Document:

Exhibit
10.3

 

FIRST AMENDMENT

TO

EXECUTIVE EMPLOYMENT AGREEMENT

 

First Amendment (the “First Amendment”) to Executive
Employment Agreement (the “Agreement”) dated as of November 25, 2001 between
Providian Financial Corporation, a Delaware corporation (the “Company”), and
Joseph W. Saunders (the “Executive”), is entered into as of July 27, 2004.

 

WHEREAS, the Board of Directors of the Company (the “Board”)
has determined that it is in the best interest of the Company and its
stockholders to extend the term of the Executive’s Agreement and to reflect the
Executive’s current annual base salary of $800,000; and

 

WHEREAS, the Board has determined that the Agreement
should provide the Executive with the same level of severance protections upon
a termination of employment without Cause or for Good Reason following a Change
in Control as are provided to other senior executives of the Company;

 

NOW, THEREFORE, in consideration of the foregoing,
of the mutual provisions contained in this Agreement and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

1.                     Section
2 of the Agreement is hereby amended by deleting “December 31, 2004” at the end
of the first sentence thereof and replacing such words with “December 31,
2005.”

 

2.                     The
first sentence of Section 3 of the Agreement is hereby amended by deleting it
in its entirety and replacing it with the following:

 

“The Company agrees to pay the Executive a base salary
at an annual rate of not less than $800,000, payable in accordance with the
regular payroll practices of the Company, but not less frequently than monthly.”

 

3.                     The
second sentence of Section 4 of the Agreement is hereby amended by deleting it
in its entirety and replacing it with the following:

 

“The Executive shall have the opportunity to earn an
annual target bonus of 200% of the Executive’s Base Salary (the “Target Bonus”)
for each fiscal year, measured against objective financial criteria to be
determined by the Board (or a committee thereof) after good faith consultation
with the Executive.”

 

4.                     Section
8(d) is hereby amended by deleting it in its entirety and replacing it with the
following:

 

(d)           TERMINATION WITHOUT CAUSE
OR FOR GOOD REASON PRIOR TO A CHANGE IN CONTROL.  If, prior to a Change in Control, the
Executive’s employment should be terminated (x) by the Company other than for
Cause, or (y) by the Executive for Good Reason, the Company shall pay or
provide the Executive with (i) Accrued Benefits; and (ii) shall pay to the
Executive a lump sum in cash within 30 days of date of termination in an 

 

 

amount equal to the product
of (A) three, and (B) the sum of (1) the Base Salary in effect immediately
prior to termination and (2) the Target Bonus.

 

5.                     Section
8 of the Agreement is hereby amended by adding a new Section 8(e) at the end
thereof:

 

(e)           TERMINATION WITHOUT CAUSE
OR FOR GOOD REASON UPON OR FOLLOWING A CHANGE IN CONTROL.  If, upon or during the three years following
a Change in Control, the Executive’s employment should be terminated (x) by the
Company other than for Cause, or (y) by the Executive for Good Reason,

 

(i)    the Company shall pay to
the Executive in a lump sum in cash within 30 days after the date of
termination the aggregate of the following amounts:

 

(A)          the
sum of (1) the Executive’s Base Salary through the date of termination, (2) a
pro-rata annual bonus for the year in which the date of termination occurs
equal to the product of (x) the highest bonus paid or payable, including by
reason of any deferral, to the Executive by the Company and its affiliated
companies (whether in cash, stock or other property, whether such stock or
property is granted under the Management Incentive Plan (or any successor
thereto) or another plan including the Company Stock Incentive Plan or any
successor thereto)) in respect of the three fiscal years during which the
Executive has been employed by the Company or any of its affiliated companies
immediately preceding the fiscal year in which the Change in Control occurs (it
being understood that such annual bonus shall not include any one-time stock or
cash bonuses granted outside the annual bonus program) (the “Annual Bonus”), provided, that for any fiscal year during such three-year or
shorter period immediately preceding the fiscal year in which the Change in
Control occurs consisting of less than 12 full months or with respect to which
the Executive has been employed by the Company or its affiliated companies for
less than 12 full months and for which the Executive shall have been eligible
to receive an annual bonus, the annual bonus for such year for purposes of
determining the Executive’s Annual Bonus shall be the greater of (i) the
Executive’s target annual bonus for such year or (ii) the actual annual bonus paid
or payable, including by reason of any deferral, to the Executive by the
Company and its affiliated companies (whether in cash, stock or other property,
whether such stock or property is granted under the Company Management
Incentive Plan (or any successor thereto) or another plan including the
Corporation Stock Incentive Plan (or any successor thereto)) in respect of such
fiscal year, and (y) a fraction, the numerator of which is the number of days
in the current fiscal year through the date of termination, and the denominator
of which is 365, and (3) any compensation previously deferred by the Executive
under non-qualified plans (together with any accrued interest or earnings
thereon) and the value of any unused paid time off, in each case to the extent
not theretofore paid; and

 

 

(B)           the
amount equal to the product of (1) three and (2) the sum of (x) the Executive’s
Base Salary, and (y) the Executive’s Base Salary multiplied by the Bonus
Percentage.  For purposes of this Section
8(e)(i)(B), “Bonus Percentage” shall mean the highest percentage obtained by
dividing (i) the annual bonus paid or payable, including by reason of any
deferral, whether or not payable under the Company Management Incentive Plan
(or any successor thereto) to the Executive by the Company and its affiliated
companies (whether in cash, stock or other property, whether such stock or
property is granted under the Company Management Incentive Plan (or any
successor thereto) or another plan including the Company Stock Incentive Plan (or
any successor thereto)) in respect of each of the three fiscal years during
which the Executive has been employed by the Company or its affiliated
companies immediately preceding the fiscal year in which the Change in Control
occurs or such lesser number of years that the Executive has been employed by
the Company and its affiliated companies (it being understood that such annual
bonus shall not include any one-time stock or cash bonuses granted outside the
annual bonus program); provided that
for any fiscal year during such three-year or shorter period immediately
preceding the fiscal year in which the Change in Control occurs consisting of
less than 12 full months or with respect to which the Executive has been
employed by the Company or its affiliated companies for less than 12 full
months and for which the Executive shall have been eligible to receive an
annual bonus, the annual bonus for such year shall be the greater of (A) the
Executive’s target annual bonus for such year or (B) the actual annual bonus
paid or payable, including by reason of any deferral, to the Executive by the
Company and its affiliated companies (whether in cash, stock or other property,
whether such stock or property is granted under the Company Management
Incentive Plan (or any successor thereto) or another plan including the Company
Stock Incentive Plan (or any successor thereto)) in respect of such fiscal
year, provided, further, that if the Executive
has not been eligible to earn such a bonus for any period prior to the Change
in Control, the annual bonus for purposes of this clause (1) shall mean the
Executive’s target annual bonus for the year in which the Change in Control
occurs, by (2) the base salary paid or payable to the Executive by the Company
and its affiliated companies for each such year, annualized for any fiscal year
consisting of less than twelve full months or with respect to which the
Executive has been employed by the Company or its affiliated companies for less
than twelve full months.  The amount
described in the first sentence of this clause (B) shall be paid in lieu of,
and the Executive hereby waives the right to receive, any other amount of
severance relating to salary or bonus continuation to be received by the
Executive upon termination of employment of the Executive under any severance
plan, policy or arrangement of the Company or its affiliated companies (it
being understood that this payment shall not be in lieu of, and the Executive
shall not hereby waive, any stay or retention awards or bonuses to which the
Executive may be entitled pursuant to the terms of such stay or retention
awards or bonuses); and

 

 

(C)           a
separate lump-sum payment equal to the product of (1) three and (2) the sum of
(x) the Executive’s Base Salary and (y) the Executive’s Base Salary multiplied
by the Bonus Percentage and (3) the Retirement Contribution Percentage (which,
for purposes of this Section 8(e)(i)(C) shall equal the highest percentage of
retirement contributions as a percentage of total compensation for all eligible
employees of the Company and its affiliated companies for any year beginning
with the third full year prior to the year in which the Change in Control
occurs); and

 

(D)          to
the extent not already paid under Section 8(e)(i)(A) above, an amount equal to
the unvested portion of the qualified and non-qualified retirement contribution
account in addition to any vested amounts due under the retirement plans of the
Company and its affiliated companies; and

 

(ii)           for
three years after the date of termination, or such longer period as any plan,
program, practice or policy may provide, the Company shall continue welfare
benefits to the Executive and/or the Executive’s family at least equal to those
which would have been provided to them in accordance with the welfare benefit
plans, programs, practices and policies (including, without limitation,
medical, prescription, dental, vision, disability, employee life, dependent
life, and accidental death) of the Company and its affiliated companies if the
Executive’s employment had not been terminated, in accordance with the most
favorable plans, practices, programs or policies of the Company and its
affiliated companies applicable generally to other peer executives and their
families during the 90-day period immediately preceding the date of the Change
in Control or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and
its affiliated companies and their families, provided,
however, that if the Executive becomes re-employed with another
employer and is eligible to receive medical or other welfare benefits under
another employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other plan
during such applicable period of eligibility; and

 

(iii)          to
the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive pursuant to this
Agreement under any plan, program, policy or practice or contract or agreement
of the Company and its affiliated companies (such other amounts and benefits
shall be hereinafter referred to as the “Other Benefits”), but excluding solely
purposes of this Section 8(e)(iii) amounts waived by the Executive pursuant to
the provisions of Section 8(e)(i)(B).

 

 

IN WITNESS WHEREOF, the Executive has hereunto set
his hand and, pursuant to authorization from its Board of Directors, the
Company has caused these presents to be executed in its name on its behalf, all
as of the date and year first written above.

 

	
   

  	
  PROVIDIAN FINANCIAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Richard A. Leweke

  
	
   

  	
  Name:

  	
  Richard A. Leweke

  
	
   

  	
  Title:

  	
  Vice Chairman and Chief
  Human

  Resources Officer

  
	
   

  	
   

  
	
  `

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Joseph W. Saunders

  
	
   

  	
  JOSEPH W. SAUNDERSExhibit
10.4

 

SECOND AMENDMENT

TO

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Second Amendment (this “Amendment”) to
Executive Employment Agreement dated as of November 25, 2001, as amended by the
First Amendment to Executive Employment Agreement dated as of July 27, 2004 (as
so amended, the “Agreement”), by and between Providian Financial Corporation, a
Delaware corporation (the “Company”), and Joseph W. Saunders (the “Executive”),
is entered into as of October 19, 2004.

 

WHEREAS, the Board of Directors of the Company (the “Board”)
previously determined that it was in the best interest of the Company and its
stockholders to extend the term of the Agreement for an interim period and to
reflect certain other changes; and

 

WHEREAS, the Board has determined that it is in the
best interests of the Company and its stockholders to extend the term of the
Agreement for an additional two -year period.

 

NOW, THEREFORE, in consideration of the foregoing,
of the mutual provisions contained in this Amendment and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

Section 2 of the Agreement is hereby amended by
deleting “December 31, 2005” at the end of the first sentence thereof and replacing
such words with “December 31, 2007.”

 

IN WITNESS WHEREOF, the Executive has hereunto set
his hand and, pursuant to authorization from its Board of Directors, the
Company has caused this Amendment to be executed in its name on its behalf, all
as of the date and year first written above.

 

	
   

  	
  PROVIDIAN FINANCIAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Richard A. Leweke

  
	
   

  	
  Name:

  	
  Richard A. Leweke

  
	
   

  	
  Title:

  	
  Vice Chairman and Chief
  Human

  Resources Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  `

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  JOSEPH W. SAUNDERS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Joseph W. Saunders

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