Exhibit 10.4
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[COMPANY LETTERHEAD]
March 27, 2009
[Officer Name]
c/o SBT Bancorp, Inc.
000 Xxxxxxxxx Xxxxxx
P.O. Box 248 Simsbury, CT 06070-0248
Dear [Officer],
As you know, SBT Bancorp, Inc. (the "Company," as further defined
below) has entered into a Letter Agreement, dated March 27, 2009, including the
Securities Purchase Agreement - Standard Terms incorporated therein (the
"Participation Agreement"), with the United States Department of the Treasury
("Treasury") that provides for the Company's participation in the Treasury's
TARP Capital Purchase Program ("CPP").
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. 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, you agree as follows:
(1) No Golden Parachute Payments. The Company is
prohibiting any golden parachute payments to you during any "CPP
Covered Period". A "CPP Covered Period" is any period during
which (A) you are a senior executive officer of the Company, and
(B) Treasury holds an equity or debt position acquired from the
Company in the CPP.
(2) Recovery of Bonus and Incentive Compensation. Any
bonus and/or 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 statements of earnings,
revenues, gains or other criteria that are later found to be
materially inaccurate.
(3) No Bonus, Retention Award or Incentive Compensation.
During the CPP Covered Period, the Company is prohibited from
paying to you or accruing on your behalf any bonus, retention
award or incentive compensation, except for certain long-term
restricted stock, and except as otherwise may be provided under a
written employment agreement in effect as of February 11, 2009,
and except as may otherwise be permitted by future guidance.
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(4) Compensation Program Amendments. Each of the Company's
compensation, bonus, incentive and other benefit plans,
arrangements and agreements (including, but not limited to,
golden parachute, severance and employment agreements)
(collectively, "Benefit Plans") with respect to you is hereby
amended (notwithstanding any contrary language within such
Benefit Plans) to the extent necessary to give effect to
provisions (1), (2) and (3) above.
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 and the Company hereby
agree to execute such additional documents as the Company deems
necessary to effect such revisions.
(5) Definitions and Interpretation. This letter shall be
interpreted as follows:
"Senior executive officer" means the Company's "senior
executive officers" as defined in Subsection 111(a)(1)
of EESA.
"Golden parachute payment" has the same meaning as in
Subsection 111(a)(2) of EESA.
"EESA" means the Emergency Economic Stabilization Act
of 2008 as implemented by guidance or regulation that
has been issued and is in effect as of the "Closing
Date," as defined in the Participation Agreement.
The term "Company" includes any entities treated as a
single employer with the Company under 31 C.F.R. ss.
30.1(b) (as in effect on the Closing Date). 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 letter.
The term "CPP Covered Period" shall be limited by, and
interpreted in a manner consistent with, Section
111(a)(5) of EESA.
Provisions (1), (2) and (3) of this letter are intended
to, and will be interpreted, administered and construed
to comply with Section 111 of EESA 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.
This agreement will be governed by the laws of the State of
Connecticut, except to the extent that federal law controls.
The Company's Board of Directors appreciates the concessions you are
making and looks forward to your continued leadership.
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Very truly yours,
SBT Bancorp, Inc.
By: _______________________
Name: Xxxxx X. Xxxxxxxx
Title: Chairman of the Personnel Committee
Intending to be legally bound, I hereby
agree with, acknowledge the sufficiency
of consideration for, and accept the foregoing terms.
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[Officer Name]
Dated: March 27, 2009
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