Exhibit 10.4


 


December 29,
2009


 


[Name of Executive]


Atlantic Bancshares, Inc.


One Sheridan Park Circle, PO Box 3077


Bluffton, South Carolina 29910


 


Dear
[Name of Executive],


 


Atlantic
Bancshares, Inc. (the “Company”) anticipates entering into a Securities
Purchase Agreement (the “Participation Agreement”) 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
is anticipated to occur as part of the Company’s participation in the Treasury’s
Troubled Asset Relief Program - Capital Purchase Program (the “CPP”).


 


As
a condition to the closing of the investment contemplated by the Participation
Agreement, the Company is required to take certain actions with respect to
compensation arrangements of its senior executive officers and most highly
compensated employees, including senior executive officers and most highly
compensated employees of its wholly owned subsidiary, Atlantic Community Bank.
The Company has determined that you are or may be a senior executive officer or
most highly compensated employee 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 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.


 


(3)                                  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.


 


(4)                                  Compensation Program
Amendments. Each of the Company’s compensation, bonus, incentive and other
benefit plans, arrangements and agreements , including your Employment Security
Agreement (all such plans, arrangements and agreements, the “Benefit Plans”)
are hereby amended to the extent necessary to give effect to provisions (1),
(2), and (3) 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.


 


(5)                                  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.


 


·                  “Most highly
compensated employee” 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).


 


(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 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.


 


(7)                                  If the Treasury does not
purchase the securities contemplated by the Participation Agreement, then this
letter shall be of no force or effect. 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,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ATLANTIC
  BANCSHARES, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Robert
  P. Trask

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President &
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: [Name of Executive]

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
  Date: December 29, 2009