Insert Name and Address] Dear [Insert Name],
Exhibit
10.3
[Insert
Name and Address]
Dear
[Insert Name],
Provident Community Bancshares, Inc.
(the “Company”)
anticipates entering into a letter agreement (“Agreement”) with the United
States Department of the Treasury (“Treasury”) that provides for
the Company’s participation in the Treasury’s Capital Purchase Program (the
“CPP”). If
the Company does not 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
Agreement, the Company is required to meet 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 shall not make any golden parachute payment to you during 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 (a “CPP Covered
Period”).
(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). For reference, certain affected Benefit Plans are set forth in
Appendix A to
this letter. If the payments and benefits provided under the Benefit Plans would
exceed the golden parachute limitations of the CPP, the payments and benefits
shall be reduced or revised, in the manner determined by you (subject to the
next sentence), by the amount, if any, which is the minimum necessary to result
in no portion of the payments and benefits exceeding the
limitations. The Company, at its expense, will determine the extent
of any reduction in the payments and benefits to be made pursuant to this
letter. 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:
(i) “Senior
executive officer” means the Company’s “senior executive officers” as defined in
subsection 111(b)(3) of EESA and 31 C.F.R. § 30.2.
(ii) “Golden
parachute payment” has the meaning given to such term in
Section 111(b)(2)(C) of EESA and 31 C.F.R. § 30.9.
(iii) “EESA”
means the Emergency Economic Stabilization Act of 2008.
(iv) The
term “Company” includes any entities treated as a single employer with the
Company under 31 C.F.R. § 30.1(b). You are also delivering a waiver
pursuant to the 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.
(v) The
term “CPP Covered Period” shall be limited by, and interpreted in a manner
consistent with, 31 C.F.R. § 30.11.
(vi) 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 Delaware. 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.
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Yours
sincerely,
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| __________________________________________ | |
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Name:
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Title:
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Intending
to be legally bound, I agree with and accept the foregoing terms on the date set
forth below.
___________________________________
[Insert
Name]
Date:_______________________________
