Exhibit 10.3
[FIRST BANKS, INC. LETTERHEAD]
December 24, 2008
[Name of Executive]
[Street Address]
[City, State Zip]
Dear [Insert Name]:
First Banks, Inc. (the "Company") anticipates entering into a Letter
Agreement and Securities Purchase Agreement (collectively, the "Participation
Agreement") with the United States Department of Treasury ("Treasury") that
provides for the Company's participation in the Treasury's TARP Capital Purchase
Program (the "CPP"). If the Company does not participate or ceases at any time
to participate in the CPP, this letter shall be of no further force and effect.
For the Company to participate in the CPP and as a condition to the closing
of the investment contemplated by the Participation Agreement, the Company is
required to establish specified standards for incentive compensation to its
senior executive officers and to make changes to its compensation arrangements.
To comply with these requirements, and in consideration of the benefits that you
will receive as a result of the Company's participation in the CPP, you agree as
follows:
(1) No Golden Parachute Payments. The Company is prohibiting any golden
parachute payment to you during any "CPP Covered Period." A "CPP
Covered Period" is any period during which (A) you are a senior
executive officer and (B) Treasury holds an equity or debt position
acquired from the Company in the CPP.
(2) Recovery of Bonus and Incentive Compensation. Any bonus and incentive
compensation paid to you during a CPP Covered Period is subject to
recovery or "clawback" by the Company if the payments were based on
materially inaccurate financial statements or any other materially
inaccurate performance metric criteria.
(3) Compensation Program Amendments. Each of the Company's compensation,
bonus, incentive and other benefit plans, arrangements and agreements
(including golden parachute, severance and employment agreements)
(collectively, "Benefit Plans") with respect to you is hereby amended
to the extent necessary to give effect to provisions (1) and (2).
In addition, the Company 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 the
Company. To the extent any such review requires revisions to any
Benefit Plan with respect to you, you and the Company agree to
negotiate such changes promptly and in good faith.
(4) Definitions and Interpretation. This letter shall be interpreted as
follows:
o "Senior executive officer" means the Company's "senior
executive officers" as defined in subsection 111(b)(3)
of EESA.
o "Golden parachute payment" is used with same meaning as
in Section 111(b)(2)(C) of EESA.
o "EESA" means the Emergency Economic Stabilization Act
of 2008 as implemented by guidance or regulation issued
by the Department of Treasury and as published in the
Federal Register on October 20, 2008.
o The term "Company" includes any entities treated as a
single employer with the Company under 31 C.F.R. ss.
30.1(b) (as in effect on the Closing Date). You are
also delivering a waiver pursuant to the Participation
Agreement, and, as between the Company and you, the
term "employer" in that waiver will be deemed to mean
the Company as used in this letter.
o The term "CPP Covered Period" shall be limited by, and
interpreted in a manner consistent with, 31 C.F.R. ss.
30.11 (as in effect on the Closing Date).
o Provisions (1) and (2) of this letter are intended to,
and will be interpreted, administered and construed to,
comply with Section 111 of EESA (and, to the maximum
extent consistent with the preceding, to permit
operation of the Benefit Plans in accordance with their
terms before giving effect to this letter).
(5) Miscellaneous. To the extent not subject to federal law, this letter
will be governed by and construed in accordance with the laws of the
State of Missouri. This letter may be executed in two or more
counterparts, each of which will be deemed to be an original. A
signature transmitted by facsimile will be deemed an original
signature.
The Board appreciates the concessions you are making and looks forward to
your continued leadership during these financially turbulent times.
Yours sincerely,
FIRST BANKS, INC.
By:
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Name: Xxxxx X. Xxxxxx
Title: Senior Vice President, General Counsel
and Corporate Secretary
Intending to be legally bound,
I agree with and accept the
foregoing terms on the date
set forth below
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[Insert Executive's Name]
Date: December 24, 2008
