Exhibit 10.04
C APITAL P URCHASE P ROGRAM C OMPLIANCE A GREEMENT
This C APITAL P URCHASE P ROGRAM C OMPLIANCE A GREEMENT (this “Agreement”) is entered into
as of this the 16th day of January, 2009, by and among ECB Bancorp,
Inc., a North Carolina corporation (the “Corporation”),
The East Carolina Bank, a North Carolina-chartered bank and wholly
owned subsidiary of the Corporation (the “Bank”), and
T. Olin Davis (the “Executive”). The Corporation and
the Bank are referred to in this Agreement individually and
together as the “Employer.”
W HEREAS , the Corporation has submitted an application
to participate in the U.S. Department of the Treasury’s
Troubled Assets Relief Program (TARP) Capital Purchase Program
(CPP), and
W HEREAS , the Corporation expects to issue to the U.S.
Department of the Treasury (UST) cumulative preferred stock and
warrants to acquire common stock of the Corporation and as a
consequence to be a participant in the U.S. Department of the
Treasury’s Troubled Assets Relief Program (TARP) Capital
Purchase Program (CPP), and
W HEREAS , as a condition to participation in the CPP,
the compensation arrangements of the Employer’s senior
executive officers must comply with applicable UST rules and
guidance governing executive compensation of CPP participants,
and
W HEREAS , the Executive is or may be a senior executive
officer, as that term is defined in the UST’s rules and
guidance governing executive compensation of participants in the
CPP; and
W HEREAS , it is in the Executive’s best interests
to agree to certain modifications to the Executive’s
compensation arrangements to allow the Employer to participate in
the CPP, which participation is expected to improve the
Executive’s long-term prospects with the Employer.
N OW T HEREFORE , in consideration of these premises, the mutual
covenants contained herein, and other good and valuable
considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
A RTICLE 1
C APITAL P URCHASE P ROGRAM C OMPLIANCE
1.1 Recovery of Bonus and
Incentive Compensation. Any bonus or incentive compensation paid to the
Executive under any compensation arrangement between the Executive
and the Employer shall be subject to recovery by the Employer and
shall be repaid by the Executive to the Employer if, in the
judgment of the Employer’s board of directors or the board
committee having jurisdiction over executive compensation, the
compensation was based on materially inaccurate financial
statements or on any other materially inaccurate performance
criteria. The compensation shall be repaid by the Executive to the
Employer within 30 days after written demand by the Employer or as
soon thereafter as is practicable.
1
The Executive’s obligations under this
section 1.1 shall survive termination of this Agreement and shall
be effective for as long as the Employer is a participant in the
CPP, and is subject to applicable CPP rules and guidance. The
Executive’s obligations under this section 1.1 shall expire
when the Employer is no longer a participant in the CPP, provided
that the Executive shall have repaid all amounts for which a
repayment demand has been made by the Employer. The bonus and
incentive compensation subject to recovery by the Employer under
this section 1.1 includes, but is not limited to, cash
compensation, stock option or other equity-based compensation,
an
