EXHIBIT 10.4
SUN BANCORP, INC.
FORM OF
CHANGE IN CONTROL SEVERANCE AGREEMENT
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THIS CHANGE IN CONTROL SEVERANCE AGREEMENT ("Agreement") entered into
this day of , ("Effective Date"), by and between Sun
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Bancorp, Inc. (the "Company") and (the "Executive").
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WHEREAS, the Executive is currently employed by the Company as
and is experienced in all phases of the business of the Company;
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and
WHEREAS, the parties desire by this writing to set forth the rights and
responsibilities of the Company and Executive if the Company should undergo a
change in control (as defined hereinafter in the Agreement) after the Effective
Date.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Executive is employed in the capacity as
of the Company. The Executive shall render such administrative and
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management services to the Company and Sun National Bank ("Bank"), as are
currently rendered and as are customarily performed by persons situated in a
similar executive capacity. The Executive's other duties shall be such as the
Board of Directors for the Company (the "Board of Directors" or "Board") may
from time to time reasonably direct, including normal duties as an officer of
the Company and the Bank.
2. Term of Agreement. The term of this Agreement shall be for the
period commencing on the Effective Date and ending months (1) thereafter
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("Term"). Additionally, on, or before, each annual anniversary date from the
Effective Date, the Term of this Agreement may be extended for an additional
period beyond the then effective expiration date upon a determination and
resolution of the Board of Directors that the performance of the Executive has
met the requirements and standards of the Board, and that the Term of such
Agreement shall be extended.
3. Termination of Employment in Connection with or Subsequent to a
Change in Control.
(a) Notwithstanding any provision herein to the contrary, in the event
of the involuntary termination of Executive's employment with the Company during
the term of this Agreement following any Change in Control of the Company or
Bank, or within months (1) thereafter of such Change in Control, absent
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Cause, Executive shall be paid an amount equal
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(1) Agreements have been entered into by the Registrant with varying
terms, ranging from eighteen to thirty-six months.
to the product of times (2) the Executive's aggregate compensation paid
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by the Company as reported, or to be reported, on the IRS Form W-2, box 1, for
the most recently completed calendar year ending on, or before, the date of such
Change in Control. Said sum shall be paid by the Company to the Executive in one
(1) lump sum not later than the date of Executive's termination of service to
the extent not otherwise paid by the Bank. In addition, the Executive and his
dependents shall be eligible to continue coverage under the Company's (or its
successor's) medical and dental insurance reimbursement plans similar to that in
effect on the date of termination of employment at the participants' election
and expense. Notwithstanding the forgoing, all sums payable hereunder shall be
reduced in such manner and to such extent so that no such payments made
hereunder when aggregated with all other payments to be made to the Executive by
the Company or the Bank shall be deemed an "excess parachute payment" in
accordance with Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code") and regulations promulgated thereunder and be subject to the excise
tax provided at Section 4999(a) of the Code. The term "Change in Control" shall
refer to (i) the sale of all, or a material portion, of the assets of the
Company or the Bank; (ii) the merger or recapitalization of the Company or the
Bank whereby the Company or the Bank is not the surviving entity; (iii) a change
in control of the Company or the Bank, as otherwise defined or determined by the
Office of the Comptroller of the Currency or regulations promulgated by it; or
(iv) the acquisition, directly or indirectly, of the beneficial ownership
(within the meaning of that term as it is used in Section 13(d) of the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder) of twenty-five percent (25%) or more of the outstanding voting
securities of the Company or the Bank by any person, trust, entity or group. The
term "person" means an individual other than the Executive, or a corporation,
partnership, trust, association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. The provisions of this Section 3(a) shall survive
the expiration of this Agreement occurring after a Change in Control.
(b) Notwithstanding any other provision of this Agreement to the
contrary, Executive may voluntarily terminate his employment during the term
of this Agreement following a Change in Control of the Company or Bank, or
within months (3)following such Change in Control, and Executive shall
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thereupon be entitled to receive the payment described in Section 3(a) of this
Agreement, upon the occurrence, or within six months thereafter, of any of the
following events, which have not been consented to in advance by the Executive
in writing: (i) if Executive would be required to move his personal residence or
perform his principal executive functions more than thirty-five (35) miles from
the Executive's primary office as of the signing of this Agreement; (ii) if in
the organizational structure of the Company, Executive would be required to
report to a person or persons other than the Board of Directors of the Company
or its President; (iii) if the Company should fail to maintain Executive's base
compensation in effect as of the date of the Change in Control and the existing
Executive benefits plans, including material
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(2) Agreements have been enteredinto by the Registrant with varying terms,
ranging from one and a half to three times the aggregate taxable
compensation for the officer.
(3) Agreements have been entered into by the Registrant with varying
terms, ranging from eighteen to thirty-six months.
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fringe benefit, stock option and retirement plans; (iv) if Executive would be
assigned duties and responsibilities other than those normally associated with
his position as referenced at Section 1, herein; or (v) if Executive's
responsibilities or authority have in any way been materially diminished or
reduced. The provisions of this Section 3(b) shall survive the expiration of
this Agreement occurring after a Change in Control.
4. Other Changes in Employment Status. Except as provided for at
Section 3, herein, the Board of Directors may terminate the Executive's
employment at any time, but any termination by the Board of Directors other than
termination for Just Cause, shall not prejudice the Executive's right to
compensation or other benefits under the Agreement. The Executive shall have no
right to receive compensation or other benefits for any period after termination
for Just Cause. Termination for "Just Cause" shall include termination because
of the Executive's personal dishonesty, incompetence, willful misconduct, breach
of fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease-and-desist order issued
by a federal banking regulatory having regulatory authority over the Company or
Bank, or a material breach of any provision of the Agreement.
5. Regulatory Exclusions. Notwithstanding anything herein to the
contrary, any payments made to the Executive pursuant to the Agreement, or
otherwise, shall be subject to and conditioned upon compliance with 12
USCss.1828(k) and any regulations promulgated thereunder.
6. No Duty to Mitigate. The Executive shall not be required to mitigate
the amount of any payment of severance benefits if he accepts other compensation
for employment with another entity.
7. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon
any corporate or other successor of the Company which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Company.
(b) The Executive shall be precluded from assigning or delegating his
rights or duties hereunder without first obtaining the written consent of the
Company.
8. Amendments. No amendments or additions to this Agreement shall be
binding upon the parties hereto unless made in writing and signed by both
parties, except as herein otherwise specifically provided.
9. Applicable Law. This agreement shall be governed by all respects
whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of New Jersey, except to the extent that Federal law shall be
deemed to apply.
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10. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
11. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules then in effect of the district office of the American
Arbitration Association ("AAA") nearest to the home office of the Company, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof, except to the extend that the parties may otherwise reach a mutual
settlement of such issue. The Company shall reimburse Executive for all
reasonable costs and expenses, including reasonable attorneys' fees, arising
from such dispute, proceedings or actions, following the delivery of the
decision of the arbitrator that the Executive's claim has merit, whether or not
the arbitrator finds in favor of the Executive. The provisions of this Section
11 shall survive the expiration of this Agreement occurring after a Change in
Control.
12. Non-Disclosure. Executive will not, during or after the Term of
this Agreement, directly or indirectly, disseminate or disclose to any person,
firm or entity, except to his legal advisor, the terms of this Agreement without
the written consent of the Company.
13. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and first hereinabove written.
Sun Bancorp, Inc.
ATTEST: By:
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Secretary
WITNESS:
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,Executive
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