FORM OF AMENDED AND RESTATED CHANGE OF CONTROL EMPLOYMENT AGREEMENT1
Exhibit
10.1
CHANGE
OF
CONTROL
EMPLOYMENT
AGREEMENT1
AGREEMENT
by and between State Bancorp, Inc., a New York corporation (the “Company”) and
[NAME] (the “Executive”), dated as [DATE].
The
Board
of Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company and its shareholders to assure that the Company
will
have the continued dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined below) of the Company.
The Board believes it is imperative to diminish the inevitable distraction
of
the Executive by virtue of the personal uncertainties and risks created by
a
pending or threatened Change of Control and to encourage the Executive’s full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the Executive with
compensation and benefits arrangements upon a Change of Control which ensure
that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations. Therefore,
in order to accomplish these objectives, the Board has caused the Company
to
enter into this Agreement.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain
Definitions. (a) The “Effective Date” shall mean the
first date during the Change of Control Period (as defined in Section 1(b))
on
which a Change of Control (as defined in Section 2) occurs. Anything in this
Agreement to the contrary notwithstanding, if a Change of Control occurs
and if
the Executive’s employment with the Company is terminated prior to the date on
which the Change of Control occurs, and if it is reasonably demonstrated
by the
Executive that such termination of employment (i) was at the request of a
third
party who has taken steps reasonably calculated to effect a Change of Control
or
(ii) otherwise arose in connection with or anticipation of a Change of Control,
then for all purposes of this Agreement the “Effective Date” shall mean the date
immediately prior to the date of such termination of employment.
(b) The
“Change of Control Period” shall mean the period commencing on the date hereof
and ending on the [YEARS] anniversary of the date hereof; provided, however,
that commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof shall
be
hereinafter referred to as the “Renewal Date”), unless previously terminated,
the Change of Control Period shall be automatically extended so as to terminate
[YEARS] years from such Renewal Date, unless at least 60 days prior to the
Renewal Date the Company shall give notice to the Executive that the Change
of
Control Period shall not be so extended.
2. Change
of Control. For the purpose of this Agreement, a “Change of
Control” shall mean:
(a) The
acquisition by any individual, entity or group (within the meaning of Section
13(d) (3) or 14(d) (2) of the Securities Exchange Act of 1934, as amended
(the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i)
the
then outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that
for purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or
any
corporation controlled by the Company or (iv) any acquisition pursuant to
a
transaction which complies with clauses (i), (ii) and (iii) of subsection
(c) of
this Section 2; or
(b) Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising
the
Incumbent Board shall be considered as though such individual were a member
of
the Incumbent Board, but excluding, for this purpose, any such individual
whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or
other
actual or threatened solicitation of proxies or consents by or on behalf
of a
Person other than the Board; or
(c) Consummation
by the Company of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the
acquisition of assets of another entity (a “Business Combination”), in each
case, unless, following such Business Combination, (i) all or substantially
all
of the individuals and entities who were the beneficial owners, respectively,
of
the Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly
or
indirectly, more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the
case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns
the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as
their
ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case
may
be, (ii) no Person (excluding any employee benefit plan (or related trust)
of
the Company or such corporation resulting from such Business Combination)
beneficial owns, directly or indirectly, 20% or more of, respectively, the
then
outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution
of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
(d) Approval
by the shareholders of the Company of a complete liquidation or dissolution
of
the Company.
3. Employment
Period. The Company hereby agrees to continue the Executive in
its employ, and the Executive hereby agrees to remain in the employ of the
Company subject to the terms and conditions of this Agreement, for the period
commencing on the Effective Date and ending on the [YEARS] anniversary of
such
date (the “Employment Period”).
4. Terms
of Employment. (a) Position and Duties. (i) During the
Employment Period, (A) the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities
shall
be at least commensurate in all material respects with the most significant
of
those held, exercised and assigned to the Executive at any time during the
120-day period immediately preceding the Effective Date and (B) the Executive’s
services shall be performed at the location where the Executive was employed
immediately preceding the Effective Date or any office or location less than
10
miles from such location.
(ii) During
the Employment Period, and excluding any periods of vacation and sick leave
to
which the Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and affairs
of
the Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder, to use the Executive’s reasonable best
efforts to perform faithfully and efficiently such responsibilities. During
the
Employment Period it shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or charitable boards or committees,
(B) deliver lectures, fulfill speaking engagements or teach at educational
institutions and (C) manage personal investments, so long as such activities
do
not significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that to the extent that
any
such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall
not
thereafter be deemed to interfere with the performance of the Executive’s
responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Executive shall receive
an
annual base salary (“Annual Base Salary”), which shall be paid at a monthly
rate. The Annual Base Salary will be at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has
been
earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the twelve-month period immediately preceding the
month
in which the Effective Date occurs. During the Employment Period, the Annual
Base Salary shall be reviewed no more than 12 months after the last salary
increase awarded to the Executive prior to the Effective Date and thereafter
at
least annually. Any increase in Annual Base Salary shall not serve to limit
or
reduce any other obligation to the Executive under this Agreement. Annual
Base
Salary shall not be reduced after any such increase and the term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary as
so
increased. As used in this Agreement, the term “affiliated companies” shall
include any company controlled by, controlling or under common control with
the
Company.
(ii) Annual
Bonus. In addition to Annual Base Salary, the Executive shall be awarded,
for
each fiscal year ending during the Employment Period, an annual bonus (the
“Annual Bonus”) in cash at least equal to the Executive’s highest bonus for the
last three full fiscal years prior to the Effective Date (annualized in the
event that the Executive was not employed by the Company for the whole of
any
such fiscal year and received a pro-rated bonus as a consequence) (the “Recent
Annual Bonus”). Each such Annual Bonus shall be paid no later than two and
one-half months after the end of the fiscal year for which the Annual Bonus
is
awarded, unless the Executive shall elect to defer the receipt of such Annual
Bonus pursuant to a written deferred compensation plan of the Company or
an
affiliated company.
(iii) Incentive,
Savings and Retirement Plans. During the Employment Period, the Executive
shall
be entitled to participate in all incentive, savings and retirement plans,
practices, policies and programs applicable generally to other peer executives
of the Company and its affiliated companies, but in no event shall such plans,
practices, policies and programs provide the Executive with incentive
opportunities (measured with respect to both regular and special incentive
opportunities, to the extent, if any, that such distinction is applicable),
savings opportunities and retirement benefit opportunities, in each case,
less
favorable, in the aggregate, than the most favorable of those provided by
the
Company and its affiliated companies for the Executive under such plans,
practices, policies and programs as in effect at any time during the 120-day
period immediately preceding the Effective Date or if more favorable to the
Executive, those provided generally at any time after the Effective Date
to
other peer executives of the Company and its affiliated companies.
(iv) Welfare
Benefit Plans. During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company and its affiliated companies (including,
without limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other
peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with benefits
which are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive at any
time
during the 120-day period immediately preceding the Effective Date or, if
more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.
(v) Expenses. During
the Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
accordance with the most favorable policies, practices and procedures of
the
Company and its affiliated companies in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if
more
favorable to the Executive, as in effect generally at any time thereafter
with
respect to other peer executives of the Company and its affiliated
companies.
(vi) Fringe
Benefits. During the Employment Period, the Executive shall be
entitled to fringe benefits, including, without limitation, tax and financial
planning services, payment of club dues, and, if applicable, use of an
automobile and payment of related expenses, in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to
the
Executive, as in effect generally at any time thereafter with respect to
other
peer executives of the Company and its affiliated companies.
(vii) Office
and Support Staff. During the Employment Period, the Executive shall
be entitled to an office or offices of a size and with furnishings and other
appointments, and to exclusive personal secretarial and other assistance,
at
least equal to the most favorable of the foregoing provided to the Executive
by
the Company and its affiliated companies at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the Executive,
as provided generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies.
(viii) Vacation. During
the Employment Period, the Executive shall be entitled to paid vacation in
accordance with the most favorable plans, policies, programs and practices
of
the Company and its affiliated companies as in effect for the Executive at
any
time during the 120-day period immediately preceding the Effective Date or,
if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies.
(ix) Equity
Compensation Awards. On the Effective Date, all awards of stock
options and stock appreciation rights granted to the Executive prior to the
date
of this Agreement shall become fully vested and immediately exercisable,
all
restrictions on shares of restricted stock awarded to the Executive prior
to the
date of this Agreement shall immediately lapse and all performance based
equity
compensation awards made to the Executive prior to the date of this Agreement
shall be deemed fully earned as if all performance goals had been fully attained
and the performance period ended prior to the date of this Agreement on the
Effective Date. The treatment of awards of stock options, stock
appreciation rights, restricted stock, performance based equity awards or
similar equity awards made on or after the date of this Agreement shall be
determined under the terms of the instruments evidencing such
awards.
5. Termination
of Employment. (a) Death or Disability. The
Executive’s employment shall terminate automatically upon the Executive’s death
during the Employment Period. If the Company determines in good faith that
the
Disability of the Executive has occurred during the Employment Period (pursuant
to the definition of Disability set forth below), it may give to the Executive
written notice in accordance with Section 12(b) of this Agreement of its
intention to terminate the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate effective on the 30th day after
receipt
of such notice by the Executive (the “Disability Effective Date”), provided
that, within the 30 days after such receipt, the Executive shall not have
returned to full-time performance of the Executive’s duties. For purposes of
this Agreement, “Disability” shall mean the absence of the Executive from the
Executive’s duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness
which
is determined to be total and permanent by a physician selected by the Company
or its insurers and acceptable to the Executive or the Executive’s legal
representative.
(b) Cause. The
Company may terminate the Executive’s employment during the Employment Period
for Cause. For purposes of this Agreement, “Cause” shall mean:
(i) fraud,
misappropriation or intentional material damage to the property or business
of
the Company, or
(ii) commission
of a felony whose determination is final and non-appealable, or entry of
a plea
of guilty or no contest to the commission of a felony, or
(iii) material
violation of any material law, rule or regulation applicable to the Company
or
its business.
For
purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered “intentional” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly
adopted by the Board or upon the instructions of the Chief Executive Officer
or
a senior officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done,
by the
Executive in good faith and in the best interests of the Company. The cessation
of employment of the Executive shall not be deemed to be for Cause unless
and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held
for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before
the
Board), finding that, in the good faith opinion of the Board, the Executive
is
guilty of the conduct described in subparagraph (i) or (ii) or (iii) above,
and
specifying the particulars thereof in detail.
(c) Good
Reason. The Executive’s employment may be terminated by the Executive
for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean:
(i) without
the express written consent of the Executive, the assignment to the Executive
of
any duties inconsistent in any respect with the Executive’s position (including
status, offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 4(a) of this Agreement, or any
other
action by the Company which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
the
Executive;
(ii) any
failure by the Company to comply with any of the provisions of Section 4(b)
of
this Agreement, other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and which is remedied by the Company promptly
after
receipt of notice thereof given by the Executive;
(iii) without
the express written consent of the Executive, the Company’s requiring the
Executive to be based at any office or location other than as provided in
Section 4(a)(i)(B) hereof or the Company’s requiring the Executive to travel on
Company business to a substantially greater extent than required during the
one-year period prior to the Effective Date;
(iv) any
purported termination by the Company of the Executive’s employment otherwise
than as expressly permitted by this Agreement; or
(v) any
failure by the Company to comply with and satisfy Section 11(c) of this
Agreement.
For
purposes of this Section 5(c), any good faith determination of “Good Reason”
made by the Executive shall be conclusive. Anything in this Agreement to
the
contrary notwithstanding, a termination by the Executive for any reason during
the 30-day period immediately following the first anniversary of the Effective
Date shall be deemed to be a termination for Good Reason for all purposes
of
this Agreement.
(d) Notice
of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of Termination
to the
other party hereto given in accordance with Section 12(b) of this Agreement.
For
purposes of this Agreement, a “Notice of Termination” means a written notice
which (i) indicates the specific termination provision in this Agreement
relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the
facts
and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after
the
giving of such notice). The failure by the Executive or the Company to set
forth
in the Notice of Termination any fact or circumstance which contributes to
a
showing of Good Reason or Cause shall not waive any right of the Executive
or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights hereunder.
(e) Date
of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for
Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive’s employment is
terminated by the Company other than for Cause or Disability, the date on
which
the Company notifies the Executive of such termination and (iii) if the
Executive’s employment is terminated by reason of death or Disability, the date
of death of the Executive or the Disability Effective Date, as the case may
be.
6. Obligations
of the Company upon Termination. (a) Good Reason;
Other Than for Cause, Death or Disability. If, during the Employment Period,
the
Company shall terminate the Executive’s employment other than for Cause, Death
or Disability or the Executive shall terminate employment for Good
Reason:
(i) the
Company shall pay to the Executive the following amounts:
A. in
a lump sum in cash 30 days after the Date of Termination, the sum of (1)
the
Executive’s Annual Base Salary through the Date of Termination to the extent not
theretofore paid, (2) the Executive’s Annual Bonus for the most recently
completed fiscal year, to the extent not theretofore paid or deferred by
the
Executive, and (3) the product of (x) the Annual Bonus in effect at such
date
and (y) a fraction, the numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the denominator of which
is
365, and (4) any accrued vacation pay, to the extent not theretofore paid;
and
B. at
the time and in the manner provided in, or in accordance with, the applicable
written deferral arrangement, any compensation previously deferred by the
Executive (together with any accrued interest or earnings thereon), to the
extent not theretofore paid (such deferred compensation, together with the
amounts referred to in subclauses (1), (2) (3) and (4) of clause (A) above,
the
“Accrued Obligations”);
C. the
amount equal to the product of (1) [MULTIPLE] and (2) the sum of (x) the
Executive’s Annual Base Salary and (y) the Annual Bonus and (z) the aggregate
employer contributions made for the Executive’s account for the most recently
completed fiscal year under all qualified and non-qualified defined contribution
plans.
(ii) for
[MULTIPLE] years after the Executive’s Date of Termination, or such longer
period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue group health, medical, dental,
vision, prescription drug and life insurance benefits to the Executive and/or
the Executive’s family (collectively, the “Other Benefits”) at least equal to
those which would have been provided to them in accordance with the plans,
programs, practices and policies described in Section 4(b)(iv) of this Agreement
if the Executive’s employment had not been terminated or, if more favorable to
the Executive, as in effect generally at any time thereafter with respect
to
other peer executives of the Company and its affiliated companies and their
families, provided, however, that if the Executive becomes reemployed with
another employer and is eligible to receive medical or other benefits under
another employer-provided plan, the medical and other benefits described
herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility, and for purposes of determining eligibility
(but not the time of commencement of benefits) of the Executive for retiree
benefits pursuant to such plans, practices, programs and policies, the Executive
shall be considered to have remained employed until three years after the
Date
of Termination and to have retired on the last day of such period;
(iii) without
limiting the generality of clause (ii) above, the Executive’s participation in
the Company’s hospital/medical/surgical insurance plan shall be continued on the
same basis as prior to the Date of Termination, or equivalent benefits shall
be
provided by the Company, at no direct cost to the Executive for a period
of
[MULTIPLE] years from the Date of Termination; and
(iv) the
Company shall, at its sole expense as incurred, provide the Executive with
outplacement services the scope and provider of which shall be selected by
the
Executive in the Executive’s sole discretion, but shall in event cost the
Company more than $10,000 in any calendar year or continue for more than
[MULTIPLE].
(b) Death. If
the Executive’s employment is terminated by reason of the Executive’s death
during the Employment Period, this Agreement shall terminate without further
obligations to the Executive’s legal representatives under this Agreement, other
than for payment of Accrued Obligations and the timely payment or provision
of
Other Benefits.
(c) Disability. If
the Executive’s employment is terminated by reason of the Executive’s Disability
during the Employment Period, this Agreement shall terminate without further
obligations to the Executive, other than for payment of Accrued Obligations
and
the timely payment or provision of Other Benefits. Accrued Obligations shall
be
paid to the Executive in a lump sum in cash 30 days after the Date of
Termination. With respect to the provision of Other Benefits, the term Other
Benefits as utilized in this Section 6(c) shall include, and the Executive
shall
be entitled after the Disability Effective Date to receive, disability and
other
benefits at least equal to the most favorable of those generally provided
by the
Company and its affiliated companies to disabled executives and/or their
families in accordance with such plans, programs, practices and policies
relating to disability, if any, as in effect generally with respect to other
peer executives and their families at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the Executive
and/or the Executive’s family, as in effect at any time thereafter generally
with respect to other peer executives of the Company and its affiliated
companies and their families.
(d) Cause;
Other than for Good Reason. If the Executive’s employment shall be
terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (x) the Annual Base Salary through the Date of
Termination, (y) the amount of any compensation previously deferred by the
Executive, to the extent vested, and (z) Other Benefits, in each case to
the
extent theretofore unpaid. If the Executive voluntarily terminates employment
during the Employment Period, excluding a termination for Good Reason, this
Agreement shall terminate without further obligations to the Executive, other
than for Accrued Obligations and the timely payment or provision of Other
Benefits. In such case, all Accrued Obligations shall be paid to the Executive
in a lump sum in cash within 30 days of the Date of Termination.
(e) Payment
Schedule. Notwithstanding anything to the contrary in this Agreement,
to the extent required to comply with Section 409A(a)(2)(B) of the Code,
(I) if
the Executive’s termination of employment does not constitute a “separation from
service” within the meaning of Section 409A of the Code, any taxable payment or
benefit which becomes due under this Agreement as a result of such termination
of employment shall be deferred to the earliest date on which the Executive
has
a separation from service within the meaning of Section 409A of the Code;
and
(ii) if the Executive is deemed to be a ‘specified employee’ for purposes of
Section 409A(a)(2)(B) of the Code at his separation from service, payments
due
to him that would otherwise have been payable at any time during the six
month
period immediately following separation from service (within the meaning
of
Section 409A of the Code) shall not be paid prior to, and shall instead be
payable in a lump sum upon, the expiration of such six-month period. Any
amounts
deferred under this Section 4(e) shall bear interest at an annual rate equal
to
the long-term rate from the date originally scheduled to be paid through
and
including the date of actual payment, compounded monthly.
(f) Payment
Cap. Notwithstanding anything to the contrary in this Agreement,
if any payment under this Section 6, either alone or together with other
payments and benefits which the Executive has the right to receive from the
Company and its affiliated companies, would constitute a “parachute payment”
under Section 280G of the Code, payments shall be reduced by the amount,
if any,
which is the minimum necessary to result in no portion of such payments being
non-deductible to the Company or its affiliated companies pursuant to Section
280G of the Code and subject to the excise tax imposed under Section 4999
of the
Code. The allocation of the reduction required hereby among such payments
shall
be determined by the Executive.
7. Non-exclusivity
of Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any plan, program, policy or
practice provided by the Company or any of its affiliated companies and for
which the Executive may qualify, nor, subject to Section 12(f), shall anything
herein limit or otherwise affect such rights as the Executive may have under
any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract
or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
8. Full
Settlement; Legal Fees. The Company’s obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against
the
Executive or others. In no event shall the Executive be obligated to seek
other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and except
as
specifically provided in Section 6(a)(ii), such amounts shall not be reduced
whether or not the Executive obtains other employment. The Company agrees
to pay
as incurred, to the full extent permitted by law, all legal fees and expenses
which the Executive may reasonably incur as a result of any contest (regardless
of the outcome thereof) by the Company, the Executive or others of the validity
or enforceability of, or liability or entitlement under, any provision of
this
Agreement or any guarantee of performance thereof (whether such contest is
between the Company and the Executive or between either of them and any third
party, and including as a result of any contest by the Executive about the
amount of any payment pursuant to this Agreement), plus in each case interest
on
any delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code.
9. Determinations
Required under Section 280G of the Code. All calculations
required to be made in order to determine whether payments constitute an
“excess
parachute payment” within the meaning of Section 280G of the Code , including
the assumptions to be utilized in arriving at such determination, shall be
made
by ▇▇▇▇▇ ▇▇▇▇▇▇ and Company LLC or such other registered public accounting
firm
as may be designated by acting as the Company’s independent auditors (the
“Accounting Firm”), which shall provide detailed supporting calculations both to
the Company and the Executive within 15 business days of the receipt of demand
from the Executive, or such earlier time as is requested by the Company.
In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Executive
shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm
shall
be borne solely by the Company. Any determination by the Accounting Firm
shall
be binding upon the Company and the Executive.
10. Restrictive
Convents. The Company conducts a consumer and business banking
business (the “Company’s Business”). The Executive acknowledges that the Company
is entering into this Agreement with him for the purpose of preserving and
cultivating the Company’s Business in preparation for a possible Change of
Control of the Company. Therefore, the Executive agrees to the following
covenants:
(i) Definition
of Company’s Geographic Market. For all purposes of this Section 10,
the Company’s Geographic Market shall be any town, county, village or other
municipal unit by which the Company or any applicable Company maintains an
office, but that contiguous town, county, village or municipal
unit.
(ii) Confidential
Information. Unless he obtains the prior written consent of the
Company, the Executive shall keep confidential and shall refrain from using
for
the benefit of himself, or any person or entity other than the Company and
its
parents and subsidiaries (the Company and such parents and subsidiaries
collectively, the “Company’s Affiliated Group”), any material document or
information obtained from a member of the Company’s Affiliated Group in the
course of his employment with any of them concerning their current or planned
future properties, operations or business, including but not limited to
information concerning the Company’s customers (the “Confidential Information”)
unless and until such document or information is readily ascertainable from
public or published information or trade sources or has otherwise been made
available to the public through no fault of his own; provided, however, that
nothing in this Section 10(a)(ii) shall prevent the Executive, with or without
the Company’s consent, from participating in or disclosing documents or
information in connection with any judicial or administrative investigation,
inquiry or proceeding to the extent that such participation or disclosure
is
compelled under applicable law; in such event, the Executive shall, to the
extent practicable under the circumstances, notify the Company in advance
of and
afford the Company an opportunity, at its own expense, to take action to
prevent
or limit the scope of such participation or disclosure.
(iii) Proprietary
Information. The Executive acknowledges that, during the course of
his employment, he will, alone or jointly with others, develop or have access
to
information (whether in written, oral, electronic or other form) concerning
the
Company’s Affiliated Group’s business plans, marketing plans, methods and
surveys, product and service design, development and pricing plans and methods,
customer lists, prospect lists, customer relationship information and need
assessments, profitability assessments, technology, service marks, trademarks
and other intellectual property, trade secrets, know-how and other proprietary
information concerning the Company’s Affiliated Group (the “Proprietary
Information”). The Executive acknowledges that all such Proprietary Information
is, as between the Executive and the Company’s Affiliated Group, the sole
property of the Company’s Affiliated Group and that the Executive has no right,
title or interest therein. During his employment with the Company and at
all
times thereafter, the Executive shall refrain from using any Proprietary
Information for the benefit of any person or entity other than the Company’s
Affiliated Group. At any time upon the Company’s request, and in any event upon
his termination of employment with the Company, the Executive shall promptly
return to the Company all Proprietary Information in his possession in any
form
or media and all laptop computers, cell phones and other property of the
Company’s Affiliated Group in his possession and shall, if requested to do so by
the Company, certify in writing that any Proprietary Information not so returned
has been destroyed.
(iv) Non-derogation. While
employed by the Company and at all times thereafter, the Executive shall
refrain
from making any statement (whether or not in writing) concerning the Company’s
Affiliated Group or its business, operations, customers, directors, officers,
employees or owners that he intends, or that a reasonable person acting in
like
circumstances would expect, to impair in any respect the Company’s Affiliated
Group’s business, operations or reputation.
(v) Solicitation. The
Executive, for a period of one (1) year following his termination of employment
with the Company, shall not, without the written consent of the Company,
either
directly or indirectly:
(A) solicit,
offer employment to, or take any other action intended, or that a reasonable
person acting in like circumstances would expect, to have the effect of causing
any officer or employee of the Company’s Affiliated Group to terminate his or
her employment and accept employment or become affiliated with, or provide
services with or without compensation in any capacity whatsoever to, any
person
or entity engaged in a business or line of business or providing a product
or
service in direct or indirect competition with the Company’s Business in the
Company’s Geographic Market;
(B) provide
any information, advice or recommendation with respect to any such officer
or
employee to any person or entity that is intended, or that a reasonable person
acting in like circumstances would expect, to have the effect of causing,
encouraging or enabling any officer or employee of the Company’s Affiliated
Group to terminate his employment and accept employment or become affiliated
with, or provide services with or without compensation in any capacity
whatsoever to, any person or entity engaged in a business or line of business
or
providing a product or service in direct or indirect competition with the
Company’s Business in the Company’s Geographic Market; or
(C) directly
or indirectly solicit, or facilitate in any manner any other person’s or
entity’s solicitation of, business in competition with the Company’s Business in
the Company’s Geographic Market from (I) any of the Company’s customers with
whom the Executive served as a relationship manager, or whom the Executive
was
assigned to solicit on behalf of the Company, at any time during the period
of
one (1) year ending on the date of his termination of employment; (II) any
other
person or entity which the Executive knows to be one of the Company’s customers,
or (III) any other person or entity which the Executive knows is being actively
solicited by the Company on, or had been identified for active solicitation
by
the Company at any time during the period of one (1) year ending on the date
of
his termination of employment with the Company.
(b) Reasonableness
of Covenants. The Executive acknowledges that: (i) the Company
has a legitimate business interest in preserving its investment in its
Confidential Information and Proprietary Information, and the Company’s
customers; (ii) the restrictions set forth in this Section 10 constitute
reasonable restrictions to protect the Company’s legitimate business interests;
(iii) such restrictions are reasonable in duration, geographic scope and
scope
of business protected; (iv) observing such restrictions will not unreasonably
impair the Employee’s ability to seek or secure employment following his
termination of employment with the Company; and (v) his employment by the
Company constitute adequate consideration for his adherence to such
restrictions. The Executive hereby waives his right, in any action or proceeding
relating to the enforcement or enforceability of the provisions of this Section
10, to make any argument or assertion to the contrary.
(c) Nonexclusive
Monetary Damages. If the Executive violates any of the covenants
set forth in Section 10(a), then in addition to any other remedies that may
be
available to the Company at law or equity: (i) the Executive shall forfeit
his
right to receive any future compensation and benefits under this Agreement,
other than earned but unpaid compensation under vested benefits under benefit
plans; (ii) the Executive shall repay to the Company on demand the amount
of any
payments (other than earned compensation and vested benefits under benefit
plans) theretofore paid, together with interest thereon from the date of
payment
by the Company to the date of repayment by the Executive at the rate of six
percent (6%) per annum, compounded annually; and (iii) the Executive shall
forfeit and pay over to the Company any monetary payments made, and the fair
market value of any benefits in kind (including but not limited to benefits
under any indemnification agreements or arrangements) provided, by any person
or
entity for the purpose of inducing the Executive to violate, or rendering
the
Executive financially indifferent to the consequences of violating, any of
such
covenants. The Executive hereby acknowledges that the foregoing constitute
reasonable but non-exclusive damages and waives his right, in any action
or
proceeding relating to the enforcement or enforceability of the provisions
of
this Section 10, to make any argument or assertion to the contrary.
(d) Specific
Performance. The Executive acknowledges that money damages will
not be an adequate remedy for his failure to observe or perform any of the
covenants set forth in Section 10(a). Therefore, the Company shall have the
right to apply to any court of competent jurisdiction for equitable relief,
including but not limited to a temporary restraining order or injunction
ordering specific performance. The Executive hereby waives his right, in
any
action or proceeding relating to any application for equitable relief, to
make
any argument or assertion to the contrary.
(e) Notification
to Subsequent Employers and Potential Employers. Prior to
accepting employment with any person or entity other than a member of the
Company’s Affiliated Group, the Executive shall disclose to such person or
entity the existence of this Agreement and furnish such person or entity
with a
copy hereof. The Company reserves the right, and the Executive hereby authorizes
the Company (i) to notify any person or entity making a pre-hire or post-hire
inquiry of the Company concerning the Executive of the existence of this
Agreement and to furnish to such person or entity a copy hereof and (ii)
to
notify any person or entity engaged in a business or line of business or
providing products or services in direct or indirect competition with the
Company’s Business in the Company’s Geographic Market by whom the Executive is
subsequently employed, or with whom the Executive is subsequently affiliated
as
an owner, investor, financier, director, officer, employee, independent
contractor, vendor or service provider, whether for or without compensation,
of
the existence of this Agreement and to furnish to such person or entity a
copy
hereof.
(f) Reformation
or Modification. In the event that this Section 10 or any portion
hereof shall be found by an arbitrator or court of competent jurisdiction
to be
unenforceable as written, such court or arbitrator shall, and is hereby
authorized to, modify this Section 10 or any portion hereof in such manner
as he
or it determines to be necessary to render this section 10 enforceable to
the
maximum possible extent and to enforce this Section 10 as so
modified.
11. Successors. (a) This
Agreement is personal to the Executive and without the prior written consent
of
the Company shall not be assignable by the Executive otherwise than by will
or
the laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Executive’s legal representatives.
(b) This
Agreement shall inure to the benefit of and be binding upon the Company and
its
successors and assigns.
(c) The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would
be
required to perform it if no such succession had taken place.
As
used
in this Agreement, “Company” shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
12. Miscellaneous. (a) This
Agreement shall be governed by and construed in accordance with the laws
of the
State of New York, without reference to principles of conflict of laws. The
captions of this Agreement are not part of the provisions hereof and shall
have
no force or effect. This Agreement may not be amended or modified otherwise
than
by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) All
notices and other communications hereunder shall be in writing and shall
be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
1 The
Company’s General Counsel, ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, has not previously entered
into a Change of Control Employment Agreement with the Company. As
such, ▇▇. ▇▇▇▇▇▇▇▇▇’▇ Change of Control Employment Agreement is not being
amended and restated. All terms and conditions of ▇▇. ▇▇▇▇▇▇▇▇▇’▇
Change of Control Employment Agreement are otherwise identical to the terms
and
conditions of this form of Amended and Restated Change of Control Employment
Agreement.
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If
to the Executive:
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If
to the Company:
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State
Bancorp, Inc.
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▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Attention:
General Counsel
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or
to
such other address as either party shall have furnished to the other in writing
in accordance herewith. Notice and communications shall be effective when
actually received by the addressee.
(c) The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
(d) The
Company may withhold from any amounts payable under this Agreement such Federal,
state, local or foreign taxes as shall be required to be withheld pursuant
to
any applicable law or regulation.
(e) The
Executive’s or the Company’s failure to insist upon strict compliance with any
provision hereof or any other provision of this Agreement or the failure
to
assert any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for
Good
Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed
to
be a waiver of such provision or right or any other provision or right of
this
Agreement.
(f) The
Executive and the Company acknowledge that, except as may otherwise be provided
under any other written agreement between the Executive and the Company,
the
employment of the Executive by the Company is “at will” and, prior to the
Effective Date, the Executive’s employment may be terminated by either the
Executive or the Company at any time, in which case the Executive shall have
no
further rights under this Agreement. From and after the Effective Date, this
Agreement shall supersede any other agreement between the parties with respect
to the subject matter hereof.
IN
WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf, all as of
the
day and year first above written.
________________________________
[NAME]
STATE
BANCORP, INC.
By: _________________________________