By ALLISSA KLINE
akline@bizjournals.com | 716-541-1612

Top executives at Financial Institutions Inc. will receive limited incentive awards for 2010 because the company has not yet repaid the money it borrowed from the federal government in late 2008, according to a Feb. 22 regulatory filing.

Six executives, including Financial Institutions President and CEO Peter Humphrey, will receive restricted stock awards - not cash bonuses. The value will be limited to one-third of the executives' total compensation last year, according to the filing.

Humphrey, who was entitled to receive $324,096 in cash bonus payment as part of the company's 2010 annual management incentive plan, will instead receive 4,283 shares of restricted stock valued at $82,579, the filing shows. The company obtained clawback agreements, in which bonuses or stock options may be returned for not meeting specific goals, from each of the six executives.

Warsaw-based Financial Institutions, parent of Five Star Bank, borrowed $37.5 million as part of the federal government's Troubled Asset Relief Program and, in turn, sold senior preferred shares to the government. Like all TARP recipients, the bank is prohibited from paying cash bonuses to certain executives and must limit any restricted stock awards to one-third of total compensation until the TARP money is repaid. The company said in mid-2009 that it wanted to repay the TARP funds before the end of the year, but at the time it had no definitive plans in place to do so.

A breakdown of 2010 incentives for other Financial Institutions executives, according to the filing:

• John Witkowski, executive vice president and retail banking leader, was set to receive $131,907 in total bonus payment but instead will receive 1,912 shares of restricted stock valued at $36,877.

• Martin Birmingham, executive vice president and commercial banking leader, would have received $119,683 in annual bonus payment but will get 1,663 shares of restricted stock worth $32,079.

• Richard Harrison, executive vice president and senior retail lending administrator, would have been awarded $120,000 in bonus payment, but he will get 1,563 shares of restricted stock valued at $30,149.

• George Hagi, executive vice president and chief risk officer, will get 1,417 shares of restricted stock worth $27,330, but he would have been paid $117,446.

• Karl Krebs, executive vice president and CFO, was set to receive $107,190 in total annual bonus payment. Instead he will receive 919 shares of restricted stock valued at $17,719.

The restricted stock awards, which will not receive dividends, vest on Feb. 16, 2013, subject to continued employment or the death or disability of the executive, the company said.