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Exhibit 10.4
Xxxxx 0, 0000
X.X.X. Holding Co., Inc.
000 Xxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Tappan Zee Financial, Inc.
Tarrytowns Bank, FSB
00 Xxxxx Xxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
U.S.B. Holding Co., Inc. ("USB") and Tappan Zee Financial, Inc.
("Tappan Zee") desire to enter into an agreement dated March 6, 1998
("Agreement"), pursuant to which, subject to the terms and conditions set forth
therein, (a) Tappan Zee will merge with and into USB with USB surviving the
merger, and (b) shareholders of Tappan Zee will receive common stock of USB in
exchange for common stock of Tappan Zee outstanding on the closing date (the
foregoing, collectively, referred to as the "Merger"). As a result of the
Merger, Tarrytowns Bank, FSB (the "Bank") will become a wholly owned subsidiary
of USB.
As part of the Agreement, USB desires to have the Bank and USB enter
into an agreement with the undersigned executive (the "Executive") in the form
set forth as Exhibit G to the Agreement upon consummation of the Merger (the
"New Employment Agreement"), and to have the Bank and USB honor the terms of
the New Employment Agreement. The New Employment Agreement will replace and
supersede the Executive's Employment Agreement with Tappan Zee dated June 23,
1997 (the "1997 Tappan Zee Agreement") and the Executive's Employment Agreement
with the Bank dated June 23, 1997 (the "1997 Bank Agreement") (collectively,
the "1997 Agreements").
USB has required, as a condition to its execution and delivery to
Tappan Zee of the Agreement, that the undersigned Executive execute and deliver
to USB this Letter Agreement.
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U.S.B. Holding Co., Inc.
Tappan Zee Financial, Inc.
March 6, 1998
Page 2
In order to induce USB to enter into the Agreement, and in
consideration of the New Employment Agreement to be entered into upon
consummation of the Merger, the undersigned Executive hereby irrevocably
(except as set forth below):
(a) with respect to the Incentive Stock Option Agreement
between the Executive and Tappan Zee dated July 11, 1996 (the "Option
Agreement"), agrees that neither consummation of the Merger nor approval of the
Merger by Tappan Zee's shareholders shall result in an acceleration of the
Executive's right to exercise any of the options covered by the Option
Agreement, with it being understood that any such options which are not
exercisable as of consummation of the Merger shall continue to become
exercisable in accordance with the other terms of the Option Agreement and the
New Employment Agreement, including those relating to death or disability;
(b) with respect to the Restricted Stock Award Notice
between the Executive and Tappan Zee dated July 11, 1996 (the "Restricted Stock
Notice"), agrees that neither consummation of the Merger nor approval of the
Merger by Tappan Zee's shareholders shall result in any accelerated vesting of
the shares of stock covered by the Restricted Stock Notice, with it being
understood that any such restricted shares which have not vested as of
consummation of the Merger shall continue to vest in accordance with the other
terms of the Restricted Stock Notice and the New Employment Agreement,
including those relating to death or disability;
(c) agrees to waive in connection with the transactions
contemplated by the Agreement, including but not limited to consummation of the
Merger, any rights which the Executive may have under Section 9(b)(vi) of the
1997 Tappan Zee Agreement and Section 9(b)(vi) of the 1997 Bank Agreement;
(d) in light of the proposed New Employment Agreement,
agrees to waive in connection with the transactions contemplated by the
Agreement, including but not limited to consummation of the Merger, the
provisions of Section 17 of the 1997 Tappan Zee Agreement and Section 16 of the
1997 Bank Agreement; and
(e) provides written notice of non-extension to both
Tappan Zee and the Bank that his "Employment Period" (as defined in Section
2(a) of both the 1997 Tappan Zee Agreement and the 1997 Bank Agreement) shall
not be extended any further, and as a result of this written notice of
non-extension being given in accordance with Section 2(b) of both the 1997
Tappan Zee Agreement and the 1997 Bank Agreement, his "Employment Period" and
his "Remaining Unexpired Employment Period" (as defined in Section 2(b) of
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U.S.B. Holding Co., Inc.
Tappan Zee Financial, Inc.
March 6, 1998
Page 3
both the 1997 Tappan Zee Agreement and the 1997 Bank Agreement) shall each end
on the third anniversary of the date of this Letter Agreement.
This Letter Agreement shall terminate concurrently with any
termination of the Agreement in accordance with its terms, or concurrently with
the consummation of the Merger if the New Employment Agreement has not been
executed and delivered by all parties other than the Executive, in which event
the written notice of non-extension in clause (e) above shall also be deemed
null and void. This Letter Agreement shall not impair or adversely affect any
rights which the Executive (or his legal representatives and testate or
intestate distributees) may have (i) under the 1997 Agreements in the event the
Executive's employment with Tappan Zee and the Bank is terminated prior to
consummation of the Merger due to the Executive's death or disability, or (ii)
under the New Employment Agreement in the event the Executive's employment with
the Bank is terminated following consummation of the Merger due to the
Executive's death, disability or discharge without cause.
The undersigned Executive intends to be legally bound hereby and has
affixed his signature hereto as of this 6th day of March 1998.
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx