Document:

Exhibit
10.2

 

October 20, 2010

 

Charles A. Kirby

Congaree Bancshares, Inc.

2023 Sunset Boulevard

West Columbia, South Carolina 29169

 

Dear Charlie,

 

Congaree Bancshares, Inc. (the “Company”) has
entered into a Securities Purchase Agreement (the “SPA”) 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 occurred as part of the Company’s
participation in the Capital Purchase Program (the “CPP”) component of Treasury’s
Troubled Asset Relief Program.

 

As a condition to the Treasury’s investment under the
SPA, the Company is required to take certain actions with respect to
compensation arrangements of its senior executive officers, including senior
executive officers of its wholly owned subsidiary, Congaree State Bank.  The Company recently 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, 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 Bonus, Retention Award, or Incentive Compensation.  At any time at which you are the Company’s
most highly compensated employee, as such term is defined in Q&A 1 of the
Interim Final Rule (as defined below), you will not be entitled to receive
from the Company any bonus, retention award, or incentive compensation during
the CPP Covered Period, except for certain long term restricted stock payments
and previously determined bonus payments to the extent permitted by Section 111(b)(3)(D) of
EESA (as defined below).

 

(3)                                 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.

 

(4)                                 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.

 

 

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

 

(6)           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.

 

·                  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).

 

(7)                                 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.

 

(8)                                 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,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CONGAREE BANCSHARES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ E. Daniel Scott

  
	
   

  	
  Name:

  	
  E. Daniel Scott

  
	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Intending to be legally bound, I agree with and
  accept the

  	
   

  	
   

  
	
  foregoing terms on the date set forth below.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Charles A. Kirby

  	
   

  	
   

  
	
  Name:

  	
  Charles A. Kirby

  	
   

  	
   

  
	
  Title:

  	
  President and Chief Executive Officer

  	
   

  	
   

  
	
  Date:

  	
  October 20, 2010Exhibit 10.3

 

AMENDMENT

TO

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

 

This amendment (the “Amendment”) is effective as of the 20th day of
October, 2010, and is made by and between Congaree Bancshares, a South Carolina
corporation (the “Company”), Congaree State Bank, a South Carolina state bank
and wholly owned subsidiary of the Company (the “Bank”; together with the
Company, the “Employer”), and Stephen P. Nivens, an individual resident of
South Carolina (the “Executive”).

 

WHEREAS, the Executive and the Employer entered into an employment agreement,
dated February 15, 2006 (the “Agreement”), whereby the Executive agreed to serve as Chief Business Development Officer of
the Bank and Senior Vice President and Chief Business Development Officer of
the Company;

 

WHEREAS, the Executive and the Employer amended
the Agreement, during the second half of 2007 (the “Amended and Restated Agreement”), to amend certain outdated provisions in the
Agreement and to ensure documentary compliance with the final regulations of Section 409A
of the Internal Revenue Code;

 

WHEREAS,
the Executive and the Company entered into a letter agreement, dated January 9,
2009, to ensure compliance with Section 111(b) of the Emergency
Economic Stabilization Act of 2008 and to acknowledge modification of certain
provisions of the Amended and Restated Agreement during the period which the
United States Department of Treasury (the “Treasury”) holds any equity or debt
securities of the Company acquired through the Company’s participation in the Treasury’s
Troubled Asset Relief Program – Capital Purchase Program (the “CPP”); and

 

WHEREAS,
the parties now desire to further amend the Amended and Restated Agreement to (i) revise the cash
bonus provision to comply with the regulatory guidance of the South Carolina
Board of Financial Institutions regarding incentive compensation and (ii) update
an outdated provision and to ensure documentary compliance with the final
Treasury regulations under Section 409A of the Internal Revenue Code and
IRS Notice 2010-6 issued pursuant thereto.

 

NOW,
THEREFORE, the Company, the Bank, and the
Executive do hereby agree as follows:

 

1.            Section 3(b) of
the Amended and Restated Agreement is
hereby deleted in its entirety and replaced with the following:

 

(b)     The Executive shall be
eligible to receive a cash bonus equaling up to 50% of the previous year’s
salary and compensation if the Bank achieves certain performance levels
established by the Board from time to time (the “Bonus Plan”).  Any bonus payment made pursuant to this Section 3(b) shall
be made the earlier of (i) 70 calendar days after the previous year end

 

 

for which the bonus was earned by the Executive and became a payable of
the Employer or (ii) the first pay period following the Employer’s press
release announcing its previous year’s financial performance.

 

2.            The scrivener’s error
labeling Section 4 of the Amended
and Restated Agreement as Section 2 is hereby corrected by
deleting the section heading “2. Termination” and substituting the section
heading “4. Termination” in lieu thereof.

 

3.            Section 4(g) of
the Amended and Restated Agreement is
hereby deleted in its entirety and replaced with the following:

 

(h)     With the exceptions of the
provisions of this Section 4, and the express terms of any benefit plan under
which the Executive is a participant, it is agreed that, upon termination of
the Executive’s employment, the Employer shall have no obligation to the
Executive for, and the Executive waives and relinquishes, any further
compensation or benefits (exclusive of COBRA benefits).  Within 45 days of the Executive’s Termination
of Employment, and as a condition to the Employer’s obligation to pay any
severance hereunder, the Employer
and the Executive shall enter into mutually satisfactory form of release, and
may not revoke such release within the revocation period stated in such
release, acknowledging such remaining obligations and discharging both parties,
as well as the Employer’s officers, directors and employees with respect to
their actions for or on behalf of the Employer, from any other claims or
obligations arising out of or in connection with the Executive’s employment by
the Employer, including the circumstances of such termination.

 

3.             All other terms
and conditions of the Amended
and Restated Agreement, except as modified herein, shall remain
in full force and effect and shall be binding on the parties hereto, their
heirs, successors, and assigns.

 

[Signatures appear on following page.]

 

 

IN WITNESS WHEREOF, the Company and the Bank each have caused this
Amendment to be executed and its respective seals to be affixed hereunto by its
respective officers thereunto duly authorized, and the Executive has signed and
sealed this Amendment, effective as of the date first above written.

 

	
   

  	
   

  	
   

  	
  CONGAREE
  BANCSHARES, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  X

  	
   

  	
  By:

  	
  /s/
  E. Daniel Scott

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
  E.
  Daniel Scott

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  CONGAREE
  STATE BANK

  
	
  ATTEST:

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  X

  	
   

  	
  By:

  	
  /s/
  E. Daniel Scott

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
  E.
  Daniel Scott

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/
  Stephen P. Nivens

  
	
   

  	
   

  	
   

  	
  Stephen
  P. Nivens

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