Exhibit 10.3(a)
December 15, 2008
James V. DeRentis
14 Cady Street
Providence, Rhode Island 02903
Dear Mr. DeRentis:
Bancorp Rhode Island, Inc. (the “
Company ”) anticipates entering into a Securities
Purchase Agreement (the “ Participation Agreement
”) on December 19, 2008 (the “ Closing Date
”), 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
letter 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. 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:
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(1)
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No Golden Parachute Payments . The Company is
prohibiting any golden parachute payment to you during any
“CPP Covered Period.” A “ CPP Covered
Period ” is any period during which (A) you are a
senior executive officer and (B) Treasury holds an equity or
debt position acquired from the Company in the CPP.
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(2)
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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.
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(3)
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Compensation Program Amendments.
Each of the Company’s 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).
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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
James V. DeRentis
December 15, 2008
Page 2
value of the Company. To the extent
any such review requires revisions to any Benefit Plan with respect
to you, you and the Company agree to negotiate such changes
promptly and in good faith.
