ex10_3.htm


    
      

    

    Exhibit No. 10.3

     

    Form of Senior Executive
Officer Agreement

     

    [Date]

     

     

    [OFFICER
NAME]

    First
Security Group, Inc.

    531 Broad
Street

    Chattanooga,
TN 37402

     

     

    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.

            


    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    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 First Security Group, Inc., a Tennessee
      corporation, and any entities treated as a single employer with First
      Security Group, Inc. under 31 C.F.R. § 30.1(b) and any subsequent CCP
      Guidance (as in effect on the Closing Date), including, without
      limitation, FSGBank, N.A. 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 Tennessee. 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.

            


    

    


    


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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,

                        
	 
      	 
      	 
      
	 
      	
                          FIRST
      SECURITY GROUP, INC. (for itself and each entity constituting the Company
      hereunder)

                        
	 
      	 
      	 
      
	 
      	
                          By:

                        	 
      
	 
      	
                          Name:

                        
	 
      	
                          Title:

                        


                

              

            

          

        

      

    

     

     

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

                  	 
      
	 
      	 
      
	 
      	 
      
	
                    [Officer
      Name]

                  	 
      
	 
      	 
      
	 
      	 
      
	
                    Date:

                  	 
      


          

        

      

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    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]