Exhibit 10.3





Exhibit 10.3




WESTERN LIBERTY BANCORP




October 28, 2010




Western Liberty Bancorp

1370 Avenue of the Americas, 28th Floor

New York, NY 10019




	 	 	 	 	 
	 

	 	Re:
	 	Agreement Relating to Service as a Director of Western Liberty Bancorp






Mr. Andrew Nelson:



This letter agreement (the “Letter Agreement”) is being delivered to you in connection with
your service as a member of the board of directors (the “Board”) of Western Liberty Bancorp (the
“Company”) during the period in which the Company sought the requisite regulatory approval to
become a bank holding company in connection with its acquisition of Service1st Bank of Nevada. In
connection with and in consideration of the foregoing, and in consideration of the representations,
warranties and mutual covenants made in this Letter Agreement, the parties hereto agree as follows:




	 	1.	 	Equity Compensation






	 	a)	 	In consideration of your participation as a member of the Board during the
aforementioned period, the Company hereby grants to you on the date hereof (the “Grant
Date”) 25,000 restricted stock units (the “Restricted Stock Units”) with respect to
 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”).
	 
	 	b)	 	The Restricted Stock Units are immediately and fully vested on the Grant Date.
	 
	 	c)	 	Upon the earlier of (i) the date of a transaction that constitutes with respect
to the Company a “change in control event” within the meaning of Section 409A of the
Internal Revenue Code or 1986, as amended, and the regulations and guidance promulgated
thereunder (collectively “Code Section 409A”) and (ii) October 28, 2013 (the applicable
date, the “Settlement Date”), you will receive one share of Common Stock for each
Restricted Stock Unit.
	 
	 	d)	 	Any cash dividends paid with respect to the shares of Common Stock covered by
the Restricted Stock Units prior to the Settlement Date shall be credited to a dividend
book entry account on your behalf as if the shares of Common Stock had been issued,
provided that such cash dividends shall not be deemed to be reinvested in shares of
Common Stock and will be held uninvested and without interest and shall be paid to you
in cash on the Settlement Date. Any stock dividends paid with respect to the shares of
Common Stock covered by the Restricted Stock Units prior to the Settlement Date shall
be credited to a dividend book entry account on your behalf as if shares of Common
Stock had been issued, provided that you shall not be entitled to
receive such dividend until, and such dividends shall be paid to you, on the Settlement
Date.




 


 









 





	 	e)	 	You acknowledge that you shall have no rights as a stockholder of the Company
with respect to any shares of Common Stock covered by the Restricted Stock Units until
you become the holder of record of the shares on the Settlement Date, and no
adjustments shall be made for dividends in cash or other property, distributions or
other rights in respect of any such shares of Common Stock made or arising prior to the
Settlement Date, except as otherwise specifically provided for in this Letter
Agreement.
	 
	 	f)	 	You acknowledge and agree that no later than the Settlement Date you shall pay,
or make arrangements to pay or otherwise satisfy, in a manner satisfactory to the
Company, an amount equal to the amount of all applicable federal, state, and local
taxes that the Company is required to withhold with respect to the settlement of the
Restricted Stock Units.
	 
	 	g)	 	This grant of Restricted Stock Units shall not affect in any way the right or
power of the Board or stockholders of the Company to make or authorize an adjustment,
recapitalization or other change in the capital structure or the business of the
Company, any merger or consolidation of the Company or its subsidiaries, any issue of
bonds, debentures, preferred or prior preference stock ahead of or affecting the Common
Stock, the dissolution or liquidation of the Company, any sale or transfer of all or
part of its assets or business or any other corporate act or proceeding. In the event
of any such change in the capital structure or business of the Company by reason of any
stock split, reverse stock split, stock dividend, combination or reclassification of
 shares, recapitalization, merger, consolidation, spin-off, reorganization, partial or
complete liquidation, issuance of rights or warrants to purchase any Common Stock or
securities convertible into Common Stock, any sale or transfer of all or part of the
Company’s assets or business, or any other corporate transaction or event having an
effect similar to any of the foregoing and effected without receipt of consideration by
the Company, then the Board shall make such adjustments to the Restricted Stock Units
consistent with such change in such manner as the Board deems equitable to prevent
substantial dilution or enlargement of your rights under the Restricted Stock Units.
Any such adjustment determined by the Board shall be final, binding and conclusive on
the Company and you and your heirs, executors, administrators, successors and assigns.






	 	2.	 	Representations and Warranties. You hereby represent and warrant to the Company
as follows:






	 	a)	 	You have all the requisite power, authority and legal capacity to execute and
deliver this Letter Agreement and to consummate the transactions contemplated hereby.
	 
	 	b)	 	This Letter Agreement constitutes your legal, valid and binding obligations,
enforceable against you in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally and by equitable principles.




 


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	 	c)	 	You are an “accredited investor” as such term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities
Act”).
	 
	 	d)	 	You have such knowledge and experience in financial and business matters to be
capable of evaluating the merits and risks of entering into this Letter Agreement and
to make an informed decision relating thereto.
	 
	 	e)	 	The receipt of Restricted Stock Units and shares of Common Stock pursuant to
the terms and conditions of this Letter Agreement will be for your account for the
purpose of investment and not with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act of 1933, as amended.
	 
	 	f)	 	You understand that your shares of Common Stock may not be sold, transferred or
otherwise disposed of by you without registration under the Securities Act and any
applicable state securities laws, or an exemption thereto, and your shares of Common
Stock shall bear the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”). THESE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER
THE SECURITIES ACT OR AN OPINION OF COUNSEL FOR THE CORPORATION THAT REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT.






	 	3.	 	Counterparts. This Letter Agreement may be executed (including by facsimile
transmission) with counterpart signature pages or in several counterparts, each of which
shall be deemed an original and all of which shall together constitute one and the same
instrument.
	 
	 	4.	 	D&O Coverage. As long as the Company maintains directors and officers liability
insurance, the levels of coverage shall not be reduced from those currently in effect as of
the date of this Agreement.
	 
	 	5.	 	Headings. The headings contained in this Letter Agreement are for the sole
purpose of convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Letter Agreement.
	 
	 	6.	 	Amendment. No amendment or waiver of any provision of this Letter Agreement
shall be valid unless the same shall be in writing and signed by each of the parties. No
amendment to the indemnification provisions of the Company’s Certificate of Incorporation
or By-laws, each as may be amended from time to time, may become
effective without your having at least five (5) business days prior written notice of the
adoption thereof.




 


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	 	7.	 	Tax Treatment. Although the Company does not guarantee to you any particular
tax treatment relating to the Restricted Stock Units, the Restricted Stock Units are
intended to comply with, or to be exempt from, the applicable requirements of Code Section
409A and shall be limited, construed and interpreted in a in a manner consistent with such
intent.
	 
	 	8.	 	Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.






	 	a)	 	This Letter Agreement and all matters arising directly or indirectly herefrom
shall be governed by, construed and enforced in accordance with the laws of the State
of New York, without giving effect to any principles of conflict of laws (whether of
the State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York.
	 
	 	b)	 	Any actions, suits or proceedings arising out of or relating to this Letter
Agreement shall be heard and determined in any state or federal court sitting in the
Borough of Manhattan, The City of New York, and each of the parties hereto hereby
irrevocably submits to the exclusive jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such action, suit or proceeding and
irrevocably waives the defense of an inconvenient forum to the maintenance of any such
action, suit or proceeding. The parties hereto agree that a final judgment in any such
action, suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by applicable
law.
	 
	 	c)	 	EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS LETTER AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, SUIT OR PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS LETTER AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT
(A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR
PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND
HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS LETTER
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 8(c).




 


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	 	9.	 	Severability. If any provision of this Letter Agreement, including any phrase,
sentence, clause, Section or subsection is inoperative or unenforceable for any reason,
such circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of rendering any other
provision or provisions herein contained invalid, inoperative, or unenforceable to any
extent whatsoever.
	 
	 	10.	 	Entire Agreement. This Letter Agreement and the documents and instruments and
other agreements specifically referred to herein or delivered pursuant hereto constitute
the entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
	 
	 	11.	 	Assignment. This Letter Agreement shall not be assigned by you, other than by
operation of law, without the prior written consent of the Company in its sole discretion.
	 
	 	12.	 	Effective Date of this Letter Agreement. This Letter Agreement shall not be
immediately effective as of the date hereof.
	 
	 	13.	 	Indemnification Agreement. In the event that the Company enters into an
indemnification agreement with any member of the Board having terms that are different than
the terms of your Indemnification Agreement which was previously entered into between you
and the Company, you shall receive prompt written notice thereof and the Company, at your
request, will amend your Indemnification Agreement to include such of those terms as you
may request.
	 
	 	14.	 	No Obligation to Continue Service. This Letter Agreement is not a service
agreement. This Letter Agreement does not guarantee that the Company will continue to
retain you as a director or in any other capacity for any specific time period, nor does it
modify in any respect the Company’s right to terminate or modify your service or
compensation.
	 
	 	15.	 	Acknowledgement of Current Report on Form 8-K. You acknowledge that the Company
intends to file a Current Report on Form 8-K that will set forth, among other things, the
terms of this Letter Agreement.





[Remainder of Page Intentionally Left Blank]





 


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	 	Sincerely,



WESTERN LIBERTY BANCORP

 	 
	 	By:  	 /s/ Daniel B. Silvers
 	 
	 	 	Name:  	Daniel B. Silvers 	 
	 	 	Title:  	President 	 



Acknowledged and agreed to as of
the date 
first written above:




	 	 	 	 	 
	By:

	 	 /s/ Andrew Nelson
	 	 
	 

	 	 	 	 
	 

	 	Andrew Nelson	 	 






[SIGNATURE PAGE TO DIRECTOR LETTER]