCIAL CORPORATION (“Company”), FIRSTBANK, a Tennessee bank (“Bank”), a wholly owned subsidiary of the Company, and Mark E. Hickman (“Executive”). Company, Bank, and Executive are sometimes referred to herein collectively as the “Parties,” and each is sometimes referred to herein individually as a “Party.”
BACKGROUND
WHEREAS, the Parties are presently party to that certain Employment Agreement, dated July 31, 2023 (the “Prior Agreement”); and

WHEREAS, the Parties desire to amend and restate the Prior Agreement as of the Effective Date (as defined herein).
NOW, THEREFORE, in consideration of the payments, consents, and acknowledgements described below, in consideration of Executive’s employment with Company and Bank, and in consideration of other good and valuable consideration, the receipt and sufficiency of all of which is hereby acknowledged, the Parties agree as follows:
1.Definitions. The following capitalized terms used in this Agreement shall have the meanings assigned to them below, which definitions shall apply to both the singular and the plural forms of such terms:
(a)“Board of Directors” means, collectively, the board of directors of Company and the board of directors of Bank and, where appropriate, any committee or other designee thereof.
(b)“Beneficial Owner” has the meaning given such term in Rule 13d-3 of the General Rules and Regulations promulgated under the Securities Exchange Act of 1934.
(c)“Cause” means, in the context of the termination of this Agreement by Employer, a good faith determination by the Chief Executive Officer of Company that is agreed to by a majority of the members of the Compensation Committee, that any of the following has occurred:
(i)conduct by Executive that amounts to willful misconduct, gross neglect, or a material failure to perform Executive’s duties and responsibilities hereunder, including prolonged absences without the consent of the Chief Executive Officer of Company unless otherwise excused by law or under Bank’s leave policies; provided that the nature of such conduct shall be set forth in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
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(ii)any willful violation of any material law, rule, or regulation applicable to banks or the banking industry generally (including but not limited to the regulations of the Board of Governors of the Federal Reserve, the FDIC, the Tennessee Department of Financial Institutions, or any other applicable regulatory authority).
(iii)the exhibition by Executive of a standard of behavior within the scope of or related to Executive’s employment that is in violation of any written policy, board committee charter, or code of ethics or business conduct (or similar code) of Company or Bank to which Executive is subject; provided that the nature of such conduct shall be set forth with reasonable particularity in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(iv)any act of fraud, misappropriation, or embezzlement by Executive, whether or not such act was committed in connection with the business of Company and/or Bank;
(v)a material breach of this Agreement, including, without limitation, a breach of Section 7 hereof; provided that the nature of such breach shall be set forth with reasonable particularity in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such breach, provided that such breach is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure; or
(vi)Executive’s conviction of, or Executive’s pleading guilty or nolo contendere to with respect to (a) a felony or a crime involving moral turpitude (including pleading guilty or nolo contendere to a felony or lesser charge which results from plea bargaining), whether or not such felony, crime, or lesser offense is connected with the business of Company and/or Bank, or (b) any crime in connection with the business of Company or Bank.
(d)“Change in Control” means and includes any one of following events:
(i)any Person becomes a Beneficial Owner, directly or indirectly, of 50% or more of the voting power of the then-outstanding securities of Company eligible to vote for the election of directors (“Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions of Company Voting Securities shall not constitute a Change in Control: (A) an acquisition by a Principal Shareholder, (B) an acquisition directly or indirectly from Company, including an acquisition by or through a broker, underwriter, or financial institution acquiring such securities as part of a firm commitment or similar underwriting or distribution process, (C) an acquisition by Company or Bank, (D) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by Company or Bank, or (E) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (iii) below); or
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(ii)during any consecutive 12-month period, individuals who, at the beginning of such period, constitute Company’s Board of Directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board of Directors, provided that any person becoming a director after the beginning of such 12-month period and whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board of Directors shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board of Directors (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or
(iii)the consummation of a reorganization, merger, consolidation, statutory share exchange, or similar form of corporate transaction involving Company or Bank, the sale or other disposition of all or substantially all of Company’s assets, or the acquisition of assets or stock of another corporation or other entity (each, a “Transaction”), unless immediately following such Transaction: (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the outstanding Company Voting Securities immediately prior to such Transaction beneficially own, directly or indirectly, more than 50% of the voting power of the then outstanding shares of voting securities of the entity resulting from such Transaction (including, without limitation, an entity which as a result of such Transaction owns Company or all or substantially all of Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving Entity”) in substantially the same proportions as their ownership, immediately prior to such Transaction, of the outstanding Company Voting Securities, and (B) no person (other than Company or Bank, (y) the Surviving Entity or its ultimate parent entity, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 50% or more of the total common stock or 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity were Incumbent Directors at the time of the Board of Director’s approval of the execution of the initial agreement providing for such Transaction (any Transaction which satisfies all of the criteria specified in (A), (B), and (C) above shall be deemed to be a “Non-Qualifying Transaction”).
(e)“CIC Severance Multiple” shall mean two and one-half (2.5).
(f)“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
(g)“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
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(h)“Compensation Committee” means the compensation committee of the board of directors of Company.
(i)“Competitive Services” means engaging in the business of commercial and mortgage banking, including, without limitation, originating, underwriting, closing and selling loans, receiving deposits, as well as the business of providing any other activities, products, or services of the type routinely conducted, offered, or provided by Employer as of or during the two years immediately prior to the Date of Termination.
(j)“Confidential Information” means any and all data and information relating to Employer, its activities, business, or clients that (i) is disclosed to Executive or of which Executive becomes aware because of Executive’s employment with Employer; (ii) has value to Employer; and (iii) is not generally known outside of Employer. “Confidential Information” shall include, but is not limited to the following types of information regarding, related to, or concerning Employer: trade secrets (as defined by the Tennessee Uniform Trade Secrets Act); financial plans and data; management planning information; business plans; operational methods; market studies; marketing plans or strategies; pricing information; product development techniques or plans; customer lists; customer files, data, and financial information; details of customer contracts; current and anticipated customer requirements; identifying and other information pertaining to business referral sources; past, current, and planned research and development; computer aided systems, software, strategies, and programs; business acquisition plans; management organization and related information (including, without limitation, data and other information concerning the compensation and benefits paid to officers, directors, employees, and management); personnel and compensation policies; new personnel acquisition plans; and other similar information. “Confidential Information” also includes combinations of information or materials which individually may be generally known outside of Employer, but for which the nature, method, or procedure for combining such information or materials is not generally known outside of Employer. In addition to data and information relating to Employer, “Confidential Information” also includes any and all data and information relating to or concerning a third party that otherwise meets the definition set forth above, that was provided or made available to Employer by such third party, and that Employer has a duty or obligation to keep confidential. This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of Employer.
(k)“Date of Termination” means: (i) if Executive’s employment is terminated other than by reason of death or Disability, the date of delivery of the Notice of Termination, or any later date specified in such Notice of Termination, or (ii) if Executive’s employment is terminated by reason of death or Disability, the Date of Termination will be the date of death or the Disability Effective Date, as the case may be.
(l)“Disability” means a condition for which benefits would be payable under any long-term disability coverage (without regard to the application of any elimination period requirement) then provided to Executive by Employer or, if no such coverage is then being
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provided, the inability of Executive to perform the essential functions of Executive’s job with Employer (as specified in this Agreement), with or without reasonable accommodation, for a period of at least 180 consecutive days as certified by a physician chosen by Executive and reasonably acceptable to the Employer. Notwithstanding the provisions in this Section l(l), Disability for purposes of this Agreement must also be a disability within the meaning of Code Section 409A(a)(2)(A)(ii) and 409A(a)(2)(C) and Treas. Reg. Section 1.409A-3(a)(2).
(m)“Effective Date” means February 23, 2024.
(n)“Employer” means Company and Bank, collectively.
(o)“Excise Tax” means any excise tax imposed by Section 4999 of the Code.
(p)“FDIC” means the Federal Deposit Insurance Corporation.
(q)“Good Reason” shall mean, in the context of the termination of this Agreement by Executive:
(i)a material diminution in Executive’s base compensation (which includes Executive’s Base Salary and Target Annual Bonus opportunity) which is not consented to by Executive in writing or made as part of across-the-board compensation reductions affecting all or substantially all similarly-situated employees;
(ii)a change in the location of Executive’s primary office such that Executive is required to report regularly to an office located outside of a 50-mile radius from the location of Executive’s primary office as of the Effective Date, which change is not consented to by Executive in writing; or
(iii)a material breach of the terms of this Agreement by Employer.
(r)“Material Contact” means contact between Executive and a customer or potential customer of Company or Bank (i) with whom or which Executive has or had substantive dealings on behalf of Company or Bank; (ii) whose dealings with Company or Bank are or were coordinated or supervised by Executive; (iii) about whom Executive obtains Confidential Information in the ordinary course of business as a result of Executive’s employment with Employer; or (iv) who receives products or services of Company or Bank, the sale or provision of which directly results or resulted in incentive compensation, or commissions for Executive within the two years prior to the Date of Termination.
(s)“Non-CIC Severance Multiple” shall mean two (2.0).
(t)“Notice of Termination” shall mean a written notice delivered by a Party in connection with the termination of this Agreement which (i) indicates the specific termination provision in this Agreement relied upon for such termination, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and (iii) specifies the Date of Termination.
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(u)“Parachute Value” of a Payment means the present value as of the date of the Change in Control of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm (as defined in Section 10(b)) for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.
(v)“Payment” shall mean any benefit, payment, or distribution made or given by Employer to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise).
(w)“Person” means any individual or any corporation, partnership, joint venture, limited liability company, association, or other entity or enterprise.
(x)“Principal or Representative” means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative, or consultant.
(y)“Principal Shareholder” means James W. Ayers or his designee(s), and shall include any entity that is directly or indirectly affiliated with the Principal Shareholder.
(z)“Protected Customer” means any Person to whom Company or Bank has sold its products or services or actively solicited to sell its products or services, and with whom Executive has had Material Contact during the last 24 months of his employment with Employer.
(aa)“Protected Work’’ means any and all ideas, inventions, formulas, Confidential Information, source codes, object codes, techniques, processes, concepts, systems, programs, software, software integration techniques, hardware systems, schematics, flow charts, computer data bases, client lists, trademarks, service marks, brand names, trade names, compilations, documents, data, notes, designs, drawings, technical data, and/or training materials, including improvements thereto or derivatives therefrom, whether or not patentable, and whether or not subject to copyright or trademark or trade secret protection, conceived, developed or produced by Executive, or by others working with Executive or under the direction of Executive, during the period of Executive’s employment, or conceived, produced or used or intended for use by or on behalf of Employer or its customers.
(ab)“Restricted Period” means a period of 12 months following the Date of Termination.
(ac)“Restricted Territory” means a radius of 50 miles from Bank’s headquarters in Nashville, Tennessee.
(ad)“Restrictive Covenants” means the restrictive covenants contained in Section 7(b) through 7(j) hereof.
(ae)“Severance Formula” means the sum of (A) Executive’s then current Base Salary (or, in the case of a termination for Good Reason as defined in Section 1(q)(ii), the
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Base Salary in effect immediately prior to the diminution in Base Salary giving rise to termination), plus (B) the greater of Executive’s Target Annual Bonus for the fiscal year in which the Date of Termination occurs or the average Annual Bonus received by Executive for the three fiscal years immediately preceding the fiscal year in which the Date of Termination occurs.
2.Effective Date; Term. Upon the terms and subject to the conditions set forth in this Agreement, Employer hereby employs Executive, and Executive hereby accepts such employment, for the term commencing on the Effective Date and, unless otherwise earlier terminated pursuant to Section 5 hereof, the close of business on the third anniversary of the Effective Date (the “Initial Term”). The Initial Term and any and all renewal terms, if any, are referred to together herein as the “Term.” The third anniversary of the Effective Date is referred to herein as the “Term End Date.” Beginning on the initial Term End Date and on each subsequent anniversary of the Term End Date thereafter, the Term shall, without further action by Executive or Employer, be extended by an additional one-year period; provided, however, that either Employer or Executive may cause the Term to cease to extend automatically, by giving written notice to the other not less than 90 days prior to the scheduled expiration of the Term.
3.Employment; Extent of Service. Executive is hereby employed on the Effective Date as the Chief Human Resources Officer. Executive shall have the duties, responsibilities, and authority commensurate with such position and such other duties as may be assigned by the Chief Executive Officer of Company and Bank or his designee. During the Term of this Agreement, and excluding any periods of vacation or sick leave to which Executive is entitled, Executive agrees to (i) devote substantially all of Executive’s business effort, time, energy, and skill to the business of Employer; (ii) faithfully, loyally, and diligently perform such duties; and (iii) diligently follow and implement all lawful management policies and decisions of Employer that are communicated to Executive. During the Term of this Agreement, Executive shall not, without the consent of Employer, be engaged in or provide services to any other business or enterprise (whether engaged in for profit or not) which interferes with his obligations to Employer under this Agreement.
4.Compensation and Benefits. For the avoidance of doubt, the compensation and benefits provided under this Section 4 shall be in consideration of services rendered to both Company and Bank.
(a)Base Salary. During the Term, Bank shall pay to Executive a base salary at the rate of $340,000 per year (“Base Salary”), less normal withholdings, payable in accordance with Bank’s payroll practices. The Compensation Committee shall review Executive’s Base Salary annually and may increase the Base Salary based on such review but may not decrease the Base Salary unless (i) Executive consents in writing to such decrease, or (ii) such decrease is made as part of across-the-board salary reductions affecting all or substantially all similarly-situated employees. Such adjusted salary then shall become Executive’s Base Salary for purposes of this Agreement.
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(b)Annual Bonus. During the Term, Executive shall have an opportunity to participate in any short-term or cash incentive plans available to other Bank employees similarly situated to Executive (“Peer Executives”) and based upon the achievement of performance goals established from year to year by the Compensation Committee (the “Annual Bonus”). Except as otherwise provided in Section 6(a)(ii) and Section 6(e)(ii) hereof, Executive must be employed by Company and/or Bank on the date the Annual Bonus, if any, is paid in order to receive the Annual Bonus. Subject to the vesting and performance requirements as the Compensation Committee may require, the initial target value of Executive’s potential Annual Bonus shall be $255,000, with a maximum payout of 150% of such target value, which number shall be reviewed by the Compensation Committee annually and may be adjusted based on such review. The Annual Bonus will be paid by March 15 of the year following the year for which it is earned. For purposes of this Agreement, Executive’s target Annual Bonus opportunity for any given fiscal year is referred to as the “Target Annual Bonus.” For the period ending December 31, 2023, Executive shall be entitled to a pro rata portion of the Annual Bonus.
(c)Long-Term Incentive Plans. During the Term, Executive shall be entitled to participate in any long-term or equity incentive plans available to other Peer Executives, and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan, provided that nothing herein shall limit the ability of Company and/or Bank to amend, modify or terminate any such plans at any time and from time to time. Subject to the vesting and performance requirements as the Compensation Committee may require, the initial base value of Executive’s potential long-term incentive plan award shall be $255,000, with a maximum payout of 150% of such amount, which number shall be reviewed by the Compensation Committee annually and may be adjusted based on such review. Notwithstanding the foregoing, for the period ending December 31, 2023, Executive shall be entitled to receive a long-term incentive award equal to 60% of the initial base value as provided pursuant to this Section 4(c).
(d)Retirement Plans. During the Term, Executive shall be entitled to participate in any retirement plans available to Peer Executives, and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan, provided that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such plans at any time and from time to time.
(e)Welfare Benefit Plans. During the Term, Executive and Executive’s eligible dependents shall be eligible for participation in the welfare benefit plans, practices, policies, and programs provided by Bank, if any, to the extent available to other Peer Executives and subject to eligibility requirements and terms and conditions of each such plan; provided, that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such benefit plans, policies, or programs at any time and from time to time.
(f)Expenses. During the Term, and subject to Section 12 hereof, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in the course of performing Executive’s duties and responsibilities under this
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Agreement, in accordance with the policies, practices, and procedures of Bank to the extent available to other Peer Executives with respect to travel and other business expenses.
(g)Disability Insurance. During the Term, Bank shall provide supplemental long-term disability coverage for Executive sufficient to provide two-thirds of Executive’s pre-disability Base Salary.
(h)Hiring Bonus; Initial Equity Grant.
(i)Cash Bonus. Executive shall be entitled to a cash hiring bonus in an aggregate amount of $350,000 (“Hiring Bonus”). Subject to any required tax and other deductions, $200,000 of the Hiring Bonus shall be payable with the first payroll cycle following the Effective Date or as soon as reasonably practical thereafter (“First Hiring Bonus Payment”). The remainder of the Hiring Bonus, subject to any required deductions and Executive’s continued employment on each payment date, shall be payable annually in three equal installments of $50,000, payable in the payroll cycle following the first, second, and third anniversary of the Effective Date. For the avoidance of doubt, the Hiring Bonus shall be separate from and not be considered part of Executive’s Annual Bonus. If Executive’s employment ceases for any reason, other than termination for by the Company without Cause, termination by Executive for Good Reason, or by reason of death or Disability, within 24 months following the Effective Date, then Executive shall promptly repay the Company a pro-rata portion of the First Hiring Bonus Payment according to the following formula: (x) the First Hiring Bonus Payment, multiplied by (y) the fraction equal to the number of months remaining before the second anniversary of the Effective Date divided by 24.
(ii)Initial Equity Award. Executive shall receive a restricted stock unit award with a grant date value of $400,000, issued on the first business day of the quarter following the Effective Date (“Initial Equity Grant”), which award shall vest ratably on each of the first three anniversaries of the grant date over the three-year period commencing on the date of grant and shall contain other customary terms and conditions as set forth in the Company’s 2016 Incentive Plan and the award agreement for the Initial Equity Grant.
5.Termination of Employment.For the avoidance of doubt, if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason, and if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason.
(a)Termination upon Death. Executive’s employment shall terminate automatically upon Executive’s death. For the avoidance of doubt, termination of Executive’s employment upon the death of Executive under this Section 5(a) shall not be considered termination without Cause that would entitle Executive to severance under Section 6(a).
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(b)Termination by Employer. Employer may terminate Executive’s employment during the Term with or without Cause on written notice to Executive, provided that the written Notice of Termination with respect to a termination without Cause shall be provided at least 30 days prior to the effective date of such termination.
(c)Termination by Executive. Executive’s employment may be terminated by Executive:
(i)at any time for Good Reason, provided that (A) before terminating this Agreement and Executive’s employment for Good Reason, (1) Executive shall give notice to Employer of the existence of Good Reason for termination, which notice must be given by Executive to Employer within 90 days of Executive’s discovery of the existence of the condition(s) giving rise to Good Reason for termination and shall state with reasonable detail the condition(s) giving rise to Good Reason for termination, and (2) Employer shall have 30 days from the date of receipt of such notice to remedy the condition(s) giving rise to Good Reason for termination; and (B) such termination must occur within 12 months of the initial existence of the condition(s) giving rise to Good Reason for termination; or
(ii)at any time without Good Reason, provided that Executive shall give Employer at least 30 days prior written notice of Executive’s intent to terminate.
(d)Notice of Termination. Any termination by Company and/or Bank with or without Cause and any termination by Executive shall be communicated by Notice of Termination to the other Party hereto given in accordance with Section 16(e) of this Agreement. The failure by Company and/or Bank to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of Company and/or Bank hereunder or preclude Company and/or Bank from asserting such fact or circumstance in enforcing its rights hereunder. The failure by Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing its rights hereunder.
6.Obligations of Employer upon Termination.
(a)Resignation for Good Reason; Termination Other Than for Cause, Death, or Disability. During the Term, if (x) Employer terminates Executive’s employment other than for Cause, death, or Disability, or (y) Executive terminates employment for Good Reason, then, subject to Section 6(f) hereof:
(i)Bank shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Base Salary through the Date of Termination to the extent not theretofore paid (the “Accrued Salary”).
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(ii)Bank shall pay to Executive in a lump sum in cash a prorated Annual Bonus for the year in which the Date of Termination occurs based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned Annual Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Date of Termination, and the denominator shall be twelve (12)) (the “Prorated Annual Bonus”), payable at the same time that annual bonuses are paid to Peer Executives;
(iii)subject to Section 12 hereof, Bank shall pay to Executive an amount equal to the Non-CIC Severance Multiple times the Severance Formula (such aggregate payment, the “Non-CIC Severance Amount”), payable in approximately equal monthly installments during the 24-month period following the Date of Termination, commencing on the first payroll date to occur after the 60th day following the Date of Termination; provided that the first such payment shall consist of all amounts payable to Executive pursuant to this Section 6(a)(iii) between the Date of Termination and the first payroll date to occur after the 60th day following the Date of Termination;
(iv)if Executive elects to continue participation in any group medical, dental, vision, and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then for a period of 18 months after the Date of Termination (the “Health Benefits Continuation Period”), Bank shall pay to Executive an amount in cash equal to the COBRA cost of such coverage; provided, however, that (1) that if Executive becomes eligible to receive medical benefits under a program of a subsequent employer or otherwise (including coverage available to Executive’s spouse through the spouse’s employer), Bank’s obligation to pay any portion of the cost of health coverage as described herein shall cease, except as otherwise provided by law; (2) the Health Benefits Continuation Period shall run concurrently with any period for which Executive is eligible to elect health coverage under COBRA; (3) the Bank-paid portion of the monthly premium for such group health benefits, determined in accordance with Code Section 4980B and the regulations thereunder, shall be treated as taxable compensation by including such amount in Executive’s income in accordance with applicable rules and regulations; (4) during the Health Benefits Continuation Period, the benefits provided in any one calendar year shall not affect the amount of benefits provided in any other calendar year (other than the effect of any overall coverage benefits under the applicable plans); (5) the reimbursement of an eligible taxable expense shall be made as soon as practicable but not later than December 31 of the year following the year in which the expense was incurred; and (6) Executive’s rights pursuant to this Section 6(a)(iv) shall not be subject to liquidation or exchange for another benefit. The benefit described in this Section 6(a)(iv) is referred to as the “Health Coverage Benefit;”
(v)to the extent not theretofore paid or provided, Bank shall timely pay or provide to Executive any other amounts or benefits required to be paid or provided or which Executive is eligible to receive under any plan, program, policy, practice, contract, or agreement of Bank and its affiliated companies and in accordance with the terms thereof, including, but not limited to, any expense reimbursements and accrued but
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unused vacation (which shall be paid out, if at all, in accordance with Bank’s then current written policy regarding accrual and payment for unused vacation pay) (such amounts and benefits shall be hereinafter referred to as the “Other Benefits”); and
(vi)unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall remain outstanding and shall vest, in whole, in part, or not at all, on a pro rata basis based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned award by a fraction, the numerator of which shall be the number of months elapsed in the applicable performance period prior to the Date of Termination, and the denominator shall be the number of months in the applicable performance period). The treatment of equity awards described in this Section 6(a)(vi) is hereinafter referred to as the “Non-CIC Equity Award Treatment”.
(b)Termination for Cause; Resignation by Executive other than Resignation for Good Reason; Death. If during the Term Executive’s employment is terminated by Employer for Cause, by Executive other than for Good Reason, or in the event of Executive’s death, then Employer shall have no further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive or Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after the Date of Termination, and payments of Other Benefits, as applicable. Notwithstanding the above, if Executive’s employment is terminated by Executive’s death, Executive’s then outstanding equity-based awards shall be subject to the Non-CIC Equity Award Treatment as provided Section 6(a)(vi).
(c)Non-Renewal of Agreement.
(i)If Employer elects not to renew the Term pursuant to Section 2 hereof, and within the 12 months following the expiration of such Term, Employer terminates Executive’s employment other than for Cause, death, or Disability, then, notwithstanding the expiration of the Term and subject to Sections 6(f) and 12 hereof, Bank shall pay or provide to Executive (X) the Non-CIC Severance Amount, payable pursuant to the payment schedule set forth in Section 6(a)(ii) hereof, (Y) the Health Coverage Benefit as set forth in Section 6(a)(iii) and (Z) any unvested equity awards held by Executive shall be subject to Non-CIC Equity Award Treatment as and to the extent set forth in Section 6(a)(vi) (collectively, the “Non-Renewal Severance”).
(ii)If Executive elects not to renew the Term pursuant to Section 2 hereof, and following the expiration of such Term, Executive’s employment with Employer terminates, then Employer shall have no further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination, and payment or provision of Other Benefits, as applicable.
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(d)Termination for Disability. During the Term, if Employer terminates Executive’s employment for Disability of Executive, then, subject to Section 6(f) hereof, Employer shall give Executive 30 days’ prior notice of its intent to terminate and Executive’s employment shall terminate on the 30th day after receipt of such notice (the “Disability Effective Date”), in which event, Bank shall pay to Executive a lump sum amount equal to six months of the Executive's then current Base Salary, plus a prorated Target Bonus for the year in which the Disability Effective Date occurs (with such pro rata portion determined by multiplying the Target Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Disability Effective Date, and the denominator shall be twelve (12)), with such amount payable in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank.
(e)Termination following a Change in Control. If, within 12 months following a Change in Control, (x) Employer (or any successor to Employer) terminates Executive’s employment other than for Cause, or (y) Executive terminates employment for Good Reason, then, subject to Section 6(f) hereof and in lieu of any amounts under Section 6(a) hereof:
(i)Bank (or its successor) shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Accrued Salary;
(ii)Bank shall pay to Executive in a lump sum in cash the Prorated Annual Bonus, payable at the same time that annual bonuses are paid to Peer Executives;
(iii)subject to Section 12 hereof, Bank (or its successor) shall pay to Executive an amount equal to the CIC Multiple times the Severance Formula, payable in a lump sum in cash on the 60th day following the Date of Termination (such aggregate payment, the “CIC Severance Amount”);
(iv)if Executive elects to continue participation in any group medical, dental, vision and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then during the Health Benefits Continuation Period, Bank (or its successor) shall pay to Executive the Health Coverage Benefit;
(v)to the extent not theretofore paid or provided, Bank (or its successor) shall timely pay or provide to Executive any Other Benefits; and
(vi)unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall become vested as soon as possible but not later than the 60th day after the Date of Termination as to the greater of (1) the number of shares that would have vested based upon an assumed achievement of all applicable performance metrics at the target level of performance or (2) the number of shares that
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would have vested based upon the actual level of achievement of all applicable performance metrics measured as of the Date of Termination. The treatment of equity awards described in this Section 6(e)(vi) is hereinafter referred to as the “CIC Equity Award Treatment.”.
(f)Release of Claims. Restrictive Covenants. Notwithstanding the foregoing, Bank shall be obligated to provide the amounts and benefits set forth in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable, only if (A) within 45 days after the Date of Termination Executive shall have executed a separation and full release of claims/covenant not to sue in substantially the form attached hereto as Exhibit A (the “Release Agreement”) and such Release Agreement shall not have been revoked within the revocation period specified in the Release Agreement, and (B) Executive fully complies with the obligations set forth in Section 7 hereof. For the avoidance of doubt, if Executive does not comply with the obligations set forth in Section 7 hereof, then payment of the amounts and benefits set forth in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable, shall cease immediately upon Executive’s breach thereof.
(g)Equity Awards Granted Prior to the Effective Date. Notwithstanding anything to the contrary in this Agreement, any equity-based awards granted prior to the Effective Date that remain outstanding as of the Executive’s Date of Termination or a Change in Control, as applicable, shall be governed by the terms of the Prior Agreement.
(h)Resignations. If Executive is a member of the board of directors of Company, the board of directors of Bank, or the board of directors of any subsidiary of Company or Bank, then termination of Executive’s employment hereunder for any reason whatsoever shall constitute Executive’s resignation from such boards of directors and as resignation as an officer of Bank, Company, and of any of the subsidiaries for which Executive serves as an officer.
7.Restrictive Covenants. For the avoidance of doubt, the Restrictive Covenants contained in this Section 7, as well as any other provisions of this Agreement necessary to interpret or enforce the Restrictive Covenants, shall survive termination of this Agreement and/or termination of Executive’s employment for any reason, and shall continue to be in full force and effect in accordance with their terms.
(a)Acknowledgments.
(i)Condition of Employment and Other Consideration. Executive acknowledges and agrees that Executive has received good and valuable consideration for entering into this Agreement.
(ii)Access to Confidential Information, Relationships, and Goodwill. Executive acknowledges and agrees that Executive is being provided and entrusted with Confidential Information, including highly confidential customer information that is subject to extensive measures to maintain its secrecy by Employer, is not known in the trade or disclosed to the public, and would materially harm Employer’s legitimate business interests if it was disclosed or used in violation of this Agreement. Executive also acknowledges and agrees that Executive is being provided and entrusted with access
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to Employer’s customer and employee relationships and goodwill. Executive further acknowledges and agrees that the Employer would not provide access to the Confidential Information, customer and employee relationships, and goodwill in the absence of Executive’s execution of and compliance with this Agreement. Executive further acknowledges and agrees that the Employer’s Confidential Information, customer and employee relationships, and goodwill are valuable assets of Employer and are legitimate business interests that are properly subject to protection through the covenants contained in this Agreement.
(iii)Potential Unfair Competition. Executive acknowledges and agrees that as a result of Executive’s employment with Employer, Executive’s knowledge of and access to Confidential Information, and relationships with Employer’s customers and employees, Executive would have an unfair competitive advantage if Executive were to engage in activities in violation of this Agreement.
(iv)Voluntary Execution. Executive acknowledges and affirms that Executive has executed this Agreement voluntarily, has read this Agreement carefully, and had a full and reasonable opportunity to consider this Agreement (including an opportunity to consult with legal counsel), and that Executive has not been pressured or in any way coerced, threatened, or intimidated into signing this Agreement.
(b)Restriction on Disclosure and Use of Confidential Information. Executive agrees that Executive shall not, directly or indirectly, use any Confidential Information on Executive’s own behalf or on behalf of any Person other than Employer, or reveal, divulge, or disclose any Confidential Information to any Person not expressly authorized by Employer to receive such Confidential Information. This obligation shall remain in effect for as long as the information or materials in question retain their status as Confidential Information. Executive further agrees to fully cooperate with Employer in maintaining the Confidential Information to the extent permitted by law. The Parties acknowledge and agree that this Agreement is not intended to, and does not, alter either Employer’s rights or Executive’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein to the contrary notwithstanding, Executive shall not be restricted from disclosing information that is required to be disclosed by law, court order, or other valid and appropriate legal process; provided, however, that in the event such disclosure is required by law, Executive shall provide Employer with prompt notice of such requirement so that Employer may seek an appropriate protective order prior to any such required disclosure by Executive. Executive understands and acknowledges that nothing in this section limits Executive’s ability to report possible violations of federal, state, or local law or regulation to any governmental agency or entity; to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agencies in connection with any charge or complaint, whether filed by Executive, on Executive’s behalf, or by any other individual; or to make other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation, and Executive shall not need the prior authorization of Employer to make any such reports or disclosures and shall not be required to notify Employer that Executive has made such reports or disclosures. In addition, and anything herein to the
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contrary notwithstanding, Executive is hereby given notice that Executive shall not be criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (as defined by 18 U.S.C. § 1839) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, in either event solely for the purpose of reporting or investigating a suspected violation of law; or disclosing a trade secret (as defined by 18 U.S.C. § 1839) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(c)Non-Competition. Except as provided herein, Executive agrees that, during the Restricted Period, Executive will not, without prior written consent of Employer, directly or indirectly (i) carry on or engage in Competitive Services within the Restricted Territory on Executive’s own behalf or on behalf of any Person or any Principal or Representative of any Person, or (ii) own, manage, operate, control or participate in the ownership, management, operation or control of any business, whether in corporate, proprietorship, or partnership form or otherwise, where such business is engaged in the provision of Competitive Services within the Restricted Territory; provided that nothing herein shall prohibit Executive from being a passive owner of not more than five percent of the outstanding securities of any publicly traded company engaged in the Competitive Services, so long as Executive does not serve on the board of directors of such company and does not engage in the management of such company.
(d)Non-Solicitation of Protected Customers. Executive agrees that, during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, on Executive’s own behalf or as a Principal or Representative of any Person, solicit, divert, or attempt to solicit or divert a Protected Customer for the purpose of engaging in, providing, or selling Competitive Services.
(e)Non-Recruitment of Employees and Independent Contractors. Executive agrees that during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, whether on Executive’s own behalf or as a Principal or Representative of any Person, solicit or induce or attempt to solicit or induce any employee or individual independent contractor of Employer to terminate an employment relationship with Employer or to enter into employment or independent contractor relationship with Executive or any such other Person. Notwithstanding the foregoing, the provisions of this Section 7(e) shall not be violated by general advertising or solicitation not specifically targeted at employees or independent contractor of Employer, or actions taken by any person or entity with which Executive is associated if Executive is not personally involved in any manner in the matter and has not identified such employee for soliciting or hiring and has not provided any information regarding the employee’s qualifications.
(f)Proprietary Rights.
(i)Ownership and Assignment of Protected Works. Executive agrees that any and all Confidential Information and Protected Works are the sole property of Employer, and that no compensation in addition to Executive’s compensation hereunder is due to Executive for development or transfer of such Protected Works. Executive
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agrees that Executive shall promptly disclose in writing to Employer the existence of any Protected Works. Executive hereby assigns and agrees to assign all of Executive’s rights, title, and interest in any and all Protected Works, including all patents or patent applications, and all copyrights therein, to Employer. Executive shall not be entitled to use Protected Works for Executive’s own benefit or the benefit of anyone except Employer without written permission from Employer and then only subject to the terms of such permission. Executive further agrees that Executive will communicate to Employer any facts known to Executive and testify in any legal proceedings, sign all lawful papers, make all rightful oaths, execute all divisionals, continuations, continuations-in-part, foreign counterparts, or reissue applications, all assignments, all registration applications, and all other instruments or papers to carry into full force and effect the assignment, transfer, and conveyance hereby made or to be made and generally do everything possible for title to the Protected Works and all patents or copyrights or trademarks or service marks therein to be clearly and exclusively held by Employer. Executive agrees that Executive will not oppose or object in any way to applications for registration of Protected Works by Employer or others designated by Employer. Executive agrees to exercise reasonable care to avoid making Protected Works available to any third party and shall be liable to Employer for all damages and expenses, including reasonable attorneys’ fees, if Protected Works are made available to third parties by Executive without the express written consent of Employer.
Anything herein to the contrary notwithstanding, Executive will not be obligated to assign to Employer any Protected Work for which no equipment, supplies, facilities, or Confidential Information of Employer was used and which was developed entirely on Executive’s own time, unless (A) the invention relates (1) directly to the business of Employer, or (2) to the Employer’s actual or demonstrably anticipated research or development; or (B) the invention results from any work performed by Executive for Employer. Executive likewise will not be obligated to assign to Employer any Protected Work that is conceived by Executive after Executive leaves the employ of Employer, except that Executive is so obligated if the same relates to or is based on Confidential Information to which Executive had access by virtue of employment with Employer. Similarly, Executive will not be obligated to assign any Protected Work to Employer that was conceived and reduced to practice prior to Executive’s employment with Employer, regardless of whether such Protected Work relates to or would be useful in the business of Employer. Executive acknowledges and agrees that there are no Protected Works conceived and reduced to practice by Executive prior to his employment with Employer.
(ii)No Other Duties. Executive acknowledges and agrees that there is no other contract or duty on the part of Executive now in existence to assign Protected Works to anyone other than Employer.
(iii)Works Made for Hire. Employer and Executive acknowledge that in the course of Executive’s employment with Employer, Executive may from time to time create for Employer copyrightable works. Such works may consist of manuals,
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pamphlets, instructional materials, computer programs, software, software integration techniques, software codes, and data, technical data, photographs, drawings, logos, designs, artwork, or other copyrightable material, or portions thereof, and may be created within or without Employer’s facilities and before, during or after normal business hours. All such works related to or useful in the business of Employer are specifically intended to be works made for hire by Executive, and Executive shall cooperate with Employer in the protection of Employer’s copyrights in such works and, to the extent deemed desirable by Employer, the registration of such copyrights.
(g)Return of Materials. Executive agrees to not retain or destroy (except as set forth below), and to immediately return to Employer on or prior to the Date of Termination, or at any other time Employer requests such return, any and all property of Employer that is the possession of Executive or subject to Executive’s control, including, but not limited to, keys, credit and identification cards, equipment, customer files and information, papers, drawings, notes, manuals, specifications, designs, devices, code, email, documents, diskettes, CDs, tapes, keys, access cards, credit cards, identification cards, computers, mobile devices, other electronic media, all other files and documents relating to Employer and its business (regardless of form, but specifically including all electronic files and data of Employer), together with all Protected Works and Confidential Information belonging to Employer or that Executive received from or through his employment with Employer. Executive will not make, distribute, or retain copies of any such information or property. To the extent that Executive has electronic files or information in Executive’s possession or control that belong to Employer, contain Confidential Information, or constitute Protected Works (specifically including but not limited to electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), on or prior to the Date of Termination, or at any other time Employer requests, Executive shall (i) provide Employer with an electronic copy of all of such files or information (in an electronic format that readily accessible by Employer); (ii) after doing so, delete all such files and information, including all copies and derivatives thereof, from all non-Employer-owned computers, mobile devices, electronic media, cloud storage, and other media, devices, and equipment, such that such files and information are permanently deleted and irretrievable; and (iii) provide a written certification to Employer that the required deletions have been completed and specifying the files and information deleted and the media source from which they were deleted.
(h)Enforcement of Restrictive Covenants. For the avoidance of doubt, nothing in this Section 7(i) limits the remedies available to Employer under Section 14 hereof.
(i)Rights and Remedies Upon Breach. The Parties specifically acknowledge and agree that the remedy at law for any breach of the Restrictive Covenants will be inadequate, and that in the event Executive breaches any of the Restrictive Covenants, Employer shall have the right and remedy, without the necessity of proving actual damage or posting any bond, to enjoin, preliminarily and permanently, Executive from violating the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to Employer and that money damages would not provide an adequate remedy to Employer.
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Executive understands and agrees that if he materially violates any of the obligations set forth in the Restrictive Covenants, the Restricted Period shall cease to run during the pendency of any litigation over such violation, provided that such litigation was initiated during the Restricted Period. If Employer does not substantially prevail in such litigation, the Restricted Period shall be deemed to have continued to run during the litigation. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to Employer at law or in equity. Employer’s ability to enforce its rights under the Restrictive Covenants or applicable law against Executive shall not be impaired in any way by the existence of a claim or cause of action on the part of Executive based on, or arising out of, this Agreement or any other event or transaction.
(j)Severability and Modification of Covenants. Executive acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The Parties agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and construed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants, or any other provision of this Section 7, be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of Employer’s legitimate business interests and may be enforced by Employer to that extent in the manner described above and all other provisions of this Agreement shall be valid and enforceable.
(k)Existing Covenants. Executive represents and warrants that Executive’s employment with Employer does not and will not breach any agreement that Executive has with any former employer to keep in confidence proprietary or confidential information or not to compete with any such former employer. Executive will not disclose to Employer or use on its behalf any proprietary or confidential information of any other party required to be kept confidential by Executive.
(l)Disclosure of Agreement. Executive acknowledges and agrees that, during the Restricted Period, Executive will disclose the existence and terms of the Restrictive Covenants in Section 7 of this Agreement to any prospective employer or business partner, within the Restricted Territory prior to entering into an employment, partnership, or other business relationship with such prospective employer or business partner. Executive further agrees that Employer shall have the right to make any such prospective employer or business partner of Executive within the Restricted Territory aware of the existence and terms of the Restrictive Covenants in Section 7 of this Agreement.
8.Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any employee benefit plan, program, policy, or practice provided by Employer and for which Executive may qualify, except as specifically
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provided herein. Amounts that are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice, or program of Employer at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice, or program except as explicitly modified by this Agreement.
9.Full Settlement; No Mitigation. Employer’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which Employer may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment. For the avoidance of doubt, nothing in this Section 9 shall impact Employer’s remedy of recoupment set forth in Section 14 hereof.
10.Mandatory Reduction of Payments in Certain Events.
(a)Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any Payment would, if paid, be subject to any Excise Tax, then, prior to the making of any Payments to or for the benefit of Executive, a calculation shall be made comparing (i) the net after-tax benefit to Executive of the Payments after payment by Executive of the Excise Tax, to (ii) the net after-tax benefit to Executive if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of a Change in Control, as determined by the Determination Firm (as defined below). For purposes of this Section 10, present value shall be determined in accordance with Section 280G(d)(4) of the Code.
(b)All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, shall be made by a nationally recognized accounting firm or compensation consulting firm mutually acceptable to Employer and Executive (the “Determination Firm”) which shall provide detailed supporting calculations to Employer and Executive within 15 business days after the receipt of notice from Executive that a Payment is due to be made, or such earlier time as is requested by Employer. All fees and expenses of the Determination Firm shall be borne solely by Employer. Any determination by the Determination Firm shall be binding upon Employer and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder, it is possible that Payments which Executive was entitled to, but did not receive pursuant to Section 10(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with the calculations required to be made hereunder. In such
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event, the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Employer to or for the benefit of Executive but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.
(c)In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 10 shall be of no further force or effect. In the event the provisions of Code Section 280G or 4999 are modified, this Section 10 shall be modified accordingly.
11.Successors.
(a)This Agreement is personal to Executive and shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.
(b)This Agreement can be assigned by Company and/or Bank only to a subsidiary or successor and shall be binding and inure to the benefit of Company and Bank, and their successors and assigns. Company and/or Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of Bank, expressly and unconditionally to assume and agree to perform Bank’s obligations under this Agreement, in the same manner and to the same extent that Bank would be required to perform if no such succession or assignment had taken place
12.Code Section 409A.
(a)General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code). Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither Company nor Bank, nor their directors, officers, employees, or advisers, shall be held liable for any taxes, interest, penalties, or other monetary amounts owed by Executive as a result of the application of Section 409A of the Code.
(b)Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, such Non-Exempt Deferred Compensation will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such payment event meet any description or definition of “change in control event” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such
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definition). This provision does not affect the dollar amount or prohibit the vesting of any Non-Exempt Deferred Compensation termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, or the application of a different form of payment, then, subject to subsection (c) below, such payment or distribution shall be made at the time and in the form that would have applied absent the non-409A-conforming event.
(c)Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a specified employee (as determined by Employer in accordance with Section 409A of the Code and Treasury Regulations§ 1.409A-3(i)(2)), then, subject to any permissible acceleration of payment by Employer under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes): (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following Executive’s separation from service (or, if Executive dies during such period, within 30 days after Executive’s death) (in either case, the “Required Delay Period’’); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.
(d)Treatment of Installment Payments. Each payment of termination benefits under this Agreement, including but not limited to Section 6, shall be considered a separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.
(e)Timing of Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on Executive’s execution of a release of claims, such release must be executed and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, Employer may elect to make or commence payment at any time during such period.
(f)Timing of Reimbursements and In-kind Benefits. If Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement, and such payments or reimbursements are includible in Executive’s federal gross taxable income, the amount of such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. No right of Executive
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to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.
(g)Permitted Acceleration. Employer shall have the sole authority to make any accelerated distribution permissible under Treas. Reg. Section 1.409A-3(j)(4) to Executive of deferred amounts, provided that such distribution meets the requirements of Treas. Reg. Section 1.409A-3(j)(4).
13.Regulatory Action.
(a)If Executive is removed and/or permanently prohibited from participating in the conduct of Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(l) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of Employer under this Agreement shall terminate, as of the effective date of such order.
(b)If Executive is suspended and/or temporarily prohibited from participating in the conduct of Bank’s affairs by a notice served under Section 8(e)(3) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), all obligations of Employer under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, Employer shall reinstate (in whole or in part) any of its obligations which were suspended.
(c)If Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default.
(d)All obligations under this Agreement shall be terminated, except to the extent a determination is made that continuation of the Agreement is necessary for the continued operation of Bank (1) by the director of the FDIC or his or her designee (the “Director”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of Bank under the authority contained in 13(c) of the FDIA; or (2) by the Director, at the time the Director approves a supervisory merger to resolve problems related to operation of Bank when Bank is determined by the Director to be in an unsafe and unsound condition.
14.Compensation Recoupment Policy. Any incentive compensation, including, but not limited to, cash-based and equity-based compensation, awarded to Executive by Employer shall be subject to any written compensation recoupment policy that the Compensation Committee may adopt from time to time that is applicable by its terms to Executive, including but not limited to the Company’s mandatory recoupment policy as required by The New York Stock Exchange. In addition, the Compensation Committee may specify in any written documentation memorializing an incentive award that Executive’s rights, payments, and benefits with respect to such award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable conditions of such award. Such events may include, but shall not be limited to: (i) termination of employment for Cause, (ii) violation of material Company or Bank policies, (iii) breach of noncompetition, confidentiality, or other restrictive covenants, (iv) other conduct by Executive that is detrimental to the business or reputation of the Employer, or (v) a later determination that
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the amount realized from a performance-based award was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, whether or not Executive caused or contributed to such material inaccuracy. The reduction, cancellation, forfeiture, and recoupment rights associated with any equity awards or similar awards granted to Executive, if any, shall be as provided in the award certificate memorializing any such award.
15.Indemnification. Employer shall indemnify Executive for liabilities incurred by Executive while acting in good faith as an officer to the fullest extent provided for any other officer of Employer. To the extent that Employer maintains director and officer liability insurance, such insurance shall cover Executive to the same extent as any other officer of Employer.
16.Miscellaneous.
(a)Applicable Law; Consent to Arbitration. Employer and Executive agree that this Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Tennessee without giving effect to its conflicts of law principles. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators sitting in a location selected by Executive within fifty (50) miles from the headquarters location of Bank, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
(b)Non-Duplication. Notwithstanding anything to the contrary in this Agreement, and except as specifically provided below, any severance payments or benefits received by Executive pursuant to this Agreement shall be in lieu of any general severance policy or other severance plan maintained by Employer (other than a stock option, restricted stock, share or unit, performance share or unit, supplemental retirement, deferred compensation, or similar plan or agreement which may contain provisions operative on a termination of Executive’s employment or may incidentally refer to accelerated vesting or accelerated payment upon a termination of employment).
(c)Captions. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
(d)Amendments. This Agreement may not be amended or modified otherwise than- by a written agreement executed by the Parties or their respective successors and legal representatives.
(e)Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other Party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
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If to Executive:
On file with Bank
If to Bank:
1221 Broadway
Suite 1300
Nashville, Tennessee 37203
Attention: General Counsel
or to such other address as a Party shall have furnished to the other Party(ies) in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(f)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(g)Withholding. Employer may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(h)Waivers. Failure of any Party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted in this Agreement or of the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the Party making the waiver.
(i)Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and, from and after the date hereof, this Agreement shall supersede any other agreement, written or oral, between the Parties relating to the subject matter of this Agreement, including but not limited to the Prior Agreement (except to the extent necessary to govern the treatment of outstanding equity-based awards granted prior to the Effective Date as specified in Section 6(h) hereof), any prior discussions, understandings, letters, and/or agreements between the Parties, written or oral, at any time.
(j)Construction. The Parties understand and agree that because they have been given the opportunity to have counsel review and revise this Agreement, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall be construed as a whole, and according to its fair meaning, and not strictly for or against any Party.
(k)Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
(l)Survival. The rights and obligations of the Parties under Sections 6, 7, 10, 12, 14, 15, 16 shall survive the expiration and/or termination of this Agreement and the termination of Executive’s employment hereunder for the periods expressly designated in such
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sections or, if no such period 1s designated, for the maximum period permissible under applicable law.
[signature page follows]
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Execution Copy
IN WITNESS WHEREOF, the Parties hereby signify their agreement to these terms by their signatures below, as of the Effective Date.
MARK E. HICKMAN



    
Mark E. Hickman



FB FINANCIAL CORPORATION

image_02.jpg
    
Christopher T. Holmes
President and Chief Executive Officer



FIRSTBANK

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Christopher T. Holmes
President and Chief Executive Officer

[Hickman - Employment Agreement Signature Page]
LEGAL02/43780275v2
Exhibit 10.4
Execution Copy
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 23rd day of February 2024 by and among FB FINANCIAL CORPORATION (“Company”), FIRSTBANK, a Tennessee bank (“Bank”), a wholly owned subsidiary of the Company, and Christopher T. Holmes (“Executive”). Company, Bank, and Executive are sometimes referred to herein collectively as the “Parties,” and each is sometimes referred to herein individually as a “Party.”
BACKGROUND
WHEREAS, Executive is currently engaged as the President and Chief Executive Officer of Company and Bank pursuant to that certain employment agreement by and among Executive and Company and Bank, dated July 31, 2021 (the “Prior Agreement”); and
WHEREAS, the Parties desire to amend and restate the Prior Agreement as of Effective Date (as defined herein).
NOW, THEREFORE, in consideration of the payments, consents, and acknowledgements described below, in consideration of Executive’s employment with Company and Bank, and in consideration of other good and valuable consideration, the receipt and sufficiency of all of which is hereby acknowledged, the Parties agree as follows:
1.Definitions. The following capitalized terms used in this Agreement shall have the meanings assigned to them below, which definitions shall apply to both the singular and the plural forms of such terms:
(a)“Board of Directors” means, collectively, the board of directors of Company and the board of directors of Bank and, where appropriate, any committee or other designee thereof.
(b)“Beneficial Owner” has the meaning given such term in Rule 13d-3 of the General Rules and Regulations promulgated under the Securities Exchange Act of 1934.
(c)“Cause” means, in the context of the termination of this Agreement by Employer, a good faith determination by the Board of Directors that any of the following has occurred:
(i)conduct by Executive that amounts to willful misconduct, gross neglect, or a material failure to perform Executive’s duties and responsibilities hereunder, including prolonged absences without the consent of the Board of Directors unless otherwise excused by law or under Bank’s leave policies; provided that the nature of such conduct shall be set forth in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Board of Directors, susceptible to a cure;
LEGAL02/43756821v3

Execution Copy
(ii)any willful violation of any material law, rule, or regulation applicable to banks or the banking industry generally (including but not limited to the regulations of the Board of Governors of the Federal Reserve, the FDIC, the Tennessee Department of Financial Institutions, or any other applicable regulatory authority);
(iii)the exhibition by Executive of a standard of behavior within the scope of or related to Executive’s employment that is in violation of any written policy, board committee charter, or code of ethics or business conduct (or similar code) of Company or Bank to which Executive is subject; provided that the nature of such conduct shall be set forth with reasonable particularity in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Board of Directors, susceptible to a cure;
(iv)any act of fraud, misappropriation, or embezzlement by Executive, whether or not such act was committed in connection with the business of Company and/or Bank;
(v)a material breach of this Agreement, including, without limitation, a breach of Section 7 hereof; provided that the nature of such breach shall be set forth with reasonable particularity in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such breach, provided that such breach is, in the reasonable discretion of the Board of Directors, susceptible to a cure;
(vi)Executive’s conviction of, or Executive’s pleading guilty or nolo contendere to with respect to (a) a felony or a crime involving moral turpitude (including pleading guilty or nolo contendere to a felony or lesser charge which results from plea bargaining), whether or not such felony, crime, or lesser offense is connected with the business of Company and/or Bank, or (b) any crime in connection with the business of Company or Bank.
(d)“Change in Control” means and includes any one of following events:
(i)any Person becomes a Beneficial Owner, directly or indirectly, of 50% or more of the voting power of the then-outstanding securities of Company eligible to vote for the election of directors (“Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions of Company Voting Securities shall not constitute a Change in Control: (A) an acquisition by a Principal Shareholder, (B) an acquisition directly or indirectly from the Company, including an acquisition by or through a broker, underwriter, or financial institution acquiring such securities as part of a firm commitment or similar underwriting or distribution process, (C) an acquisition by Company or Bank, (D) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by Company or Bank, or (E) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (iii) below); or
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(ii)during any consecutive 12-month period, individuals who, at the beginning of such period, constitute Company’s Board of Directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board of Directors, provided that any person becoming a director after the beginning of such 12-month period and whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board of Directors shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board of Directors (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or
(iii)the consummation of a reorganization, merger, consolidation, statutory share exchange, or similar form of corporate transaction involving Company or Bank, the sale or other disposition of all or substantially all of Company’s assets, or the acquisition of assets or stock of another corporation or other entity (each, a “Transaction”), unless immediately following such Transaction: (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the outstanding Company Voting Securities immediately prior to such Transaction beneficially own, directly or indirectly, more than 50% of the voting power of the then-outstanding shares of voting securities of the entity resulting from such Transaction (including, without limitation, an entity which as a result of such Transaction owns Company or all or substantially all of Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving Entity”) in substantially the same proportions as their ownership, immediately prior to such Transaction, of the outstanding Company Voting Securities, and (B) no person (other than (x) Company or Bank, (y) the Surviving Entity or its ultimate parent entity, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 50% or more of the total common stock or 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity were Incumbent Directors at the time of the Board of Director’s approval of the execution of the initial agreement providing for such Transaction (any Transaction which satisfies all of the criteria specified in (A), (B), and (C) above shall be deemed to be a “Non-Qualifying Transaction”).
(e)“CIC Severance Multiple” shall mean three (3.0).
(f)“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
(g)“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
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(h)“Compensation Committee” means the compensation committee of the board of directors of Company.
(i)“Competitive Services” means engaging in the business of commercial and mortgage banking, including, without limitation, originating, underwriting, closing and selling loans, receiving deposits, as well as the business of providing any other activities, products, or services of the type routinely conducted, offered, or provided by Employer as of or during the two years immediately prior to the Date of Termination.
(j)“Confidential Information” means any and all data and information relating to Employer, its activities, business, or clients that (i) is disclosed to Executive or of which Executive becomes aware because of Executive’s employment with Employer; (ii) has value to Employer; and (iii) is not generally known outside of Employer. “Confidential Information” shall include, but is not limited to the following types of information regarding, related to, or concerning Employer: trade secrets (as defined by the Tennessee Uniform Trade Secrets Act); financial plans and data; management planning information; business plans; operational methods; market studies; marketing plans or strategies; pricing information; product development techniques or plans; customer lists; customer files, data, and financial information; details of customer contracts; current and anticipated customer requirements; identifying and other information pertaining to business referral sources; past, current, and planned research and development; computer aided systems, software, strategies, and programs; business acquisition plans; management organization and related information (including, without limitation, data and other information concerning the compensation and benefits paid to officers, directors, employees, and management); personnel and compensation policies; new personnel acquisition plans; and other similar information. “Confidential Information” also includes combinations of information or materials which individually may be generally known outside of Employer, but for which the nature, method, or procedure for combining such information or materials is not generally known outside of Employer. In addition to data and information relating to Employer, “Confidential Information” also includes any and all data and information relating to or concerning a third party that otherwise meets the definition set forth above, that was provided or made available to Employer by such third party, and that Employer has a duty or obligation to keep confidential. This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of Employer.
(k)“Date of Termination” means: (i) if Executive’s employment is terminated other than by reason of death or Disability, the date of delivery of the Notice of Termination, or any later date specified in such Notice of Termination, or (ii) if Executive’s employment is terminated by reason of death or Disability, the Date of Termination will be the date of death or the Disability Effective Date, as the case may be.
(l)“Disability” means a condition for which benefits would be payable under any long-term disability coverage (without regard to the application of any elimination period requirement) then provided to Executive by Employer or, if no such coverage is then being
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provided, the inability of the Executive to perform the essential functions of Executive’s job with Employer (as specified in this Agreement), with or without reasonable accommodation, for a period of at least 180 consecutive days as certified by a physician chosen by Executive and reasonably acceptable to the Employer. Notwithstanding the provisions in this Section 1(k), Disability for purposes of this Agreement must also be a disability within the meaning of Code Section 409A(a)(2)(A)(ii) and 409A(a)(2)(C) and Treas. Reg. Section 1.409A-3(a)(2).
(m)“Effective Date” means February 23, 2024.
(n)“Employer” means Company and Bank, collectively.
(o)“Excise Tax” means any excise tax imposed by Section 4999 of the Code.
(p)“FDIC” means the Federal Deposit Insurance Corporation.
(q)“Good Reason” shall mean, in the context of the termination of this Agreement by Executive:
(i)a material diminution in Executive’s title, authority, duties, or responsibilities which is not consented to by Executive in writing;
(ii)a material diminution in Executive’s base compensation (which includes Executive’s Base Salary and Target Annual Bonus opportunity) which is not consented to by Executive in writing or made as part of across-the-board compensation reductions affecting all or substantially all executive officers;
(iii)a change in the location of Executive’s primary office such that Executive is required to report regularly to an office located outside of a 50-mile radius from the location of Executive’s primary office as of the Effective Date, which change is not consented to by Executive in writing; or
(iv)a material breach of the terms of this Agreement by Employer.
(r)“Material Contact” means contact between Executive and a customer or potential customer of Company or Bank (i) with whom or which Executive has or had substantive dealings on behalf of Company or Bank; (ii) whose dealings with Company or Bank are or were coordinated or supervised by Executive; (iii) about whom Executive obtains Confidential Information in the ordinary course of business as a result of Executive’s employment with Employer; or (iv) who receives products or services of Company or Bank, the sale or provision of which directly results or resulted in incentive compensation or commissions for Executive within the two years prior to the Date of Termination.
(s)“Non-CIC Severance Multiple” shall mean two (2.0).
(t)“Notice of Termination” shall mean a written notice delivered by a Party in connection with the termination of this Agreement which (i) indicates the specific termination provision in this Agreement relied upon for such termination, (ii) to the extent applicable, sets
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forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and (iii) specifies the Date of Termination.
(u)“Parachute Value” of a Payment means the present value as of the date of the Change in Control of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm (as defined in Section 10(b)) for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.
(v)“Payment” shall mean any benefit, payment, or distribution made or given by Employer to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise).
(w)“Person” means any individual or any corporation, partnership, joint venture, limited liability company, association, or other entity or enterprise.
(x)“Principal or Representative” means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative, or consultant.
(y)“Principal Shareholder” means James W. Ayers or his designee(s), and shall include any entity that is directly or indirectly affiliated with the Principal Shareholder.
(z)“Protected Customer” means any Person to whom Company or Bank has sold its products or services or actively solicited to sell its products or services, and with whom Executive has had Material Contact during the last 24 months of his employment with Employer.
(aa)“Protected Work” means any and all ideas, inventions, formulas, Confidential Information, source codes, object codes, techniques, processes, concepts, systems, programs, software, software integration techniques, hardware systems, schematics, flow charts, computer data bases, client lists, trademarks, service marks, brand names, trade names, compilations, documents, data, notes, designs, drawings, technical data, and/or training materials, including improvements thereto or derivatives therefrom, whether or not patentable, and whether or not subject to copyright or trademark or trade secret protection, conceived, developed or produced by Executive, or by others working with Executive or under the direction of Executive, during the period of Executive’s employment, or conceived, produced or used or intended for use by or on behalf of Employer or its customers.
(ab)“Restricted Period” means a period of 12 months following the Date of Termination.
(ac)“Restricted Territory” means a radius of 50 miles from the Bank’s headquarters office in Nashville, Tennessee.
(ad)“Restrictive Covenants” means the restrictive covenants contained in Section 7(b) through 7(j) hereof.
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(ae)“Severance Formula” means the sum of (A) Executive’s then current Base Salary (or, in the case of a termination for Good Reason as defined in Section 1(q)(ii), the Base Salary in effect immediately prior to the diminution in Base Salary giving rise to termination), plus (B) the greater of Executive’s Target Annual Bonus for the fiscal year in which the Date of Termination occurs or the average Annual Bonus received by Executive for the three fiscal years immediately preceding the fiscal year in which the Date of Termination occurs.
2.Effective Date; Term. Upon the terms and subject to the conditions set forth in this Agreement, Employer hereby employs Executive, and Executive hereby accepts such employment, for the term commencing on the Effective Date and, unless otherwise earlier terminated pursuant to Section 5 hereof, the close of business on the third anniversary of the Effective Date (the “Initial Term”). The Initial Term and any and all renewal terms, if any, are referred to together herein as the “Term.” The third anniversary of the Effective Date is referred to herein as the “Term End Date.” Beginning on the initial Term End Date and on each subsequent anniversary of the Term End Date thereafter, the Term shall, without further action by Executive or Employer, be extended by an additional one-year period; provided, however, that either Employer or Executive may cause the Term to cease to extend automatically, by giving written notice to the other not less than 90 days prior to the scheduled expiration of the Term.
3.Employment; Extent of Service. Executive is hereby employed on the Effective Date as the President and Chief Executive Officer of Company and Bank. Executive shall have the duties, responsibilities, and authority commensurate with such position and such other duties as may be assigned by the Board of Directors. During the Term of this Agreement, and excluding any periods of vacation or sick leave to which Executive is entitled, Executive agrees to (i) devote substantially all of Executive’s business effort, time, energy, and skill to the business of Employer; (ii) faithfully, loyally, and diligently perform such duties; and (iii) diligently follow and implement all lawful management policies and decisions of Employer that are communicated to Executive. During the Term of this Agreement, Executive shall not, without the consent of Employer, be engaged in or provide services to any other business or enterprise (whether engaged in for profit or not) which interferes with his obligations to Employer under this Agreement. For the avoidance of doubt, Executive shall not be prohibited from serving on a board of directors or advisory board of other companies or organizations as long as such service does not interfere with his obligations to the Company and is consistent with the Company’s Corporate Governance Guidelines. Executive will report directly to the Board of Directors of the Company.
4.Compensation and Benefits. For the avoidance of doubt, the compensation and benefits provided under this Section 4 shall be in consideration of services rendered to both Company and Bank.
(a)Base Salary. During the Term, Bank shall pay to Executive a base salary at the rate of $725,000 per year (“Base Salary”), less normal withholdings, payable in accordance with Bank’s payroll practices. The Compensation Committee shall review Executive’s Base
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Salary annually and may increase the Base Salary based on such review but may not decrease the Base Salary unless (i) Executive consents in writing to such decrease, or (ii) such decrease is made as part of across-the-board salary reductions affecting all or substantially all executive officers. Such adjusted salary then shall become Executive’s Base Salary for purposes of this Agreement.
(a)Annual Bonus. During the Term, Executive shall have an opportunity to participate in any short-term or cash incentive plans available to other Peer Executives and based upon the achievement of performance goals established from year to year by the Compensation Committee of Company (the “Annual Bonus”). Subject to the vesting and performance requirements as the Compensation Committee may require, the initial base value of Executive’s potential Annual Bonus shall be $725,000, with a maximum payout of 150% of such amount, which number shall be reviewed by the Compensation Committee annually and adjusted based on such review. Except as otherwise provided in Section 6(a)(ii) and Section 6(e)(ii), Executive must be employed by Company and/or Bank on the date the Annual Bonus, if any, is paid in order to receive the Annual Bonus. The Annual Bonus will be paid by March 15 of the year following the year for which it is earned. For purposes of this Agreement, Executive’s target Annual Bonus opportunity for any given fiscal year is referred to as the “Target Annual Bonus.”
(b)Retirement Plans. During the Term, Executive shall be entitled to participate in any retirement plans available to other Bank employees similarly situated to Executive (“Peer Executives”), and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such plans at any time and from time to time.
(c)Long-Term Incentive Plans. During the Term, Executive shall be entitled to participate in any long-term or equity incentive plans available to other Peer Executives, and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Company and/or Bank to amend, modify or terminate any such plans at any time and from time to time. Subject to the vesting and performance requirements as the Compensation Committee may require, the initial base value of the Executive’s potential long-term incentive plan award shall be $1,250,000, with a maximum payout of 200% of such amount, which number shall be reviewed by the Compensation Committee annually and adjusted based on such review.
(d)Welfare Benefit Plans. During the Term, Executive and Executive’s eligible dependents shall be eligible for participation in the welfare benefit plans, practices, policies, and programs provided by Bank, if any, to the extent available to other Peer Executives and subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such benefit plans, policies, or programs at any time and from time to time.
(e)Other Benefits. During the Term, the Company shall make available for use by Executive an automobile, the make and model of which will be chosen by the Executive with approval by the Chairperson of the Compensation Committee. During the Term, the
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Company shall reimburse Executive for the costs of maintaining membership in a social club or country club to be selected by Executive with approval by the Chairperson of the Compensation Committee, to be used for the purposes of business relations and development and otherwise furthering the performance of Executive’s responsibilities under this Agreement. Any such perquisites and benefits provided by Employer shall be subject to any written perquisite policy that the Compensation Committee may adopt from time to time that is applicable by its terms to Executive.
(f)Expenses. During the Term, and subject to Section 12 hereof, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in the course of performing Executive’s duties and responsibilities under this Agreement, in accordance with the policies, practices, and procedures of Bank to the extent available to other Peer Executives with respect to travel and other business expenses.
(g)Disability Insurance. During the Term, Bank shall provide supplemental long-term disability coverage for Executive sufficient to provide two-thirds of the Executive’s pre-disability Base Salary.
(h)Life Insurance. During the Term, Bank shall pay the premiums on a term life insurance contract covering Executive paying a death benefit of $2,500,000. Bank shall, in its sole discretion, select the life insurance contract on which it will pay the premiums, but Executive shall be the owner of such contract and will be or will designate the beneficiary of such contract. Notwithstanding any other provision of this Agreement, in the event the life insurance contract described herein extends beyond the termination of Executive’s employment with Company and/or Bank, Executive, and not Bank, shall be obligated to pay the premiums on such life insurance contract accruing after Executive’s termination of employment with Company and/or Bank. Notwithstanding any other provision of this Agreement, if Bank’s preferred insurance providers, for whatever reason, are unwilling to insure Executive on commercially reasonable terms, then this Section 4(h) shall be null and void.
5.Termination of Employment. For the avoidance of doubt, if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason, and if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason.
(a)Termination upon Death. Executive’s employment shall terminate automatically upon Executive’s death. For the avoidance of doubt, termination of Executive’s employment upon the death of Executive under this Section 5(a) shall not be considered termination without Cause that would entitle Executive to severance under Section 6(a).
(b)Termination by Employer. Employer may terminate Executive’s employment during the Term with or without Cause on written notice to Executive; provided that the written Notice of Termination with respect to a termination without Cause shall be provided at least 30 days prior to the effective date of such termination.
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(c)Termination by Executive. Executive’s employment may be terminated by Executive:
(i)at any time for Good Reason, provided that (A) before terminating this Agreement and Executive’s employment for Good Reason, (1) Executive shall give notice to Employer of the existence of Good Reason for termination, which notice must be given by Executive to Employer within 90 days of Executive’s discovery of the initial, continued or repeated existence of the condition(s) giving rise to Good Reason for termination and shall state with reasonable detail the condition(s) giving rise to Good Reason for termination, and (2) Employer shall have 30 days from the date of receipt of such notice to remedy the condition(s) giving rise to Good Reason for termination; and (B) such termination must occur within 12 months of the initial existence of the condition(s) giving rise to Good Reason for termination; or
(ii)at any time without Good Reason, provided that Executive shall give Employer at least 30 days prior written notice of Executive’s intent to terminate.
(d)Notice of Termination. Any termination by Company and/or Bank with or without Cause and any termination by Executive shall be communicated by Notice of Termination to the other Party hereto given in accordance with Section 16(e) of this Agreement. The failure by Company and/or Bank to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of Company and/or Bank hereunder or preclude the Company and/or Bank from asserting such fact or circumstance in enforcing its rights hereunder. The failure by Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing its rights hereunder.
6.Obligations of Employer upon Termination.
(a)Resignation for Good Reason; Termination Other Than for Cause, Death, or Disability. During the Term, if (x) Employer terminates Executive’s employment other than for Cause, death, or Disability, or (y) Executive terminates employment for Good Reason, then, subject to Section 6(f) hereof:
(i)Bank shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Base Salary through the Date of Termination to the extent not theretofore paid (the “Accrued Salary”);
(ii)Bank shall pay to Executive in a lump sum in cash a prorated Annual Bonus for the year in which the Date of Termination occurs based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned Annual Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Date of
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Termination, and the denominator shall be twelve (12)) (the “Prorated Annual Bonus”), payable at the same time that annual bonuses are paid to Peer Executives;
(iii)subject to Section 12 hereof, Bank shall pay to Executive an amount equal to the Non-CIC Severance Multiple times Severance Formula (such aggregate payment, the “Non-CIC Severance Amount”), payable in approximately equal monthly installments during the 24-month period following the Date of Termination, commencing on the first payroll date to occur after the 60th day following the Date of Termination; provided that the first such payment shall consist of all amounts payable to Executive pursuant to this Section 6(a)(iii) between the Date of Termination and the first payroll date to occur after the 60th day following the Date of Termination;
(iv)if Executive elects to continue participation in any group medical, dental, vision, and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then for a period of 18 months after the Date of Termination (the “Health Benefits Continuation Period”), Bank shall pay to Executive an amount in cash equal to the COBRA cost of such coverage; provided, however, that (1) that if Executive becomes eligible to receive medical benefits under a program of a subsequent employer or otherwise (including coverage available to Executive’s spouse through the spouse’s employer), Bank’s obligation to pay any portion of the cost of health coverage as described herein shall cease, except as otherwise provided by law; (2) the Health Benefits Continuation Period shall run concurrently with any period for which Executive is eligible to elect health coverage under COBRA; (3) the Bank-paid portion of the monthly premium for such group health benefits, determined in accordance with Code Section 4980B and the regulations thereunder, shall be treated as taxable compensation by including such amount in Executive’s income in accordance with applicable rules and regulations; (4) during the Health Benefits Continuation Period, the benefits provided in any one calendar year shall not affect the amount of benefits provided in any other calendar year (other than the effect of any overall coverage benefits under the applicable plans); (5) the reimbursement of an eligible taxable expense shall be made as soon as practicable but not later than December 31 of the year following the year in which the expense was incurred; and (6) Executive’s rights pursuant to this Section 6(a)(iv) shall not be subject to liquidation or exchange for another benefit. The benefit described in this Section 6(a)(iv) is referred to as the “Health Coverage Benefit;”
(v)to the extent not theretofore paid or provided, Bank shall timely pay or provide to Executive any other amounts or benefits required to be paid or provided or which Executive is eligible to receive under any plan, program, policy, practice, contract, or agreement of Bank and its affiliated companies and in accordance with the terms thereof, including, but not limited to, any expense reimbursements and accrued but unused vacation (which shall be paid out, if at all, in accordance with Bank’s then current written policy regarding accrual and payment for unused vacation pay) (such amounts and benefits shall be hereinafter referred to as the “Other Benefits”); and
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(vi) unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall remain outstanding and shall vest, in whole, in part, or not at all, on a pro rata basis based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned award by a fraction, the numerator of which shall be the number of months elapsed in the applicable performance period prior to the Date of Termination, and the denominator shall be the number of months in the applicable performance period). The treatment of equity awards described in this clause Section 6(A)(vi) is hereinafter referred to as the “Non-CIC Equity Award Treatment”.”
(b)Termination for Cause; Resignation by Executive other than Resignation for Good Reason; Death. If during the Term Executive’s employment is terminated by Employer for Cause, by Executive other than for Good Reason, or in the event of Executive’s death, then Employer shall have no further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive or Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after the Date of Termination, and payments of Other Benefits, as applicable. Notwithstanding the above, and unless the applicable equity award agreement expressly provides otherwise, if Executive’s employment is terminated by Executive’s death, Executive’s then outstanding equity awards shall be subject to the Non-CIC Equity Award Treatment as provided Section 6(a)(vi).
(c)Non-Renewal of Agreement.
(i)If Employer elects not to renew the Term pursuant to Section 2 hereof, and within the 12 months following the expiration of such Term, Employer terminates Executive’s employment other than for Cause, death, or Disability, then, notwithstanding the expiration of the Term and subject to Section 6(f) and Section 12 hereof, Bank shall pay or provide to Executive (X) the Non-CIC Severance Amount, payable pursuant to the payment schedule set forth in Section 6(a)(iii) hereof, (Y) the Health Coverage Benefit as set forth in Section 6(a)(iv) and (Z) any unvested equity awards held by Executive shall be subject to Non-CIC Equity Award Treatment as and to the extent set forth in Section 6(a)(vi) (collectively, the “Non-Renewal Severance”).
(ii)If Executive elects not to renew the Term pursuant to Section 2 hereof, and following the expiration of such Term, Executive’s employment with Employer terminates then Employer shall have no further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination, and payment or provision of Other Benefits, as applicable.
(d)Termination for Disability. During the Term, if Employer terminates Executive’s employment for Disability of Executive, then Employer shall give Executive 30
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days’ prior notice of its intent to terminate and Executive’s employment shall terminate on the 30th day after receipt of such notice (the “Disability Effective Date”), in which event, Bank shall pay to Executive a lump sum amount equal to six months of the Executive's then current Base Salary, plus a prorated Target Annual Bonus for the year in which the Disability Effective Date occurs (with such pro rata portion determined by multiplying the Target Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Disability Effective Date, and the denominator shall be twelve (12)), with such amount payable in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank.
(e)Termination following a Change in Control. If, within 12 months following a Change in Control, (x) Employer (or any successor to Employer) terminates Executive’s employment other than for Cause, or (y) Executive terminates employment for Good Reason, then, subject to Section 6(f) and in lieu of any amounts under Section 6(a) hereof:
(i)Bank (or its successor) shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Accrued Salary;
(ii)Bank shall pay to Executive in a lump sum in cash the Prorated Annual Bonus, payable at the same time that annual bonuses are paid to Peer Executives;
(iii)subject to Section 12 hereof, Bank (or its successor) shall pay to Executive the CIC Multiple times the Severance Formula (such aggregate payment, the “CIC Severance Amount”), payable in a lump sum in cash on the 60th day following the Date of Termination;
(iv)if Executive elects to continue participation in any group medical, dental, vision and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then during the Health Benefits Continuation Period, Bank (or its successor) shall pay to Executive the Health Coverage Benefit;
(v)to the extent not theretofore paid or provided, Bank (or its successor) shall timely pay or provide to Executive any Other Benefits; and
(vi) unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall become vested as soon as possible but not later than the 60th day after the Date of Termination as to the greater of (1) the number of shares that would have vested based upon an assumed achievement of all applicable performance metrics at the target level of performance or (2) the number of shares that would have vested based upon the actual level of achievement of all applicable performance metrics measured as of the Date of Termination. The treatment of equity
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awards described in this Section 6(e)(vi) is hereinafter referred to as the “CIC Equity Award Treatment”.
(f)Release of Claims; Restrictive Covenants. Notwithstanding the foregoing, Bank shall be obligated to provide the amounts and benefits set forth in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable, only if (A) within 45 days after the Date of Termination Executive shall have executed a separation and full release of claims/covenant not to sue in substantially the form attached hereto as Exhibit A (the “Release Agreement”) and such Release Agreement shall not have been revoked within the revocation period specified in the Release Agreement, and (B) Executive fully complies with the obligations set forth in Section 7 hereof. For the avoidance of doubt, if Executive does not comply with the obligations set forth in Section 7 hereof, then payment or provision of the amounts and benefits set forth in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable, shall cease immediately upon Executive’s breach thereof.
(g)Resignations. If Executive is a member of the board of directors of Company, the board of directors of Bank, or the board of directors of any subsidiary of Company or Bank, then termination of Executive’s employment hereunder for any reason whatsoever shall constitute Executive’s resignation from such boards of directors and as resignation as an officer of Bank, Company, and of any of the subsidiaries for which Executive serves as an officer.
(h)Equity Awards Granted Prior to the Effective Date. Notwithstanding anything to the contrary in this Agreement, any equity-based awards granted prior to the Effective Date that remain outstanding as of the Executive’s Date of Termination or a Change in Control, as applicable, shall be governed by the terms of the Prior Agreement.
7.Restrictive Covenants. For the avoidance of doubt, the Restrictive Covenants contained in this Section 7, as well as any other provisions of this Agreement necessary to interpret or enforce the Restrictive Covenants, shall survive termination of this Agreement and/or termination of Executive’s employment for any reason, and shall continue to be in full force and effect in accordance with their terms.
(a)Acknowledgments.
(i)Condition of Employment and Other Consideration. Executive acknowledges and agrees that Executive has received good and valuable consideration for entering into this Agreement.
(ii)Access to Confidential Information, Relationships, and Goodwill. Executive acknowledges and agrees that Executive is being provided and entrusted with Confidential Information, including highly confidential customer information that is subject to extensive measures to maintain its secrecy by Employer, is not known in the trade or disclosed to the public, and would materially harm Employer’s legitimate business interests if it was disclosed or used in violation of this Agreement. Executive also acknowledges and agrees that Executive is being provided and entrusted with access to Employer’s customer and employee relationships and goodwill. Executive further acknowledges and agrees that the Employer would not provide access to the Confidential
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Information, customer and employee relationships, and goodwill in the absence of Executive’s execution of and compliance with this Agreement. Executive further acknowledges and agrees that the Employer’s Confidential Information, customer and employee relationships, and goodwill are valuable assets of Employer and are legitimate business interests that are properly subject to protection through the covenants contained in this Agreement.
(iii)Potential Unfair Competition. Executive acknowledges and agrees that as a result of Executive’s employment with Employer, Executive’s knowledge of and access to Confidential Information, and relationships with Employer’s customers and employees, Executive would have an unfair competitive advantage if Executive were to engage in activities in violation of this Agreement.
(iv)Voluntary Execution. Executive acknowledges and affirms that Executive has executed this Agreement voluntarily, has read this Agreement carefully, and had a full and reasonable opportunity to consider this Agreement (including an opportunity to consult with legal counsel), and that Executive has not been pressured or in any way coerced, threatened, or intimidated into signing this Agreement.
(b)Restriction on Disclosure and Use of Confidential Information. Executive agrees that Executive shall not, directly or indirectly, use any Confidential Information on Executive’s own behalf or on behalf of any Person other than Employer, or reveal, divulge, or disclose any Confidential Information to any Person not expressly authorized by Employer to receive such Confidential Information. This obligation shall remain in effect for as long as the information or materials in question retain their status as Confidential Information. Executive further agrees to fully cooperate with Employer in maintaining the Confidential Information to the extent permitted by law. The Parties acknowledge and agree that this Agreement is not intended to, and does not, alter either Employer’s rights or Executive’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein to the contrary notwithstanding, Executive shall not be restricted from disclosing information that is required to be disclosed by law, court order, or other valid and appropriate legal process; provided, however, that in the event such disclosure is required by law, Executive shall provide Employer with prompt notice of such requirement so that Employer may seek an appropriate protective order prior to any such required disclosure by Executive. Executive understands and acknowledges that nothing in this section limits Executive’s ability to report possible violations of federal, state, or local law or regulation to any governmental agency or entity; to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agencies in connection with any charge or complaint, whether filed by Executive, on Executive’s behalf, or by any other individual; or to make other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation, and Executive shall not need the prior authorization of Employer to make any such reports or disclosures and shall not be required to notify Employer that Executive has made such reports or disclosures. In addition, and anything herein to the contrary notwithstanding, Executive is hereby given notice that Executive shall not be criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (as defined
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by 18 U.S.C. § 1839) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, in either event solely for the purpose of reporting or investigating a suspected violation of law; or disclosing a trade secret (as defined by 18 U.S.C. § 1839) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(c)Non-Competition. Except as provided herein, Executive agrees that, during the Restricted Period, Executive will not, without prior written consent of Employer, directly or indirectly (i) carry on or engage in Competitive Services within the Restricted Territory on Executive’s own behalf or on behalf of any Person or any Principal or Representative of any Person, or (ii) own, manage, operate, control or participate in the ownership, management, operation or control, of any business, whether in corporate, proprietorship or partnership form or otherwise, where such business is engaged in the provision of Competitive Services within the Restricted Territory; provided that nothing herein shall prohibit Executive from being a passive owner of not more than five percent of the outstanding securities of any publicly traded company engaged in the Competitive Services, so long as Executive does not serve on the board of directors of such company, and does not engage in the management of such company. The restrictions contained in this Section 7(c) shall not apply in the event that the Date of Termination occurs in connection with or subsequent to a Change in Control.
(d)Non-Solicitation of Protected Customers. Executive agrees that, during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, on Executive’s own behalf or as a Principal or Representative of any Person, solicit, divert, or attempt to solicit or divert a Protected Customer for the purpose of engaging in, providing, or selling Competitive Services.
(e)Non-Recruitment of Employees and Independent Contractors. Executive agrees that during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, whether on Executive’s own behalf or as a Principal or Representative of any Person, solicit or induce or attempt to solicit or induce any employee or individual independent contractor of Employer to terminate an employment relationship with Employer or to enter into employment or independent contractor relationship with Executive or any such other Person. Notwithstanding the foregoing, the provisions of this Section 7(e) shall not be violated by general advertising or solicitation not specifically targeted at employees or independent contractor of Employer, or actions taken by any person or entity with which Executive is associated if Executive is not personally involved in any manner in the matter and has not identified such employee for soliciting or hiring and has not provided any information regarding the employee’s qualifications.
(f)Proprietary Rights.
(i)Ownership and Assignment of Protected Works. Executive agrees that any and all Confidential Information and Protected Works are the sole property of Employer, and that no compensation in addition to Executive’s compensation hereunder is due to Executive for development or transfer of such Protected Works. Executive
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agrees that Executive shall promptly disclose in writing to Employer the existence of any Protected Works. Executive hereby assigns and agrees to assign all of Executive’s rights, title, and interest in any and all Protected Works, including all patents or patent applications, and all copyrights therein, to Employer. Executive shall not be entitled to use Protected Works for Executive’s own benefit or the benefit of anyone except Employer without written permission from Employer and then only subject to the terms of such permission. Executive further agrees that Executive will communicate to Employer any facts known to Executive and testify in any legal proceedings, sign all lawful papers, make all rightful oaths, execute all divisionals, continuations, continuations-in-part, foreign counterparts, or reissue applications, all assignments, all registration applications, and all other instruments or papers to carry into full force and effect the assignment, transfer, and conveyance hereby made or to be made and generally do everything possible for title to the Protected Works and all patents or copyrights or trademarks or service marks therein to be clearly and exclusively held by Employer. Executive agrees that Executive will not oppose or object in any way to applications for registration of Protected Works by Employer or others designated by Employer. Executive agrees to exercise reasonable care to avoid making Protected Works available to any third party and shall be liable to Employer for all damages and expenses, including reasonable attorneys’ fees, if Protected Works are made available to third parties by Executive without the express written consent of Employer.
Anything herein to the contrary notwithstanding, Executive will not be obligated to assign to Employer any Protected Work for which no equipment, supplies, facilities, or Confidential Information of Employer was used and which was developed entirely on Executive’s own time, unless (A) the invention relates (1) directly to the business of Employer, or (2) to the Employer’s actual or demonstrably anticipated research or development; or (B) the invention results from any work performed by Executive for Employer. Executive likewise will not be obligated to assign to Employer any Protected Work that is conceived by Executive after Executive leaves the employ of Employer, except that Executive is so obligated if the same relates to or is based on Confidential Information to which Executive had access by virtue of employment with Employer. Similarly, Executive will not be obligated to assign any Protected Work to Employer that was conceived and reduced to practice prior to Executive’s employment with Employer, regardless of whether such Protected Work relates to or would be useful in the business of Employer. Executive acknowledges and agrees that there are no Protected Works conceived and reduced to practice by Executive prior to his employment with Employer.
(ii)No Other Duties. Executive acknowledges and agrees that there is no other contract or duty on the part of Executive now in existence to assign Protected Works to anyone other than Employer.
(iii)Works Made for Hire. Employer and Executive acknowledge that in the course of Executive’s employment with Employer, Executive may from time to time create for Employer copyrightable works. Such works may consist of manuals,
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pamphlets, instructional materials, computer programs, software, software integration techniques, software codes, and data, technical data, photographs, drawings, logos, designs, artwork, or other copyrightable material, or portions thereof, and may be created within or without Employer’s facilities and before, during or after normal business hours. All such works related to or useful in the business of Employer are specifically intended to be works made for hire by Executive, and Executive shall cooperate with Employer in the protection of Employer’s copyrights in such works and, to the extent deemed desirable by Employer, the registration of such copyrights.
(g)Return of Materials. Executive agrees to not retain or destroy (except as set forth below), and to immediately return to Employer on or prior to the Date of Termination, or at any other time Employer requests such return, any and all property of Employer that is the possession of Executive or subject to Executive’s control, including, but not limited to, keys, credit and identification cards, equipment, customer files and information, papers, drawings, notes, manuals, specifications, designs, devices, code, email, documents, diskettes, CDs, tapes, keys, access cards, credit cards, identification cards, computers, mobile devices, other electronic media, all other files and documents relating to Employer and its business (regardless of form, but specifically including all electronic files and data of Employer), together with all Protected Works and Confidential Information belonging to Employer or that Executive received from or through his employment with Employer. Executive will not make, distribute, or retain copies of any such information or property. To the extent that Executive has electronic files or information in Executive’s possession or control that belong to Employer, contain Confidential Information, or constitute Protected Works (specifically including but not limited to electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), on or prior to the Date of Termination, or at any other time Employer requests, Executive shall (i) provide Employer with an electronic copy of all of such files or information (in an electronic format that readily accessible by Employer); (ii) after doing so, delete all such files and information, including all copies and derivatives thereof, from all non- Employer-owned computers, mobile devices, electronic media, cloud storage, and other media, devices, and equipment, such that such files and information are permanently deleted and irretrievable; and (iii) provide a written certification to Employer that the required deletions have been completed and specifying the files and information deleted and the media source from which they were deleted.
(h)Enforcement of Restrictive Covenants. For the avoidance of doubt, nothing in this Section 7(h) limits the remedies available to Employer under Section 14 hereof.
(i)Rights and Remedies Upon Breach. The Parties specifically acknowledge and agree that the remedy at law for any breach of the Restrictive Covenants will be inadequate, and that in the event Executive breaches any of the Restrictive Covenants, Employer shall have the right and remedy, without the necessity of proving actual damage or posting any bond, to enjoin, preliminarily and permanently, Executive from violating the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to Employer and that
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money damages would not provide an adequate remedy to Employer. Executive understands and agrees that if he materially violates any of the obligations set forth in the Restrictive Covenants, the Restricted Period shall cease to run during the pendency of any litigation over such violation, provided that such litigation was initiated during the Restricted Period. If Employer does not substantially prevail in such litigation, the Restricted Period shall be deemed to have continued to run during the litigation. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to Employer at law or in equity. Employer’s ability to enforce its rights under the Restrictive Covenants or applicable law against Executive shall not be impaired in any way by the existence of a claim or cause of action on the part of Executive based on, or arising out of, this Agreement or any other event or transaction.
(ii)Severability and Modification of Covenants. Executive acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The Parties agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and construed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants, or any other provision of this Section 7, be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of Employer’s legitimate business interests and may be enforced by Employer to that extent in the manner described above and all other provisions of this Agreement shall be valid and enforceable.
(i)Existing Covenants. Executive represents and warrants that Executive’s employment with Employer does not and will not breach any agreement that Executive has with any former employer to keep in confidence proprietary or confidential information or not to compete with any such former employer. Executive will not disclose to Employer or use on its behalf any proprietary or confidential information of any other party required to be kept confidential by Executive.
(j)Disclosure of Agreement. Executive acknowledges and agrees that, during the Restricted Period, Executive will disclose the existence and terms of the Restrictive Covenants in Section 7 of this Agreement to any prospective employer or business partner within the Restricted Territory prior to entering into an employment, partnership, or other business relationship with such prospective employer or business partner. Executive further agrees that Employer shall have the right to make any such prospective employer or business partner of Executive within the Restricted Territory aware of the existence and terms of the Restrictive Covenants in Section 7 of this Agreement.
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8.Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any employee benefit plan, program, policy, or practice provided by Employer and for which Executive may qualify, except as specifically provided herein. Amounts that are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice, or program of Employer at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice, or program except as explicitly modified by this Agreement.
9.Full Settlement; No Mitigation. Employer’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which Employer may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment. For the avoidance of doubt, nothing in this Section 9 shall impact Employer’s remedy of recoupment set forth in Section 14 hereof.
10.Mandatory Reduction of Payments in Certain Events.
(a)Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any Payment would, if paid, be subject to any Excise Tax, then, prior to the making of any Payments to or for the benefit of Executive, a calculation shall be made comparing (i) the net after-tax benefit to Executive of the Payments after payment by Executive of the Excise Tax, to (ii) the net after-tax benefit to Executive if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of a Change in Control, as determined by the Determination Firm (as defined below). For purposes of this Section 10, present value shall be determined in accordance with Section 280G(d)(4) of the Code.
(b)All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, shall be made by a nationally recognized accounting firm or compensation consulting firm mutually acceptable to Employer and Executive (the “Determination Firm”) which shall provide detailed supporting calculations to Employer and Executive within 15 business days after the receipt of notice from Executive that a Payment is due to be made, or such earlier time as is requested by Employer. All fees and expenses of the Determination Firm shall be borne solely by Employer. Any determination by the Determination Firm shall be binding upon Employer and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm
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hereunder, it is possible that Payments which Executive was entitled to, but did not receive pursuant to Section 10(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Employer to or for the benefit of Executive but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.
(c)In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 10 shall be of no further force or effect. In the event the provisions of Code Section 280G or 4999 are modified, this Section 10 shall be modified accordingly.
11.Successors.
(a)This Agreement is personal to Executive and shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.
(b)This Agreement can be assigned by Company and/or Bank only to a subsidiary or successor and shall be binding and inure to the benefit of Company and Bank, and their successors and assigns. The Company and/or Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank, expressly and unconditionally to assume and agree to perform the Bank’s obligations under this Agreement, in the same manner and to the same extent that the Bank would be required to perform if no such succession or assignment had taken place.
12.Code Section 409A.
(a)General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code). Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither Company nor Bank, nor their directors, officers, employees, or advisers, shall be held liable for any taxes, interest, penalties, or other monetary amounts owed by Executive as a result of the application of Section 409A of the Code.
(b)Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, such Non-Exempt Deferred Compensation will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances
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giving rise to such payment event meet any description or definition of “change in control event” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not affect the dollar amount or prohibit the vesting of any Non-Exempt Deferred Compensation termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, or the application of a different form of payment, then, subject to subsection (c) below, such payment or distribution shall be made at the time and in the form that would have applied absent the non-409A-conforming event.
(c)Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a specified employee (as determined by Employer in accordance with Section 409A of the Code and Treasury Regulations § 1.409A-3(i)(2)), then, subject to any permissible acceleration of payment by Employer under Treas. Reg. Section 1.409A- 3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes): (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following Executive’s separation from service (or, if Executive dies during such period, within 30 days after Executive’s death) (in either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.
(d)Treatment of Installment Payments. Each payment of termination benefits under this Agreement, including but not limited to Section 6, shall be considered a separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.
(e)Timing of Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on Executive’s execution of a release of claims, such release must be executed and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, Employer may elect to make or commence payment at any time during such period.
(f)Timing of Reimbursements and In-kind Benefits. If Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement, and such payments or reimbursements are includible in Executive’s federal gross taxable income, the amount of such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any
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other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. No right of Executive to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.
(g)Permitted Acceleration. Employer shall have the sole authority to make any accelerated distribution permissible under Treas. Reg. Section 1.409A-3(j)(4) to Executive of deferred amounts, provided that such distribution meets the requirements of Treas. Reg. Section 1.409A-3(j)(4).
13.Regulatory Action.
(a)If Executive is removed and/or permanently prohibited from participating in the conduct of Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of Employer under this Agreement shall terminate, as of the effective date of such order.
(b)If Executive is suspended and/or temporarily prohibited from participating in the conduct of Bank’s affairs by a notice served under Section 8(e)(3) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), all obligations of Employer under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, Employer shall reinstate (in whole or in part) any of its obligations which were suspended.
(c)If Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default.
(d)All obligations under this Agreement shall be terminated, except to the extent a determination is made that continuation of the Agreement is necessary for the continued operation of Bank (1) by the director of the FDIC or his or her designee (the “Director”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of Bank under the authority contained in 13(c) of the FDIA; or (2) by the Director, at the time the Director approves a supervisory merger to resolve problems related to operation of Bank when Bank is determined by the Director to be in an unsafe and unsound condition.
14.Compensation Recoupment Policy. Any incentive compensation, including, but not limited to, cash-based and equity-based compensation, awarded to Executive by Employer shall be subject to any written compensation recoupment policy that the Compensation Committee may adopt from time to time that is applicable by its terms to Executive, including but not limited to Employer’s mandatory recoupment policy as required by The New York Stock Exchange. In addition, the Compensation Committee may specify in any written documentation memorializing an incentive award that Executive’s rights, payments, and benefits with respect to such award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable conditions of such award. Such events may include, but shall not be limited to: (i) termination of employment for Cause, (ii) violation of material Company or Bank policies, (iii) breach of noncompetition,
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confidentiality, or other restrictive covenants, (iv) other conduct by Executive that is detrimental to the business or reputation of the Employer, or (v) a later determination that the amount realized from a performance-based award was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, whether or not Executive caused or contributed to such material inaccuracy. The reduction, cancellation, forfeiture, and recoupment rights associated with any equity awards or similar awards granted to Executive, if any, shall be as provided in the award certificate memorializing any such award.
15.Indemnification. Employer shall indemnify Executive for liabilities incurred by Executive while acting in good faith as an officer to the fullest extent provided for any other officer of Employer. To the extent that Employer maintains director and officer liability insurance, such insurance shall cover Executive to the same extent as any other officer of Employer.
16.Miscellaneous.
(a)Applicable Law; Consent to Arbitration. Employer and Executive agree that this Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Tennessee without giving effect to its conflicts of law principles. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators sitting in a location selected by Executive within fifty (50) miles from the headquarters location of the Bank, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
(b)Non-Duplication. Notwithstanding anything to the contrary in this Agreement, and except as specifically provided below, any severance payments or benefits received by Executive pursuant to this Agreement shall be in lieu of any general severance policy or other severance plan maintained by Employer (other than a stock option, restricted stock, share or unit, performance share or unit, supplemental retirement, deferred compensation, or similar plan or agreement which may contain provisions operative on a termination of Executive’s employment or may incidentally refer to accelerated vesting or accelerated payment upon a termination of employment).
(c)Captions. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
(d)Amendments. This Agreement may not be amended or modified otherwise than- by a written agreement executed by the Parties or their respective successors and legal representatives.
(e)Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other Party(ies) or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:    If to Company and/or Bank:
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On file with Bank     1221 Broadway
Suite 1300
Nashville, Tennessee 37203
Attention: General Counsel
or to such other address as a Party shall have furnished to the other Party(ies) in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(f)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(g)Withholding. Employer may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(h)Waivers. Failure of any Party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted in this Agreement or of the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the Party making the waiver.
(i)Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and, from and after the date hereof, this Agreement shall supersede any other agreement, written or oral, between the Parties relating to the subject matter of this Agreement, including but not limited to the Prior Agreement (except to the extent necessary to govern the treatment of outstanding equity-based awards granted prior to the Effective Date as specified in Section 6(h) hereof), any prior discussions, understandings, letters, and/or agreements between the Parties, written or oral, at any time.
(j)Construction. The Parties understand and agree that because they have been given the opportunity to have counsel review and revise this Agreement, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall be construed as a whole, and according to its fair meaning, and not strictly for or against any Party.
(k)Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
(l)Survival. The rights and obligations of the Parties under Sections 6, 7, 10, 12, 14, 15, 16 shall survive the expiration and/or termination of this Agreement and the termination of Executive’s employment hereunder for the periods expressly designated in such
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Execution Copy
sections or, if no such period is designated, for the maximum period permissible under applicable law.
[signature page follows]

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Execution Copy
IN WITNESS WHEREOF, the Parties hereby signify their agreement to these terms by their signatures below, as of the Effective Date.
CHRISTOPHER T. HOLMES
    
Christopher T. Holmes
FIRSTBANK
    
William F. Carpenter
Chairman of the Board of Directors
FB FINANCIAL CORPORATION
    
William F. Carpenter
Chairman of the Board of Directors

[Holmes - Employment Agreement Signature Page]
LEGAL02/43756821v3
Exhibit 10.5
Execution Copy
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 23rd day of February 2024 by and among FB FINANCIAL CORPORATION (“Company”), FIRSTBANK, a Tennessee bank (“Bank”), a wholly owned subsidiary of the Company, and Michael M. Mettee (“Executive”). Company, Bank, and Executive are sometimes referred to herein collectively as the “Parties,” and each is sometimes referred to herein individually as a “Party.”
BACKGROUND
WHEREAS, the Parties are presently party to that certain Employment Agreement, dated November 27, 2020 (the “Prior Agreement”); and
WHEREAS, the Parties desire to amend and restate the Prior Agreement as of the Effective Date (as defined herein).
NOW, THEREFORE, in consideration of the payments, consents, and acknowledgements described below, in consideration of Executive’s employment with Company and Bank, and in consideration of other good and valuable consideration, the receipt and sufficiency of all of which is hereby acknowledged, the Parties agree as follows:
1.Definitions. The following capitalized terms used in this Agreement shall have the meanings assigned to them below, which definitions shall apply to both the singular and the plural forms of such terms:
(a)“Board of Directors” means, collectively, the board of directors of Company and the board of directors of Bank and, where appropriate, any committee or other designee thereof.
(b)“Beneficial Owner” has the meaning given such term in Rule 13d-3 of the General Rules and Regulations promulgated under the Securities Exchange Act of 1934.
(c)“Cause” means, in the context of the termination of this Agreement by Employer, a good faith determination by the Chief Executive Officer of Company that is agreed to by a majority of the members of the Compensation Committee of the Board of Directors of Company, that any of the following has occurred:
(i)conduct by Executive that amounts to willful misconduct, gross neglect, or a material failure to perform Executive’s duties and responsibilities hereunder, including prolonged absences without the consent of the Chief Executive Officer of Company unless otherwise excused by law or under Bank’s leave policies; provided that the nature of such conduct shall be set forth in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
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(ii)any willful violation of any material law, rule, or regulation applicable to banks or the banking industry generally (including but not limited to the regulations of the Board of Governors of the Federal Reserve, the FDIC, the Tennessee Department of Financial Institutions, or any other applicable regulatory authority);
(iii)the exhibition by Executive of a standard of behavior within the scope of or related to Executive’s employment that is in violation of any written policy, board committee charter, or code of ethics or business conduct (or similar code) of Company or Bank to which Executive is subject; provided that the nature of such conduct shall be set forth with reasonable particularity in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(iv)any act of fraud, misappropriation, or embezzlement by Executive, whether or not such act was committed in connection with the business of Company and/or Bank;
(v)a material breach of this Agreement, including, without limitation, a breach of Section 7 hereof; provided that the nature of such breach shall be set forth with reasonable particularity in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such breach, provided that such breach is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(vi)Executive’s conviction of, or Executive’s pleading guilty or nolo contendere to with respect to (a) a felony or a crime involving moral turpitude (including pleading guilty or nolo contendere to a felony or lesser charge which results from plea bargaining), whether or not such felony, crime, or lesser offense is connected with the business of Company and/or Bank, or (b) any crime in connection with the business of Company or Bank.
(d)“Change in Control” means and includes any one of following events:
(i)any Person becomes a Beneficial Owner, directly or indirectly, of 50% or more of the voting power of the then-outstanding securities of Company eligible to vote for the election of directors (“Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions of Company Voting Securities shall not constitute a Change in Control: (A) an acquisition by a Principal Shareholder, (B) an acquisition directly or indirectly from the Company, including an acquisition by or through a broker, underwriter, or financial institution acquiring such securities as part of a firm commitment or similar underwriting or distribution process, (C) an acquisition by Company or Bank, (D) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by Company or Bank, or (E) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (iii) below); or
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(ii)during any consecutive 12-month period, individuals who, at the beginning of such period, constitute Company’s Board of Directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board of Directors, provided that any person becoming a director after the beginning of such 12-month period and whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board of Directors shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board of Directors (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or
(iii)the consummation of a reorganization, merger, consolidation, statutory share exchange, or similar form of corporate transaction involving Company or Bank, the sale or other disposition of all or substantially all of Company’s assets, or the acquisition of assets or stock of another corporation or other entity (each, a “Transaction”), unless immediately following such Transaction: (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the outstanding Company Voting Securities immediately prior to such Transaction beneficially own, directly or indirectly, more than 50% of the voting power of the then-outstanding shares of voting securities of the entity resulting from such Transaction (including, without limitation, an entity which as a result of such Transaction owns Company or all or substantially all of Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving Entity”) in substantially the same proportions as their ownership, immediately prior to such Transaction, of the outstanding Company Voting Securities, and (B) no person (other than (x) Company or Bank, (y) the Surviving Entity or its ultimate parent entity, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 50% or more of the total common stock or 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity were Incumbent Directors at the time of the Board of Director’s approval of the execution of the initial agreement providing for such Transaction (any Transaction which satisfies all of the criteria specified in (A), (B), and (C) above shall be deemed to be a “Non-Qualifying Transaction”).
(e)“CIC Severance Multiple” shall mean two and one-half (2.5).
(f)“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
(g)“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
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(h)“Compensation Committee” means the compensation committee of the board of directors of Company.
(i)“Competitive Services” means engaging in the business of commercial and mortgage banking, including, without limitation, originating, underwriting, closing and selling loans, receiving deposits, as well as the business of providing any other activities, products, or services of the type routinely conducted, offered, or provided by Employer as of or during the two years immediately prior to the Date of Termination.
(j)“Confidential Information” means any and all data and information relating to Employer, its activities, business, or clients that (i) is disclosed to Executive or of which Executive becomes aware because of Executive’s employment with Employer; (ii) has value to Employer; and (iii) is not generally known outside of Employer. “Confidential Information” shall include, but is not limited to the following types of information regarding, related to, or concerning Employer: trade secrets (as defined by the Tennessee Uniform Trade Secrets Act); financial plans and data; management planning information; business plans; operational methods; market studies; marketing plans or strategies; pricing information; product development techniques or plans; customer lists; customer files, data, and financial information; details of customer contracts; current and anticipated customer requirements; identifying and other information pertaining to business referral sources; past, current, and planned research and development; computer aided systems, software, strategies, and programs; business acquisition plans; management organization and related information (including, without limitation, data and other information concerning the compensation and benefits paid to officers, directors, employees, and management); personnel and compensation policies; new personnel acquisition plans; and other similar information. “Confidential Information” also includes combinations of information or materials which individually may be generally known outside of Employer, but for which the nature, method, or procedure for combining such information or materials is not generally known outside of Employer. In addition to data and information relating to Employer, “Confidential Information” also includes any and all data and information relating to or concerning a third party that otherwise meets the definition set forth above, that was provided or made available to Employer by such third party, and that Employer has a duty or obligation to keep confidential. This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of Employer.
(k)“Date of Termination” means: (i) if Executive’s employment is terminated other than by reason of death or Disability, the date of delivery of the Notice of Termination, or any later date specified in such Notice of Termination, or (ii) if Executive’s employment is terminated by reason of death or Disability, the Date of Termination will be the date of death or the Disability Effective Date, as the case maybe.
(l)“Disability” means a condition for which benefits would be payable under any long-term disability coverage (without regard to the application of any elimination period requirement) then provided to Executive by Employer or, if no such coverage is then being
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provided, the inability of the Executive to perform the essential functions of Executive’s job with Employer (as specified in this Agreement), with or without reasonable accommodation, for a period of at least 180 consecutive days as certified by a physician chosen by Executive and reasonably acceptable to the Employer. Notwithstanding the provisions in this Section l(k), Disability for purposes of this Agreement must also be a disability within the meaning of Code Section 409A(a)(2)(A)(ii) and 409A(a)(2)(C) and Treas. Reg. Section l.409A-3(a)(2).
(m)“Effective Date” means February 23, 2024.
(n)“Employer” means Company and Bank, collectively.
(o)“Excise Tax” means any excise tax imposed by Section 4999 of the Code.
(p)“FDIC’ means the Federal Deposit Insurance Corporation.
(q)“Good Reason” shall mean, in the context of the termination of this Agreement by Executive:
(i)a material diminution in Executive’s title, authority, duties, or responsibilities which is not consented to by Executive in writing;
(ii)a material diminution in Executive’s base compensation (which includes Executive’s Base Salary and target annual bonus opportunity) which is not consented to by Executive in writing or made as part of across-the-board compensation reductions affecting all or substantially all similarly-situated employees;
(iii)a change in the location of Executive’s primary office such that Executive is required to report regularly to an office located outside of a 50-mile radius from the location of Executive’s primary office as of the Effective Date, which change is not consented to by Executive in writing; or
(iv)a material breach of the terms of this Agreement by Employer.
(r)“Material Contact” means contact between Executive and a customer or potential customer of Company or Bank (i) with whom or which Executive has or had substantive dealings on behalf of Company or Bank; (ii) whose dealings with Company or Bank are or were coordinated or supervised by Executive; (iii) about whom Executive obtains Confidential Information in the ordinary course of business as a result of Executive’s employment with Employer; or (iv) who receives products or services of Company or Bank, the sale or provision of which directly results or resulted in incentive compensation or commissions for Executive within the two years prior to the Date of Termination.
(s)“Non-CIC Severance Multiple” shall mean two (2.0).
(t)“Notice of Termination” shall mean a written notice delivered by a Party in connection with the termination of this Agreement which (i) indicates the specific termination provision in this Agreement relied upon for such termination, (ii) to the extent applicable, sets
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forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and (iii) specifies the Date of Termination.
(u)“Parachute Value” of a Payment means the present value as of the date of the Change in Control of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm (as defined in Section I0(b)) for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.
(v)“Payment” shall mean any benefit, payment, or distribution made or given by Employer to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise).
(w)“Person” means any individual or any corporation, partnership, joint venture, limited liability company, association, or other entity or enterprise.
(x)“Principal or Representative” means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative, or consultant.
(y)“Principal Shareholder” means James W. Ayers or his designee(s), and shall include any entity that is directly or indirectly affiliated with the Principal Shareholder.
(z)“Protected Customer” means any Person to whom Company or Bank has sold its products or services or actively solicited to sell its products or services, and with whom Executive has had Material Contact during the last 24 months of his employment with Employer.
(aa)“Protected Work” means any and all ideas, inventions, formulas, Confidential Information, source codes, object codes, techniques, processes, concepts, systems, programs, software, software integration techniques, hardware systems, schematics, flow charts, computer data bases, client lists, trademarks, service marks, brand names, trade names, compilations, documents, data, notes, designs, drawings, technical data, and/or training materials, including improvements thereto or derivatives therefrom, whether or not patentable, and whether or not subject to copyright or trademark or trade secret protection, conceived, developed or produced by Executive, or by others working with Executive or under the direction of Executive, during the period of Executive’s employment, or conceived, produced or used or intended for use by or on behalf of Employer or its customers.
(ab)“Restricted Period” means a period of 12 months following the Date of Termination.
(ac)“Restricted Territory” means a radius of 50 miles from the Bank’s headquarters office in Nashville, Tennessee.
(ad)“Restrictive Covenants” means the restrictive covenants contained in Section 7(b)through 7(j) hereof.
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(ae)“Severance Formula” means the sum of (A) Executive’s then current Base Salary (or, in the case of a termination for Good Reason as defined in Section 1(q)(ii), the Base Salary in effect immediately prior to the diminution in Base Salary giving rise to termination), plus (B) the greater of Executive’s Target Annual Bonus for the fiscal year in which the Date of Termination occurs or the average Annual Bonus received by Executive for the three fiscal years immediately preceding the fiscal year in which the Date of Termination occurs.
2.Effective Date; Term. Upon the terms and subject to the conditions set forth in this Agreement, Employer hereby employs Executive, and Executive hereby accepts such employment, for the term commencing on the Effective Date and, unless otherwise earlier terminated pursuant to Section 5 hereof, the close of business on the third anniversary of the Effective Date (the “Initial Term”). The Initial Term and any and all renewal terms, if any, are referred to together herein as the “Term.” The third anniversary of the Effective Date is referred to herein as the “Term End Date.” Beginning on the initial Term End Date and on each subsequent anniversary of the Term End Date thereafter, the Term shall, without further action by Executive or Employer, be extended by an additional one-year period; provided, however, that either Employer or Executive may cause the Term to cease to extend automatically, by giving written notice to the other not less than 90 days prior to the scheduled expiration of the Term.
3.Employment; Extent of Service. Executive is hereby employed on the Effective Date as Chief Financial Officer of the Company and the Bank. Executive shall have the duties, responsibilities, and authority commensurate with such position and such other duties as may be assigned by the Chief Executive Officer. During the Term of this Agreement, and excluding any periods of vacation or sick leave to which Executive is entitled, Executive agrees to (i) devote substantially all of Executive’s business effort, time, energy, and skill to the business of Employer; (ii) faithfully, loyally, and diligently perform such duties; and (iii) diligently follow and implement all lawful management policies and decisions of Employer that are communicated to Executive. During the Term of this Agreement, Executive shall not, without the consent of Employer, be engaged in or provide services to any other business or enterprise (whether engaged in for profit or not) which interferes with his obligations to Employer under this Agreement. Executive will report directly to the Chief Executive Officer of the Company or such other individual as the Compensation Committee may approve.
4.Compensation and Benefits. For the avoidance of doubt, the compensation and benefits provided under this Section 4 shall be in consideration of services rendered to both Company and Bank.
(a)Base Salary. During the Term, Bank shall pay to Executive a base salary at the rate of $405,000 per year (“Base Salary”), less normal withholdings, payable in accordance with Bank’s payroll practices. The Compensation Committee shall review Executive’s Base Salary annually and may increase the Base Salary based on such review but may not decrease the Base Salary unless (i) Executive consents in writing to such decrease, or (ii) such decrease is made as part of across-the-board salary reductions affecting all or substantially all similarly-
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situated employees. Such adjusted salary then shall become Executive’s Base Salary for purposes of this Agreement.
(b)Annual Bonus. During the Term, Executive shall have an opportunity to participate in any short-term or cash incentive plans available to other Peer Executives and based upon the achievement of performance goals established from year to year by the Compensation Committee of Company (the “Annual Bonus”). Subject to the vesting and performance requirements as the Compensation Committee may require, effective for the performance year commencing January 1, 2023, the initial target value of Executive’s potential Annual Bonus shall equal $250,000 with a maximum payout of 150% of such amount, which number shall be reviewed by the Compensation Committee annually and adjusted based on such review. Except as otherwise provided in Section 6(a)(ii) and Section 6(e)(ii) hereof, Executive must be employed by Company and/or Bank on the date the Annual Bonus, if any, is paid in order to receive the Annual Bonus. The Annual Bonus will be paid by March 15 of the year following the year for which it is earned. For purposes of this Agreement, Executive’s target Annual Bonus opportunity for any given fiscal year is referred to as the “Target Annual Bonus.”
(c)Retirement Plans. During the Term, Executive shall be entitled to participate in any retirement plans available to other Bank employees similarly situated to Executive (“Peer Executives”), and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such plans at any time and from time to time.
(d)Long-Term Incentive Plans. During the Term, Executive shall be entitled to participate in any long-term or equity incentive plans available to other Peer Executives, and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Company and/or Bank to amend, modify or terminate any such plans at any time and from time to time. Subject to the vesting and performance requirements as the Compensation Committee may require, effective for grant awards with respect to the performance year commencing January 1, 2023, the initial base value of the Executive’s potential long term incentive plan award shall equal $250,000, with a maximum payout of 200% of such amount, which number shall be reviewed by the Compensation Committee annually and adjusted based on such review.
(e)Welfare Benefit Plans. During the Term, Executive and Executive’s eligible dependents shall be eligible for participation in the welfare benefit plans, practices, policies, and programs provided by Bank, if any, to the extent available to other Peer Executives and subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such benefit plans, policies, or programs at any time and from time to time.
(f)Expenses. During the Term, and subject to Section 12 hereof, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in the course of performing Executive’s duties and responsibilities under this
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Agreement, in accordance with the policies, practices, and procedures of Bank to the extent available to other Peer Executives with respect to travel and other business expenses.
(g)Disability Insurance. During the Term, Bank shall provide supplemental long-term disability coverage for Executive to the extent necessary to provide total long-term disability coverage equal to 60% of Executive’s Base Salary.
5.Termination of Employment. For the avoidance of doubt, if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason, and if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason.
(a)Termination upon Death. Executive’s employment shall terminate automatically upon Executive’s death. For the avoidance of doubt, termination of Executive’s employment upon the death of Executive under this Section 5(a) shall not be considered a termination without Cause that would entitle Executive to severance under Section 6(a).
(b)Termination by Employer. Employer may terminate Executive’s employment during the Term with or without Cause on written notice to Executive, provided that the written notice of termination with respect to a termination without Cause shall be provided at least 30 days prior to the effective date of such termination.
(c)Termination by Executive. Executive’s employment may be terminated by Executive:
(i)at any time for Good Reason, provided that (A) before terminating this Agreement and Executive’s employment for Good Reason, (1) Executive shall give notice to Employer of the existence of Good Reason for termination, which notice must be given by Executive to Employer within 90 days of Executive’s discovery of the existence of the condition(s) giving rise to Good Reason for termination and shall state with reasonable detail the condition(s) giving rise to Good Reason for termination, and (2) Employer shall have 30 days from the date of receipt of such notice to remedy the condition(s) giving rise to Good Reason for termination; and (B) such termination must occur within 12 months of the initial existence of the condition(s) giving rise to Good Reason for termination; or
(ii)at any time without Good Reason, provided that Executive shall give Employer at least 30 days prior written notice of Executive’s intent to terminate.
(d)Notice of Termination. Any termination by Company and/or Bank with or without Cause and any termination by Executive shall be communicated by Notice of Termination to the other Party(ies) hereto given in accordance with Section 16(e) of this Agreement. The failure by Company and/or Bank to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of Company and/or Bank hereunder or preclude the Company and/or Bank from asserting such fact
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or circumstance in enforcing its rights hereunder. The failure by Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing its rights hereunder.
6.Obligations of Employer upon Termination.
(a)Resignation for Good Reason; Termination Other Than for Cause, Death, or Disability. During the Term, if (x) Employer terminates Executive’s employment other than for Cause, death, or Disability, or (y) Executive terminates employment for Good Reason, then. subject to Section 6(f) hereof:
(i)Bank shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Base Salary through the Date of Termination to the extent not theretofore paid (the “Accrued Salary”); and
(ii)Bank shall pay to Executive in a lump sum in cash a prorated Annual Bonus for the year in which the Date of Termination occurs based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned Annual Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Date of Termination, and the denominator shall be twelve (12)) (the “Prorated Annual Bonus”), payable at the same time that annual bonuses are paid to Peer Executives;
(iii)subject to Section 12 hereof, Bank shall pay to Executive an amount equal to the Non-CIC Severance Multiple times the Severance Formula (such aggregate payment, the “Non-CIC Severance Amount”), payable in approximately equal monthly installments during the 24-month period following the Date of Termination, commencing on the first payroll date to occur after the 60th day following the Date of Termination; provided that the first such payment shall consist of all amounts payable to Executive pursuant to this Section 6(a)(iii) between the Date of Termination and the first payroll date to occur after the 60th day following the Date of Termination; and
(iv)if Executive elects to continue participation in any group medical, dental, v1s10n, and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then for a period of 18 months after the Date of Termination (the “Health Benefits Continuation Period’’), Bank shall pay to Executive an amount in cash equal to the COBRA cost of such coverage; provided, however, that (1) that if Executive becomes eligible to receive medical benefits under a program of a subsequent employer or otherwise (including coverage available to Executive’s spouse through the spouse’s employer), Bank’s obligation to pay any portion of the cost of health coverage as described herein shall cease, except as otherwise provided by law; (2) the Health Benefits Continuation Period shall run concurrently with any period for which Executive is eligible to elect health coverage under COBRA; (3) the Bank-paid portion of the monthly premium for such
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group health benefits, determined in accordance with Code Section 4980B and the regulations thereunder, shall be treated as taxable compensation by including such amount in Executive’s income in accordance with applicable rules and regulations; (4) during the Health Benefits Continuation Period, the benefits provided in any one calendar year shall not affect the amount of benefits provided in any other calendar year (other than the effect of any overall coverage benefits under the applicable plans); (5) the reimbursement of an eligible taxable expense shall be made as soon as practicable but not later than December 31 of the year following the year in which the expense was incurred; and (6) Executive’s rights pursuant to this Section 6(a)(iii) shall not be subject to liquidation or exchange for another benefit. The benefit described in this Section 6(a)(iii) is referred to as the “Health Coverage Benefit;”
(v)to the extent not theretofore paid or provided, Bank shall timely pay or provide to Executive any other amounts or benefits required to be paid or provided or which Executive is eligible to receive under any plan, program, policy, practice, contract, or agreement of Bank and its affiliated companies and in accordance with the terms thereof, including, but not limited to, any expense reimbursements and accrued but unused vacation (which shall be paid out, if at all, in accordance with Bank’s then current written policy regarding accrual and payment for unused vacation pay) (such amounts and benefits shall be hereinafter referred to as the “Other Benefits”); and
(vi)unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall remain outstanding and shall vest, in whole, in part, or not at all, on a pro rata basis based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned award by a fraction, the numerator of which shall be the number of months elapsed in the applicable performance period prior to the Date of Termination, and the denominator shall be the number of months in the applicable performance period). The treatment of equity awards described in this clause Section 6(A)(vi) is hereinafter referred to as the “Non-CIC Equity Award Treatment”.
(b)Termination for Cause; Resignation by Executive other than Resignation for Good Reason; Death. If during the Term Executive’s employment is terminated by Employer for Cause, by Executive other than for Good Reason, or in the event of Executive’s death, then Employer shall have no further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive or Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after the Date of Termination, and payments of Other Benefits, as applicable. Notwithstanding the above, if Executive’s employment is terminated by Executive’s death, Executive’s then outstanding equity-based awards shall be subject to the Non-CIC Equity Award Treatment as provided Section 6(a)(vi).
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(c)Non-Renewal of Agreement.
(i)If Employer elects not to renew the Term pursuant to Section 2 hereof, and within the 12 months following the expiration of such Term, Employer terminates Executive’s employment other than for Cause, death, or Disability, then, notwithstanding the expiration of the Term and subject to Sections 6(f) and 12 hereof, Bank shall pay or provide to Executive (X) the Non-CIC Severance Amount, payable pursuant to the payment schedule set forth in Section 6(a)(iii) hereof, (Y) the Health Coverage Benefit as set forth in Section 6(a)(iii) and (Z) the Non-CIC Equity Award Treatment (collectively, the “Non-Renewal Severance”).
(ii)If Executive elects not to renew the Term pursuant to Section 2 hereof, and following the expiration of such Term, Executive’s employment with Employer terminates, then Employer shall have no further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination, and payment or provision of Other Benefits, as applicable.
(d)Termination for Disability. During the Term, if Employer terminates Executive’s employment for Disability of Executive, then, subject to Section 6(f) hereof, Employer shall give Executive 30 days’ prior notice of its intent to terminate and Executive’s employment shall terminate on the 30th day after receipt of such notice (the “Disability Effective Date”), in which event, Bank shall pay to Executive a lump sum amount equal to six months of the Executive's then current Base Salary, plus a prorated Target Annual Bonus for the fiscal year in which the Disability Effective Date occurs (with such pro rata portion determined by multiplying the Target Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Disability Effective Date, and the denominator shall be twelve (12)), with such amount payable in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank.
(d)Termination following a Change in Control. If, within 12 months following a Change in Control, (x) Employer (or any successor to Employer) terminates Executive’s employment other than for Cause, or (y) Executive terminates employment for Good Reason, then, subject to Section 6(f) hereof:
(i)Bank (or its successor) shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Accrued Salary;
(ii)Bank shall pay to Executive in a lump sum in cash the Prorated Annual Bonus, payable at the same time that annual bonuses are paid to Peer Executives;
(iii)subject to Section 12 hereof, Bank (or its successor) shall pay to Executive an amount equal to the CIC Multiple times the Severance Formula, payable in a lump sum in cash on the 60th day following the Date of Termination;
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(iv)if Executive elects to continue participation in any group medical, dental, vision and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then during the Health Benefits Continuation Period, Bank (or its successor) shall pay to Executive the Health Coverage Benefit;
(v)to the extent not theretofore paid or provided, Bank (or its successor) shall timely pay or provide to Executive any Other Benefits; and
(vi)unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall become vested as soon as possible but not later than the 60th day after the Date of Termination as to the greater of (1) the number of shares that would have vested based upon an assumed achievement of all applicable performance metrics at the target level of performance or (2) the number of shares that would have vested based upon the actual level of achievement of all applicable performance metrics measured as of the Date of Termination. The treatment of equity awards described in this Section 6(e)(vi) is hereinafter referred to as the “CIC Equity Award Treatment.”
(e)Release of Claims. Restrictive Covenants. Notwithstanding the foregoing, Bank shall be obligated to provide the amounts and benefits set forth in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable, only if (A) within 45 days after the Date of Termination Executive shall have executed a separation and full release of claims/covenant not to sue in substantially the form attached hereto as Exhibit A (the “Release Agreement”) and such Release Agreement shall not have been revoked within the revocation period specified in the Release Agreement, and (B) Executive fully complies with the obligations set forth in Section 7 hereof. For the avoidance of doubt, if Executive does not comply with the obligations set forth in Section 7 hereof, then payment of the amounts and benefits set forth in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable, shall cease immediately upon Executive’s breach thereof.
(f)Resignations. If Executive is a member of the board of directors of Company, the board of directors of Bank, or the board of directors of any subsidiary of Company or Bank, then termination of Executive’s employment hereunder for any reason whatsoever shall constitute Executive’s resignation from such boards of directors and as resignation as an officer of Bank, Company, and of any of the subsidiaries for which Executive serves as an officer.
(g)Equity Awards Granted Prior to the Effective Date. Notwithstanding anything to the contrary in this Agreement, any equity-based awards granted prior to the Effective Date that remain outstanding as of the Executive’s Date of Termination or a Change in Control, as applicable, shall be governed by the terms of the Prior Agreement.
7.Restrictive Covenants. For the avoidance of doubt, except as expressly set forth herein, the Restrictive Covenants contained in this Section 7, as well as any other provisions of
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this Agreement necessary to interpret or enforce the Restrictive Covenants, shall survive termination of this Agreement and/or termination of Executive’s employment for any reason, and shall continue to be in full force and effect in accordance with their terms.
(a)Acknowledgments.
(i)Condition of Employment and Other Consideration. Executive acknowledges and agrees that Executive has received good and valuable consideration for entering into this Agreement.
(ii)Access to Confidential Information, Relationships, and Goodwill. Executive acknowledges and agrees that Executive is being provided and entrusted with Confidential Information, including highly confidential customer information that is subject to extensive measures to maintain its secrecy by Employer, is not known in the trade or disclosed to the public, and would materially harm Employer’s legitimate business interests if it was disclosed or used in violation of this Agreement. Executive also acknowledges and agrees that Executive is being provided and entrusted with access to Employer’s customer and employee relationships and goodwill. Executive further acknowledges and agrees that the Employer would not provide access to the Confidential Information, customer and employee relationships, and goodwill in the absence of Executive’s execution of and compliance with this Agreement. Executive further acknowledges and agrees that the Employer’s Confidential Information, customer and employee relationships, and goodwill are valuable assets of Employer and are legitimate business interests that are properly subject to protection through the covenants contained in this Agreement.
(iii)Potential Unfair Competition. Executive acknowledges and agrees that as a result of Executive’s employment with Employer, Executive’s knowledge of and access to Confidential Information, and relationships with Employer’s customers and employees, Executive would have an unfair competitive advantage if Executive were to engage in activities in violation of this Agreement.
(iv)Voluntary Execution. Executive acknowledges and affirms that Executive has executed this Agreement voluntarily, has read this Agreement carefully, and had a full and reasonable opportunity to consider this Agreement (including an opportunity to consult with legal counsel), and that Executive has not been pressured or in any way coerced, threatened, or intimidated into signing this Agreement.
(b)Restriction on Disclosure and Use of Confidential Information. Executive agrees that Executive shall not, directly or indirectly, use any Confidential Information on Executive’s own behalf or on behalf of any Person other than Employer, or reveal, divulge, or disclose any Confidential Information to any Person not expressly authorized by Employer to receive such Confidential Information. This obligation shall remain in effect for as long as the information or materials in question retain their status as Confidential Information. Executive further agrees to fully cooperate with Employer in maintaining the Confidential Information to the extent permitted by law. The Parties acknowledge and agree that this Agreement is not
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intended to, and does not, alter either Employer’s rights or Executive’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein to the contrary notwithstanding, Executive shall not be restricted from disclosing information that is required to be disclosed by law, court order, or other valid and appropriate legal process; provided, however, that in the event such disclosure is required by law, Executive shall provide Employer with prompt notice of such requirement so that Employer may seek an appropriate protective order prior to any such required disclosure by Executive. Executive understands and acknowledges that nothing in this section limits Executive’s ability to report possible violations of federal, state, or local law or regulation to any governmental agency or entity; to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agencies in connection with any charge or complaint, whether filed by Executive, on Executive’s behalf, or by any other individual; or to make other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation, and Executive shall not need the prior authorization of Employer to make any such reports or disclosures and shall not be required to notify Employer that Executive has made such reports or disclosures. In addition, and anything herein to the contrary notwithstanding, Executive is hereby given notice that Executive shall not be criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (as defined by 18 U.S.C. § 1839) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, in either event solely for the purpose of reporting or investigating a suspected violation of law; or disclosing a trade secret (as defined by 18 U.S.C. § 1839) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(c)Non-Competition. Except as provided herein, Executive agrees that, during the Restricted Period, Executive will not, without prior written consent of Employer, directly or indirectly (i) carry on or engage in Competitive Services within the Restricted Territory on Executive’s own behalf or on behalf of any Person or any Principal or Representative of any Person, or (ii) own, manage, operate, control or participate in the ownership, management, operation or control of any business, whether in corporate, proprietorship or partnership form or otherwise, where such business is engaged in the provision of Competitive Services within the Restricted Territory; provided that nothing herein shall prohibit Executive from being a passive owner of not more than five percent of the outstanding securities of any publicly traded company engaged in the Competitive Services, so long as Executive does not serve on the board of directors of such company and does not engage in the management of such company. The restrictions contained in this Section 7(c) shall not apply in the event that the Date of Termination occurs in connection with or subsequent to a Change in Control.
(d)Non-Solicitation of Protected Customers. Executive agrees that, during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, on Executive’s own behalf or as a Principal or Representative of any Person, solicit, divert, or attempt to solicit or divert a Protected Customer for the purpose of engaging in, providing, or selling Competitive Services.
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(e)Non-Recruitment of Employees and Independent Contractors. Executive agrees that during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, whether on Executive’s own behalf or as a Principal or Representative of any Person, solicit or induce or attempt to solicit or induce any employee or individual independent contractor of Employer to terminate an employment relationship with Employer or to enter into employment or independent contractor relationship with Executive or any such other Person. Notwithstanding the foregoing, the provisions of this Section 7(e) shall not be violated by general advertising or solicitation not specifically targeted at employees or independent contractor of Employer, or actions taken by any person or entity with which Executive is associated if Executive is not personally involved in any manner in the matter and has not identified such employee for soliciting or hiring and has not provided any information regarding the employee’s qualifications.
(f)Proprietary Rights.
(i)Ownership and Assignment of Protected Works. Executive agrees that any and all Confidential Information and Protected Works are the sole property of Employer, and that no compensation in addition to Executive’s compensation hereunder is due to Executive for development or transfer of such Protected Works. Executive agrees that Executive shall promptly disclose in writing to Employer the existence of any Protected Works. Executive hereby assigns and agrees to assign all of Executive’s rights, title, and interest in any and all Protected Works, including all patents or patent applications, and all copyrights therein, to Employer. Executive shall not be entitled to use Protected Works for Executive’s own benefit or the benefit of anyone except Employer without written permission from Employer and then only subject to the terms of such permission. Executive further agrees that Executive will communicate to Employer any facts known to Executive and testify in any legal proceedings, sign all lawful papers, make all rightful oaths, execute all divisionals, continuations, continuations-in-part, foreign counterparts, or reissue applications, all assignments, all registration applications, and all other instruments or papers to carry into full force and effect the assignment, transfer, and conveyance hereby made or to be made and generally do everything possible for title to the Protected Works and all patents or copyrights or trademarks or service marks therein to be clearly and exclusively held by Employer. Executive agrees that Executive will not oppose or object in any way to applications for registration of Protected Works by Employer or others designated by Employer. Executive agrees to exercise reasonable care to avoid making Protected Works available to any third party and shall be liable to Employer for all damages and expenses, including reasonable attorneys’ fees, if Protected Works are made available to third parties by Executive without the express written consent of Employer.
Anything herein to the contrary notwithstanding, Executive will not be obligated to assign to Employer any Protected Work for which no equipment, supplies, facilities, or Confidential Information of Employer was used and which was developed entirely on Executive’s own time, unless (A) the invention relates (1) directly to the business of Employer, or (2) to the Employer’s actual or demonstrably anticipated
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research or development; or (B) the invention results from any work performed by Executive for Employer. Executive likewise will not be obligated to assign to Employer any Protected Work that is conceived by Executive after Executive leaves the employ of Employer, except that Executive is so obligated if the same relates to or is based on Confidential Information to which Executive had access by virtue of employment with Employer. Similarly, Executive will not be obligated to assign any Protected Work to Employer that was conceived and reduced to practice prior to Executive’s employment with Employer, regardless of whether such Protected Work relates to or would be useful in the business of Employer. Executive acknowledges and agrees that there are no Protected Works conceived and reduced to practice by Executive prior to his employment with Employer.
(ii)No Other Duties. Executive acknowledges and agrees that there is no other contract or duty on the part of Executive now in existence to assign Protected Works to anyone other than Employer.
(iii)Works Made for Hire. Employer and Executive acknowledge that in the course of Executive’s employment with Employer, Executive may from time to time create for Employer copyrightable works. Such works may consist of manuals, pamphlets, instructional materials, computer programs, software, software integration techniques, software codes, and data, technical data, photographs, drawings, logos, designs, artwork, or other copyrightable material, or portions thereof, and may be created within or without Employer’s facilities and before, during or after normal business hours. All such works related to or useful in the business of Employer are specifically intended to be works made for hire by Executive, and Executive shall cooperate with Employer in the protection of Employer’s copyrights in such works and, to the extent deemed desirable by Employer, the registration of such copyrights.
(g)Return of Materials. Executive agrees to not retain or destroy (except as set forth below), and to immediately return to Employer on or prior to the Date of Termination, or at any other time Employer requests such return, any and all property of Employer that is the possession of Executive or subject to Executive’s control, including, but not limited to, keys, credit and identification cards, equipment, customer files and information, papers, drawings, notes, manuals, specifications, designs, devices, code, email, documents, diskettes, CDs, tapes, keys, access cards, credit cards, identification cards, computers, mobile devices, other electronic media, all other files and documents relating to Employer and its business (regardless of form, but specifically including all electronic files and data of Employer), together with all Protected Works and Confidential Information belonging to Employer or that Executive received from or through his employment with Employer. Executive will not make, distribute, or retain copies of any such information or property. To the extent that Executive has electronic files or information in Executive’s possession or control that belong to Employer, contain Confidential Information, or constitute Protected Works (specifically including but not limited to electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), on or prior to the Date of Termination, or at any other time Employer requests, Executive shall (i) provide Employer with an electronic copy of all of such files or information (in an electronic
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format that readily accessible by Employer); (ii) after doing so, delete all such files and information, including all copies and derivatives thereof, from all non Employer-owned computers, mobile devices, electronic media, cloud storage, and other media, devices, and equipment, such that such files and information are permanently deleted and irretrievable; and (iii) provide a written certification to Employer that the required deletions have been completed and specifying the files and information deleted and the media source from which they were deleted.
(h)Enforcement of Restrictive Covenants. For the avoidance of doubt, nothing in this Section 7(h) limits the remedies available to Employer under Section 14 hereof.
(i)Rights and Remedies Upon Breach. The Parties specifically acknowledge and agree that the remedy at law for any breach of the Restrictive Covenants will be inadequate, and that in the event Executive breaches any of the Restrictive Covenants, Employer shall have the right and remedy, without the necessity of proving actual damage or posting any bond, to enjoin, preliminarily and permanently, Executive from violating the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to Employer and that money damages would not provide an adequate remedy to Employer. Executive understands and agrees that if he materially violates any of the obligations set forth in the Restrictive Covenants, the Restricted Period shall cease to run during the pendency of any litigation over such violation, provided that such litigation was initiated during the Restricted Period. If Employer does not substantially prevail in such litigation, the Restricted Period shall be deemed to have continued to run during the litigation. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to Employer at law or in equity. Employer’s ability to enforce its rights under the Restrictive Covenants or applicable law against Executive shall not be impaired in any way by the existence of a claim or cause of action on the part of Executive based on, or arising out of, this Agreement or any other event or transaction.
(ii)Severability and Modification of Covenants. Executive acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The Parties agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and construed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants, or any other provision of this Section 7, be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of Employer’s legitimate business
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interests and may be enforced by Employer to that extent in the manner described above and all other provisions of this Agreement shall be valid and enforceable.
(i)Existing Covenants. Executive represents and warrants that Executive’s employment with Employer does not and will not breach any agreement that Executive has with any former employer to keep in confidence proprietary or confidential information or not to compete with any such former employer. Executive will not disclose to Employer or use on its behalf any proprietary or confidential information of any other party required to be kept confidential by Executive.
(j)Disclosure of Agreement. Executive acknowledges and agrees that, during the Restricted Period, Executive will disclose the existence and terms of the Protective Covenants in Section 7 of this Agreement to any prospective employer or business partner, within the Restricted Territory prior to entering into an employment, partnership, or other business relationship with such prospective employer or business partner. Executive further agrees that Employer shall have the right to make any such prospective employer or business partner of Executive within the Restricted Territory aware of the existence and terms of the Protective Covenants in Section 7 of this Agreement.
8.Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any employee benefit plan, program, policy, or practice provided by Employer and for which Executive may qualify, except as specifically provided herein. Amounts that are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice, or program of Employer at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice, or program except as explicitly modified by this Agreement.
9.Full Settlement; No Mitigation. Employer’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which Employer may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment. For the avoidance of doubt, nothing in this Section 9 shall impact Employer’s remedy of recoupment set forth in Section 14 hereof.
10.Mandatory Reduction of Payments in Certain Events.
(a)Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any Payment would, if paid, be subject to any Excise Tax, then, prior to the making of any Payments to or for the benefit of Executive, a calculation shall be made comparing (i) the net after-tax benefit to Executive of the Payments after payment by Executive of the Excise Tax, to (ii) the net after-tax benefit to Executive if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The
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reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of a Change in Control, as determined by the Determination Firm (as defined below). For purposes of this Section 10, present value shall be determined in accordance with Section 280G(d)(4) of the Code.
(b)All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, shall be made by a nationally recognized accounting firm or compensation consulting firm mutually acceptable to Employer and Executive (the “Determination Firm”) which shall provide detailed supporting calculations to Employer and Executive within 15 business days after the receipt of notice from Executive that a Payment is due to be made, or such earlier time as is requested by Employer. All fees and expenses of the Determination Firm shall be borne solely by Employer. Any determination by the Determination Firm shall be binding upon Employer and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder, it is possible that Payments which Executive was entitled to, but did not receive pursuant to Section 10(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Employer to or for the benefit of Executive but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.
(c)In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 10 shall be of no further force or effect. In the event the provisions of Code Section 280G and 4999 are modified, this Section 10 shall be modified accordingly.
11.Successors.
(a)This Agreement is personal to Executive and shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.
(b)This Agreement can be assigned by Company and/or Bank only to a subsidiary or successor and shall be binding and inure to the benefit of Company and Bank, and their successors and assigns. The Company and/or Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank, expressly and unconditionally to assume and agree to perform the Bank’s obligations under this Agreement, in the same manner and to the same extent that the Bank would be required to perform if no such succession or assignment had taken place.
12.Code Section 409A.
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(a)General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code). Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither Company nor Bank, nor their directors, officers, employees, or advisers, shall be held liable for any taxes, interest, penalties, or other monetary amounts owed by Executive as a result of the application of Section 409A of the Code.
(b)Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, such Non-Exempt Deferred Compensation will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such payment event meet any description or definition of “change in control event” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not affect the dollar amount or prohibit the vesting of any Non-Exempt Deferred Compensation termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, or the application of a different form of payment, then, subject to subsection (c) below, such payment or distribution shall be made at the time and in the form that would have applied absent the non-409A-conforming event.
(c)Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a specified employee (as determined by Employer in accordance with Section 409A of the Code and Treasury Regulations§ l.409A-3(i)(2)), then, subject to any permissible acceleration of payment by Employer under Treas. Reg. Section l .409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes): (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six month period immediately following Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following Executive’s separation from service (or, if Executive dies during such period, within 30 days after Executive’s death) (in either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.
(d)Treatment of Installment Payments. Each payment of termination benefits under this Agreement, including but not limited to Section 6, shall be considered a separate
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payment, as described in Treas. Reg. Section l.409A-2(b)(2), for purposes of Section 409A of the Code.
(e)Timing of Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on Executive’s execution of a release of claims, such release must be executed and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, Employer may elect to make or commence payment at any time during such period.
(f)Timing of Reimbursements and In-kind Benefits. If Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement, and such payments or reimbursements are includible in Executive’s federal gross taxable income, the amount of such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. No right of Executive to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.
(g)Permitted Acceleration. Employer shall have the sole authority to make any accelerated distribution permissible under Treas. Reg. Section l.409A-3(j)(4) to Executive of deferred amounts, provided that such distribution meets the requirements of Treas. Reg. Section l.409A-3(j)(4).
13.Regulatory Action.
(a)If Executive is removed and/or permanently prohibited from participating in the conduct of Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(l)), all obligations of Employer under this Agreement shall terminate, as of the effective date of such order.
(b)If Executive is suspended and/or temporarily prohibited from participating in the conduct of Bank’s affairs by a notice served under Section 8(e)(3) or 8(g)(l) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(l)), all obligations of Employer under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, Employer shall reinstate (in whole or in part) any of its obligations which were suspended.
(c)If Bank is in default (as defined in Section 3(x)(l) of the FDIA), all obligations under this Agreement shall terminate as of the date of default.
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(d)All obligations under this Agreement shall be terminated, except to the extent a determination is made that continuation of the Agreement is necessary for the continued operation of Bank (1) by the director of the FDIC or his or her designee (the “Director”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of Bank under the authority contained in 13(c) of the FDIA; or (2) by the Director, at the time the Director approves a supervisory merger to resolve problems related to operation of Bank when Bank is determined by the Director to be in an unsafe and unsound condition.
14.Compensation Recoupment Policy. Any incentive compensation, including, but not limited to, cash-based and equity-based compensation, awarded to Executive by Employer shall be subject to any written compensation recoupment policy that the Compensation Committee may adopt from time to time that is applicable by its terms to Executive, including but not limited to Employer’s mandatory recoupment policy as required by The New York Stock Exchange. In addition, the Compensation Committee may specify in any written documentation memorializing an incentive award that Executive’s rights, payments, and benefits with respect to such award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable conditions of such award. Such events may include, but shall not be limited to: (i) termination of employment for Cause, (ii) violation of material Company or Bank policies, (iii) breach of noncompetition, confidentiality, or other restrictive covenants, (iv) other conduct by Executive that is detrimental to the business or reputation of the Employer, or (v) a later determination that the amount realized from a performance-based award was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, whether or not Executive caused or contributed to such material inaccuracy. The reduction, cancellation, forfeiture, and recoupment rights associated with any equity awards or similar awards granted to Executive, if any, shall be as provided in the award certificate memorializing any such award.
15.Indemnification. Employer shall indemnify Executive for liabilities incurred by Executive while acting in good faith as an officer to the fullest extent provided for any other officer of Employer. To the extent that Employer maintains director and officer liability insurance, such insurance shall cover Executive to the same extent as any other officer of Employer.
16.Miscellaneous.
(a)Applicable Law; Consent to Arbitration. Employer and Executive agree that this Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Tennessee without giving effect to its conflicts of law principles. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators sitting in a location selected by Executive within fifty (50) miles from the headquarters location of the Bank, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
(b)Non-Duplication. Notwithstanding anything to the contrary in this Agreement, and except as specifically provided below, any severance payments or benefits
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received by Executive pursuant to this Agreement shall be in lieu of any general severance policy or other severance plan maintained by Employer (other than a stock option, restricted stock, share or unit, performance share or unit, supplemental retirement, deferred compensation, or similar plan or agreement which may contain provisions operative on a termination of Executive’s employment or may incidentally refer to accelerated vesting or accelerated payment upon a termination of employment).
(c)Captions. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
(d)Amendments. This Agreement may not be amended or modified otherwise than- by a written agreement executed by the Parties or their respective successors and legal representatives.
(e)Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other Party(ies) or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:     If to Company and/or Bank:
On file with Bank    1221 Broadway
    Suite 1300
    Nashville, Tennessee 37203
    Attention: General Counsel

or to such other address as a Party shall have furnished to the other Party(ies) in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(f)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(g)Withholding. Employer may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(h)Waivers. Failure of any Party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted in this Agreement or of the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the Party making the waiver.
(i)Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and, from and after the date hereof, this Agreement shall supersede any other agreement, written or oral, between the Parties relating to the subject matter of this Agreement, including but not limited to the Prior Agreement (except to
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the extent necessary to govern the treatment of outstanding equity-based awards granted prior to the Effective Date as specified in Section 6(h) hereof) and any prior discussions, understandings, letters, and/or agreements between the Parties, written or oral, at any time (expressly including, but not limited to, any confidentiality, non-solicitation, non-recruitment, and/or non-competition agreements Executive has previously entered into with Bank or Company); provided, however, that the foregoing shall not be construed to limit any restrictive covenants set forth in an equity award agreement entered into by the Executive after the Effective Date.
(j)Construction. The Parties understand and agree that because they have been given the opportunity to have counsel review and revise this Agreement, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall be construed as a whole, and according to its fair meaning, and not strictly for or against any Party.
(k)Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
(l)Survival. The rights and obligations of the Parties under Sections 6, 7, 10, 12, 14, 15, 16 shall survive the expiration and/or termination of this Agreement and the termination of Executive’s employment hereunder for the periods expressly designated in such sections or, if no such period is designated, for the maximum period permissible under applicable law.
[signature page follows]
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Execution Copy
IN WITNESS WHEREOF, the Parties hereby signify their agreement to these terms by their signatures below, as of the Effective Date.
MICHAEL M. METTEE




    
Michael M. Mettee



FIRSTBANK

image_02a.jpg

    
Christopher T. Holmes
President and Chief Executive Officer


FB FINANCIAL CORPORATION


image_02a.jpg
    
Christopher T. Holmes
President and Chief Executive Officer


[Mettee - Employment Agreement Signature Page]
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Exhibit 10.6
Execution Copy
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 23rd day of February 2024, by and among FB FINANCIAL CORPORATION (“Company”), FIRSTBANK, a Tennessee bank (“Bank”), a wholly owned subsidiary of the Company, and R. Wade Peery (“Executive”). Company, Bank, and Executive are sometimes referred to herein collectively as the “Parties,” and each is sometimes referred to herein individually as a “Party.”
BACKGROUND
WHEREAS, Executive is currently engaged as the Chief Innovations Officer of Company and Bank; and
WHEREAS, the Parties are presently party to that certain Employment Agreement, dated November 27, 2020 (the “Prior Agreement”); and
WHEREAS, the Parties desire to amend and restate the Prior Agreement as of the Effective Date (as defined herein).
WHEREAS, the Parties desire to memorialize the terms and conditions of Executive’s employment.
NOW, THEREFORE, in consideration of the payments, consents, and acknowledgements described below, in consideration of Executive’s employment with Company and Bank, and in consideration of other good and valuable consideration, the receipt and sufficiency of all of which is hereby acknowledged, the Parties agree as follows:
1.Definitions. The following capitalized terms used in this Agreement shall have the meanings assigned to them below, which definitions shall apply to both the singular and the plural forms of such terms:
(a)“Board of Directors” means, collectively, the board of directors of Company and the board of directors of Bank and, where appropriate, any committee or other designee thereof.
(b)“Beneficial Owner” has the meaning given such term in Rule 13d-3 of the General Rules and Regulations promulgated under the Securities Exchange Act of 1934.
(c)“Cause” means, in the context of the termination of this Agreement by Employer, a good faith determination by the Chief Executive Officer of Company that is agreed to by a majority of the members of the Compensation Committee, that any of the following has occurred:
(i)
LEGAL02/43756812v3

(i)conduct by Executive that amounts to willful misconduct, gross neglect, or a material failure to perform Executive’s duties and responsibilities hereunder, including prolonged absences without the consent of the Chief Executive Officer of Company unless otherwise excused by law or under Bank’ s leave policies; provided that the nature of such conduct shall be set forth in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(ii)any willful violation of any material law, rule, or regulation applicable to banks or the banking industry generally (including but not limited to the regulations of the Board of Governors of the Federal Reserve, the FDIC, the Tennessee Department of Financial Institutions, or any other applicable regulatory authority);
(iii)the exhibition by Executive of a standard of behavior within the scope of or related to Executive’s employment that is in violation of any written policy, board committee charter, or code of ethics or business conduct (or similar code) of Company or Bank to which Executive is subject; provided that the nature of such conduct shall be set forth with reasonable particularity in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(iv)any act of fraud, misappropriation, or embezzlement by Executive, whether or not such act was committed in connection with the business of Company and/or Bank;
(v)a material breach of this Agreement, including, without limitation, a breach of Section 7 hereof; provided that the nature of such breach shall be set forth with reasonable particularity in written notice to Executive who shall have 30 business days following delivery of such notice to cure such breach, provided that such breach is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(vi)Executive’s conviction of, or Executive’s pleading guilty or nolo contendere to with respect to (a) a felony or a crime involving moral turpitude (including pleading guilty or nolo contendere to a felony or lesser charge which results from plea bargaining), whether or not such felony, crime, or lesser offense is connected with the business of Company and/or Bank, or (b) any crime in connection with the business of Company or Bank.
(d)“Change in Control” means and includes any one of following events:
(i)any Person becomes a Beneficial Owner, directly or indirectly, of 50% or more of the voting power of the then-outstanding securities of Company eligible to vote for the election of directors (“Company Voting Securities”); provided, however,
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that for purposes of this subsection (i), the following acquisitions of Company Voting Securities shall not constitute a Change in Control: (A) an acquisition by a Principal Shareholder, (B) an acquisition directly or indirectly from the Company, including an acquisition by or through a broker, underwriter, or financial institution acquiring such securities as pan of a firm commitment or similar underwriting or distribution process, (C) an acquisition by Company or Bank, (D) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by Company or Bank, or (E) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (iii) below);
(i)during any consecutive 12-month period, individuals who, at the beginning of such period, constitute Company’s Board of Directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board of Directors, provided that any person becoming a director after the beginning of such 12-month period and whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board of Directors shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board of Directors (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or
(ii)during any consecutive 12-month period, individuals who, at the beginning of such period, constitute Company’s Board of Directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board of Directors, provided that any person becoming a director after the beginning of such 12-month period and whose election or nomination for election was approved by a vote of at least a maj01ity of the Incumbent Directors then on the Board of Directors shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board of Directors (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or
(iii)the consummation of a reorganization, merger, consolidation, statutory share exchange, or similar form of corporate transaction involving Company or Bank, the sale or other disposition of all or substantially all of Company’s assets, or the acquisition of assets or stock of another corporation or other entity (each, a “Transaction”), unless immediately following such Transaction: (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the outstanding Company Voting Securities immediately prior to such Transaction beneficially own, directly or indirectly, more than 50% of the voting power of the then-outstanding shares of voting securities of the entity resulting from such Transaction (including, without limitation, an entity which as a result of such Transaction owns
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Company or all or substantially all of Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving Entity”) in substantially the same proportions as their ownership, immediately prior to such Transaction, of the outstanding Company Voting Securities, and (B) no person (other than (x) Company or Bank, (y) the Surviving Entity or its ultimate parent entity, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 50% or more of the total common stock or 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity were Incumbent Directors at the time of the Board of Director’s approval of the execution of the initial agreement providing for such Transaction (any Transaction which satisfies all of the criteria specified in (A), (B), and (C) above shall be deemed to be a “Non-Qualifying Transaction”).
(e)
(f)“CIC Severance Multiple” shall mean two and one-half (2.5).
(g)“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
(h)“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
(i)“Compensation Committee” means the compensation committee of the board of directors of Company.
(j)“Competitive Services” means engaging in the business of commercial and mortgage banking, including, without limitation, originating, underwriting, closing and selling loans, receiving deposits, as well as the business of providing any other activities, products, or services of the type routinely conducted, offered, or provided by Employer as of or during the two years immediately prior to the Date of Termination.
(k)“Confidential Information” means any and all data and information relating to Employer, its activities, business, or clients that (i) is disclosed to Executive or of which Executive becomes aware because of Executive’s employment with Employer; (ii) has value to Employer; and (iii) is not generally known outside of Employer. “Confidential Information” shall include, but is not limited to the following types of information regarding, related to, or concerning Employer: trade secrets (as defined by the Tennessee Uniform Trade Secrets Act); financial plans and data; management planning information; business plans; operational methods; market studies; marketing plans or strategies; pricing information; product development techniques or plans; customer lists; customer files, data, and financial information; details of customer contracts; current and anticipated customer requirements; identifying and other information pertaining to business referral sources; past, current, and planned research and development; computer aided systems, software, strategies, and programs; business acquisition plans; management organization and related information (including, without limitation, data and
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other information concerning the compensation and benefits paid to officers, directors, employees, and management); personnel and compensation policies; new personnel acquisition plans; and other similar information. “Confidential Information” also includes combinations of information or materials which individually may be generally known outside of Employer, but for which the nature, method, or procedure for combining such information or materials is not generally known outside of Employer. In addition to data and information relating to Employer, “Confidential Information” also includes any and all data and information relating to or concerning a third party that otherwise meets the definition set forth above, that was provided or made available to Employer by such third party, and that Employer has a duty or obligation to keep confidential. This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of Employer.
(l)“Date of Termination” means: (i) if Executive’s employment is terminated other than by reason of death or Disability, the date of delivery of the Notice of Termination, or any later date specified in such Notice of Termination, or (ii) if Executive’s employment is terminated by reason of death or Disability, the Date of Termination will be the date of death or the Disability Effective Date, as the case may be.
(m)“Disability” means a condition for which benefits would be payable under any long-term disability coverage (without regard to the application of any elimination period requirement) then provided to Executive by Employer or, if no such coverage is then being provided, the inability of the Executive to perform the essential functions of Executive’s job with Employer (as specified in this Agreement), with or without reasonable accommodation, for a period of at least 180 consecutive days as certified by a physician chosen by Executive and reasonably acceptable to the Employer. Notwithstanding the provisions in this Section 1(l), Disability for purposes of this Agreement must also be a disability within the meaning of Code Section 409A(a)(2)(A)(ii) and 409A(a)(2)(C) and Treas. Reg. Section 1.409A-3(a)(2).
(n)“Effective Date” means February 23, 2024.
(o)“Employer” means Company and Bank, collectively.
(p)“Excise Tax” means any excise tax imposed by Section 4999 of the Code.
(q)“FDIC” means the Federal Deposit Insurance Corporation.
(r)“Good Reason” shall mean, in the context of the termination of this Agreement by Executive:
(i)a material diminution in Executive’s title, authority, duties, or responsibilities which is not consented to by Executive in writing;
(i)
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(ii)a material diminution in Executive’s base compensation (which includes Executive’s Base Salary and Target Annual Bonus opportunity) which is not consented to by Executive in writing or made as part of across-the-board compensation reductions affecting all or substantially all similarly-situated employees;
(iii)
(iv)
(v)

(iii) a change in the location of Executive’s primary office such that Executive is required to report regularly to an office located outside of a 50-mile radius from the location of Executive’s primary office as of the Effective Date, which change is not consented to by Executive in writing; or

(vi)a material breach of the terms of this Agreement by Employer.
(s)
(t)“Material Contact” means contact between Executive and a customer or potential customer of Company or Bank (i) with whom or which Executive has or had substantive dealings on behalf of Company or Bank; (ii) whose dealings with Company or Bank are or were coordinated or supervised by Executive; (iii) about whom Executive obtains Confidential Information in the ordinary course of business as a result of Executive’s employment with Employer; or (iv) who receives products or services of Company or Bank, the sale or provision of which directly results or resulted in incentive compensation or commissions for Executive within the two years prior to the Date of Termination.
(u)“Non-CIC Severance Multiple” shall mean two (2.0).
(v)“Notice of Termination” shall mean a written notice delivered by a Party in connection with the termination of this Agreement which (i) indicates the specific termination provision in this Agreement relied upon for such termination, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and (iii) specifies the Date of Termination.
(w)“Parachute Value” of a Payment means the present value as of the date of the Change in Control of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm (as defined in Section 10(b)) for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.
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(x)“Payment” shall mean any benefit, payment, or distribution made or given by Employer to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise).
(y)“Person” means any individual or any corporation, partnership, joint venture, limited liability company, association, or other entity or enterprise.
(z)“Principal or Representative” means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative, or consultant.
(aa)“Principal Shareholder” means James W. Ayers or his designee(s), and shall include any entity that is directly or indirectly affiliated with the Principal Shareholder.
(ab)“Protected Customer” means any Person to whom Company or Bank has sold its products or services or actively solicited to sell its products or services, and with whom Executive has had Material Contact during the last 24 months of his employment with Employer.
(ac)“Protected Work” means any and all ideas, inventions, formulas, Confidential Information, source codes, object codes, techniques, processes, concepts, systems, programs, software, software integration techniques, hardware systems, schematics, flow charts, computer data bases, client lists, trademarks, service marks, brand names, trade names, compilations, documents, data, notes, designs, drawings, technical data, and/or training materials, including improvements thereto or derivatives therefrom, whether or not patentable, and whether or not subject to copyright or trademark or trade secret protection, conceived, developed or produced by Executive, or by others working with Executive or under the direction of Executive, during the period of Executive’s employment, or conceived, produced or used or intended for use by or on behalf of Employer or its customers, but not including any such ideas, concepts, inventions, or similar processes conceived, developed or produced by Executive that are rejected by Employer.
(ad)“Restricted Period” means a period of 12 months following the Date of Termination.
(ae)“Restricted Territory” means a radius of 50 miles from the Bank’s headquarters office in Nashville, Tennessee.
(af)“Restrictive Covenants” means the restrictive covenants contained in Section 7(b) through 7(j) hereof.
(ag)“Severance Formula” means the sum of (A) Executive’s then current Base Salary (or, in the case of a termination for Good Reason as defined in Section 1(q)(ii), the Base Salary in effect immediately prior to the diminution in Base Salary giving rise to termination), plus (B) the greater of Executive’s Target Annual Bonus for the fiscal year in which the Date of Termination occurs or the average Annual Bonus received by Executive for
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the three fiscal years immediately preceding the fiscal year in which the Date of Termination occurs.
2.Effective Date; Term. Upon the terms and subject to the conditions set forth in this Agreement, Employer hereby employs Executive, and Executive hereby accepts such employment, for the term commencing on the Effective Date and, unless otherwise earlier terminated pursuant to Section 5 hereof, the close of business on the third anniversary of the Effective Date (the “Initial Term”). The Initial Term and any and all renewal terms, if any, are referred to together herein as the “Term.” The third anniversary of the Effective Date is referred to herein as the “Term End Date.” Beginning on the initial Term End Date and on each subsequent anniversary of the Term End Date thereafter, the Term shall, without further action by Executive or Employer, be extended by an additional one-year period; provided, however, that either Employer or Executive may cause the Term to cease to extend automatically, by giving written notice to the other not less than 90 days prior to the scheduled expiration of the Term.
3.Employment; Extent of Service. Executive is hereby employed on the Effective Date as the Chief Innovations Officer of Company and Bank. Executive shall have the duties, responsibilities, and authority commensurate with such position and such other duties as may be assigned by the Chief Executive Officer. During the Term of this Agreement, and excluding any periods of vacation or sick leave to which Executive is entitled, Executive agrees to (i) devote substantially all of Executive’s business effort, time, energy, and skill to the business of Employer; (ii) faithfully, loyally, and diligently perform such duties; and (iii) diligently follow and implement all lawful management policies and decisions of Employer that are communicated to Executive. During the Term of this Agreement, Executive shall not, without the consent of Employer, be engaged in or provide services to any other business or enterprise (whether engaged in for profit or not) which interferes with his obligations to Employer under this Agreement. Executive will report directly to the Chief Executive Officer of the Company.
4.Compensation and Benefits. For the avoidance of doubt, the compensation and benefits provided under this Section 4 shall be in consideration of services rendered to both Company and Bank.
(a)Base Salary. During the Term, Bank shall pay to Executive a base salary at the rate of $326,000 per year (“Base Salary”), less normal withholdings, payable in accordance with Bank’s payroll practices. The Compensation Committee shall review Executive’s Base Salary annually and may increase the Base Salary based on such review but may not decrease the Base Salary unless (i) Executive consents in writing to such decrease, or (ii) such decrease is made as part of across-the-board salary reductions affecting all or substantially all similarly-situated employees. Such adjusted salary then shall become Executive’s Base Salary for purposes of this Agreement.
(b)Annual Bonus. During the Term, Executive shall have an opportunity to participate in any short-term or cash incentive plans available to other Bank employees similarly situated to Executive (“Peer Executives”) and based upon the achievement of performance goals established from year to year by the Compensation Committee (the “Annual Bonus”). Subject to
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the vesting and performance requirements as the Compensation Committee may require, effective January 1, 2023, the initial base value of Executive’s potential Annual Bonus shall equal $272,000, with a maximum payout of 150% of such amount, which number shall be reviewed by the Compensation Committee annually and adjusted based on such review. Except as otherwise provided in Section 6(a)(ii) and Section 6(e)(ii) hereof, Executive must be employed by Company and/or Bank on the date the Annual Bonus, if any, is paid in order to receive the Annual Bonus. The Annual Bonus will be paid by March 15 of the year following the year for which it is earned. For purposes of this Agreement, Executive’s target Annual Bonus opportunity for any given fiscal year is referred to as the “Target Annual Bonus.”
(c)Retirement Plans. During the Term, Executive shall be entitled to participate in any retirement plans available to other Peer Executives, and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such plans at any time and from time to time.
(d)Long-Term Incentive Plans. During the Term, Executive shall be entitled to participate in any long-term or equity incentive plans available to other Peer Executives, and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Company and/or Bank to amend, modify or terminate any such plans at any time and from time to time. Subject to the vesting and performance requirements as the Compensation Committee may require, effective January 1, 2023, the initial base value of the Executive’s potential long-term incentive plan award shall equal $408,000, with a maximum payout of 200% of such amount, which number shall be reviewed by the Compensation Committee annually and adjusted based on such review.
(e)Welfare Benefit Plans. During the Term, Executive and Executive’s eligible dependents shall be eligible for participation in the welfare benefit plans, practices, policies, and programs provided by Bank, if any, to the extent available to other Peer Executives and subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such benefit plans, policies, or programs at any time and from time to time.
(f)Expenses. During the Term, and subject to Section 12 hereof, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in the course of performing Executive’s duties and responsibilities under this Agreement, in accordance with the policies, practices, and procedures of Bank to the extent available to other Peer Executives with respect to travel and other business expenses.
(g)Disability Insurance. During the Term, Bank shall provide supplemental long-term disability coverage for Executive to the extent necessary to provide total long-term disability coverage equal to 60% of Executive’s Base Salary.
5.Termination of Employment. For the avoidance of doubt, if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s
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employment with Bank shall be deemed terminated for the same reason, and if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason.
(a)Termination upon Death. Executive’s employment shall terminate automatically upon Executive’s death. For the avoidance of doubt, termination of Executive’s employment upon the death of Executive under this Section 5(a) shall not be considered a termination without Cause that would entitle Executive to severance under Section 6(a).
(b)Termination by Employer. Employer may terminate Executive’s employment during the Term with or without Cause on written notice to Executive, provided that the written notice of termination with respect to a termination without Cause shall be provided at least 30 days prior to the effective date of such termination.
(c)Termination by Executive. Executive’s employment may be terminated by Executive:
(i)at any time for Good Reason, provided that (A) before terminating this Agreement and Executive’s employment for Good Reason, (1) Executive shall give notice to Employer of the existence of Good Reason for termination, which notice must be given by Executive to Employer within 90 days of Executive’s discovery of the existence of the condition(s) giving rise to Good Reason for termination and shall state with reasonable detail the condition(s) giving rise to Good Reason for termination, and (2) Employer shall have 30 days from the date of receipt of such notice to remedy the condition(s) giving rise to Good Reason for termination; and (B) such termination must occur within 12 months of the initial existence of the condition(s) giving rise to Good Reason for termination; or
(i)
(ii)at any time without Good Reason, provided that Executive shall give Employer at least 30 days prior written notice of Executive's intent to terminate.
(d)
(e)Notice of Termination. Any termination by Company and/or Bank with or without Cause and any termination by Executive shall be communicated by Notice of Termination to the other Party(ies) hereto given in accordance with Section 16(e) of this Agreement. The failure by Company and/or Bank to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of Company and/or Bank hereunder or preclude the Company and/or Bank from asserting such fact or circumstance in enforcing its rights hereunder. The failure by Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing its rights hereunder.
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6.Obligations of Employer upon Termination.
(a)Resignation for Good Reason; Termination Other Than for Cause, Death, or Disability. During the Term, if (x) Employer terminates Executive’s employment other than for Cause, death, or Disability, or (y) Executive terminates employment for Good Reason, then, subject to Section 6(f) hereof:
(i)Bank shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Base Salary through the Date of Termination to the extent not theretofore paid (the “Accrued Salary”); and
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
(xiii)
(xiv)
(xv)
(xvi)
(xvii)
(xviii)
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(xix)
(xx)
(xxi)
(xxii)
(xxiii)
(xxiv)
(xxv)
(xxvi)
(xxvii)
(xxviii)
(xxix)
(xxx)
(xxxi)
(xxxii)
(xxxiii)

(ii)Bank shall pay to Executive in a lump sum in cash a prorated Annual Bonus for the year in which the Date of Termination occurs based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned Annual Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Date of Termination, and the denominator shall be twelve (12)) (the “Prorated Annual Bonus”), payable at the same time that annual bonuses are paid to Peer Executives;
(xxxiv)
(iii)subject to Section 12 hereof, Bank shall pay to Executive an amount equal to the Non-CIC Severance Multiple times the Severance Formula (such aggregate payment, the “Non-CIC Severance Amount”), payable in approximately equal monthly installments during the 24-month period following the Date of Termination, commencing on the first payroll date to occur after the 60th day following the Date of Termination; provided that the first such payment shall consist of all amounts payable to
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Executive pursuant to this Section 6(a)(iii) between the Date of Termination and the first payroll date to occur after the 60th day following the Date of Termination; and
(xxxv)and
(iv)if Executive elects to continue participation in any group medical, dental, vision, and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then for a period of 18 months after the Date of Termination (the “Health Benefits Continuation Period”), Bank shall pay to Executive an amount in cash equal to the COBRA cost of such coverage; provided, however, that (1) that if Executive becomes eligible to receive medical benefits under a program of a subsequent employer or otherwise (including coverage available to Executive’s spouse through the spouse’s employer), Bank’s obligation to pay any portion of the cost of health coverage as described herein shall cease, except as otherwise provided by law; (2) the Health Benefits Continuation Period shall run concurrently with any period for which Executive is eligible to elect health coverage under COBRA; (3) the Bank-paid portion of the monthly premium for such group health benefits, determined in accordance with Code Section 4980B and the regulations thereunder, shall be treated as taxable compensation by including such amount in Executive’s income in accordance with applicable rules and regulations; (4) during the Health Benefits Continuation Period, the benefits provided in any one calendar year shall not affect the amount of benefits provided in any other calendar year (other than the effect of any overall coverage benefits under the applicable plans); (5) the reimbursement of an eligible taxable expense shall be made as soon as practicable but not later than December 31 of the year following the year in which the expense was incurred; and (6) Executive’s rights pursuant to this Section 6(a)(iv) shall not be subject to liquidation or exchange for another benefit. The benefit described in this Section 6(a)(iv) is referred to as the “Health Coverage Benefit;”
(xxxvi)and
(v)to the extent not theretofore paid or provided, Bank shall timely pay or provide to Executive any other amounts or benefits required to be paid or provided or which Executive is eligible to receive under any plan, program, policy, practice, contract, or agreement of Bank and its affiliated companies and in accordance with the terms thereof, including, but not limited to, any expense reimbursements and accrued but unused vacation (which shall be paid out, if at all, in accordance with Bank’s then current written policy regarding accrual and payment for unused vacation pay) (such amounts and benefits shall be hereinafter referred to as the “Other Benefits”); and
(xxxvii)
(vi)unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall remain outstanding and shall vest, in whole, in
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part, or not at all, on a pro rata basis based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned award by a fraction, the numerator of which shall be the number of months elapsed in the applicable performance period prior to the Date of Termination, and the denominator shall be the number of months in the applicable performance period). The treatment of equity awards described in this Section 6(a)(vi) is hereinafter referred to as the “Non-CIC Equity Award Treatment”.
(b)
(c)Termination for Cause; Resignation by Executive other than Resignation for Good Reason; Death. If during the Term Executive’s employment is terminated by Employer for Cause, by Executive other than for Good Reason, or in the event of Executive’s death, then Employer shall have no further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive or Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after the Date of Termination, and payments of Other Benefits, as applicable. Notwithstanding the above, if Executive’s employment is terminated by Executive’s death, Executive’s then outstanding equity-based awards shall be subject to the Non-CIC Equity Award Treatment as provided Section 6(a)(vi).
(d)Non-Renewal of Agreement.
(i)If Employer elects not to renew the Term pursuant to Section 2 hereof, and within the 12 months following the expiration of such Term, Employer terminates Executive’s employment other than for Cause, death, or Disability, then, notwithstanding the expiration of the Term and subject to Section 6(f) and Section 12 hereof, Bank shall pay or provide to Executive (X) the Non-CIC Severance Amount, payable pursuant to the payment schedule set forth in Section 6(a)(iii) hereof, (Y) the Health Coverage Benefit as set forth in Section 6(a)(iv) and (Z) any unvested equity awards held by Executive shall be subject to Non-CIC Equity Award Treatment as and to the extent set forth in Section 6(a)(vi) (collectively, the “Non-Renewal Severance”).
(i)
(ii)If Executive elects not to renew the Term pursuant to Section 2 hereof, and following the expiration of such Term, Executive’s employment with Employer terminates, then Employer shall have no further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination, and payment or provision of Other Benefits, as applicable.
(e)
(f)Termination for Disability. During the Term, if Employer terminates Executive’s employment for Disability of Executive, then, subject to Section 6(f) hereof,
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Employer shall give Executive 30 days’ prior notice of its intent to terminate and Executive’s employment shall terminate on the 30th day after receipt of such notice (the “Disability Effective Date”), in which event, Bank shall pay to Executive a lump sum amount equal to six months of the Executive's then current Base Salary, plus an amount equal to a prorated Target Annual Bonus for the fiscal year in which the Disability Effective Date occurs (with such pro rata portion determined by multiplying the Target Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Disability Effective Date, and the denominator shall be twelve (12)), with such amount payable in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank.
(g)Termination following a Change in Control. If, within 12 months following a Change in Control, (x) Employer (or any successor to Employer) terminates Executive’s employment other than for Cause, or (y) Executive terminates employment for Good Reason, then, subject to Section 6(f) hereof and in lieu of any amounts under Section 6(a) hereof:
(i)Bank (or its successor) shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Accrued Salary;
(i)
(ii)
(iii)

(ii)Bank shall pay to Executive in a lump sum in cash the Prorated Annual Bonus, payable at the same time that annual bonuses are paid to Peer Executives;
(iii)subject to Section 12 hereof, Bank (or its successor) shall pay to Executive an amount equal to the CIC Multiple times the Severance Formula, payable in a lump sum in cash on the 60th day following the Date of Termination (such aggregate payment, the “CIC Severance Amount”);
(iv)
(iv)if Executive elects to continue participation in any group medical, dental, vision and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then during the Health Benefits Continuation Period, Bank (or its successor) shall pay to Executive the Health Coverage Benefit;
(v)
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(v)to the extent not theretofore paid or provided, Bank (or its successor) shall timely pay or provide to Executive any Other Benefits; and
(vi)
(vi)unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall become vested as soon as possible but not later than the 60th day after the Date of Termination as to the greater of (1) the number of shares that would have vested based upon an assumed achievement of all applicable performance metrics at the target level of performance or (2) the number of shares that would have vested based upon the actual level of achievement of all applicable performance metrics measured as of the Date of Termination. The treatment of equity awards described in this Section 6(e)(vi) is hereinafter referred to as the “CIC Equity Award Treatment.”
(h)
(i)Release of Claims; Restrictive Covenants. Notwithstanding the foregoing, Bank shall be obligated to provide the amounts and benefits in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable, only if (A) within 45 days after the Date of Termination Executive shall have executed a separation and full release of claims/covenant not to sue in substantially the form attached hereto as Exhibit A (the “Release Agreement”) and such Release Agreement shall not have been revoked within the revocation period specified in the Release Agreement, and (B) Executive fully complies with the obligations set forth in Section 7 hereof. For the avoidance of doubt, if Executive does not comply with the obligations set forth in Section 7 hereof, then payment of the amounts and benefits in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable shall cease immediately upon Executive’s breach thereof.
(j)Equity Awards Granted Prior to the Effective Date. Notwithstanding anything to the contrary in this Agreement, any equity-based awards granted prior to the Effective Date that remain outstanding as of the Executive’s Date of Termination or a Change in Control, as applicable, shall be governed by the terms of the Prior Agreement.
(k)Resignations. If Executive is a member of the board of directors of Company, the board of directors of Bank, or the board of directors of any subsidiary of Company or Bank, then termination of Executive’s employment hereunder for any reason whatsoever shall constitute Executive’s resignation from such boards of directors and as resignation as an officer of Bank, Company, and of any of the subsidiaries for which Executive serves as an officer.
7.Restrictive Covenants. For the avoidance of doubt, the Restrictive Covenants contained in this Section 7, as well as any other provisions of this Agreement necessary to interpret or enforce the Restrictive Covenants, shall survive termination of this Agreement and/or
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termination of Executive’s employment for any reason, and shall continue to be in full force and effect in accordance with their terms.
(a)Acknowledgments.
(i)Condition of Employment and Other Consideration. Executive acknowledges and agrees that Executive has received good and valuable consideration for entering into this Agreement.
(ii)Access to Confidential Information, Relationships, and Goodwill. Executive acknowledges and agrees that Executive is being provided and entrusted with Confidential Information, including highly confidential customer information that is subject to extensive measures to maintain its secrecy by Employer, is not known in the trade or disclosed to the public, and would materially harm Employer’s legitimate business interests if it was disclosed or used in violation of this Agreement. Executive also acknowledges and agrees that Executive is being provided and entrusted with access to Employer’s customer and employee relationships and goodwill. Executive further acknowledges and agrees that the Employer would not provide access to the Confidential Information, customer and employee relationships, and goodwill in the absence of Executive’s execution of and compliance with this Agreement. Executive further acknowledges and agrees that the Employer’s Confidential Information, customer and employee relationships, and goodwill are valuable assets of Employer and are legitimate business interests that are properly subject to protection through the covenants contained in this Agreement.
(iii)Potential Unfair Competition. Executive acknowledges and agrees that as a result of Executive’s employment with Employer, Executive’s knowledge of and access to Confidential Information, and relationships with Employer’s customers and employees, Executive would have an unfair competitive advantage if Executive were to engage in activities in violation of this Agreement.
(iv)Voluntary Execution. Executive acknowledges and affirms that Executive has executed this Agreement voluntarily, has read this Agreement carefully, and had a full and reasonable opportunity to consider this Agreement (including an opportunity to consult with legal counsel), and that Executive has not been pressured or in any way coerced, threatened, or intimidated into signing this Agreement.
(b)Restriction on Disclosure and Use of Confidential Information. Executive agrees that Executive shall not, directly or indirectly, use any Confidential Information on Executive’s own behalf or on behalf of any Person other than Employer, or reveal, divulge, or disclose any Confidential Information to any Person not expressly authorized by Employer to receive such Confidential Information. This obligation shall remain in effect for as long as the information or materials in question retain their status as Confidential Information. Executive further agrees to fully cooperate with Employer in maintaining the Confidential Information to the extent permitted by law. The Parties acknowledge and agree that this Agreement is not intended to, and does not, alter either Employer’s rights or Executive’s obligations under any
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state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein to the contrary notwithstanding, Executive shall not be restricted from disclosing information that is required to be disclosed by law, court order, or other valid and appropriate legal process; provided, however, that in the event such disclosure is required by law, Executive shall provide Employer with prompt notice of such requirement so that Employer may seek an appropriate protective order prior to any such required disclosure by Executive. Executive understands and acknowledges that nothing in this section limits Executive’s ability to report possible violations of federal, state, or local law or regulation to any governmental agency or entity; to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agencies in connection with any charge or complaint, whether filed by Executive, on Executive’s behalf, or by any other individual; or to make other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation, and Executive shall not need the prior authorization of Employer to make any such reports or disclosures and shall not be required to notify Employer that Executive has made such reports or disclosures. In addition, and anything herein to the contrary notwithstanding, Executive is hereby given notice that Executive shall not be criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (as defined by 18 U.S.C. § 1839) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, in either event solely for the purpose of reporting or investigating a suspected violation of law; or disclosing a trade secret (as defined by 18 U.S.C. § 1839) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(c)Non-Competition. Except as provided herein, Executive agrees that, during the Restricted Period, Executive will not, without prior written consent of Employer, directly or indirectly (i) carry on or engage in Competitive Services within the Restricted Territory on Executive’s own behalf or on behalf of any Person or any Principal or Representative of any Person, or (ii) own, manage, operate, control or participate in the ownership, management, operation or control of any business, whether in corporate, proprietorship, or partnership form or otherwise, where such business is engaged in the provision of Competitive Services within the Restricted Territory; provided that nothing herein shall prohibit Executive from being a passive owner of not more than five percent of the outstanding securities of any publicly traded company engaged in the Competitive Services, so long as Executive does not serve on the board of directors of such company and does not engage in the management of such company. The restrictions contained in this Section 7(c) shall not apply in the event that the Date of Termination occurs in connection with or subsequent to a Change in Control.
(d)Non-Solicitation of Protected Customers. Executive agrees that, during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, on Executive’s own behalf or as a Principal or Representative of any Person, solicit, divert, or attempt to solicit or divert a Protected Customer for the purpose of engaging in, providing, or selling Competitive Services.
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(e)Non-Recruitment of Employees and Independent Contractors. Executive agrees that during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, whether on Executive’s own behalf or as a Principal or Representative of any Person, solicit or induce or attempt to solicit or induce any employee or individual independent contractor of Employer to terminate an employment relationship with Employer or to enter into employment or independent contractor relationship with Executive or any such other Person. Notwithstanding the foregoing, the provisions of this Section 7(e) shall not be violated by general advertising or solicitation not specifically targeted at employees or independent contractor of Employer, or actions taken by any person or entity with which Executive is associated if Executive is not personally involved in any manner in the matter and has not identified such employee for soliciting or hiring and has not provided any information regarding the employee’s qualifications.
(f)Proprietary Rights.
(i)Ownership and Assignment of Protected Works. Executive agrees that any and all Confidential Information and Protected Works are the sole property of Employer, and that no compensation in addition to Executive’s compensation hereunder is due to Executive for development or transfer of such Protected Works. Executive agrees that Executive shall promptly disclose in writing to Employer the existence of any Protected Works. Executive hereby assigns and agrees to assign all of Executive’s rights, title, and interest in any and all Protected Works, including all patents or patent applications, and all copyrights therein, to Employer. Executive shall not be entitled to use Protected Works for Executive’s own benefit or the benefit of anyone except Employer without written permission from Employer and then only subject to the terms of such permission. Executive further agrees that Executive will communicate to Employer any facts known to Executive and testify in any legal proceedings, sign all lawful papers, make all rightful oaths, execute all divisionals, continuations, continuations-in-part, foreign counterparts, or reissue applications, all assignments, all registration applications, and all other instruments or papers to carry into full force and effect the assignment, transfer, and conveyance hereby made or to be made and generally do everything possible for title to the Protected Works and all patents or copyrights or trademarks or service marks therein to be clearly and exclusively held by Employer. Executive agrees that Executive will not oppose or object in any way to applications for registration of Protected Works by Employer or others designated by Employer. Executive agrees to exercise reasonable care to avoid making Protected Works available to any third party and shall be liable to Employer for all damages and expenses, including reasonable attorneys’ fees, if Protected Works are made available to third parties by Executive without the express written consent of Employer.

Anything herein to the contrary notwithstanding, Executive will not be obligated to assign to Employer any Protected Work for which no equipment, supplies, facilities, or Confidential Information of Employer was used and which was developed
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entirely on Executive’s own time, unless (A) the invention relates (1) directly to the business of Employer, or (2) to the Employer’s actual or demonstrably anticipated research or development; or (B) the invention results from any work performed by Executive for Employer. Executive likewise will not be obligated to assign to Employer any Protected Work that is conceived by Executive after Executive leaves the employ of Employer, except that Executive is so obligated if the same relates to or is based on Confidential Information to which Executive had access by virtue of employment with Employer. Similarly, Executive will not be obligated to assign any Protected Work to Employer that was conceived and reduced to practice prior to Executive’s employment with Employer, regardless of whether such Protected Work relates to or would be useful in the business of Employer. Executive acknowledges and agrees that there are no Protected Works conceived and reduced to practice by Executive prior to his employment with Employer.
(ii)No Other Duties. Executive acknowledges and agrees that there is no other contract or duty on the part of Executive now in existence to assign Protected Works to anyone other than Employer.
(i)
(iii)Works Made for Hire. Employer and Executive acknowledge that in the course of Executive’s employment with Employer, Executive may from time to time create for Employer copyrightable works. Such works may consist of manuals, pamphlets, instructional materials, computer programs, software, software integration techniques, software codes, and data, technical data, photographs, drawings, logos, designs, artwork, or other copyrightable material, or portions thereof, and may be created within or without Employer’s facilities and before, during or after normal business hours. All such works related to or useful in the business of Employer are specifically intended to be works made for hire by Executive, and Executive shall cooperate with Employer in the protection of Employer’s copyrights in such works and, to the extent deemed desirable by Employer, the registration of such copyrights.
(g)
(h)Return of Materials. Executive agrees to not retain or destroy (except as set forth below), and to immediately return to Employer on or prior to the Date of Termination, or at any other time Employer requests such return, any and all property of Employer that is the possession of Executive or subject to Executive’s control, including, but not limited to, keys, credit and identification cards, equipment, customer files and information, papers, drawings, notes, manuals, specifications, designs, devices, code, email, documents, diskettes, CDs, tapes, keys, access cards, credit cards, identification cards, computers, mobile devices, other electronic media, all other files and documents relating to Employer and its business (regardless of form, but specifically including all electronic files and data of Employer), together with all Protected Works and Confidential Information belonging to Employer or that Executive received from or through his employment with Employer. Executive will not make, distribute, or retain copies of any such information or property. To the extent that Executive has electronic files or information
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in Executive’s possession or control that belong to Employer, contain Confidential Information, or constitute Protected Works (specifically including but not limited to electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), on or prior to the Date of Termination, or at any other time Employer requests, Executive shall (i) provide Employer with an electronic copy of all of such files or information (in an electronic format that readily accessible by Employer); (ii) after doing so, delete all such files and information, including all copies and derivatives thereof, from all non- Employer-owned computers, mobile devices, electronic media, cloud storage, and other media, devices, and equipment, such that such files and information are permanently deleted and irretrievable; and (iii) provide a written certification to Employer that the required deletions have been completed and specifying the files and information deleted and the media source from which they were deleted.
(i)Enforcement of Restrictive Covenants. For the avoidance of doubt, nothing in this Section 7(i) limits the remedies available to Employer under Section 14 hereof.
(i)Rights and Remedies Upon Breach. The Parties specifically acknowledge and agree that the remedy at law for any breach of the Restrictive Covenants will be inadequate, and that in the event Executive breaches any of the Restrictive Covenants, Employer shall have the right and remedy, without the necessity of proving actual damage or posting any bond, to enjoin, preliminarily and permanently, Executive from violating the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to Employer and that money damages would not provide an adequate remedy to Employer. Executive understands and agrees that if he materially violates any of the obligations set forth in the Restrictive Covenants, the Restricted Period shall cease to run during the pendency of any litigation over such violation, provided that such litigation was initiated during the Restricted Period. If Employer does not substantially prevail in such litigation, the Restricted Period shall be deemed to have continued to run during the litigation. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to Employer at law or in equity. Employer’s ability to enforce its rights under the Restrictive Covenants or applicable law against Executive shall not be impaired in any way by the existence of a claim or cause of action on the part of Executive based on, or arising out of, this Agreement or any other event or transaction.
(i)
(ii)Severability and Modification of Covenants. Executive acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The Parties agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and construed as a separate and independent covenant. should any part or provision of any of the Restrictive Covenants, or any other provision of this Section 7, be held invalid, void, or
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unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of Employer’s legitimate business interests and may be enforced by Employer to that extent in the manner described above and all other provisions of this Agreement shall be valid and enforceable.
(j)
(k)Existing Covenants. Executive represents and warrants that Executive’s employment with Employer does not and will not breach any agreement that Executive has with any former employer to keep in confidence proprietary or confidential information or not to compete with any such former employer. Executive will not disclose to Employer or use on its behalf any proprietary or confidential information of any other party required to be kept confidential by Executive.
(l)Disclosure of Agreement. Executive acknowledges and agrees that, during the Restricted Period, Executive will disclose the existence and terms of the Protective Covenants in Section 7 of this Agreement to any prospective employer or business partner, within the Restricted Territory prior to entering into an employment, partnership, or other business relationship with such prospective employer or business partner. Executive further agrees that Employer shall have the right to make any such prospective employer or business partner of Executive within the Restricted Territory aware of the existence and terms of the Protective Covenants in Section 7 of this Agreement.
8.Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any employee benefit plan, program, policy, or practice provided by Employer and for which Executive may qualify, except as specifically provided herein. Amounts that are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice, or program of Employer at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice, or program except as explicitly modified by this Agreement.
9.Full Settlement; No Mitigation. Employer’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which Employer may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment. For the avoidance of doubt, nothing in this Section 9 shall impact Employer’s remedy of recoupment set forth in Section 14 hereof.
10.Mandatory Reduction of Payments in Certain Events.
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(a)Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any Payment would, if paid, be subject to any Excise Tax, then, prior to the making of any Payments to or for the benefit of Executive, a calculation shall be made comparing (i) the net after-tax benefit to Executive of the Payments after payment by Executive of the Excise Tax, to (ii) the net after-tax benefit to Executive if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of a Change in Control, as determined by the Determination Firm (as defined below). For purposes of this Section 10, present value shall be determined in accordance with Section 280G(d)(4) of the Code.
(b)All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, shall be made by a nationally recognized accounting firm or compensation consulting firm mutually acceptable to Employer and Executive (the “Determination Firm”) which shall provide detailed supporting calculations to Employer and Executive within 15 business days after the receipt of notice from Executive that a Payment is due to be made, or such earlier time as is requested by Employer. All fees and expenses of the Determination Firm shall be borne solely by Employer. Any determination by the Determination Firm shall be binding upon Employer and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder, it is possible that Payments which Executive was entitled to, but did not receive pursuant to Section 10(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Employer to or for the benefit of Executive but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.
(c)In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 10 shall be of no further force or effect. In the event the provisions of Code Section 280G and 4999 are modified, this Section 10 shall be modified accordingly.
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11.Successors.
(a)This Agreement is personal to Executive and shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.
(b)This Agreement can be assigned by Company and/or Bank only to a subsidiary or successor and shall be binding and inure to the benefit of Company and Bank, and their successors and assigns. The Company and/or Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank, expressly and unconditionally to assume and agree to perform the Bank’s obligations under this Agreement, in the same manner and to the same extent that the Bank would be required to perform if no such succession or assignment had taken place.
12.Code Section 409A.
(a)General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code). Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither Company nor Bank, nor their directors, officers, employees, or advisers, shall be held liable for any taxes, interest, penalties, or other monetary amounts owed by Executive as a result of the application of Section 409A of the Code.
(b)Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, such Non-Exempt Deferred Compensation will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such payment event meet any description or definition of “change in control event” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not affect the dollar amount or prohibit the vesting of any Non-Exempt Deferred Compensation termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, or the application of a different form of payment, then, subject to subsection (c) below, such payment or distribution shall be made at the time and in the form that would have applied absent the non-409A-conforming event.
(c)Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by
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reason of Executive’s separation from service during a period in which Executive is a specified employee (as determined by Employer in accordance with Section 409A of the Code and Treasury Regulations § 1.409A-3(i)(2)), then, subject to any permissible acceleration of payment by Employer under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes): (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six- month period immediately following Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following Executive’s separation from service (or, if Executive dies during such period, within 30 days after Executive’s death) (in either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.
(d)Treatment of Installment Payments. Each payment of termination benefits under this Agreement, including but not limited to Section 6, shall be considered a separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.
(e)Timing of Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on Executive’s execution of a release of claims, such release must be executed and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, Employer may elect to make or commence payment at any time during such period.
(f)Timing of Reimbursements and In-kind Benefits. If Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement, and such payments or reimbursements are includible in Executive’s federal gross taxable income, the amount of such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. No right of Executive to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.
(g)Permitted Acceleration. Employer shall have the sole authority to make any accelerated distribution permissible under Treas. Reg. Section 1.409A-3(j)(4) to Executive of deferred amounts, provided that such distribution meets the requirements of Treas. Reg. Section 1.409A-3(j)(4).
13.Regulatory Action.
(a)If Executive is removed and/or permanently prohibited from participating in the conduct of Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal
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Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of Employer under this Agreement shall terminate, as of the effective date of such order.
(b)If Executive is suspended and/or temporarily prohibited from participating in the conduct of Bank’s affairs by a notice served under Section 8(e)(3) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), all obligations of Employer under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, Employer shall reinstate (in whole or in part) any of its obligations which were suspended.
(c)If Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default.
(d)All obligations under this Agreement shall be terminated, except to the extent a determination is made that continuation of the Agreement is necessary for the continued operation of Bank (1) by the director of the FDIC or his or her designee (the “Director”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of Bank under the authority contained in 13(c) of the FDIA; or (2) by the Director, at the time the Director approves a supervisory merger to resolve problems related to operation of Bank when Bank is determined by the Director to be in an unsafe and unsound condition.
14.Compensation Recoupment Policy. Any incentive compensation, including, but not limited to, cash-based and equity-based compensation, awarded to Executive by Employer shall be subject to any written compensation recoupment policy that the Compensation Committee may adopt from time to time that is applicable by its terms to Executive, including, but not limited to, the Company’s mandatory recoupment policy as required by the listing rules of The New York Stock Exchange. In addition, the Compensation Committee may specify in any written documentation memorializing an incentive award that Executive’s rights, payments, and benefits with respect to such award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable conditions of such award. Such events may include, but shall not be limited to: (i) termination of employment for Cause, (ii) violation of material Company or Bank policies, (iii) breach of noncompetition, confidentiality, or other restrictive covenants, (iv) other conduct by Executive that is detrimental to the business or reputation of the Employer, or (v) a later determination that the amount realized from a performance-based award was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, whether or not Executive caused or contributed to such material inaccuracy. The reduction, cancellation, forfeiture, and recoupment rights associated with any equity awards or similar awards granted to Executive, if any, shall be as provided in the award certificate memorializing any such award.
15.Indemnification. Employer shall indemnify Executive for liabilities incurred by Executive while acting in good faith as an officer to the fullest extent provided for any other officer of Employer. To the extent that Employer maintains director and officer liability insurance, such insurance shall cover Executive to the same extent as any other officer of Employer.
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16.Miscellaneous.
(a)Applicable Law; Consent to Arbitration. Employer and Executive agree that this Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Tennessee without giving effect to its conflicts of law principles. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators sitting in a location selected by Executive within fifty (50) miles from the headquarters location of the Bank, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
(b)Non-Duplication. Notwithstanding anything to the contrary in this Agreement, and except as specifically provided below, any severance payments or benefits received by Executive pursuant to this Agreement shall be in lieu of any general severance policy or other severance plan maintained by Employer (other than a stock option, restricted stock, share or unit, performance share or unit, supplemental retirement, deferred compensation, or similar plan or agreement which may contain provisions operative on a termination of Executive’s employment or may incidentally refer to accelerated vesting or accelerated payment upon a termination of employment).
(c)Captions. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
(d)Amendments. This Agreement may not be amended or modified otherwise than- by a written agreement executed by the Party(ies) or their respective successors and legal representatives.
(e)Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other Party(ies) or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:    If to Company and/or Bank:
On file with Bank     1221 Broadway
Suite 1300
Nashville, Tennessee 37203
Attention: General Counsel
or to such other address as a Party shall have furnished to the other Party(ies) in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(f)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
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(g)Withholding. Employer may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(h)Waivers. Failure of any Party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted in this Agreement or of the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the Party making the waiver.
(i)Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and, from and after the date hereof, this Agreement shall supersede any other agreement, written or oral, between the Parties relating to the subject matter of this Agreement, including but not limited to any prior discussions, understandings, letters, and/or agreements between the Parties, written or oral, at any time (expressly including, but not limited to, the Prior Agreement (except to the extent necessary to govern the treatment of outstanding equity-based awards granted prior to the Effective Date as specified in Section 6(h) hereof), any confidentiality, non-solicitation, non-recruitment, and/or non-competition agreements Executive has previously entered into with Bank or Company); provided, however, that the foregoing shall not be construed to limit any restrictive covenants set forth in an equity award agreement entered into by the Executive after the Effective Date.
(j)Construction. The Parties understand and agree that because they have been given the opportunity to have counsel review and revise this Agreement, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall be construed as a whole, and according to its fair meaning, and not strictly for or against any Party.
(k)Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
(l)Survival. The rights and obligations of the Parties under Sections 6, 7, 10, 12, 14, 15, 16 shall survive the expiration and/or termination of this Agreement and the termination of Executive’s employment hereunder for the periods expressly designated in such sections or, if no such period is designated, for the maximum period permissible under applicable law.
[signature page follows]

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IN WITNESS WHEREOF, the Parties hereby signify their agreement to these terms by their signatures below, as of the Effective Date.
R. WADE PEERY

    
R. Wade Peery
FIRSTBANK
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Christopher T. Holmes
President and Chief Executive Officer
FB FINANCIAL CORPORATION
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Christopher T. Holmes
President and Chief Executive Officer

[Peery - Employment Agreement Signature Page]
LEGAL02/43756812v3
Exhibit 10.7
Execution Copy
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 23 day of February 2024 by and among FB FINANCIAL CORPORATION (“Company”), FIRSTBANK, a Tennessee bank (“Bank”), a wholly owned subsidiary of the Company, and Beth W. Sims (“Executive”). Company, Bank, and Executive are sometimes referred to herein collectively as the “Parties,” and each is sometimes referred to herein individually as a “Party.”
BACKGROUND
WHEREAS, Executive is currently engaged as the General Counsel of Company and Bank; and
WHEREAS, the Parties are presently party to that certain Employment Agreement, dated November 27, 2020 (the “Prior Agreement”); and
WHEREAS, the Parties desire to amend and restate the Prior Agreement as of the Effective Date (as defined herein).
NOW, THEREFORE, in consideration of the payments, consents, and acknowledgements described below, in consideration of Executive’s employment with Company and Bank, and in consideration of other good and valuable consideration, the receipt and sufficiency of all of which is hereby acknowledged, the Patties agree as follows:
1.Definitions. The following capitalized terms used in this Agreement shall have the meanings assigned to them below, which definitions shall apply to both the singular and the plural forms of such terms:
(a)“Board of Directors” means, collectively, the board of directors of Company and the board of directors of Bank and, where appropriate, any committee or other designee thereof.
(b)“Beneficial Owner” has the meaning given such term in Rule 13d-3 of the General Rules and Regulations promulgated under the Securities Exchange Act of 1934.
(c)“Cause” means, in the context of the termination of this Agreement by Employer, a good faith determination by the Chief Executive Officer of Company that is agreed to by a majority of the members of the Compensation Committee that any of the following has occurred:
(i)conduct by Executive that amounts to willful misconduct, gross neglect, or a material failure to perform Executive’s duties and responsibilities hereunder, including prolonged absences without the consent of the Chief Executive Officer of Company unless otherwise excused by law or under Bank’s leave policies; provided that the nature of such conduct shall be set forth in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct,
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Exhibit 10.7
Execution Copy
provided that such conduct is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(ii)any willful violation of any material law, rule, or regulation applicable to banks or the banking industry generally (including but not limited to the regulations of the Board of Governors of the Federal Reserve, the FDIC, the Tennessee Department of Financial Institutions, or any other applicable regulatory authority);
(iii)the exhibition by Executive of a standard of behavior within the scope of or related to Executive’s employment that is in violation of any written policy, board committee charter, or code of ethics or business conduct (or similar· code) of Company or Bank to which Executive is subject; provided that the nature of such conduct shall be set forth with reasonable particularity in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(iv)any act of fraud, misappropriation, or embezzlement by Executive, whether or not such act was committed in connection with the business of Company and/or Bank;
(v)a material breach of this Agreement, including, without limitation, a breach of Section 7 hereof; provided that the nature of such breach shall be set forth with reasonable particularity in a written notice to Executive who shall have 30 business days following delivery of such notice to cure such breach, provided that such breach is, in the reasonable discretion of the Chief Executive Officer of Company, susceptible to a cure;
(vi)Executive’s conviction of or Executive’s pleading guilty or nolo contendere to with respect to (a) a felony or a crime involving moral turpitude (including pleading guilty or nolo contendere to a felony or lesser charge which results from plea bargaining), whether or not such felony, crime, or lesser offense is connected with the business of Company and/or Bank, or (b) any crime in connection with the business of Company or Bank.
(d)“Change in Control” means and includes any one of following events:
(i)any Person becomes a Beneficial Owner, directly or indirectly, of 50% or more of the voting power of the then-outstanding securities of Company eligible to vote for the election of directors (“Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions of Company Voting Securities shall not constitute a Change in Control: (A) an acquisition by a Principal Shareholder, (B) an acquisition directly or indirectly from the Company, including an acquisition by or through a broker, underwriter, or financial institution acquiring such securities as part of a firm commitment or similar underwriting or distribution process, (C) an acquisition by Company or Bank, (D) an acquisition by any employee benefit plan
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Exhibit 10.7
Execution Copy
(or related trust) sponsored or maintained by Company or Bank, or (E) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (iii) below); or
(ii)during any consecutive 12-month period, individuals who, at the beginning of such period, constitute Company’s Board of Directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board of Directors, provided that any person becoming a director after the beginning of such 12-month period and whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board of Directors shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board of Directors (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or
(iii)the consummation of a reorganization, merger, consolidation, statutory share exchange, or similar form of corporate transaction involving Company or Bank, the sale or other disposition of all or substantially all of Company’s assets, or the acquisition of assets or stock of another corporation or other entity (each, a “Transaction”), unless immediately following such Transaction: (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the outstanding Company Voting Securities immediately prior to such Transaction beneficially own, directly or indirectly, more than 50% of the voting power of the then outstanding shares of voting securities of the entity resulting from such Transaction (including, without limitation, an entity which as a result of such Transaction owns Company or all or substantially all of Company’s assets or stock either directly or through one or more subsidiaries, the “Surviving Entity”) in substantially the same proportions as their ownership, immediately prior to such Transaction, of the outstanding Company Voting Securities, and (B) no person (other than (x) Company or Bank, (y) the Surviving Entity or its ultimate parent entity, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 50% or more of the total common stock or 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity were Incumbent Directors at the time of the Board of Director’s approval of the execution of the initial agreement providing for such Transaction (any Transaction which satisfies all of the criteria specified in (A), (B), and (C) above shall be deemed to be a “Non-Qualifying Transaction”).
(e)“CIC Severance Multiple” shall mean two and one-half (2.5).
(f)“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
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Exhibit 10.7
Execution Copy
(g)“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
(h)“Compensation Committee” means the compensation committee of the board of directors of Company.
(i)“Competitive Services” means engaging in the business of commercial and mortgage banking, including, without limitation, originating, underwriting, closing and selling loans, receiving deposits, as well as the business of providing any other activities, products, or services of the type routinely conducted, offered, or provided by Employer as of or during the two years immediately prior to the Date of Termination.
(j)“Confidential Information” means any and all data and information relating to Employer, its activities, business, or clients that (i) is disclosed to Executive or of which Executive becomes aware because of Executive’s employment with Employer; (ii) has value to Employer; and (iii) is not generally known outside of Employer. “Confidential Information” shall include, but is not limited to the following types of information regarding, related to, or concerning Employer: trade secrets (as defined by the Tennessee Uniform Trade Secrets Act); financial plans and data; management planning information; business plans; operational methods; market studies; marketing plans or strategies; pricing information; product development techniques or plans; customer lists; customer files, data, and financial information; details of customer contracts; current and anticipated customer requirements; identifying and other information pertaining to business referral sources; past, current, and planned research and development; computer aided systems, software, strategies, and programs; business acquisition plans; management organization and related information (including, without limitation, data and other information concerning the compensation and benefits paid to officers, directors, employees, and management); personnel and compensation policies; new personnel acquisition plans; and other similar information. “Confidential Information” also includes combinations of information or materials which individually may be generally known outside of Employer, but for which the nature, method, or procedure for combining such information or materials is not generally known outside of Employer. In addition to data and information relating to Employer, “Confidential Information” also includes any and all data and information relating to or concerning a third party that otherwise meets the definition set forth above, that was provided or made available to Employer by such third party, and that Employer has a duty or obligation to keep confidential This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of Employer.
(k)“Date of Termination” means: (i) if Executive’s employment is terminated other than by reason of death or Disability, the date of delivery of the Notice of Termination, or any later date specified in such Notice of Termination, or (ii) if Executive’s employment is terminated by reason of death or Disability, the Date of Termination will be the date of death or the Disability Effective Date, as the case maybe.
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Exhibit 10.7
Execution Copy
(l)“Disability” means a condition for which benefits would be payable under any long-term disability coverage (without regard to the application of any elimination period requirement) then provided to Executive by Employer or, if no such coverage is then being provided, the inability of the Executive to perform the essential functions of Executive’s job with Employer (as specified in this Agreement), with or without reasonable accommodation, for a period of at least 180 consecutive days as certified by a physician chosen by Executive and reasonably acceptable to the Employer. Notwithstanding the provisions in this Section 1(k), Disability for purposes of this Agreement must also be a disability within the meaning of Code Section 409A(a)(2)(A)(ii) and 409A(a)(2)(C) and Treas. Reg. Section 1.409A-3(a)(2) and 1.409A-3(i)(4).
(m)“Effective Date” means February 23, 2024.
(n)“Employer” means Company and Bank, collectively.
(o)“Excise Tax” means any excise tax imposed by Section 4999 of the Code.
(p)“FDIC” means the Federal Deposit Insurance Corporation.
(q)“Good Reason” shall mean, in the context of the termination of this Agreement by Executive:
(i)a material diminution in Executive’s title, authority, duties, or responsibilities which is not consented to by Executive in writing;
(ii)a material diminution in Executive’s base compensation (which includes Executive’s Base Salary and Target Annual Bonus opportunity) which is not consented to by Executive in writing or made as part of across-the-board compensation reductions affecting all or substantially all similarly-situated employees;
(iii)a change in the location of Executive’s primary office such that Executive is required to report regularly to an office located outside of a 50-mile radius from the location of Executive’s primary office as of the Effective Date, which change is not consented to by Executive in writing; or
(iv)a material breach of the terms of this Agreement by Employer.
(r)“Material Contact” means contact between Executive and a customer or potential customer of Company or Bank (i) with whom or which Executive has or had substantive dealings on behalf of Company or Bank; (ii) whose dealings with Company or Bank are or were coordinated or supervised by Executive; (iii) about whom Executive obtains Confidential Information in the ordinary course of business as a result of Executive’s employment with Employer; or (iv) who receives products or services of Company or Bank, the sale or provision of which directly results or resulted in incentive compensation or commissions for Executive within the two year’s prior to the Date of Termination.
(s)“Non-CIC Severance Multiple” shall mean two (2.0).
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Exhibit 10.7
Execution Copy
(t)“Notice of Termination” shall mean a written notice delivered by a Party in connection with the termination of this Agreement which (i) indicates the specific termination provision in this Agreement relied upon for such termination, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and (iii) specifies the Date of Termination.
(u)“Parachute Value” of a Payment means the present value as of the date of the Change in Control of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm (as defined in Section 10(b)) for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.
(v)“Payment” shall mean any benefit, payment, or distribution made or given by Employer to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise).
(w)“Person” means any individual or any corporation, partnership, joint venture, limited liability company, association, or other entity or enterprise.
(x)“Principal or Representative” means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative, or consultant.
(y)“Principal Shareholder” means James W. Ayers or his designee(s), and shall include any entity that is directly or indirectly affiliated with the Principal Shareholder.
(z)“Protected Customer” means any Person to whom Company or Bank has sold its products or services or actively solicited to sell its products or services, and with whom Executive has had Material Contact during the last 24 months of her employment with Employer.
(aa)“Protected Work” means any and all ideas, inventions, formulas, Confidential Information, source codes, object codes, techniques, processes, concepts, systems, programs, software, software integration techniques, hardware systems, schematics, flow charts, computer data bases, client lists, trademarks, service marks, brand names, trade names, compilations, documents, data, notes, designs, drawings, technical data, and/or training materials, including improvements thereto or derivatives therefrom, whether or not patentable, and whether or not subject to copyright or trademark or trade secret protection, conceived, developed or produced by Executive, or by others working with Executive or under the direction of Executive, during the period of Executive’s employment, or conceived, produced or used or intended for use by or on behalf of Employer or its customers.
(ab)“Restricted Period” means a period of 12 months following the Date of Termination.
(ac)“Restricted Territory” means a radius of 50 miles from Bank’s headquarters office in Nashville, Tennessee.
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Exhibit 10.7
Execution Copy
(ad)“Restrictive Covenants” means the restrictive covenants contained in Section 7(b) through 7(j) hereof.
(ae)“Severance Formula” means the sum of (A) Executive’s then current Base Salary (or, in the case of a termination for Good Reason as defined in Section 1(q)(ii), the Base Salary in effect immediately prior to the diminution in Base Salary giving rise to termination), plus (B) the greater of Executive’s Target Annual Bonus for the fiscal year in which the Date of Termination occurs or the average Annual Bonus received by Executive for the three fiscal years immediately preceding the fiscal year in which the Date of Termination occurs.
2.Effective Date: Term. Upon the terms and subject to the conditions set forth in this Agreement, Employer hereby employs Executive, and Executive hereby accepts such employment, for the term commencing on the Effective Date and, unless otherwise earlier terminated pursuant to Section 5 hereof, the close of business on the third anniversary of the Effective Date (the “Initial Term”). The Initial Term and any and all renewal terms, if any, are referred to together herein as the “Term.” The third anniversary of the Effective Date is referred to herein as the “Term End Date.” Beginning on the initial Term End Date and on each subsequent anniversary of the Term End Date thereafter, the Term shall, without further action by Executive or Employer, be extended by an additional one-year period; provided, however, that either Employer or Executive may cause the Term to cease to extend automatically, by giving written notice to the other not less than 90 days prior to the scheduled expiration of the Team. Upon such notice, the Term shall terminate upon the expiration of, as applicable, the Term End Date or the then-current one-year extension period.
3.Employment; Extent of Service. Executive is hereby employed on the Effective Date as the General Counsel. Executive shall have the duties, responsibilities, and authority commensurate with such position and such other duties as may be assigned by the Chief Executive Officer of Company. During the Term of this Agreement, and excluding any periods of vacation or sick leave to which Executive is entitled, Executive agrees to (i) devote substantially all of Executive’s business effort, time, energy, and skill to the business of Employer; (ii) faithfully, loyally, and diligently perform such duties; and (iii) diligently follow and implement all lawful management policies and decisions of Employer that are communicated to Executive. During the Term of this Agreement, Executive shall not, without the consent of Employer, be engaged in or provide services to any other business or enterprise (whether engaged in for profit or not) which interferes with her obligations to Employer under this Agreement. Executive will report directly to the Chief Executive Officer of Company or such other individual as the Compensation Committee may approve.
4.Compensation and Benefits. For the avoidance of doubt, the compensation and benefits provided under this Section 4 shall be in consideration of services rendered to both Company and Bank.
(a)Base Salary. During the Term, Bank shall pay to Executive a base salary at the rate of $336,000 per year (“Base Salary”), less normal withholdings, payable in accordance with Bank’s payroll practices. The Compensation Committee shall review Executive’s Base
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Exhibit 10.7
Execution Copy
Salary annually and may increase the Base Salary based on such review but may not decrease the Base Salary unless (i) Executive consents in writing to such decrease, or (ii) such decrease is made as part of across-the-board salary reductions affecting all or substantially all similarly-situated employees. Such adjusted salary then shall become Executive’s Base Salary for purposes of this Agreement.
(b)Annual Bonus. During the Term, Executive shall have an opportunity to participate in any short-term or cash incentive plans available to other Peer Executives and based upon the achievement of performance goals established from year to year by the Compensation Committee (the “Annual Bonus”). Subject to the vesting and performance requirements as the Compensation Committee may require, effective January 1, 2023, the initial base value of Executive’s potential Annual Bonus shall be $190,000, with a maximum payout of 150% of such amount, which number shall be reviewed by the Compensation Committee annually and adjusted based on such review. Except as otherwise provided in Section 6(a)(ii) and Section 6(e)(ii) hereof, Executive must be employed by Company and/or Bank on the date the Annual Bonus, if any, is paid in order to receive the Annual Bonus. The Annual Bonus will be paid by March 15 of the year following the year for which it is earned. For purposes of this Agreement, Executive’s target Annual Bonus opportunity for any given fiscal year is referred to as the “Target Annual Bonus.”
(c)Retirement Plans. During the Term, Executive shall be entitled to participate in any retirement plans available to other Bank employees similarly situated to Executive (“Peer Executives”), and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such plans at any time and from time to time.
(d)Long-Term Incentive Plans. During the Term, Executive shall be entitled to participate in any long-term or equity incentive plans available to other Peer Executives, and on the same basis as such Peer Executives, subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Company and/or Bank to amend, modify or terminate any such plans at any time and from time to time. Subject to the vesting and performance requirements as the Compensation Committee may require, effective January 1, 2023, the initial base value of the Executive’s potential long-term incentive plan award shall be $190,000, with a maximum payout of 200% of such amount, which number shall be reviewed by the Compensation Committee annually and adjusted based on such review.
(e)Welfare Benefit Plans. During the Term, Executive and Executive’s eligible dependents shall be eligible for participation in the welfare benefit plans, practices, policies, and programs provided by Bank, if any, to the extent available to other Peer Executives and subject to eligibility requirements and terms and conditions of each such plan; provided that nothing herein shall limit the ability of Bank to amend, modify, or terminate any such benefit plans, policies, or programs at any time and from time to time.
(f)Expenses. During the Term, and subject to Section 12 hereof, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by
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Exhibit 10.7
Execution Copy
Executive in the course of performing Executive’s duties and responsibilities under this Agreement, in accordance with the policies, practices, and procedures of Bank to the extent available to other Peer Executives with respect to travel and other business expenses.
(g)Disability Insurance. During the Term, Bank shall provide supplemental long-term disability coverage for Executive to the extent necessary to provide total long-term disability coverage equal to 60% of Executive’s Base Salary.
5.Termination of Employment. For the avoidance of doubt, if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason, and if Executive’s employment with Company terminates for any reason under this Section 5, Executive’s employment with Bank shall be deemed terminated for the same reason.
(a)Termination upon Death. Executive’s employment shall terminate automatically upon Executive’s death. For the avoidance of doubt, termination of Executive’s employment upon the death of Executive under this Section 5(a) shall not be considered termination without Cause that would entitle Executive to severance under Section 6(a).
(b)Termination by Employer. Employer may terminate Executive’s employment during the Term with or without Cause on written notice to Executive, provided that the written notice of termination with respect to a termination without Cause shall be provided at least 30 days prior to the effective date of such termination.
(c)Termination by Executive. Executive’s employment may be terminated by Executive:
(i)at any time for Good Reason, provided that (A) before terminating this Agreement and Executive’s employment for Good Reason, (1) Executive shall give notice to Employer of the existence of Good Reason for termination, which notice must be given by Executive to Employer within 90 days of Executive’s discovery of the existence of the condition(s) giving rise to Good Reason for termination and shall state with reasonable detail the condition(s) giving rise to Good Reason for termination, and (2) Employer shall have 30 days from the date of receipt of such notice to remedy the condition(s) giving rise to Good Reason for termination; and (B) such termination must occur within 12 months of the initial existence of the condition(s) giving rise to Good Reason for termination; or
(ii)at any time without Good Reason, provided that Executive shall give Employer at least 30 days prior written notice of Executive’s intent to terminate.
(d)Notice of Termination. Any termination by Company and/or Bank with or without Cause and any termination by Executive shall be communicated by Notice of Termination to the other Party(ies) hereto given in accordance with Section 16(e) of this Agreement. The failure by Company and/or Bank to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause shall not waive any right of
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Exhibit 10.7
Execution Copy
Company and/or Bank hereunder or preclude the Company and/or Bank from asserting such fact or circumstance in enforcing its rights hereunder. The failure by Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstance in enforcing its rights hereunder.
6.Obligations of Employer upon Termination.
(a)Resignation for Good Reason; Termination Other Than for Cause, Death, or Disability. During the Term, if (x) Employer terminates Executive’s employment other than for Cause, death, or Disability, or (y) Executive terminates employment for Good Reason, then, subject to Section 6(f) hereof:
(i)Bank shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Base Salary through the Date of Termination to the extent not theretofore paid (the “Accrued Salary”); and
(ii)Bank shall pay to Executive in a lump sum in cash a prorated Annual Bonus for the year in which the Date of Termination occurs based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned Annual Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Date of Termination, and the denominator shall be twelve (12)) (the “Prorated Annual Bonus”), payable at the same time that annual bonuses are paid to Peer Executives;
(iii)Subject to Section 12 hereof, Bank shall pay to Executive an amount equal to the Non-CIC Severance Multiple times the Severance Formula (such aggregate payment, the “Non-CIC Severance Amount”), payable in approximately equal monthly installments during the 24-month period following the Date of Termination, commencing on the first payroll date to occur after the 60th day following the Date of Termination; provided that the first such payment shall consist of all amounts payable to Executive pursuant to this Section 6(a)(iii) between the Date of Termination and the first payroll date to occur after the 60th day following the Date of Termination; and
(iv)if Executive elects to continue participation in any group medical, dental, vision, and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then for a period of 18 months after the Date of Termination (the “Health Benefits Confirmation Period”), Bank shall pay to Executive an amount in cash equal to the COBRA cost of such coverage; provided, however, that (1) that if Executive becomes eligible to receive medical benefits under a program of a subsequent employer or otherwise (including coverage available to Executive’s spouse through the spouse’s employer), Bank’s obligation to pay any portion of the cost of health coverage as described herein shall cease, except as otherwise provided by law; (2) the Health Benefits Continuation Period shall run concurrently with any period for which Executive is eligible to elect health
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Exhibit 10.7
Execution Copy
coverage under COBRA; (3) the Bank-paid portion of the monthly premium for such group health benefits, determined in accordance with Code Section 4980B and the regulations thereunder, shall be treated as taxable compensation by including such amount in Executive’s income in accordance with applicable rules and regulations; (4) during the Health Benefits Continuation Period, the benefits provided in any one calendar year shall not affect the amount of benefits provided in any other calendar year (other than the effect of any overall coverage benefits under the applicable plans); (5) the reimbursement of an eligible taxable expense shall be made as soon as practicable but not later than December 31 of the year following the year in which the expense was included; and (6) Executive’s rights pursuant to this Section 6(a)(iv) shall not be subject to liquidation or exchange for another benefit. The benefit described in this Section 6(a)(iv) is referred to as the “Health Coverage Benefit;”
(v)to the extent not theretofore paid or provided, Bank shall timely pay or provide to Executive any other amounts or benefits required to be paid or provided or which Executive is eligible to receive under any plan, program, policy, practice, contract, or agreement of Bank and its affiliated companies and in accordance with the terms thereof, including, but not limited to, any expense reimbursements and accrued but unused vacation (which shall be paid out, if at all, in accordance with Bank’s then current policy regarding accrual and payment for unused vacation pay) (such amounts and benefits shall be hereinafter referred to as the “Other Benefits”); and
(vi)unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall remain outstanding and shall vest, in whole, in part, or not at all, on a pro rata basis based on the level of achievement of applicable performance metrics (with such pro rata portion determined by multiplying the earned award by a fraction, the numerator of which shall be the number of months elapsed in the applicable performance period prior to the Date of Termination, and the denominator shall be the number of months in the applicable performance period). The treatment of equity awards described in this clause Section 6(A)(vi) is hereinafter referred to as the “Non-CIC Equity Award Treatment”).
(b)Termination for Cause; Resignation by Executive other than Resignation for Good Reason; Death. If during the Term Executive’s employment is terminated by Employer for Cause, by Executive other than for Good Reason, or in the event of Executive’s death, then Employer shall have no further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive or Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after the Date of Termination, and payments of Other Benefits, as applicable. Notwithstanding the above, if Executive’s employment is terminated by Executive’s death, Executive’s then-outstanding equity-based awards shall be subject to the Non-CIC Equity Award Treatment as provided Section 6(a)(vi).
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Exhibit 10.7
Execution Copy
(c)Non-Renewal of Agreement.
(i)If Employer elects not to renew the Term pursuant to Section 2 hereof, and within the 12 months following the expiration of such Term, Employer terminates Executive’s employment other than for Cause, death, or Disability, then, notwithstanding the expiration of the Term and subject to Sections 6(f) and 12 hereof, Bank shall pay or provide to Executive (X) the Non-CIC Severance Amount, payable pursuant to the payment schedule set forth in Section 6(a)(iii) hereof, (Y) the Health Coverage Benefit as set forth in Section 6(a)(iv), and (Z) any unvested equity awards held by Executive shall be subject to the Non-CIC Equity Award Treatment as and to the extent set forth in Section 6(a)(vi) (collectively, the “Non-Renewal Severance”).
(ii)If Executive elects not to renew the Term pursuant to Section 2 hereof, and following the expiration of such Term, Executive’s employment with Employer terminates, then Employer shall have no further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of Accrued Salary which shall be paid to Executive in a lump sum in cash within 30 days after the Date of Termination, and payment or provision of Other Benefits, as applicable.
(d)Termination for Disability. During the Term, if Employer terminates Executive’s employment for Disability of Executive, then, subject to Section 6(f) hereof, Employer shall give Executive 30 days’ prior notice of its intent to terminate and Executive’s employment shall terminate on the 30th day after receipt of such notice (the “Disability Effective Date”), in which event, Bank shall pay to Executive a lump sum amount equal to six months of the Executive's then current Base Salary, plus a lump sum equal to a prorated Target Bonus for the year in which the Disability Effective Date occurs (with such pro rata portion determined by multiplying the Target Bonus by a fraction, the numerator of which shall be the number of months elapsed in the applicable calendar year prior to the Disability Effective Date, and the denominator shall be twelve (12)), with such amount payable in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank.
(e)Termination following a Change in Control. If, within 12 months following a Change in Control, (x) Employer (or any successor to Employer) terminates Executive’s employment other than for Cause, or (y) Executive terminates employment for Good Reason, then, subject to Section 6(f) hereof and in lieu of any amounts under Section 6(a) hereof:
(i)Bank (or its successor) shall pay to Executive in a lump sum in cash within 30 days after the Date of Termination, the exact payment date to be determined by Bank, Executive’s Accrued Salary;
(ii)Bank shall pay to Executive in a lump sum in cash the Prorated Annual Bonus, payable at the same time that annual bonuses are paid to Peer Executives;
(iii)Subject to Section 12 hereof, Bank (or its successor) shall pay to Executive an amount equal to the CIC Multiple times the Severance Formula (such
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Exhibit 10.7
Execution Copy
aggregate payment, the “CIC Severance Amount”), payable in a lump sum in cash on the 60th day following the Date of Termination;
(iv)If Executive elects to continue participation in any group medical, dental, vision and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then during the Health Benefits Continuation Period, Bank (or its successor) shall pay to Executive the Health Coverage Benefit;
(v)To the extent not theretofore paid or provided, Bank (or its successor) shall timely pay or provide to Executive any Other Benefits; and
(vi)unless the applicable award agreement expressly provides otherwise, (A) all of Executive’s then outstanding time-based equity-based awards shall become fully vested (to the extent not previously vested) as soon as possible but not later than the 60th day after the Date of Termination; and (B) Executive’s then outstanding performance-based equity awards shall become vested as soon as possible but not later than the 60th day after the Date of Termination as to the greater of (1) the number of shares that would have vested based upon an assumed achievement of all applicable performance metrics at the target level of performance or (2) the number of shares that would have vested based upon the actual level of achievement of all applicable performance metrics measured as of the Date of Termination. The treatment of equity awards described in this Section 6(e)(vi) is hereinafter referred to as the “CIC Equity Award Treatment.”
(f)Release of Claims. Restrictive Covenants. Notwithstanding the foregoing, Bank shall be obligated to provide the amounts and benefits set forth in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable, only if (A) within 45 days after the Date of Termination Executive shall have executed a separation and full release of claims/covenant not to sue in substantially the form attached hereto as Exhibit A (the “Release Agreement”) and such Release Agreement shall not have been revoked within the revocation period specified in the Release Agreement, and (B) Executive fully complies with the obligations set forth in Section 7 hereof. For the avoidance of doubt, if Executive does not comply with the obligations set forth in Section 7 hereof, then payment of the amounts and benefits set forth in Sections 6(a), (b), (c), (d) and (e) hereof, as applicable, shall cease immediately upon Executive’s breach thereof.
(g)Resignations. If Executive is a member of the board of directors of Company, the board of directors of Bank, or the board of directors of any subsidiary of Company or Bank, then termination of Executive’s employment hereunder for any reason whatsoever shall constitute Executive’s resignation from such boards of directors and as resignation as an officer of Bank, Company, and of any of the subsidiaries for which Executive serves as an officer.
(h)Equity Awards Granted Prior to the Effective Date. Notwithstanding anything to the contrary in this Agreement, any equity-based awards granted prior to the Effective Date that remain outstanding as of the Executive’s Date of Termination or a Change in Control, as applicable, shall be governed by the terms of the Prior Agreement.
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Exhibit 10.7
Execution Copy
7.Restrictive Covenants. For the avoidance of doubt, the Restrictive Covenants contained in this Section 7, as well as any other provisions of this Agreement necessary to interpret or enforce the Restrictive Covenants, shall survive termination of this Agreement and/or termination of Executive’s employment for any reason, and shall continue to be in full force and effect in accordance with their terms.
(a)Acknowledgments.
(i)Condition of Employment and Other Consideration. Executive acknowledges and agrees that Executive has received good and valuable consideration for entering into this Agreement.
(ii)Access to Confidential Information. Relationships. and Goodwill. Executive acknowledges and agrees that Executive is being provided and entrusted with Confidential Information, including highly confidential customer information that is subject to extensive measures to maintain its secrecy by Employer, is not known in the trade or disclosed to the public, and would materially harm Employer’s legitimate business interests if it was disclosed or used in violation of this Agreement. Executive also acknowledges and agrees that Executive is being provided and entrusted with access to Employer’s customer and employee relationships and goodwill. Executive further acknowledges and agrees that the Employer would not provide access to the Confidential Information, customer and employee relationships, and goodwill in the absence of Executive’s execution of and compliance with this Agreement. Executive further acknowledges and agrees that the Employer’s Confidential Information, customer and employee relationships, and goodwill are valuable assets of Employer and are legitimate business interests that are properly subject to protection through the covenants contained in this Agreement.
(iii)Potential Unfair Competition. Executive acknowledges and agrees that as a result of Executive’s employment with Employer, Executive’s knowledge of and access to Confidential Information, and relationships with Employer’s customers and employees, Executive would have an unfair competitive advantage if Executive were to engage in activities in violation of this Agreement.
(iv)Voluntary Execution. Executive acknowledges and affirms that Executive has executed this Agreement voluntarily, has read this Agreement carefully, and had a full and reasonable opportunity to consider this Agreement (including an opportunity to consult with legal counsel), and that Executive has not been pressured or in any way coerced, threatened, or intimidated into signing this Agreement.
(b)Restriction on Disclosure and Use of Confidential Information. Executive agrees that Executive shall not, directly or indirectly, use any Confidential Information on Executive’s own behalf or on behalf of any Person other than Employer, or reveal, divulge, or disclose any Confidential Information to any Person not expressly authorized by Employer to receive such Confidential Information. This obligation shall remain in effect for as long as the information or materials in question retain their status as Confidential Information. Executive
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Exhibit 10.7
Execution Copy
further agrees to fully cooperate with Employer in maintaining the Confidential Information to the extent permitted by law. The Patties acknowledge and agree that this Agreement is not intended to, and does not, alter either Employer’s rights or Executive’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein to the contrary notwithstanding, Executive shall not be restricted from disclosing information that is required to be disclosed by law, court order, or other valid and appropriate legal process; provided, however, that in the event such disclosure is required by law, Executive shall provide Employer with prompt notice of such requirement so that Employer may seek an appropriate protective order prior to any such required disclosure by Executive. Executive understands and acknowledges that nothing in this section limits Executive’s ability to report possible violations of federal, state, or local law or regulation to any governmental agency or entity; to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agencies in connection with any charge or complaint, whether filed by Executive, on Executive’s behalf, or by any other individual; or to make other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation, and Executive shall not need the prior authorization of Employer to make any such reports or disclosures and shall not be required to notify Employer that Executive has made such reports or disclosures. In addition, and anything herein to the contrary notwithstanding, Executive is hereby given notice that Executive shall not be criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (as defined by 18 U.S.C. § 1839) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, in either event solely for the purpose of reporting or investigating a suspected violation of law; or disclosing a trade secret (as defined by 18 U.S.C. § 1839) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
(c)Intentionally Omitted.
(d)Non-Solicitation of Protected Customers. Executive agrees that, during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, on Executive’s own behalf or as a Principal or Representative of any Person, solicit or divert or attempt to solicit or divert a Protected Customer for the purpose of engaging in, providing, or selling Competitive Services.
(e)Non-Recruitment of Employees and Independent Contractors. Executive agrees that during the Restricted Period, Executive shall not, without the prior written consent of Employer, directly or indirectly, whether on Executive’s own behalf or as a Principal or Representative of any Person, solicit or induce or attempt to solicit or induce any employee or individual independent contractor of Employer to terminate an employment relationship with Employer or to enter into employment or any independent contractor relationship with Executive or any such other Person. Notwithstanding the foregoing, the provisions of this Section 7(e) shall not be violated by general advertising or solicitation not specifically targeted at employees or independent contractor of Employer, or actions taken by any person or entity with which Executive is associated if Executive is not personally involved in any manner in the matter and
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Exhibit 10.7
Execution Copy
has not identified such employee for soliciting or hiring and has not provided any information regarding the employee’s qualifications.
(f)Proprietary Rights.
(i)Ownership and Assignment of Protected Works. Executive agrees that any and all Confidential Information and Protected Works are the sole property of Employer, and that no compensation in addition to Executive’s compensation hereunder is due to Executive for development or transfer of such Protected Works. Executive agrees that Executive shall promptly disclose in writing to Employer the existence of any Protected Works. Executive hereby assigns and agrees to assign all of Executive’s rights, title, and interest in any and all Protected Works, including all patents or patent applications, and all copyrights therein, to Employer. Executive shall not be entitled to use Protected Works for Executive’s own benefit or the benefit of anyone except Employer without written permission from Employer and then only subject to the terms of such permission. Executive further agrees that Executive will communicate to Employer any facts known to Executive and testify in any legal proceedings, sign all lawful papers, make all rightful oaths, execute all divisionals, continuations, continuations-in-part, foreign counterparts, or reissue applications, all assignments, all registration applications, and all other instruments or papers to cany into full force and effect the assignment, transfer, and conveyance hereby made or to be made and generally do everything possible for title to the Protected Works and all patents or copyrights or trademarks or service marks therein to be clearly and exclusively held by Employer. Executive agrees that Executive will not oppose or object in any way to applications for registration of Protected Works by Employer or others designated by Employer. Executive agrees to exercise reasonable care to avoid making Protected Works available to any third party and shall be liable to Employer for all damages and expenses, including reasonable attorneys’ fees, if Protected Works are made available to third parties by Executive without the express written consent of Employer.
Anything herein to the contrary notwithstanding, Executive will not be obligated to assign to Employer any Protected Work for which no equipment, supplies, facilities, or Confidential Information of Employer was used and which was developed entirely on Executive’s own time, unless (A) the invention relates (1) directly to the business of Employer, or (2) to the Employer’s actual or demonstrably anticipated research or development; or (B) the invention results from any work performed by Executive for Employer. Executive likewise will not be obligated to assign to Employer any Protected Work that is conceived by Executive after Executive leaves the employ of Employer, except that Executive is so obligated if the same relates to or is based on Confidential Information to which Executive had access by virtue of employment with Employer. Similarly, Executive will not be obligated to assign any Protected Work to Employer that was conceived and reduced to practice prior to Executive’s employment with Employer, regardless of whether such Protected Work relates to or would be useful in the business of Employer. Executive acknowledges and agrees that there are no
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Exhibit 10.7
Execution Copy
Protected Works conceived and reduced to practice by Executive prior to her employment with Employer.
(ii)No Other Duties. Executive acknowledges and agrees that there is no other contract or duty on the part of Executive now in existence to assign Protected Works to anyone other than Employer.
(iii)Works Made for Hire. Employer and Executive acknowledge that in the course of Executive’s employment with Employer, Executive may from time to time create for Employer copyrightable works. Such works may consist of manuals, pamphlets, instructional materials, computer programs, software, software integration techniques, software codes, and data, technical data, photographs, drawings, logos, designs, artwork, or other copyrightable material, or portions thereof, and may be created within or without Employer’s facilities and before, during or after normal business hours. All such works related to or useful in the business of Employer are specifically intended to be works made for hire by Executive, and Executive shall cooperate with Employer in the protection of Employer’s copyrights in such works and, to the extent deemed desirable by Employer, the registration of such copyrights.
(g)Return of Materials. Executive agrees to not retain or destroy (except as set Bank below), and to immediately return to Employer on or prior to the Date of Termination, or at any other time Employer requests such return, any and all property of Employer that is the possession of Executive or subject to Executive’s control, including, but not limited to, keys, credit and identification cards, equipment, customer files and information, papers, drawings, notes, manuals, specifications, designs, devices, code, email, documents, diskettes, CDs, tapes, keys, access cards, credit cards, identification cards, computers, mobile devices, other electronic media, all other files and documents relating to Employer and its business (regardless of form, but specifically including all electronic files and data of Employer), together with all Protected Works and Confidential Information belonging to Employer or that Executive received from or through her employment with Employer. Executive will not make, distribute, or retain copies of any such information or property. To the extent that Executive has electronic files or information in Executive’s possession or control that belong to Employer, contain Confidential Information, or constitute Protected Works (specifically including but not limited to electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), on or prior to the Date of Termination, or at any other time Employer requests, Executive shall (i) provide Employer with an electronic copy of all of such files or information (in an electronic format that readily accessible by Employer); (ii) after doing so, delete all such files and information, including all copies and derivatives thereof, from all non-Employer-owned computers, mobile devices, electronic media, cloud storage, and other media, devices, and equipment, such that such files and information are permanently deleted and irretrievable; and (iii) provide a written certification to Employer that the required deletions have been completed and specifying the files and information deleted and the media source from which they were deleted.
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Exhibit 10.7
Execution Copy
(h)Enforcement of Restrictive Covenants. For the avoidance of doubt, nothing in this Section 7(i) limits the remedies available to Employer under Section 14 hereof.
(i)Rights and Remedies Upon Breach. The Parties specifically acknowledge and agree that the remedy at law for any breach of the Restrictive Covenants will be inadequate, and that in the event Executive breaches any of the Restrictive Covenants, Employer shall have the right and remedy, without the necessity of proving actual damage or posting any bond, to enjoin, preliminarily and permanently, Executive from violating the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to Employer and that money damages would not provide an adequate remedy to Employer. Executive understands and agrees that if she materially violates any of the obligations set Bank in the Restrictive Covenants, the Restricted Period shall cease to run during the pendency of any litigation over such violation, provided that such litigation was initiated during the Restricted Period. If Employer does not substantially prevail in such litigation, the Restricted Period shall be deemed to have continued to run during the litigation. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to Employer at law or in equity. Employer’s ability to enforce its rights under the Restrictive Covenants or applicable law against Executive shall not be impaired in any way by the existence of a claim or cause of action on the part of Executive based on, or arising out of, this Agreement or any other event or transaction.
(ii)Severability and Modification of Covenants. Executive acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The Parties agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and constructed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants, or any other provision of this Section 7, be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of Employer’s legitimate business interests and may be enforced by Employer to that extent in the maimer described above and all other provisions of this Agreement shall be valid and enforceable.
(i)Existing Covenants. Executive represents and warrants that Executive’s employment with Employer does not and will not breach any agreement that Executive has with any former employer to keep in confidence proprietary or confidential information or not to compete with any such former employer. Executive will not disclose to Employer or use on its behalf any proprietary or confidential information of any other party required to be kept confidential by Executive.
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Exhibit 10.7
Execution Copy
(j)Disclosure of Agreement. Executive acknowledges and agrees that, during the Restricted Period, Executive will disclose the existence and terms of the Restrictive Covenants in Section 7 of this Agreement to any prospective employer, business partner, investor, or lender within the Restricted Territory prior to entering into an employment, partnership, or other business relationship with such prospective employer or business partner. Executive further agrees that Employer shall have the right to make any such prospective employer or business partner of Executive within the Restricted Territory aware of the existence and terms of the Restrictive Covenants in Section 7 of this Agreement.
8.Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any employee benefit plan, program, policy, or practice provided by Employer and for which Executive may qualify, except as specifically provided herein. Amounts that are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice, or program of Employer at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice, or program except as explicitly modified by this Agreement.
9.Full Settlement: No Mitigation. Employer’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which Employer may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment. For the avoidance of doubt, nothing in this Section 9 shall impact Employer’s remedy of recoupment set forth in Section 14 hereof.
10.Mandatory Reduction of Payments in Certain Events.
(a)Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any Payment would, if paid, be subject to any Excise Tax, then, prior to the making of any Payments to or for the benefit of Executive, a calculation shall be made comparing (i) the net after-tax benefit to Executive of the Payments after payment by Executive of the Excise Tax, to (ii) the net after-tax benefit to Executive if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of a Change in Control, as determined by the Determination Firm (as defined below). For purposes of this Section 10, present value shall be determined in accordance with Section 280G(d)(4) of the Code.
(b)All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such
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Execution Copy
determinations, shall be made by a nationally recognized accounting firm or compensation consulting film mutually acceptable to Employer and Executive (the “Determination Firm”) which shall provide detailed supporting calculations to Employer and Executive within 15 business days after the receipt of notice from Executive that a Payment is due to be made, or such earlier time as is requested by Employer. All fees and expenses of the Determination Firm shall be borne solely by Employer. Any determination by the Determination Firm shall be binding upon Employer and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Film hereunder, it is possible that Payments which Executive was entitled to, but did not receive pursuant to Section 10(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with the calculations required to be made hereunder. In such event, the Determination Film shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by Employer to or for the benefit of Executive but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.
(c)In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 10 shall be of no further force or effect. In the event the provisions of Code Section 280G and 4999 are modified, this Section 10 shall be modified accordingly.
11.Successors.
(a)This Agreement is personal to Executive and shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.
(b)This Agreement can be assigned by Company and/or Bank only to a subsidiary or successor and shall be binding and inure to the benefit of Company and Bank, and their successors and assigns. The Company and/or Bank shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank, expressly and unconditionally to assume and agree to perform the Bank’s obligations under this Agreement, in the same manner and to the same extent that the Bank would be required to perform if no such succession or assignment had taken place.
12.Code Section 409A.
(a)General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code). Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither Company nor Bank, nor their directors, officers, employees, or advisers, shall be held liable for any taxes, interest, penalties, or other monetary amounts owed by Executive as a result of the application of Section 409A of the Code.
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Exhibit 10.7
Execution Copy
(b)Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, such Non-Exempt Deferred Compensation will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such payment event meet any description or definition of “change in control event” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not affect the dollar amount or prohibit the vesting of any Non-Exempt Deferred Compensation termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, or the application of a different form of payment, then, subject to subsection (c) below, such payment or distribution shall be made at the time and in the form that would have applied absent the non-409A-conforming event.
(c)Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which Executive is a specified employee (as determined by Employer in accordance with Section 409A of the Code and Treasury Regulations§ 1.409A-3(i)(2)), then, subject to any permissible acceleration of payment by Employer under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes): (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following Executive’s separation from service (or, if Executive dies during such period, within 30 days after Executive’s death) (in either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.
(d)Treatment of Installment Payments. Each payment of termination benefits under this Agreement, including but not limited to Section 6, shall be considered a separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.
(e)Timing of Release of Claims. Whenever in this Agreement a payment or benefit is conditioned on Executive’s execution of a release of claims, such release must be executed and all revocation periods shall have expired within 60 days after the Date of Termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the Date of Termination provided such release shall have been executed and such revocation periods shall have expired. If such payment or
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Exhibit 10.7
Execution Copy
benefit is exempt from Section 409A of the Code, Employer may elect to make or commence payment at any time during such period.
(f)Timing of Reimbursements and In-kind Benefits. If Executive is entitled to be paid or reimbursed for any taxable expenses under this Agreement, and such payments or reimbursements are includible in Executive’s federal gross taxable income, the amount of such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. No right of Executive to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.
(g)Permitted Acceleration. Employer shall have the sole authority to make any accelerated distribution permissible under Treas. Reg. Section 1.409A-3(j)(4) to Executive of deferred amounts, provided that such distribution meets the requirements of Treas. Reg. Section 1.409A-3(j)(4).
13.Regulatory Action.
(a)If Executive is removed and/or permanently prohibited from participating in the conduct of Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(l) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1818(e)(4) and (g)(l)), all obligations of Employer under this Agreement shall terminate, as of the effective date of such order.
(b)If Executive is suspended and/or temporarily prohibited from participating in the conduct of Bank’s affairs by a notice served under Section 8(e)(3) or 8(g)(l) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(l)), all obligations of Employer under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, Employer shall reinstate (in whole or in part) any of its obligations which were suspended.
(c)If Bank is in default (as defined in Section 3(x)(l) of the FDIA), all obligations under this Agreement shall terminate as of the date of default.
(d)All obligations under this Agreement shall be terminated, except to the extent a determination is made that continuation of the Agreement is necessary for the continued operation of Bank ( l) by the director of the FDIC or his or her designee (the “Director”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of Bank under the authority contained in 13(c) of the FDIA; or (2) by the Director, at the time the Director approves a supervisory merger to resolve problems related to operation of Bank when Bank is determined by the Director to be in an unsafe and unsound condition.
14.Compensation Recoupment Policy. Any incentive compensation, including, but not limited to, cash-based and equity-based compensation, awarded to Executive by Employer shall be subject to any written compensation recoupment policy that Compensation Committee may adopt from time to time that is applicable by its terms to Executive, including but not
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Exhibit 10.7
Execution Copy
limited to Employer’s mandatory recoupment policy as required by The New York Stock Exchange. In addition, the Compensation Committee may specify in any written documentation memorializing an incentive award that Executive’s rights, payments, and benefits with respect to such award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable conditions of such award. Such events may include, but shall not be limited to: (i) termination of employment for Cause,(ii) violation of material Company or Bank policies, (iii) breach of noncompetition, confidentiality, or other restrictive covenants,(iv) other conduct by Executive that is detrimental to the business or reputation of the Employer, or (v) a later determination that the amount realized from a performance-based award was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, whether or not Executive caused or contributed to such material inaccuracy. The reduction, cancellation, forfeiture, and recoupment rights associated with any equity awards or similar awards granted to Executive, if any, shall be as provided in the award certificate memorializing any such award.
15.Indemnification. Employer shall indemnify Executive for liabilities incurred by Executive while acting in good faith as an officer to the fullest extent provided for any other officer of Employer. To the extent that Employer maintains director and officer liability insurance, such insurance shall cover Executive to the same extent as any other officer of Employer.
16.Miscellaneous.
(a)Applicable Law; Consent to Arbitration. Employer and Executive agree that this Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Tennessee without giving effect to its conflicts of law principles. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators sitting in a location selected by Executive within 50 miles from the headquarters location of the Bank, in accordance with the miles of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
(b)Non-Duplication. Notwithstanding anything to the contrary in this Agreement, and except as specifically provided below, any severance payments or benefits received by Executive pursuant to this Agreement shall be in lieu of any general severance policy or other severance plan maintained by Employer(other than a stock option, restricted stock, share or unit, performance share or unit, supplemental retirement, deferred compensation, or similar plan or agreement which may contain provisions operative on a termination of Executive’s employment or may incidentally refer to accelerated vesting or accelerated payment upon a termination of employment).
(c)Captions. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.
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Exhibit 10.7
Execution Copy
(d)Amendments. This Agreement may not be amended or modified otherwise than- by a written agreement executed by the Parties or their respective successors and legal representatives.
(e)Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other Party(ies) or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive:
On file with Bank
If to Company and/or Bank:
1221 Broadway
Suite 1300
Nashville, Tennessee 37203
Attention: General Counsel

or to such other address as a Party shall have furnished to the other Party(ies) in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(f)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(g)Withholding. Employer may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(h)Waivers. Failure of any Party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted in this Agreement or of the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is contained in a writing signed by the Party making the waiver.
(i)Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and, from and after the date hereof, this Agreement shall supersede any other agreement, written or oral, between the Parties relating to the subject matter of this Agreement, including but not limited to the Prior Agreement (except to the extent necessary to govern the treatment of outstanding equity-based awards granted prior to the Effective Date as specified in Section 6(h) hereof), and any prior discussions, understandings, letters, and/or agreements between the Parties, written or oral, at any ti.me (expressly including, but not limited to, any confidentiality, non-solicitation, non-recruitment, and/or non-competition agreements Executive has previously entered into with Bank or Company); provided, however, that the foregoing shall not be construed to limit any restrictive covenants set Bank in an equity award agreement entered into by the Executive after the Effective Date.
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Exhibit 10.7
Execution Copy
(j)Construction. The Parties understand and agree that because they have been given the opportunity to have counsel review and revise this Agreement, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall be construed as a whole, and according to its fair meaning, and not strictly for or against any Party.
(k)Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
(l)Survival. The rights and obligations of the Parties under Sections 6, 7, 10, 12, 14, 15, 16 shall survive the expiration and/or termination of this Agreement and the termination of Executive’s employment hereunder for the periods expressly designated in such sections or, if no such period is designated, for the maximum period permissible under applicable law.
[signature page follows]
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Exhibit 10.7
Execution Copy

Execution Copy
IN WITNESS WHEREOF, the Parties hereby signify their agreement to these terms by their signatures below, as of the Effective Date.
BETH W. SIMS



    
Beth W. Sims



FIRSTBANK

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Christopher T. Holmes
Chief Executive Officer



FB FINANCIAL CORPORATION


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Christopher T. Holmes
Chief Executive Officer

[Sims – Employment Agreement Signature Page]
LEGAL02/43757576v4
Exhibit 10.8
2024 PSU Award Agreement
PERFORMANCE-BASED
RESTRICTED STOCK UNIT AWARD CERTIFICATE

Non-transferable

GRANT TO

___________________________
(“Grantee”)

by FB Financial Corporation (the “Company”) of

________ restricted stock units convertible, on a one-for-one basis, into shares of Stock (the “Units”).

The Units are granted pursuant to and subject to the provisions of the FB Financial Corporation 2016 Incentive Plan (the “Plan”) and to the terms and conditions set forth on the following pages (the “Terms and Conditions”). By accepting the Units and signing below, Grantee shall be deemed to have agreed to the Terms and Conditions set forth in this Award Certificate and the Plan. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan.

The target number of Units subject to this award is _____ (the “Target Award”).
    
IN WITNESS WHEREOF, FB Financial Corporation, acting by and through its duly authorized officers, has caused this Award Certificate to be duly executed.


FB FINANCIAL CORPORATION

image_02b.jpg

By: Christopher T. Holmes
Its: President & CEO
 
GRANTEE




____________________________

[NAME]
   
Grant Date: 2-23-2024  




2024 PSU Award Agreement

TERMS AND CONDITIONS

1.    Defined Terms. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan. For purposes of this Award Certificate, “Company” shall be deemed to include the Company and FirstBank, the Company’s wholly-owned bank subsidiary. In addition, and notwithstanding any contrary definition in the Plan, for purposes of this Award Certificate:

(a)“CIC Qualifying Termination” means Grantee’s termination of Continuous Service without Cause or Grantee’s resignation for Good Reason, in each case within two years following a Change in Control.

(b)“Comparator Group” shall be defined on Exhibit A.

(c)“Competitive Services” means engaging in the business of commercial and mortgage banking, including, without limitation, originating, underwriting, closing and selling loans, receiving deposits and otherwise engaging in the business of banking, as well as the business of providing any other activities, products, or services of the type conducted, authorized, offered, or provided by the Company as of or during the two years immediately prior to the Termination Date.

(d)“Confidential Information” means any and all data and information relating to the Company, its activities, business, or clients that (i) is disclosed to Grantee or of which Grantee becomes aware because of Grantee’s employment with the Company; (ii) has value to the Company; and (iii) is not generally known outside of the Company. “Confidential Information” shall include, but is not limited to the following types of information regarding, related to, or concerning the Company: trade secrets (as defined by Tennessee Uniform Trade Secrets Act); financial plans and data; management planning information; business plans; operational methods; market studies; marketing plans or strategies; pricing information; product development techniques or plans; customer lists; customer files, data and financial information; details of customer contracts; current and anticipated customer requirements; identifying and other information pertaining to business referral sources; past, current and planned research and development; computer aided systems, software, strategies and programs; business acquisition plans; management organization and related information (including, without limitation, data and other information concerning the compensation and benefits paid to officers, directors, employees and management); personnel and compensation policies; new personnel acquisition plans; and other similar information. “Confidential Information” also includes combinations of information or materials which individually may be generally known outside of the Company, but for which the nature, method, or procedure for combining such information or materials is not generally known outside of the Company. In addition to data and information relating to the Company, “Confidential Information” also includes any and all data and information relating to or concerning a third party that otherwise meets the definition set forth above, that was provided or made available to the Company by such third party, and that the Company has a duty or obligation to keep confidential. This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” shall

2024 PSU Award Agreement

not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of the Company.

(e)“Determination Date” means the date of the Committee’s determination of the Performance Factors, the Performance Multiplier and approval of the Earned Award, which shall be any date between January 1 and March 15 of the year immediately following the year in which the Performance Period concludes.

(f)“Earned Award” shall be defined on Exhibit A.

(g)“Material Contact” means contact between Grantee and a customer or potential customer of Company (i) with whom or which Grantee has or had dealings on behalf of Company; (ii) whose dealings with Company are or were coordinated or supervised by Grantee; (iii) about whom Grantee obtains Confidential Information in the ordinary course of business as a result of Grantee’s employment with the Company; or (iv) who receives products or services of Company, the sale or provision of which results or resulted in compensation, commissions, or earnings for Grantee within the two years prior to Grantee’s Termination Date.

(h)“Performance Factor” means the percentage, from 0% to 200%, based on the Company’s level of achievement of the Performance Objective(s), as more fully described in Exhibit A hereto.

(i)“Performance Objective(s)” shall be defined on Exhibit A.

(j)“Performance Period” shall be defined on Exhibit A.

(k)“Person” means any individual or any corporation, partnership, joint venture, limited liability company, association, or other entity or enterprise.

(l)“Principal or Representative” means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative, or consultant.

(m)“Protected Customer” means any Person to whom Company has sold its products or services or actively solicited to sell its products or services, and with whom Grantee has had Material Contact during his employment with the Company.

(n)“Protected Work” means any and all ideas, inventions, formulas, Confidential Information, source codes, object codes, techniques, processes, concepts, systems, programs, software, software integration techniques, hardware systems, schematics, flow charts, computer data bases, client lists, trademarks, service marks, brand names, trade names, compilations, documents, data, notes, designs, drawings, technical data and/or training materials, including improvements thereto or derivatives therefrom, whether or not patentable, and whether or not subject to copyright or trademark or trade secret protection, conceived, developed or produced by

2024 PSU Award Agreement

Grantee, or by others working with Grantee or under the direction of Grantee, during the period of Grantee’s employment, or conceived, produced or used or intended for use by or on behalf of the Company or its customers.

(o)“Qualifying Termination” means Grantee’s termination of Continuous Service by reason of Grantee’s (i) death, (ii) Disability, (iii) termination without Cause, or (iv) resignation for Good Reason.

(p)“Restricted Period” means a period of 12 months following the Termination Date.

(q)“Restrictive Covenants” means the restrictive covenants contained in Section 17(a) through 17(e) hereof.
(r)“Retirement” means, for purposes of Award Certificate, Grantee’s voluntary termination of Continuous Service, other than a termination for Cause, after Grantee has attained (i) age 65, or (ii) age 60 with at least 10 years of service.

(s)“Target Award” means the number of Units granted pursuant to this Award Certificate, as indicated on the cover page hereof.

(t)“Termination Date” means the date of termination of Grantee’s Continuous Service.

2.    Vesting. The Units have been credited to a bookkeeping account on behalf of Grantee. The Units shall be earned in whole, in part, or not at all, as provided on Exhibit A attached hereto and as determined by the Committee on the Determination Date. Any Units that fail to vest in accordance with the terms of this Award Certificate shall be forfeited and reconveyed to the Company without further consideration or any act or action by Grantee.

3.    Conversion to Stock. The Earned Award shall be converted to shares of Stock on the Determination Date, provided Grantee remains in Continuous Service through the last day of the Performance Period. The shares of Stock shall be registered in the name of Grantee as of the Determination Date, and certificates for the shares of Stock (or, at the option of the Company, statements of book entry notation of the shares of Stock in the name of Grantee in lieu thereof) shall be delivered to Grantee or Grantee’s designee upon request of Grantee as soon as practicable after the Determination Date, but no later than 60 days following the Determination Date.

4.    Termination of Employment; Change in Control.

(a)If Grantee’s Continuous Service terminates for any reason prior to the Determination Date other than as provided herein, then Grantee shall forfeit Grantee’s outstanding Units as of the date of such termination without further consideration or any act or action by Grantee.


2024 PSU Award Agreement

(b)If Grantee’s Continuous Service is terminated for Cause at any time prior to the Determination Date, then Grantee shall forfeit Grantee’s outstanding Units without further consideration or any act or action by Grantee.

(c)If Grantee has a Qualifying Termination prior to the last day of the Performance Period, then, as of the date of such Qualifying Termination, then the Units shall remain outstanding and shall be earned, in whole, in part, or not at all, as provided on Exhibit A attached hereto and as determined by the Committee on the Determination Date, and the Earned Award shall be prorated by multiplying the Earned Award by a fraction, the numerator of which shall be the number of months elapsed in the Performance Period prior to Grantee’s Qualifying Termination, and the denominator shall be 36.

(d)If Grantee’s Continuous Service is terminated as a result of Grantee’s Retirement prior to the last day of the Performance Period, then the Units shall remain outstanding and shall be earned, in whole, in part, or not at all, as provided on Exhibit A attached hereto and as determined by the Committee on the Determination Date.

(e)If there is a Change in Control prior to the last day of the Performance Period, and the Units are not assumed by the surviving entity or otherwise equitably converted or substituted in connection with the Change in Control in a manner approved by the Committee or the Board, then, as of the date of the Change in Control, the Units shall vest at the greater of (1) the Target Award, or (2) the number of Units that would vest based on actual performance achievement for the Performance Metric(s), as provided on Exhibit A attached hereto and as determined by the Committee, but measured as of the Change in Control, and convert to shares of Stock.

(f)If there is a Change in Control prior to the last day of the Performance Period, and the Units are assumed by the surviving entity or otherwise equitably converted or substituted in connection with a Change in Control in a manner approved by the Committee or the Board, then, as of the date of a CIC Qualifying Termination, the Units shall vest at the greater of (1) the Target Award or (2) the number of Units that would vest based on actual performance achievement for the Performance Metric(s), as provided on Exhibit A attached hereto and as determined by the Committee, but measured as of the date of the CIC Qualifying Termination, and convert to shares of Stock.

5.    Dividend Rights; Voting Rights.

(a)If any dividends or other distributions are paid with respect to the Stock while the Units are outstanding, the dollar amount or fair market value of such dividends or distributions with respect to the number of shares of Stock then underlying the target number of Units (i.e., the Target Award) shall be credited to a bookkeeping account and held (without interest) by the Company for the account of Grantee. Such amounts shall be subject to the same vesting and forfeiture provisions as the Units to which they relate. At the end of the Performance Period, the number of dividend equivalents credited to Grantee’s account shall be adjusted to reflect the attainment of the Performance Objective(s) in the same manner as the Target Award and, except

2024 PSU Award Agreement

as may be otherwise determined by the Committee, shall be paid by the Company in the form of a cash payment to Grantee as soon as reasonably practicable following the Determination Date.

(b)Grantee shall not have voting rights with respect to the Units. Upon conversion of the Units into shares of Stock, Grantee shall obtain full voting rights and other rights as a shareholder of the Company.

6.    No Right of Continued Service. Nothing in this Award Certificate shall interfere with or limit in any way the right of the Company to terminate Grantee’s service at any time, nor confer upon Grantee any right to continue to provide services to the Company.

7.    Restrictions on Transfer and Pledge. No right or interest of Grantee in the Units may be pledged, encumbered, or hypothecated to or in favor of any party, or shall be subject to any lien, obligation, or liability of Grantee to any other party. The Units are not assignable or transferable by Grantee other than by shall or the laws of descent and distribution.

8.    Restrictions on Issuance of Shares. If at any time the Committee shall determine, in its discretion, that registration, listing or qualification of the Shares underlying the Units upon any Exchange or under any foreign, federal, or local law or practice, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition to the settlement of the Units, the Units shall not be converted to Shares in whole or in part unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee.

9.    Payment of Taxes. The Company has the authority and the right to deduct or withhold, or require Grantee to remit to the employer, an amount sufficient to satisfy federal, state, and local taxes (including Grantee’s FICA obligation) required by law to be withheld with respect to any taxable event arising in connection with the Units. The withholding requirement shall be satisfied by withholding from the settlement of the Units Shares having a Fair Market Value on the date of withholding equal to the minimum amount required to be withheld for tax purposes.

10.    Plan Controls; Employment Agreement. The terms contained in the Plan are incorporated into and made a part of this Award Certificate, and this Award Certificate shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Award Certificate, the provisions of the Plan shall be controlling and determinative. Any conflict between this Award Certificate and the terms of a written employment or change-in-control agreement with Grantee that has been approved by the Committee shall be decided in favor of the provisions of such employment or change-in-control agreement.

11.    Successors. This Award Certificate shall be binding upon any successor of the Company, in accordance with the terms of this Award Certificate and the Plan.

12.     Severability. If any provision or portion of this Award Certificate shall be or become illegal, invalid or unenforceable in whole or in part for any reason, such provision shall be

2024 PSU Award Agreement

ineffective only to the extent of such illegality, invalidity or unenforceability without invalidating the remainder of such provision or the remaining provisions of this Award Certificate. Upon such determination that any term or other provision is illegal, invalid, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Award Certificate so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the agreements contemplated hereby are fulfilled to the extent possible.

13.     Non-Waiver of Rights and Breaches. No failure or delay of any party hereto in the exercise of any right given to such party hereunder shall constitute a waiver thereof unless the time specified herein for the exercise of such right has expired, nor shall any single or partial exercise of any right preclude other or further exercise thereof or of any other right. The waiver of a party hereto of any default of any other party shall not be deemed to be a waiver of any subsequent default or other default by such party, whether similar or dissimilar in nature.

14.     Interpretation. The headings contained in this Award Certificate are for reference purposes only and shall not affect in any way the meaning or interpretation of this Award Certificate. The language in all parts of this Award Certificate shall in all cases be construed according to its fair meaning, and not strictly for or against any party hereto. In this Award Certificate, unless the context otherwise requires, the masculine, feminine and neuter genders and the singular and the plural include one another.

15.    Notice. Notices hereunder must be in writing, delivered personally or sent by registered or certified U.S. mail, return receipt requested, postage prepaid. Notices to the Company must be addressed to FB Financial Corporation, 1221 Broadway, Suite 1300, Nashville, TN 37203; Attn: Corporate Secretary, or any other address designated by the Company in a written notice to Grantee. Notices to Grantee shall be directed to the address of Grantee then currently on file with the Company, or at any other address given by Grantee in a written notice to the Company.

16.    Clawback. Grantee agrees that the Units shall be subject to the Company’s Compensation Recovery Policy as applicable, and any other compensation recoupment policy of the Company that is applicable by its terms to Grantee and to awards of this type and that any amendments to such clawback policy deemed necessary by the Committee in its sole discretion to comply with applicable law or listing requirements shall be applicable to Grantee. Without limiting the foregoing, in the event of Grantee’s breach of any provision of Section 17 hereof, (i) any unvested portion of the Units shall immediately be forfeited, and (ii) upon the Company’s written request, Grantee shall immediately reconvey to the Company any Shares received from settlement of the Units or, if Grantee previously disposed of any such Shares, the equivalent value of such disposed shares determined by the Fair Market Value per Share as of the date of the Company’s request for repayment. In such event, the Company shall not be responsible to compensate Grantee for any taxes previously incurred or paid by Grantee upon the vesting of the Units. The Company’s remedy of recoupment set forth in this Section 16 shall not be exclusive of any other remedies the Company may have, in law or in equity, for Grantee’s breach of any provision of Section 17 hereof or otherwise. The Company reserves all other rights and remedies available to it at law or in equity.


2024 PSU Award Agreement

17.    Restrictive Covenants.

(a)    Restriction on Disclosure and Use of Confidential Information. Grantee agrees that Grantee shall not, directly or indirectly, use any Confidential Information on Grantee’s own behalf or on behalf of any Person other than the Company, or reveal, divulge, or disclose any Confidential Information to any Person not expressly authorized by the Company to receive such Confidential Information. This obligation shall remain in effect for as long as the information or materials in question retain their status as Confidential Information. Grantee further agrees to fully cooperate with the Company in maintaining the Confidential Information to the extent permitted by law. The Company and Grantee acknowledge and agree that this Award Certificate is not intended to, and does not, alter either the Company’s rights or Grantee’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein to the contrary notwithstanding, Grantee shall not be restricted from disclosing information that is required to be disclosed by law, court order, or other valid and appropriate legal process; provided, however, that in the event such disclosure is required by law, Grantee shall provide the Company with prompt notice of such requirement so that the Company may seek an appropriate protective order prior to any such required disclosure by Grantee. Grantee understands and acknowledges that nothing in this section limits Grantee’s ability to report possible violations of federal, state, or local law or regulation to any governmental agency or entity; to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agencies in connection with any charge or complaint, whether filed by Grantee, on Grantee’s behalf, or by any other individual; or to make other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation, and Grantee shall not need the prior authorization of the Company to make any such reports or disclosures and shall not be required to notify the Company that Grantee has made such reports or disclosures. In addition, and anything herein to the contrary notwithstanding, Grantee is hereby given notice that Grantee shall not be criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (as defined by 18 U.S.C. § 1839) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, in either event solely for the purpose of reporting or investigating a suspected violation of law; or disclosing a trade secret (as defined by 18 U.S.C. § 1839) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

(b)    Non-Solicitation of Protected Customers. Grantee agrees that, during the Restricted Period, Grantee shall not, without the prior written consent of the Company, directly or indirectly, on Grantee’s own behalf or as a Principal or Representative of any Person, solicit, divert, take away, or attempt to solicit, divert, or take away a Protected Customer for the purpose of engaging in, providing, or selling Competitive Services.

(c)    Non-Recruitment of Employees and Independent Contractors. Grantee agrees that during the Restricted Period, Grantee shall not, without the prior written consent of the Company, directly or indirectly, whether on Grantee’s own behalf or as a Principal or Representative of any Person, solicit or induce or attempt to solicit or induce any employee or independent contractor of the Company to terminate an employment or other relationship with

2024 PSU Award Agreement

the Company or to enter into employment or any other kind of business relationship with Grantee or any other Person.

(d)    Proprietary Rights.

i.    Grantee agrees that any and all Confidential Information and Protected Works are the sole property of the Company, and that no compensation in addition to Grantee’s compensation hereunder is due to Grantee for development or transfer of such Protected Works. Grantee agrees that Grantee shall promptly disclose in writing to the Company the existence of any Protected Works. Grantee hereby assigns and agrees to assign all of Grantee’s rights, title, and interest in any and all Protected Works, including all patents or patent applications, and all copyrights therein, to the Company. Grantee shall not be entitled to use Protected Works for Grantee’s own benefit or the benefit of anyone except the Company without written permission from the Company and then only subject to the terms of such permission. Grantee further agrees that Grantee shall communicate to the Company any facts known to Grantee and testify in any legal proceedings, sign all lawful papers, make all rightful oaths, execute all divisionals, continuations, continuations-in-part, foreign counterparts, or reissue applications, all assignments, all registration applications, and all other instruments or papers to carry into full force and effect the assignment, transfer, and conveyance hereby made or to be made and generally do everything possible for title to the Protected Works and all patents or copyrights or trademarks or service marks therein to be clearly and exclusively held by the Company. Grantee agrees that Grantee shall not oppose or object in any way to applications for registration of Protected Works by the Company or others designated by the Company. Grantee agrees to exercise reasonable care to avoid making Protected Works available to any third party and shall be liable to Company for all damages and expenses, including reasonable attorneys’ fees, if Protected Works are made available to third parties by Grantee without the express written consent of the Company.

Anything herein to the contrary notwithstanding, Grantee shall not be obligated to assign to the Company any Protected Work for which no equipment, supplies, facilities, or Confidential Information of the Company was used and which was developed entirely on Grantee’s own time, unless (A) the invention relates (1) directly to the business of the Company, or (2) to the Company’s actual or demonstrably anticipated research or development; or (B) the invention results from any work performed by Grantee for the Company. Grantee likewise shall not be obligated to assign to the Company any Protected Work that is conceived by Grantee after Grantee leaves the employ of the Company, except that Grantee is so obligated if the same relates to or is based on Confidential Information to which Grantee had access by virtue of employment with the Company. Similarly, Grantee shall not be obligated to assign any Protected Work to the Company that was conceived and reduced to practice prior to Grantee’s employment with the Company, regardless of whether such Protected Work relates to or would be useful in the business of the Company. Grantee acknowledges and agrees that there are no Protected Works conceived and reduced to practice by Grantee prior to his employment with the Company.


2024 PSU Award Agreement

ii.    Grantee acknowledges and agrees that there is no other contract or duty on the part of Grantee now in existence to assign Protected Works to anyone other than the Company.

iii.    The Company and Grantee acknowledge that in the course of Grantee’s employment with the Company, Grantee may from time to time create for Company copyrightable works. Such works may consist of manuals, pamphlets, instructional materials, computer programs, software, software integration techniques, software codes, and data, technical data, photographs, drawings, logos, designs, artwork, or other copyrightable material, or portions thereof, and may be created within or without the Company’s facilities and before, during or after normal business hours. All such works related to or useful in the business of the Company are specifically intended to be works made for hire by Grantee, and Grantee shall cooperate with the Company in the protection of the Company’s copyrights in such works and, to the extent deemed desirable by the Company, the registration of such copyrights.

(e)    Return of Materials. Grantee agrees to not retain or destroy (except as set forth below), and to immediately return to the Company on or prior to the Termination Date, or at any other time the Company requests such return, any and all property of the Company that is the possession of Grantee or subject to Grantee’s control, including, but not limited to, keys, credit and identification cards, personal items or equipment, customer files and information, papers, drawings, notes, manuals, specifications, designs, devices, code, email, documents, diskettes, CDs, tapes, keys, access cards, credit cards, identification cards, computers, mobile devices, other electronic media, all other files and documents relating to the Company and its business (regardless of form, but specifically including all electronic files and data of the Company), together with all Protected Works and Confidential Information belonging to the Company or that Grantee received from or through his employment with the Company. Grantee shall not make, distribute, or retain copies of any such information or property. To the extent that Grantee has electronic files or information in his/her possession or control that belong to the Company, contain Confidential Information, or constitute Protected Works (specifically including but not limited to electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), on or prior to the Termination Date, or at any other time the Company requests, Grantee shall (i) provide the Company with an electronic copy of all of such files or information (in an electronic format that readily accessible by the Company); (ii) after doing so, delete all such files and information, including all copies and derivatives thereof, from all non-the Company-owned computers, mobile devices, electronic media, cloud storage, and other media, devices, and equipment, such that such files and information are permanently deleted and irretrievable; and (iii) provide a written certification to the Company that the required deletions have been completed and specifying the files and information deleted and the media source from which they were deleted.

(f)    Enforcement of Restrictive Covenants.

i.    The Company and Grantee specifically acknowledge and agree that the remedy at law for any breach of the Restrictive Covenants shall be inadequate, and that in the event Grantee breaches any of the Restrictive Covenants, the Company shall have the right and

2024 PSU Award Agreement

remedy, without the necessity of proving actual damage or posting any bond, to enjoin, preliminarily and permanently, Grantee from violating the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company. Grantee understands and agrees that if he violates any of the obligations set forth in the Restrictive Covenants, the Restricted Period shall cease to run during the pendency of any litigation over such violation, provided that such litigation was initiated during the Restricted Period. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity. The Company and Grantee understand and agree that, if the Company and Grantee become involved in legal action regarding the enforcement of the Restrictive Covenants, the prevailing party or parties in such legal action shall be entitled, in addition to any other remedy, to recover reasonable costs and attorneys’ fees incurred in enforcing or defending action with respect to such covenants. The Company’s ability to enforce its rights under the Restrictive Covenants or applicable law against Grantee shall not be impaired in any way by the existence of a claim or cause of action on the part of Grantee based on, or arising out of, this Award Certificate or any other event or transaction.

ii.    Grantee acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The Company and Grantee agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and construed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants, or any other provision of this Section 17, be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Award Certificate or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of the Company’s legitimate business interests and may be enforced by the Company to that extent in the manner described above and all other provisions of this Award Certificate shall be valid and enforceable.

18.    Applicable Law; Forum Selection; Consent to Jurisdiction. The Company and Grantee agree that this Award Certificate shall be governed by and construed and interpreted in accordance with the laws of the State of Tennessee without giving effect to its conflicts of law principles. Executive agrees that the exclusive forum for any action to enforce this Agreement, as well as any action relating to or arising out of this Agreement, shall be the Chancery Court of Davidson County, Tennessee. With respect to any such court action, Grantee hereby irrevocably submits to the personal jurisdiction of such courts. The parties hereto further agree that the courts listed above are convenient forums for any dispute that may arise herefrom and that neither party shall raise as a defense that such courts are not convenient forums.

19.     Survival. Unless otherwise provided herein, the provisions of Section 11, 12, 13, 14, 17, 18 and 19 hereof shall survive the termination of Grantee’s Continuous Service or termination of

2024 PSU Award Agreement

the Units or this Award Certificate and shall cease to survive upon the end of the Restricted Period.


2024 PSU Award Agreement

Exhibit A

The Units will be earned, in whole, in part or not at all, based on Grantee’s Continuous Service through the Determination Date, except as otherwise provided by this Award Certificate, and the Company’s Adjusted Tangible Book Value (“TBV”) and Company’s Relative Adjusted Return on Average Tangible Common Equity (“ROATCE”) (each weighted at 50% of the Target Award), as determined in accordance with this Exhibit A.

I.Defined Terms. For purposes of this Award Certificate:

(a)“Adjusted Tangible Book Value” means Company’s cumulative tangible book value per share over the Performance Period, to include the value of dividends paid per share, excluding the impact of share repurchase on the TBV per share, and the TBV impact of changes in Accumulated Other Comprehensive Income (“AOCI"), and further adjusted regarding any provision expense related to the establishment of allowance for credit losses on a portfolio of acquired loans and leases.

(b)“Adjusted ROATCE”, which is a company’s core net income divided by the company’s average tangible common equity, will be calculated using the published Adjusted ROATCE, per S&P Global Markets, or some equivalent third-party data provider, for both the Company (“Company Adjusted ROATCE”) and each member of the Comparator Group (“Comparator Group Adjusted ROATCE”), further adjusted so that any provision expense related to the establishment of allowance for credit losses on a portfolio of acquired loans and leases shall be added back to core net income, both for the Company and to the extent possible based on public filings, for each member of the Comparator Group.

(c)“Comparator Group” shall include the companies set forth on Attachment I (each, a “Peer Company”).

(d)“Earned Award” shall have the meaning set forth in Section V of this Exhibit A.

(e)“Performance Multiplier” shall mean the sum of the resulting Performance Factor for each Performance Objective.

(f)“Performance Objective(s)” means Adjusted Tangible Book Value and Relative Adjusted ROATCE.

(g)“Performance Period” means January 1, 2024 – December 31, 2026.

(h)“Relative Adjusted ROATCE” means Company Adjusted ROATCE compared to Comparator Group Adjusted ROATCE.



2024 PSU Award Agreement

II.Performance Matrices.

Adjusted Tangible Book Value
(50% Weighting)

Degree of Performance Attainment
Adjusted Tangible Book Value(1)
Performance
Factor

Maximum
≥ $40.08
200%

Target
$37.97
100%

Threshold
$35.94
25%

Less than Threshold
< $35.94
0

Payouts between performance levels will be determined based on straight line interpolation.

Relative Adjusted ROATCE
(50% Weighting)
Degree of Performance Attainment
Relative Adjusted ROATCE(1)
Performance
Factor
Maximum
≥ 75th Percentile
200%
Target
≥ 50th Percentile
100%
Threshold
≥ 25th Percentile
25%
Less than Threshold
< 25th Percentile
0
(1)Payouts between performance levels will be determined based on straight line interpolation.


III.Adjustments to Performance Metrics and Goals. The Committee may, in its good faith discretion, adjust the Adjusted Tangible Book Value and/or Adjusted ROATCE for any year in the performance period with respect to the Company or any member of the Comparator Group to eliminate the effects of the following: (a) gains or losses on the sale (or contemplation of a sale) of a business or a business segment, (b) gains or losses on the extinguishment or restructuring of indebtedness, (c) asset or investment impairment charges (other than those related to such company’s loan portfolio in the ordinary course

2024 PSU Award Agreement

of business), (d) restructuring charges, including charges or expenses associated with transactions involving the unwinding of previously entered into interest rate swaps, caps, hedges or other balance sheet derivative transactions, (e) changes in law (including federal and state tax laws) or accounting principles, (f) losses or other expenses associated with other real estate owned, (g) changes in accumulated other comprehensive income, (h) costs or expenses associated with any merger or acquisition affecting such company or any of its subsidiaries, (i) any other expenses or losses resulting from significant, unusual and/or nonrecurring events and (j) events, including those resulting from macro-economic conditions that impact the Company’s financial condition or results of operations in a significant manner, either not directly related to the operations of such company or not within the reasonable control of the company’s management, in each case if applicable.

IV.Adjustments to Comparator Group.

(a)In the event of a merger, acquisition or business combination transaction of a Peer Company with or by another Peer Company, the surviving entity shall remain a Peer Company.

(b)In the event of a merger of a Peer Company with an entity that is not a Peer Company, or the acquisition or business combination transaction of a Peer Company by an entity that is not a Peer Company, in each case where the Peer Company is the surviving entity and remains publicly traded, the surviving entity shall remain a Peer Company.

(c)In the event of a merger or acquisition or business combination transaction of a Peer Company by or with an entity that is not a Peer Company or a “going private” transaction involving a Peer Company where the Peer Company is not the surviving entity or is otherwise no longer publicly traded, the company shall no longer be a Peer Company.

(d)In the event of a bankruptcy, liquidation or delisting of a Peer Company at any time during the Performance Period, such company shall remain a Peer Company and the lowest rank shall be assigned such Peer Company.

(e)Without limiting the foregoing, the Committee shall have the authority to make other appropriate adjustments in response to a change in circumstances that results in a Peer Company no longer satisfying the criteria for which such company was originally selected, including but not limited to lowering such Peer Company’s rank for purposes of determining the Relative Adjusted ROATCE.

V.Determination of Earned Award.

(a)On the Determination Date, the Committee shall determine and certify the Company’s Adjusted Tangible Book Value, Relative Adjusted ROATCE, the resulting Performance Factor for each metric and the Performance Multiplier.


2024 PSU Award Agreement

(b)The number of Units earned (the “Earned Award”) shall be determined by multiplying the Target Award by the Performance Multiplier.

(c)For example, if threshold performance for Adjusted Tangible Book Value was achieved, the Performance Factor would be 25%, and if Target Performance for Relative Adjusted ROATCE was achieved, the Performance Factor would be 100%. In this example, the resulting Performance Multiplier would be 62.5%.

(d)The Earned Award will be converted into shares of Stock as provided in Section of this Award Certificate.


2024 PSU Award Agreement

Attachment I
Peer Companies
·Amerant Bancorp Inc.
·American National Bankshares Inc.
·Ameris Bancorp
·Atlantic Union Bankshares Corporation
·Bank OZK
·BankUnited, Inc.
·Berk & Herbert
·Business First Bancshares, Inc.
·Cadence Bank
·Capital City Bank Group, Inc.
·Capstar Financial Holdings, Inc.
·Carter Bankshares, Inc.
·Commerce Bancshares, Inc.
·Community Trust Bancorp, Inc.
·Enterprise Financial Services Corp
·First Bancorp
·First Community Bankshares, Inc.
·First Guaranty Bancshares, Inc.
·Great Southern Bancorp, Inc.
·Hancock Whitney Corporation
·Home Bancorp, Inc.
·Home Bancshares, Inc. (Conway, AR)
·HomeTrust Bancshares, Inc.
·Investar Holding Corporation
·Live Oak Bancshares, Inc.
·MetroCity Bankshares, Inc.
·Origin Bancorp, Inc.
·Pinnacle Financial Partners, Inc.
·Primis Financial Corp.
·Professional Holding Corp.
·Red River Bancshares, Inc.
·Renasant Corporation
·Republic Bancorp, Inc.
·Seacoast Banking Corporation of Florida
·ServisFirst Bancshares, Inc.
·Simmons First National Corporation
·SmartFinancial, Inc.
·Southern First Bancshares, Inc.
·Southern Missouri Bancorp, Inc.
·SouthState Corporation
·Stock Yards Bancorp, Inc.
·The First Bancshares, Inc.
·TowneBank
·Trustmark Corporation
Exhibit 10.9
2024 RSU Award Agreement

RESTRICTED STOCK UNIT AWARD CERTIFICATE

Non-transferable

GRANT TO

___________________________
(“Grantee”)

by FB Financial Corporation (the “Company”) of

________ restricted stock units convertible, on a one-for-one basis, into shares of Stock (the “Units”).

The Units are granted pursuant to and subject to the provisions of the FB Financial Corporation 2016 Incentive Plan (the “Plan”) and to the terms and conditions set forth on the following pages (the “Terms and Conditions”). By accepting the Units, Grantee shall be deemed to have agreed to the Terms and Conditions set forth in this Award Certificate and the Plan. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan.

Unless vesting is accelerated in accordance with the Plan or Section 1 of the Terms and Conditions, the Units shall vest (become non-forfeitable) in accordance with the following schedule, subject to Grantee’s Continuous Service on each vesting date.
                            

Vesting Date
Percent of
Units Vesting
4-1-2025
4-1-2026
4-1-2027
33 1/3%
33 1/3%
33 1/3%




IN WITNESS WHEREOF, FB Financial Corporation, acting by and through its duly authorized officers, has caused this Award Certificate to be duly executed.

FB FINANCIAL CORPORATIONimage_02c.jpg


By: Christopher T. Holmes
Its: President & CEO
GRANTEE




                        
[NAME]
Grant Date: 2-23-2024

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TERMS AND CONDITIONS

1.    Vesting of Units. The Units will vest and become non-forfeitable on the earliest to occur of the following (each, a “Vesting Date”):
(a)    as to the percentages of the Units specified on the cover page hereof, on the respective Vesting Dates specified on the cover page hereof, subject to Grantee’s Continuous Service on each vesting date;
(b)    as to all of the Units, on the termination of Grantee’s Continuous Service by the Company by reason of Grantee’s death;
(c)    as to all of the Units, on the termination of Grantee’s Continuous Service by the Company by reason of Grantee’s Disability;
(d)    as to the percentages of the Units specified on the cover page hereof, on the respective Vesting Dates specified on the cover page hereof, on the termination of Grantee’s Continuous Service by the Company by reason of Grantee’s Retirement. For purposes of this Award Certificate, a “Retirement” means Grantee’s voluntary termination of Continuous Service, other than a termination for Cause, after Grantee has attained (i) age 65, or (ii) age 60 with at least 10 years of service;
(e)    as to all of the Units, on the termination of Grantee’s Continuous Service by the Company without Cause;
(f)    as to all of the Units, on the occurrence of a Change in Control, unless the Units are assumed by the surviving entity or otherwise equitably converted or substituted in connection with the Change in Control; or
(g)    as to all of the Units, if the Units are assumed by the surviving entity or otherwise equitably converted or substituted in connection with a Change in Control, on the termination of Grantee’s employment by the Company without Cause (or Grantee’s resignation for Good Reason as provided in any employment, severance or similar agreement between Grantee and the Company or an Affiliate) within two years after the effective date of the Change in Control.
If Grantee’s Continuous Service terminates prior to a Vesting Date for any reason other than as described in (b), (c), (d), (e) or (g) above, Grantee shall forfeit all right, title and interest in and to the then unvested Units as of the date of such termination and the unvested Units will be reconveyed to the Company without further consideration or any act or action by Grantee.

2.    Conversion to Stock. The Units that vest upon a Vesting Date will be converted to shares of Stock on the Vesting Date (the “Conversion Date”). Notwithstanding the foregoing, if (i) the Vesting Date occurs by reason of Section 1(c), (e) or (g) hereof, and (ii) Grantee is a “specified employee” of the Company (as defined in Section 409A of the Code and applicable regulations) as of the date of his or her termination of employment, then, to the extent required by Section 409A of the Code, the shares of Stock will be delivered to Grantee on the first day of the seventh month following the date of Grantee’s termination of employment. The shares of Stock will be registered in the name of Grantee as of the Conversion Date, and certificates for the shares of Stock (or, at the option of the Company, statements of book entry notation of the shares of Stock in the name of Grantee in lieu thereof) shall be delivered to Grantee or Grantee’s designee upon request of Grantee as soon as practicable after the Conversion Date.

3.    Dividend Rights. If any dividends or other distributions are paid with respect to the Stock while the Units are outstanding, the dollar amount or fair market value of such dividends or distributions with respect to the number of shares of Stock then underlying the Units shall be credited to a bookkeeping account and held (without interest) by the Company for the account of Grantee. Such amounts shall be
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subject to the same vesting and forfeiture provisions as the Units to which they relate. The number of dividend equivalents credited to Grantee’s account shall be paid by the Company in the form of a cash payment to Grantee as soon as reasonably practicable following the applicable Vesting Date.

4.    Voting Rights. Grantee shall not have voting rights with respect to the Units. Upon conversion of the Units into shares of Stock, Grantee will obtain full voting rights and other rights as a shareholder of the Company.

5.    No Right of Continued Service. Nothing in this Award Certificate shall interfere with or limit in any way the right of the Company or any Affiliate to terminate Grantee’s service at any time, nor confer upon Grantee any right to continue to provide services to the Company or any Affiliate.

6.    Restrictions on Transfer and Pledge. No right or interest of Grantee in the Units may be pledged, encumbered, or hypothecated to or in favor of any party, or shall be subject to any lien, obligation, or liability of Grantee to any other party. The Units are not assignable or transferable by Grantee other than by will or the laws of descent and distribution.

7.    Restrictions on Issuance of Shares. If at any time the Committee shall determine, in its discretion, that registration, listing or qualification of the Shares underlying the Units upon any Exchange or under any foreign, federal, or local law or practice, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition to the settlement of the Units, the Units will not be converted to Shares in whole or in part unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee.

8.    Payment of Taxes. The Company or any employer Affiliate has the authority and the right to deduct or withhold, or require Grantee to remit to the employer, an amount sufficient to satisfy federal, state, and local taxes (including Grantee’s FICA obligation) required by law to be withheld with respect to any taxable event arising in connection with the Units. The withholding requirement shall be satisfied by withholding from the settlement of the Units Shares having a Fair Market Value on the date of withholding equal to the minimum amount required to be withheld for tax purposes.

9.    Plan Controls; Employment Agreement. The terms contained in the Plan are incorporated into and made a part of this Award Certificate, and this Award Certificate shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Award Certificate, the provisions of the Plan shall be controlling and determinative. Any conflict between this Award Certificate and the terms of a written employment or change-in-control agreement with Grantee that has been approved by the Committee shall be decided in favor of the provisions of such employment or change-in-control agreement.

10.    Successors. This Award Certificate shall be binding upon any successor of the Company, in accordance with the terms of this Award Certificate and the Plan.

11.     Severability. If any provision or portion of this Award Certificate shall be or become illegal, invalid or unenforceable in whole or in part for any reason, such provision shall be ineffective only to the extent of such illegality, invalidity or unenforceability without invalidating the remainder of such provision or the remaining provisions of this Award Certificate. Upon such determination that any term or other provision is illegal, invalid, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Award Certificate so as to effect the original intent of the parties as closely as possible in
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an acceptable manner to the end that the agreements contemplated hereby are fulfilled to the extent possible.

12.     Non-Waiver of Rights and Breaches. No failure or delay of any party hereto in the exercise of any right given to such party hereunder shall constitute a waiver thereof unless the time specified herein for the exercise of such right has expired, nor shall any single or partial exercise of any right preclude other or further exercise thereof or of any other right. The waiver of a party hereto of any default of any other party shall not be deemed to be a waiver of any subsequent default or other default by such party, whether similar or dissimilar in nature.

13.     Interpretation. The headings contained in this Award Certificate are for reference purposes only and shall not affect in any way the meaning or interpretation of this Award Certificate. The language in all parts of this Award Certificate shall in all cases be construed according to its fair meaning, and not strictly for or against any party hereto. In this Award Certificate, unless the context otherwise requires, the masculine, feminine and neuter genders and the singular and the plural include one another.

14.    Notice. Notices hereunder must be in writing, delivered personally or sent by registered or certified U.S. mail, return receipt requested, postage prepaid. Notices to the Company must be addressed to FB Financial Corporation, 1221 Broadway, Suite 1300, Nashville, TN 37203; Attn: Corporate Secretary, or any other address designated by the Company in a written notice to Grantee. Notices to Grantee will be directed to the address of Grantee then currently on file with the Company, or at any other address given by Grantee in a written notice to the Company.

15.    Clawback. The Units shall be subject to the Company’s Compensation Recovery Policy to the extent applicable, or any other compensation recoupment policy of the Company that is applicable by its terms to Grantee and to awards of this type.

16.    Restrictive Covenants.

(a)    Restriction on Disclosure and Use of Confidential Information. Grantee agrees that Grantee shall not, directly or indirectly, use any Confidential Information on Grantee’s own behalf or on behalf of any Person other than the Company, or reveal, divulge, or disclose any Confidential Information to any Person not expressly authorized by the Company to receive such Confidential Information. This obligation shall remain in effect for as long as the information or materials in question retain their status as Confidential Information. Grantee further agrees to fully cooperate with the Company in maintaining the Confidential Information to the extent permitted by law. The Company and Grantee acknowledge and agree that this Award Certificate is not intended to, and does not, alter either the Company’s rights or Grantee’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein to the contrary notwithstanding, Grantee shall not be restricted from disclosing information that is required to be disclosed by law, court order, or other valid and appropriate legal process; provided, however, that in the event such disclosure is required by law, Grantee shall provide the Company with prompt notice of such requirement so that the Company may seek an appropriate protective order prior to any such required disclosure by Grantee. Grantee understands and acknowledges that nothing in this section limits Grantee’s ability to report possible violations of federal, state, or local law or regulation to any governmental agency or entity; to communicate with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any government agencies in connection with any charge or complaint, whether filed by Grantee, on Grantee’s behalf, or by any other individual; or to make other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation, and Grantee shall not need the prior
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authorization of the Company to make any such reports or disclosures and shall not be required to notify the Company that Grantee has made such reports or disclosures. In addition, and anything herein to the contrary notwithstanding, Grantee is hereby given notice that Grantee shall not be criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (as defined by 18 U.S.C. § 1839) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, in either event solely for the purpose of reporting or investigating a suspected violation of law; or disclosing a trade secret (as defined by 18 U.S.C. § 1839) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

(b)    Non-Solicitation of Protected Customers. Grantee agrees that, during the Restricted Period, Grantee shall not, without the prior written consent of the Company, directly or indirectly, on Grantee’s own behalf or as a Principal or Representative of any Person, solicit, divert, take away, or attempt to solicit, divert, or take away a Protected Customer for the purpose of engaging in, providing, or selling Competitive Services.

(c)    Non-Recruitment of Employees and Independent Contractors. Grantee agrees that during the Restricted Period, Grantee shall not, without the prior written consent of the Company, directly or indirectly, whether on Grantee’s own behalf or as a Principal or Representative of any Person, solicit or induce or attempt to solicit or induce any employee or independent contractor of the Company to terminate an employment or other relationship with the Company or to enter into employment or any other kind of business relationship with Grantee or any other Person.

(d)    Proprietary Rights.

i.    Grantee agrees that any and all Confidential Information and Protected Works are the sole property of the Company, and that no compensation in addition to Grantee’s compensation hereunder is due to Grantee for development or transfer of such Protected Works. Grantee agrees that Grantee shall promptly disclose in writing to the Company the existence of any Protected Works. Grantee hereby assigns and agrees to assign all of Grantee’s rights, title, and interest in any and all Protected Works, including all patents or patent applications, and all copyrights therein, to the Company. Grantee shall not be entitled to use Protected Works for Grantee’s own benefit or the benefit of anyone except the Company without written permission from the Company and then only subject to the terms of such permission. Grantee further agrees that Grantee shall communicate to the Company any facts known to Grantee and testify in any legal proceedings, sign all lawful papers, make all rightful oaths, execute all divisionals, continuations, continuations-in-part, foreign counterparts, or reissue applications, all assignments, all registration applications, and all other instruments or papers to carry into full force and effect the assignment, transfer, and conveyance hereby made or to be made and generally do everything possible for title to the Protected Works and all patents or copyrights or trademarks or service marks therein to be clearly and exclusively held by the Company. Grantee agrees that Grantee shall not oppose or object in any way to applications for registration of Protected Works by the Company or others designated by the Company. Grantee agrees to exercise reasonable care to avoid making Protected Works available to any third party and shall be liable to Company for all damages and expenses, including reasonable attorneys’ fees, if Protected Works are made available to third parties by Grantee without the express written consent of the Company.

Anything herein to the contrary notwithstanding, Grantee shall not be obligated to assign to the Company any Protected Work for which no equipment, supplies, facilities, or Confidential Information of the Company was used and which was developed entirely on Grantee’s own time, unless (A) the invention relates (1) directly to the business of the Company, or (2) to the Company’s actual or
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demonstrably anticipated research or development; or (B) the invention results from any work performed by Grantee for the Company. Grantee likewise shall not be obligated to assign to the Company any Protected Work that is conceived by Grantee after Grantee leaves the employ of the Company, except that Grantee is so obligated if the same relates to or is based on Confidential Information to which Grantee had access by virtue of employment with the Company. Similarly, Grantee shall not be obligated to assign any Protected Work to the Company that was conceived and reduced to practice prior to Grantee’s employment with the Company, regardless of whether such Protected Work relates to or would be useful in the business of the Company. Grantee acknowledges and agrees that there are no Protected Works conceived and reduced to practice by Grantee prior to his employment with the Company.

ii.    Grantee acknowledges and agrees that there is no other contract or duty on the part of Grantee now in existence to assign Protected Works to anyone other than the Company.

iii.    The Company and Grantee acknowledge that in the course of Grantee’s employment with the Company, Grantee may from time to time create for Company copyrightable works. Such works may consist of manuals, pamphlets, instructional materials, computer programs, software, software integration techniques, software codes, and data, technical data, photographs, drawings, logos, designs, artwork, or other copyrightable material, or portions thereof, and may be created within or without the Company’s facilities and before, during or after normal business hours. All such works related to or useful in the business of the Company are specifically intended to be works made for hire by Grantee, and Grantee shall cooperate with the Company in the protection of the Company’s copyrights in such works and, to the extent deemed desirable by the Company, the registration of such copyrights.

(e)    Return of Materials. Grantee agrees to not retain or destroy (except as set forth below), and to immediately return to the Company on or prior to the Termination Date, or at any other time the Company requests such return, any and all property of the Company that is the possession of Grantee or subject to Grantee’s control, including, but not limited to, keys, credit and identification cards, personal items or equipment, customer files and information, papers, drawings, notes, manuals, specifications, designs, devices, code, email, documents, diskettes, CDs, tapes, keys, access cards, credit cards, identification cards, computers, mobile devices, other electronic media, all other files and documents relating to the Company and its business (regardless of form, but specifically including all electronic files and data of the Company), together with all Protected Works and Confidential Information belonging to the Company or that Grantee received from or through his employment with the Company. Grantee shall not make, distribute, or retain copies of any such information or property. To the extent that Grantee has electronic files or information in his/her possession or control that belong to the Company, contain Confidential Information, or constitute Protected Works (specifically including but not limited to electronic files or information stored on personal computers, mobile devices, electronic media, or in cloud storage), on or prior to the Termination Date, or at any other time the Company requests, Grantee shall (i) provide the Company with an electronic copy of all of such files or information (in an electronic format that readily accessible by the Company); (ii) after doing so, delete all such files and information, including all copies and derivatives thereof, from all non-the Company-owned computers, mobile devices, electronic media, cloud storage, and other media, devices, and equipment, such that such files and information are permanently deleted and irretrievable; and (iii) provide a written certification to the Company that the required deletions have been completed and specifying the files and information deleted and the media source from which they were deleted.

(f)    Enforcement of Restrictive Covenants.

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i.    The Company and Grantee specifically acknowledge and agree that the remedy at law for any breach of the Restrictive Covenants shall be inadequate, and that in the event Grantee breaches any of the Restrictive Covenants, the Company shall have the right and remedy, without the necessity of proving actual damage or posting any bond, to enjoin, preliminarily and permanently, Grantee from violating the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach of the Restrictive Covenants would cause irreparable injury to the Company and that money damages would not provide an adequate remedy to the Company. Grantee understands and agrees that if he violates any of the obligations set forth in the Restrictive Covenants, the Restricted Period shall cease to run during the pendency of any litigation over such violation, provided that such litigation was initiated during the Restricted Period. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company at law or in equity. The Company and Grantee understand and agree that, if the Company and Grantee become involved in legal action regarding the enforcement of the Restrictive Covenants, the prevailing party or parties in such legal action shall be entitled, in addition to any other remedy, to recover reasonable costs and attorneys’ fees incurred in enforcing or defending action with respect to such covenants. The Company’s ability to enforce its rights under the Restrictive Covenants or applicable law against Grantee shall not be impaired in any way by the existence of a claim or cause of action on the part of Grantee based on, or arising out of, this Award Certificate or any other event or transaction.

ii.    Grantee acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The Company and Grantee agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and construed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants, or any other provision of this Section 16, be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Award Certificate or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of the Company’s legitimate business interests and may be enforced by the Company to that extent in the manner described above and all other provisions of this Award Certificate shall be valid and enforceable.

(g)    Defined Terms. For purposes of this Award Certificate, “Company” shall be deemed to include the Company and FirstBank, the Company’s wholly-owned bank subsidiary. In addition, and notwithstanding any contrary definition in the Plan, for purposes of this Award Certificate:

i.    “Competitive Services” means engaging in the business of commercial and mortgage banking, including, without limitation, originating, underwriting, closing and selling loans, receiving deposits and otherwise engaging in the business of banking, as well as the business of providing any other activities, products, or services of the type conducted, authorized, offered, or provided by the Company as of or during the two years immediately prior to the Termination Date.

ii.    “Confidential Information” means any and all data and information relating to the Company, its activities, business, or clients that (i) is disclosed to Grantee or of which Grantee becomes aware because of Grantee’s employment with the Company; (ii) has value to the Company; and (iii) is not generally known outside of the Company. “Confidential Information” shall include, but is not limited to the following types of information regarding, related to, or concerning the Company: trade secrets (as
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defined by Tennessee Uniform Trade Secrets Act); financial plans and data; management planning information; business plans; operational methods; market studies; marketing plans or strategies; pricing information; product development techniques or plans; customer lists; customer files, data and financial information; details of customer contracts; current and anticipated customer requirements; identifying and other information pertaining to business referral sources; past, current and planned research and development; computer aided systems, software, strategies and programs; business acquisition plans; management organization and related information (including, without limitation, data and other information concerning the compensation and benefits paid to officers, directors, employees and management); personnel and compensation policies; new personnel acquisition plans; and other similar information. “Confidential Information” also includes combinations of information or materials which individually may be generally known outside of the Company, but for which the nature, method, or procedure for combining such information or materials is not generally known outside of the Company. In addition to data and information relating to the Company, “Confidential Information” also includes any and all data and information relating to or concerning a third party that otherwise meets the definition set forth above, that was provided or made available to the Company by such third party, and that the Company has a duty or obligation to keep confidential. This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of the Company.

iii.    “Material Contact” means contact between Grantee and a customer or potential customer of Company (i) with whom or which Grantee has or had dealings on behalf of Company; (ii) whose dealings with Company are or were coordinated or supervised by Grantee; (iii) about whom Grantee obtains Confidential Information in the ordinary course of business as a result of Grantee’s employment with the Company; or (iv) who receives products or services of Company, the sale or provision of which results or resulted in compensation, commissions, or earnings for Grantee within the two years prior to Grantee’s Termination Date.

iv.    “Person” means any individual or any corporation, partnership, joint venture, limited liability company, association, or other entity or enterprise.

v.    “Principal or Representative” means a principal, owner, partner, shareholder, joint venturer, investor, member, trustee, director, officer, manager, employee, agent, representative, or consultant.

vi.    “Protected Customer” means any Person to whom Company has sold its products or services or actively solicited to sell its products or services, and with whom Grantee has had Material Contact during his employment with the Company.

vii.    “Protected Work” means any and all ideas, inventions, formulas, Confidential Information, source codes, object codes, techniques, processes, concepts, systems, programs, software, software integration techniques, hardware systems, schematics, flow charts, computer data bases, client lists, trademarks, service marks, brand names, trade names, compilations, documents, data, notes, designs, drawings, technical data and/or training materials, including improvements thereto or derivatives therefrom, whether or not patentable, and whether or not subject to copyright or trademark or trade secret protection, conceived, developed or produced by Grantee, or by others working with Grantee or under the direction of Grantee, during the period of Grantee’s employment, or conceived, produced or used or intended for use by or on behalf of the Company or its customers.

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viii.    “Restricted Period” means 12 months following the Termination Date.

x.    “Restrictive Covenants” means the restrictive covenants contained in Section 16(a) through 16(e) hereof.

xi.    “Termination Date” means the date of termination of Grantee’s Continuous Service.

17.    Applicable Law; Forum Selection; Consent to Jurisdiction. The Company and Grantee agree that this Award Certificate shall be governed by and construed and interpreted in accordance with the laws of the State of Tennessee without giving effect to its conflicts of law principles. Executive agrees that the exclusive forum for any action to enforce this Agreement, as well as any action relating to or arising out of this Agreement, shall be the Chancery Court of Davidson County, Tennessee. With respect to any such court action, Grantee hereby irrevocably submits to the personal jurisdiction of such courts. The parties hereto further agree that the courts listed above are convenient forums for any dispute that may arise herefrom and that neither party shall raise as a defense that such courts are not convenient forums.

18.     Survival. Unless otherwise provided herein, the provisions of Section 10, 11, 12, 13, 16, 17 and 18 hereof shall survive the termination of Grantee’s Continuous Service or termination of the Units or this Award Certificate and shall cease to survive upon the end of the Restricted Period.

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EXHIBIT 31.1
 
FB FINANCIAL CORPORATION
CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Christopher T. Holmes, certify that:
1.I have reviewed this quarterly report on Form 10-Q of FB Financial Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
     (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
     (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 6, 2024
 /s/ Christopher T. Holmes
  Christopher T. Holmes
  President and Chief Executive Officer
  (Principal Executive Officer)

EXHIBIT 31.2
 
FB FINANCIAL CORPORATION
CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
 
I, Michael M. Mettee, certify that:
1.I have reviewed this quarterly report on Form 10-Q of FB Financial Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
    (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
    (b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
    (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
    (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
    (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
    (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 6, 2024
 /s/ Michael M. Mettee
  Michael M. Mettee
  Chief Financial Officer
  (Principal Financial Officer)

EXHIBIT 32.1
 
FB FINANCIAL CORPORATION
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
 
In connection with the quarterly report on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), of FB Financial Corporation (the “Company”), each of the undersigned officers of the Company hereby certify,  in  their capacity as an executive officer of the Company,  pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:
 
(1)     The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
 
(2)      The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
   
Date: May 6, 2024 /s/ Christopher T. Holmes
  Christopher T. Holmes
  President and Chief Executive Officer
  (Principal Executive Officer)
   
Date: May 6, 2024 /s/ Michael M. Mettee
  Michael M. Mettee
  Chief Financial Officer
  (Principal Financial Officer)