The man tasked with turning around First National Bank of the South could realize a pretty payoff if he accomplishes the feat.
Barry Mason, named last week to replace chief executive Jerry Calvert, signed a three-year employment agreement with First National that pays him an initial annual salary of $275,000 a year.
The agreement also includes a signing bonus of $550,000 and Mason is eligible to receive a lump sum bonus of $200,000 upon successful completion of First National’s capital restoration plan, according to information filed with the US Securities and Exchange Commission.
In lieu of an additional cash bonus, Mason will be issued 250,000 shares of First National common stock, subject to vesting restrictions. He will also be eligible to receive an annual cash bonus of up to 50 percent of his base salary based performance goals.
Mason, the filing adds, will also receive an option to purchase 1 million shares of the company’s common stock.
Mason has his work cut out for him. Earlier this month, parent company First National Bancshares reported that it lost $20 million during the second quarter. Last year, the company lost $44.8 million and another $1.36 million during the first three months of 2009.
Provisions for loan losses rose to $18 million during the most recent three-month period, compared to $943,000 a year earlier. As of June 30, First National had $116.6 million in nonperforming assets, up from $12 million in 2008.
First National Bank of the South is no longer categorized as being “well capitalized” and in April the Office of the Comptroller of the Currency gave First National 120 days to improve its balance sheet by raising capital, limiting growth or selling assets.
Also, it entered into an agreement with the Federal Reserve Bank of Richmond in June that required it to seek prior written approval from the regulator before undertaking a number of actions, including paying or declaring any dividends, or directly or indirectly purchasing or redeeming any shares of its stock.
First National closed last week at $1,.75 a share, up 80 cents for the week.