Exhibit 10.3

[Encore Bancshares, Inc. Letterhead]

December         , 2008

[Senior Executive Officer Name and Address]

Dear [Senior Executive Officer],

This letter agreement is entered into by and between                     
(“Executive”) and Encore Bancshares, Inc. (the “Company”) in connection with the
Company’s participation in the Troubled Asset Relief Program Capital Purchase
Program (the “CPP”) of the United States Department of the Treasury (the
“Treasury”). The Company has determined that Executive is a Senior Executive
Officer (as defined below).

The Company intends to enter into a Letter Agreement (including the Securities
Purchase Agreement – Standard Terms attached as Exhibit A thereto)
(collectively, the “Purchase Agreement”) with the Treasury pursuant to which the
Company will issue and sell to the Treasury shares of preferred stock of the
Company and a related warrant (“Warrant”) to purchase common stock of the
Company. Pursuant to the Purchase Agreement, the Company is required to meet
certain executive compensation and corporate governance standards under
Section 111(b) of EESA (as defined below), as implemented by guidance or
regulation thereunder that has been issued and is in effect as of the Closing
Date (as defined in the Purchase Agreement) (the “CPP Guidance”).

As a condition to the Closing (as defined in the Purchase Agreement), the
Company is required to have effected such changes to its compensation, bonus,
incentive and other benefit plans, arrangements and agreements (including golden
parachute, severance and employment agreements) (collectively, the “Benefit
Plans”) with respect to its Senior Executive Officers (and to the extent
necessary for such changes to be legally enforceable, each of its Senior
Executive Officers shall have duly consented in writing to such changes), as may
be necessary to comply with Section 111(b) of the EESA and the CPP Guidance
during the period that the Treasury owns any debt or equity securities of the
Company acquired pursuant to the Purchase Agreement and the related Warrant (the
“CPP Covered Period”).

In consideration of the benefits that Executive will receive as a result of the
Company’s participation in the CPP, the covenants set forth herein and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, Executive and the Company hereby agree as follows:

1. No Golden Parachute Payments. The Company hereby prohibits any Golden
Parachute Payment (as defined below) to be paid to Executive during any CPP
Covered Period. To the extent any event occurs during the CPP Covered Period
that would otherwise trigger a Golden Parachute Payment, Executive will be
entitled to the lesser of (i) his rights under the Benefit Plans and (ii) the
maximum amount allowed under Section 111(b)(2)(C) of EESA.

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2. Recovery of Bonus and Incentive Compensation. Any bonus and incentive
compensation paid to Executive during the CPP Covered Period is subject to
recovery or “clawback” by the Company if such bonus and incentive compensation
payments were based on materially inaccurate financial statements or any other
materially inaccurate performance metric criteria, all within the meaning of
Section 111(b) of EESA and the CPP Guidance.

3. Benefit Plan Amendments. Each of the Benefit Plans with respect to Executive
is hereby amended to the extent necessary to give effect to provisions 1 and 2
of this letter agreement and as determined by the Company’s Board of Directors
or the Compensation Committee thereof to be necessary to comply with
Section 111(b) of EESA and the CPP Guidance, and the Executive hereby consents
to such amendments to the Benefit Plans with respect to Executive.

4. Review of Incentive Compensation Arrangements. The Company is required to
review its Senior Executive Officer incentive compensation arrangements during
the CPP Covered Period to ensure that such arrangements do not encourage its
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 incentive compensation arrangements with respect to Executive, the Company
and if necessary, the Executive, shall take such action as is necessary to amend
any such incentive compensation arrangements to eliminate any features that
could lead Senior Executive Officers to take unnecessary and excessive risks.

5. Definitions and Interpretation. This letter agreement shall be interpreted as
follows:

“Senior Executive Officer” means the Company’s “senior executive officers” as
defined in Section 111(b)(3) of EESA and any CPP Guidance.

“Golden Parachute Payment” shall have the meaning in Section 111(b)(2)(C) of
EESA.

“EESA” means the Emergency Economic Stabilization Act of 2008 as implemented by
guidance or regulation issued by the Treasury and as published in the Federal
Register on October 20, 2008, as in effect on the date hereof.

“Company” includes any entities treated as a single employer with the Company
under 31 C.F.R. § 30.1(b) (as in effect on the Closing Date). Executive is also
delivering a waiver pursuant to the Purchase Agreement, and, as between the
Company and Executive, the term “employer” in that waiver will be deemed to mean
the Company as used in this letter agreement.

“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).

Provisions 1 and 2 of this letter agreement 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 agreement).

 

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6. 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 Texas
without regard the provisions thereof that would apply the law of any other
state. 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 shall be
deemed an original signature.

7. Termination. If the Treasury does not purchase the securities contemplated by
the Purchase Agreement, then this letter agreement shall be of no force or
effect. In addition, upon such time as Treasury no longer owns any debt or
equity securities of the Company acquired pursuant to the Purchase Agreement and
the related Warrant, this letter agreement shall be of no further force or
effect, except to the extent required by Section 111 of EESA. If Executive
ceases to be a Senior Executive Officer of the Company for purposes of the CPP,
Executive shall be released from the restrictions and obligations set forth in
this letter agreement to the extent permissible under the CPP.

[Signature Page Follows]

 

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This letter agreement represents the entire agreement of the parties hereto in
respect of the matters made the subject hereof. To acknowledge your agreement
with the provisions of this letter agreement, please sign where indicated below
and return this letter agreement to the Company, retaining a copy for your
records.

 

Sincerely,

 

ENCORE BANCSHARES, INC.

By:     Name:   James S. D’Agostino, Jr. Title:  

Chairman, President and Chief

Executive Officer

 

 

 

Intending to be legally bound, I agree with and accept the foregoing terms on
the date set forth below. By:     Name:     Title:     Date:    

 

[Signature Page to Compensation Letter Agreement]