On December 18, 2019, South Plains Financial, Inc. (the “Company”) and the Company’s wholly-owned banking subsidiary, City Bank, Lubbock, Texas (the “Bank”), entered into an Employment Agreement (the “Employment
Agreement”) with Mr. Curtis C. Griffith. Under the Employment Agreement, Mr. Griffith will continue to serve as the Bank’s Chairman of the Board of Directors and the Company’s Chief Executive Officer and Chairman of the Board of Directors. The
Employment Agreement has an initial three-year term beginning December 18, 2019, and automatically extends for additional three-year terms thereafter.
The Employment Agreement provides that Mr. Griffith will receive a base salary of not less than $360,000 annually. Mr. Griffith is also eligible for a performance-based annual cash bonus targeted at
50% of his salary and a maximum not exceeding 100% of his salary. The performance-based annual cash bonus will be measured against certain criteria, including, among other metrics, (i) the Company’s net income compared to the projected net income
for that year; (ii) the Bank’s efficiency ratio; (iii) the Company’s return on equity, measured in relation to other peer group financial institutions; and (iv) certain acquisition target metrics, if applicable.
Pursuant to the Employment Agreement, Mr. Griffith will also be granted an annual incentive stock option award with the shares subject to such option having a grant date fair value approximately equal
to 35% of Mr. Griffith’s base salary. Such grant will occur at the beginning of each fiscal year and will contain a vesting schedule that is no less favorable than a vesting period of 4 years, with 25% vesting upon the first anniversary of the
grant date and the remainder vesting pro rata on a monthly basis over the next three years. Such annual incentive stock option awards will be granted under the South Plains Financial, Inc. 2019 Equity Incentive Plan and the form stock option award
agreement thereunder, previously filed with the Securities and Exchange Commission.
The Employment Agreement also provides that, in the event Mr. Griffith’s employment is terminated by the Company without “Cause” (as defined in the Employment Agreement), the Company elects not to renew the
Employment Agreement, or Mr. Griffith terminates employment for “Good Reason” (as defined in the Employment Agreement), then subject to the execution and effectiveness of a general release of claims in favor of the Company, Mr. Griffith will be
entitled to receive: (i) an amount equal to 2 times the sum of (x) his annual base salary, and (y) his target annual cash incentive bonus; (ii) full vesting of equity and any phantom equity awards, with performance goals, if applicable, deemed met
at target; and (iii) a lump sum payment equal to 24 months’ of the monthly premiums to continue existing healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), grossed-up for any applicable taxes. In lieu
of the payments described in the preceding sentence, if Mr. Griffith’s employment is terminated by the Company without Cause, the Company elects not to renew the Employment Agreement, or Mr. Griffith terminated employment for Good Reason, in each
case within 24 months following a “Change in Control” (as defined in the Employment Agreement), at the request of a third party participating in a Change in Control or otherwise in connection with a Change in Control, subject to the execution and
effectiveness of a general release of claims in the Company’s favor, Mr. Griffith will be entitled to receive: (i) an amount equal to 3 times the sum of (x) his annual base salary, and (y) his target annual cash incentive bonus; (ii) full vesting
of equity and any phantom equity awards, with performance goals, if applicable, deemed met at target; and (iii) a lump sum payment equal to 36 months’ of the monthly premiums to continue existing healthcare coverage under COBRA, grossed-up for any
applicable taxes. If any Change in Control payment Mr. Griffith receives would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then the parachute payments will be
reduced so as not to trigger the excise tax imposed by Section 4999 of the Code, or paid without such reduction and with the applicable excise taxes, whichever would leave Mr. Griffith in a better after-tax position.
The Employment Agreement also contains customary restrictive covenants regarding confidentiality, non-competition, and non-solicitation covenants.
The foregoing summary of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the Employment Agreement attached to this Current Report on Form 8-K as Exhibit 10.1
and is incorporated herein by reference.