Exhibit
10.3


 


[date]


 


[name
of executive]


First
Community Corporation


5455
Sunset Boulevard


Lexington,
South Carolina 29072


 


Dear
[executive],


 


First Community Corporation (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. The Company has 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 (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)                                  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.


 


(3)                                  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) and (2) 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.


 


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


 


•                  “Senior
executive officer” means the Company’s “senior executive officers” as defined
in Q&A 2 of the Interim Final Rule issued by the Treasury at 31 CFR Part 30,
effective on October 20, 2008 (the “Interim Final Rule”).


 


•                  “Golden
parachute payment” shall have the meaning set forth in Q&A 9 of the Interim
Final Rule.


 


•                  The
term “Company” includes any entities treated as a single employer with the
Company under Q&A 1 and Q&A 11 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”) 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).


 


(5)                                  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.


 


(6)                                  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,

  
	
   

  	
   

  
	
   

  	
  FIRST COMMUNITY CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: 

  	
  Michael C. Crapps

  
	
   

  	
  Title: 

  	
  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: