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Form of
Letter Agreement Amending Employment Agreements of James D.
Rickard, Paul A. Chrisco, Michael K. Bauer, Kevin J. Cecil and Bill
D. Wright
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May [___], 2009
[Senior
Executive Officer]
Community Bank
Shares of Indiana, Inc.
101 West Spring
Street
New Albany,
IN 47150
Dear [Senior
Executive Officer],
Community
Bank Shares of Indiana, Inc. (the “ Company ”)
anticipates entering into a Securities Purchase Agreement (the
“ Purchase Agreement ”) with the United States
Department of Treasury (the “ Treasury ”) that
provides, among other things, for the Treasury’s purchase of
Company securities. This purchase is anticipated to occur as part
of the Company’s participation in the Treasury’s
Troubled Asset Relief Program (“ TARP ”) -
Capital Purchase Program (the “ CPP
”). If the Company does not participate or ceases
at any time to participate in TARP, this letter shall be of no
further force and effect.
As
a condition to the closing of the investment contemplated by the
Purchase Agreement, the Company is required to take certain actions
with respect to compensation arrangements of some of its executive
officers. For purposes of the CPP, the Company has determined that
you are or may be a Senior Executive Officer (defined below) or one
of the next 5 most highly-compensated employees of the
Company. To comply with the requirements of the CPP, and
in consideration of the benefits that you will receive because 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 (Severance) Payments . The Company may
not pay and you will not be entitled to receive from the Company
any Golden Parachute Payment (as defined below) during any
Restricted Period (defined below).
(2)
Recovery of Bonus and Incentive Compensation
. Any bonus, retention award or incentive compensation
paid to you during the Restricted Period or prior to the Restricted
Period is subject to recovery or “clawback” by the
Company if the payments were based on materially inaccurate
statements of earnings, revenues, gains or other
criteria. In such an event, you will be required to and
shall return to the Company any bonus, retention award or incentive
compensation paid to you by the Company if such bonus, retention
award or incentive compensation was paid to you based on materially
inaccurate statements of earnings, revenues, gains or other
criteria.
(3)
Compensation Program Amendments . Each of the
Company’s compensation, bonus, incentive and other benefit
plans, arrangements and agreements, including your employment
agreement (the “Employment Agreement”), and
compensation policies (all such plans, arrangements and agreements,
and policies, the “ Compensation Plans ”) are
hereby amended with respect to you to the extent necessary to give
effect to provisions (1) and (2) of this letter, and you agree to
execute any further amendments as may be necessary to implement the
agreements contained in this letter.
(4)
Compensation Plan Review . In addition, the
Company is required to review its Compensation Plans to ensure that
the Compensation Plans do not (a) provide incentives or otherwise
encourage its Senior Executive Officers to take unnecessary and
excessive risk
