FNB UNITED CORP.
000
Xxxxx Xxxxxxxxxxxx Xxxxxx
Asheboro,
North Carolina 27203
[Date]
[Name of
officer]
[Address]
Dear
[officer]:
FNB
United Corporation (“FNB United”) anticipates entering into a Letter Agreement
and Securities Purchase Agreement – Standard Terms incorporated into the Letter
Agreement with the United States Department of the Treasury (the “Treasury”),
which provides for FNB United’s participation in the Capital Purchase Program
(the “CPP”) of the Treasury’s Troubled Asset Relief Program. A copy
of the Letter Agreement and Securities Purchase Agreement – Standard Terms is
attached to this letter as Exhibit A and the documents are referred to
collectively in this letter as the “Participation Agreement.”
For FNB
United to participate in the CPP, and as a condition to closing the Treasury’s
investment in FNB United contemplated by the Participation Agreement, FNB United
is required to establish specified standards for executive compensation payable
to Senior Executive Officers and to make certain changes to its compensation
arrangements as described below:
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No Golden Parachute
Payments. FNB United is prohibited from making any
Golden Parachute Payment to you during the CPP Covered
Period.
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Recovery of Bonus and
Incentive Compensation. Any bonus or incentive
compensation paid to you during a CPP Covered Period is subject to
recovery by FNB United if the payments were based on materially inaccurate
financial statements or any other materially inaccurate performance metric
criteria.
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No Unnecessary or
Excessive Risk. FNB United is required to review its
Benefit Plans to ensure that they do not encourage Senior Executive
Officers to take unnecessary and excessive risks that threaten the value
of FNB United.
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This
letter is intended to comply with the requirements imposed by the
CPP. In consideration of the benefits that you will receive as a
result of FNB United’s participation in the CPP, by signing this letter, you
agree that each of FNB United’s compensation, bonus, incentive and other benefit
plans, arrangements and agreements
(including
golden parachute, severance, change-of-control and employment agreements
(collectively, “Benefit Plans”) with respect to you is hereby amended to the
extent necessary to give effect to the first two bullet points
above. For your reference, the affected Benefit Plans are listed on
Exhibit B, attached to this letter. In addition, you and FNB United
agree to negotiate in good faith any revisions to a Benefit Plan that may be
required to ensure compliance with the third bullet point above.
The three
bullet points listed above are intended to, and will be interpreted,
administered and construed to, comply with Section 111 of EESA. To
the maximum extent consistent with the foregoing, they will also be interpreted,
administered and construed to permit operation of the Benefit Plans in
accordance with their terms before giving effect to this letter.
The
following capitalized terms shall have the meanings set forth
below:
“CPP Covered Period” is any
period during which: (a) you are a Senior Executive Officer and (b) the Treasury
holds an equity or debt position acquired from FNB United under the
CPP. The term “CPP Covered Period” shall be limited by, and
interpreted in a manner consistent with, 31 C.F.R. § 30.11, as in effect on the
Closing Date.
“Closing Date” shall have the
meaning given to it in the Participation Agreement.
“EESA” means the Emergency
Economic Stabilization Act of 2008, as published in the Federal Register on
October 20, 2008, and as implemented by guidance or regulation issued by the
Treasury.
“FNB United” includes FNB
United Corp. and any entity treated as a single employer with FNB United Corp.
under 31 C.F.R. § 30.1(b), as in effect on the Closing Date.
“Golden Parachute Payment” is
used with the same meaning as in Section 111(b)(2)(C) of EESA, as supplemented
by 31 C.F.R. §
30.9, as in effect on the Closing Date.
“Senior Executive Officer”
means FNB United’s “senior executive officers” as defined in Section 111(b)(3)
of EESA, as supplemented by 31 C.F.R. § 30.2, as in effect on the Closing
Date.
To the
extent not governed by federal law, this letter will be governed by and
construed in accordance with the laws of the State of North
Carolina. This letter may be executed in multiple counterparts, each
of which will be deemed to be an original. A signature transmitted by
facsimile will be deemed an original signature.
If FNB
United does not participate or ceases at any time to participate in the CPP,
this letter shall be of no further force or effect.
FNB
United appreciates your willingness to agree to the terms of this letter and
looks forward to your continued leadership.
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Very
truly yours,
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By
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[Name
of officer executing agreement on
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behalf
of FNB United]
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[Title]
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Agreed
and accepted:
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[Name
of officer]
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[Date]
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Exhibit
A
Letter
Agreement, and Securities Purchase
Agreement
– Standard Terms incorporated into the
Letter
Agreement, with the United States Department of the Treasury
[Intentionally
omitted; included as Exhibit 10.1 to the Current Report on Form 8-K of FNB
United Corp. filed with the Securities and Exchange Commission on February 13,
2009]
Exhibit
B
Benefit
Plans
The
benefit plans described in this letter include, without limitation, the
following plans, agreements, and arrangements:
Supplemental
Executive Retirement Plans and Benefit Agreements
FNB
United/CommunityONE Short-Term Incentive Plan
FNB
United Long-Term Incentive Plan
Performance
Compensation Plan for Stakeholders
