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Royal Bancshares of Pennsylvania,
Inc.
732 Montgomery Avenue
Narberth, Pennsylvania 19072
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c/o Royal
Bancshares of Pennsylvania, Inc.
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732 Montgomery
Avenue
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Narberth,
Pennsylvania 19072
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:
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Royal
Bancshares of Pennsylvania, Inc. (the “ Company
”) anticipates entering into a Securities Purchase Agreement
(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 (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 only to the extent required by
EESA.
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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). For
reference, certain affected Benefit Plans are set forth in
Appendix A to this letter.
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