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Exhibit 10(i)(b)
Sterling Bancorp
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000-0000
May 22, 1998
Xx. Xxxx X. Xxxxxxx
President
Sterling Bancorp
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xx. Xxxxxxx:
This will confirm the following amendments to your employment agreement, dated
February 19, 1993 (as amended, February 14, 1995, February 8, 1996, February 28,
1997 and February 19, 1998), with our Company:
(1) The first sentence of Paragraph 5 is hereby deleted and the following
sentence is inserted in lieu thereof:
In the event of a Change of Control (as defined in Schedule A
annexed) you may terminate without cause your employment within 13 months
following the event of Change in Control by reason thereof.
(2) Paragraph 7(i)(A) is hereby deleted and the following paragraph is
inserted in lieu thereof:
(i) (A) if the termination of your employment follows a Change in Control,
the Company will pay to you a lump-sum cash amount equal to (x) three (3)
times your then base annual compensation plus (y) three times your highest
annual bonus earned from the Company (and its affiliates) during the last
three completed fiscal years of the Company immediately preceding your
Date of Termination, such amount to be paid within ten days following the
Date of Termination. Such payment will be made notwithstanding the length
of the then current term of this Agreement. In addition, for
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Exhibit 10(i)(b)
a period of thirty-six (36) months, the Company shall maintain the
benefits listed in subparagraph (iv) of this Paragraph 7 below.
(3) The following paragraph is hereby inserted at the end of Paragraph 7:
In addition, if you are entitled to receive a payment under
paragraph 7.(i)(A) following a Change in Control and it shall be
determined that any payment, award, benefit or distribution (or any
acceleration of any payment, award, benefit or distribution) by the
Company (or any of its affiliated entities) or any entity which
effectuates a Change in Control (or any of its affiliated entities) to or
for your benefit (whether pursuant to the terms of this Agreement or
otherwise determined without regard to any additional payments required
under this paragraph) (the "Payments") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"), or any interest or penalties are incurred by you with
respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Company shall pay to you an additional payment (a
"Gross-Up Payment") in an amount such that after payment by you of all
taxes (including any Excise Tax) imposed upon the Gross-Up Payment, you
shall retain an amount of the Gross-Up Payment equal to the sum of (x) the
Excise Tax imposed upon the Payments and (y) the product of any deductions
disallowed because of the inclusion of the Gross-up Payment in your
adjusted gross income and the highest applicable marginal rate of federal
income taxation for the calendar year in which the Gross-up Payment is to
be made. For purposes of determining the amount of the Gross-up Payment,
you shall be deemed to (i) pay federal income taxes at the highest
marginal rates of federal income taxation for the calendar year in which
the Gross-up Payment is to be made, (ii) pay applicable state and local
income taxes at the highest marginal rate of taxation for the calendar
year in which the Gross-up Payment is to be made, net of the maximum
reduction in federal income taxes which could be obtained from deduction
of such state and local taxes and (iii) have otherwise allowable
deductions for federal income tax purposes at
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Exhibit 10(i)(b)
least equal to those which could be disallowed because of the inclusion of
the Gross-up Payment in your adjusted gross income.
Subject to the provisions of the immediately preceding paragraph,
all determinations required to be made concerning the Gross-Up Payment
including whether and when a Gross-Up Payment is required, the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at
such determinations, shall be made by the public accounting firm that is
retained by the Company as of the date immediately prior to the Change in
Control (the "Accounting Firm") which shall provide detailed supporting
calculations both to you and to the Company within fifteen (15) business
days of the receipt of notice from you or the Company that there has been
a Payment, or such earlier time as is requested by the Company
(collectively, the "Determination"). In the event that the Accounting Firm
is serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, you may appoint another nationally
recognized public 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 and the Company shall enter into any
agreement requested by the Accounting Firm in connection with the
performance of the services hereunder. The Gross-up Payment with respect
to any Payments shall be made no later than thirty (30) days following
such Payment. If the Accounting Firm determines that no Excise Tax is
payable by you, it shall furnish you with a written opinion to such
effect, and to the effect that failure to report the Excise Tax, if any,
on your applicable federal income tax return will not result in the
imposition of a negligence or similar penalty. The Determination by the
Accounting Firm shall be binding upon you and the Company. As a result of
the uncertainty in the application of Section 4999 of the Code at the time
of the Determination, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment") or
Gross-up Payments will be made by the Company which should not have been
made ("Overpayment"), consistent with the calculations required to be made
hereunder. In the event that you thereafter
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Exhibit 10(i)(b)
are required to make payment of any Excise Tax or additional Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by
the Company to or for your benefit. In the event the amount of the
Gross-up Payment exceeds the amount necessary to reimburse you for your
Excise Tax, the Accounting Firm shall determine the amount of the
Overpayment that has been made and any such Overpayment (together with
interest at the rate provided in Section 1274(b)(2) of the Code) shall be
promptly paid by you (to the extent you have received a refund if the
applicable Excise Tax has been paid to the Internal Revenue Service) to or
for the benefit of the Company. You shall cooperate, to the extent your
expenses are reimbursed by the Company, with any reasonable requests by
the Company in connection with any contests or disputes with the Internal
Revenue Service in connection with the Excise Tax.
The foregoing amendments were recommended by the Compensation Committee
and were approved by the Board of Directors at its May 21, 1998 meeting.
Kindly sign and return the enclosed copy to the Company in order to confirm your
understanding and acceptance of the foregoing amendments.
Sincerely,
STERLING BANCORP
By /s/ Xxxxxxx Xxxxxxx
--------------------------------
Executive Vice President
Agreed:
/s/ Xxxx X. Xxxxxxx
--------------------------------
Xxxx X. Xxxxxxx
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