Exhibit 10.2

 

October 20, 2010

 

Charles A. Kirby

Congaree Bancshares, Inc.

2023 Sunset Boulevard

West Columbia, South Carolina 29169

 

Dear Charlie,

 

Congaree Bancshares, Inc. (the “Company”) has entered into a Securities Purchase
Agreement (the “SPA”) with the United States Department of Treasury (the
“Treasury”) that provides, among other things, for the purchase by the Treasury
of securities issued by the Company.  This purchase occurred as part of the
Company’s participation in the Capital Purchase Program (the “CPP”) component of
Treasury’s Troubled Asset Relief Program.

 

As a condition to the Treasury’s investment under the SPA, the Company is
required to take certain actions with respect to compensation arrangements of
its senior executive officers, including senior executive officers of its wholly
owned subsidiary, Congaree State Bank.  The Company recently determined that you
are or may be a senior executive officer for purposes of the CPP.  To comply
with the requirements of the CPP, 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. You will not
be entitled to receive from the Company any golden parachute payment (as defined
below) during any period in which the Treasury holds an equity or debt position
acquired from the Company in the CPP, as defined by Section 111(a)(5) of EESA
(as defined below) (the “CPP Covered Period”) (or during the year following any
acquisition of the Company, to the extent required by the CPP Limitations (as
defined below)).

 

(2)                                 No Bonus, Retention Award, or Incentive
Compensation.  At any time at which you are the Company’s most highly
compensated employee, as such term is defined in Q&A 1 of the Interim Final
Rule (as defined below), you will not be entitled to receive from the Company
any bonus, retention award, or incentive compensation during the CPP Covered
Period, except for certain long term restricted stock payments and previously
determined bonus payments to the extent permitted by Section 111(b)(3)(D) of
EESA (as defined below).

 

(3)                                 No Tax Gross-Up Payments.  You will not be
entitled to receive from the Company any tax gross-up (as defined below),
including a right to a payment of such gross-up at a date following the CPP
Covered Period, or other reimbursements for the payment of taxes during the CPP
Covered Period.

 

(4)                                 Recovery of Bonus and Incentive
Compensation. You will be required to and shall return to the Company any bonus
or incentive compensation paid to you by the Company during the CPP Covered
Period if such bonus or incentive compensation is paid to you based on
materially inaccurate financial statements or any other materially inaccurate
performance metric criteria.

 

--------------------------------------------------------------------------------

 

(5)                                 Compensation Program Amendments. Each of the
Company’s compensation, bonus, incentive and other benefit plans, arrangements
and agreements, including your Employment Agreement (all such plans,
arrangements and agreements, the “Benefit Plans”) are hereby amended to the
extent necessary to give effect to provisions (1)-(4) of this letter.

 

The Company is also required as a condition to participation in the CPP to
review the Benefit Plans to ensure that the Benefit Plans do not encourage its
senior executive officers to take unnecessary and excessive risks that threaten
the value of the Company. To the extent that the Company determines that the
Benefit Plans must be revised as a result of such review, or determines that the
Benefit Plans must otherwise be revised to comply with Section 111(b) of the
EESA (as defined below) as implemented by any guidance or regulation thereunder
that has been issued and is in effect as of the closing date of the Company’s
issuance of preferred stock and warrants to acquire common stock to the Treasury
pursuant to the CPP (the “CPP Limitations”), you and the Company agree to
negotiate and effect such changes promptly and in good faith.

 

(6)           Definitions and Interpretation. This letter shall be interpreted
as follows:

 

·                  “Senior executive officer” means the Company’s “senior
executive officers” as defined under Q&A 1 of the Interim Final Rule issued by
the Treasury at 31 CFR Part 30, effective on June 15, 2009 (the “Interim Final
Rule”).

 

·                  “Golden parachute payment” shall have the meaning set forth
under Q&A 1 of the Interim Final Rule.

 

·                  “Gross-up” shall have the meaning set forth under Q&A 1 of
the Interim Final Rule.

 

·                  The term “Company” includes any entities treated as a single
employer with the Company under Q&A 1 of the Interim Final Rule.

 

·                  This letter is intended to, and shall be interpreted,
administered and construed to comply with Section 111 of the Emergency Economic
Stabilization Act of 2008 (the “EESA”), as amended by the American Recovery and
Reinvestment Act of 2009 and the regulations and guidance promulgated thereunder
(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).

 

(7)                                 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 South Carolina. 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.

 

(8)                                 In addition, upon such time as the Treasury
no longer holds securities or debt of the Company acquired under the CPP, this
letter shall be of no further force or effect, except to the extent required by
the CPP Limitations. If you cease to be a senior executive officer of the
Company for purposes of the CPP, you shall be released from the restrictions and
obligations set forth in this letter to the extent permissible under the CPP. If
it is determined that you are not a senior executive officer of the Company as
of the date hereof, this letter shall be of no force or effect.

 

--------------------------------------------------------------------------------

 

The Company appreciates the concessions you are making and looks forward to your
continued leadership during these financially turbulent times.

 

[Signature page follows]

 

--------------------------------------------------------------------------------

 

 

Sincerely,

 

 

 

 

 

CONGAREE BANCSHARES, INC.

 

 

 

 

By:

/s/ E. Daniel Scott

 

Name:

E. Daniel Scott

 

Title:

Chairman

 

 

 

 

 

 

Intending to be legally bound, I agree with and accept the

 

 

foregoing terms on the date set forth below.

 

 

 

 

 

By:

/s/ Charles A. Kirby

 

 

Name:

Charles A. Kirby

 

 

Title:

President and Chief Executive Officer

 

 

Date:

October 20, 2010

 

 

 

--------------------------------------------------------------------------------