Form of Senior Executive Officer Agreement [Date]
Exhibit No. 10.3
Form of Senior Executive
Officer Agreement
[Date]
[OFFICER
NAME]
First
Security Group, Inc.
000 Xxxxx
Xxxxxx
Xxxxxxxxxxx,
XX 00000
Dear
[OFFICER],
The
Company (as defined below) anticipates entering into a Securities Purchase
Agreement (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
Agreement 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
consistent with Section 111(b) of the EESA (as defined below) and related
guidance and regulations (the “CCP
Guidance”). The requirements of this Agreement shall apply to
you for the duration of the CPP Covered Period (as defined below). 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 and for other
good and valuable consideration, the sufficiency of which you hereby
acknowledge, you agree as follows:
|
(1)
|
No Golden Parachute
Payments. The Company is prohibiting any Golden Parachute Payment
to you during any CPP Covered Period and you shall not be entitled to
receive any such Golden Parachute Payment. To the extent any
event occurs during the CPP Covered Period that would otherwise trigger a
Golden Parachute Payment, you will be entitled to the lesser of (i) your
rights under the Benefit Plans (as defined below) and (ii) the maximum
amount allowed under Section 111(b)(2)(C) of EESA, as modified by
subsequent CCP Guidance.
|
(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. You agree to return promptly any such bonus and
incentive compensation identified to you by the
Company.
|
(3)
|
Compensation Program
Amendments. Each of the Company’s existing 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) above. In addition, any Benefit Plans with respect to you
that are established hereafter, but during the CPP Coverage Period, shall
be deemed to incorporate, and shall be interpreted to give effect to,
provisions (1) and (2) above. For reference, a non-exclusive
list of affected Benefit Plans is attached as Appendix A to this
Agreement.
|
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 hereby
consent to any reasonable amendment to such Benefit Plan to eliminate such
encouragement consistent with the CCP Guidance.
(4)
|
Definitions and
Interpretation. This Agreement shall be interpreted as
follows:
|
|
—
|
“Company,”
as used in this Agreement, means First Security Group, Inc., a Tennessee
corporation, and any entities treated as a single employer with First
Security Group, Inc. under 31 C.F.R. § 30.1(b) and any subsequent CCP
Guidance (as in effect on the Closing Date), including, without
limitation, FSGBank, N.A. 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 Agreement.
|
|
—
|
“CPP
Covered Period” means the period during which you are a Senior Executive
Officer of the Company and Treasury holds any debt or equity securities
issued by the Company 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 and any subsequent CCP Guidance (as in effect on the
Closing Date).
|
|
—
|
“EESA”
means the Emergency Economic Stabilization Act of 2008 as implemented by
guidance or regulation issued by the Department of the Treasury and as
published in the Federal Register on October 20,
2008.
|
|
—
|
“Golden
Parachute Payment” has the same meaning as in Section 111(b)(2)(C) of
EESA, as modified by subsequent CCP
Guidance.
|
|
—
|
“Senior
Executive Officer” means the Company’s “senior executive officers” as
defined in Section 111(b)(3) of EESA, as modified by subsequent CCP
Guidance.
|
|
—
|
Provisions
(1) and (2) of this Agreement are intended to, and will be
interpreted, administered and construed to, comply with Section 111
of EESA and any subsequent CCP Guidance (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
Agreement).
|
(5)
|
Miscellaneous. To the
extent not subject to federal law, this Agreement will be governed by and
construed in accordance with the laws of Tennessee. This Agreement 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.
|
[Signatures
Follow on Next Page]
The
Company appreciates the concessions you are making and looks forward to your
continued leadership during these financially turbulent times.
Yours
sincerely,
|
||
FIRST
SECURITY GROUP, INC. (for itself and each entity constituting the Company
hereunder)
|
||
By:
|
||
Name:
|
||
Title:
|
Intending
to be legally bound, I agree with and accept the foregoing terms on the
date set forth below.
|
|
[Officer
Name]
|
|
Date:
|
Appendix
A
[Identify
any employment agreement, separation agreement,
change
in control agreement, etc., if applicable]
[Identify
each SERP / deferred compensation arrangement, if applicable]
[Identify
equity awards still subject to vesting, if applicable]