Exhibit No. 10.3

Form of Senior Executive Officer Agreement

[Date]

[OFFICER NAME]

Coastal Banking Company, Inc.

1891 South 14th Street

Fernandina Beach, FL. 32034

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.

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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 Coastal Banking Company, Inc., a
South Carolina corporation, and any entities treated as a single employer with
Coastal Banking Company, Inc. under 31 C.F.R. § 30.1(b) and any subsequent CCP
Guidance (as in effect on the Closing Date), including, without limitation, CBC
National Bank. 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 South Carolina. 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]

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

 

Yours sincerely,

 

COASTAL BANKING COMPANY, INC. (for itself and each entity constituting the
Company hereunder)

 

 

By:

 

 

Name:

 

[Human Resources Director]

Title:

 

 

 

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

 

 

[OFFICER NAME]

 

 

 

 

Date:

  

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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]