EXHIBIT 10.7 - AMENDED SPECIAL SEVERANCE AGREEMENT BETWEEN REGISTRANT AND
XXXXXX X. XXXXX
31
THE FIRST OF LONG ISLAND CORPORATION
AMENDED SPECIAL SEVERANCE AGREEMENT
AGREEMENT dated as of July 1, 1999 by and between THE FIRST OF LONG ISLAND
CORPORATION (hereinafter referred to as "FLIC") XXXXXX X. XXXXX (hereinafter
referred to as the "Officer").
1. Term.
The term of this agreement shall be for a period of one (1) year commencing
on the date hereof. The term shall be automatically renewed for additional one
(1) year terms, unless the Board of Directors of FLIC chooses not to renew and
notifies Officer of such intention not to renew at least thirty (30) days prior
to the end of a term; provided, however, that FLIC may not decline to renew
during any period of time in which the Board of Directors is actively
negotiating a transaction the consummation of which would result in Officer
becoming entitled to a Termination Payment hereunder.
2. Termination Payment.
A. Officer will be entitled to a payment (the "Termination Payment") equal
to One Hundred Per Cent (100%) of his then current annual base salary (the
dollar amount so calculated being hereafter referred to as the "Full
Severance"), and FLIC shall make such Termination Payment to Officer, in the
event of the occurrence of any of the following:
(i) The employment of Officer is terminated by The First National Bank
Of Long Island ("FNBLI") within twenty-four months after a Change Of
Control Event (as hereinafter defined);
(ii) Officer resigns his employment with FNBLI for Good Reason (as
hereinafter defined) within twenty-four months after a Change of Control
Event; or
(iii) The employment of Officer is terminated by FNBLI within
twenty-four months after any entity, person or group shall have acquired
more than twenty per cent (20%) of the voting shares of FLIC and, at the
time of such termination, the Chief Executive Officer of FNBLI serving in
that capacity as of the first day of the term hereof, or of the then
current renewal term, as the case may be, shall have ceased to be employed
by FNBLI in such capacity.
B. Officer will be entitled to a Termination Payment equal to Sixty Six and
Two Thirds Per Cent (66 2/3%) of the Full Severance in the event that Officer
shall resign for any reason during the period beginning on the thirty-first day
after a Change of Control Event and ending on the sixtieth day after such event.
C. In the event that Officer shall become entitled to a Termination Payment
pursuant to Section 2(A) or 2(B) hereof, FLIC shall, at no cost to Officer,
continue to provide family medical and dental coverage to Officer for a period
of twelve (12) months after Officer ceases to be employed by FNBLI, on terms and
conditions substantially the same as FNBLI may, from time to time, make
available to its employees generally during such period; provided, however, that
the obligation of FLIC to provide such coverage
32
shall cease on the date when another employer makes substantially comparable
coverage available to Officer, regardless of whether the benefits made available
by such employer require a contribution on the part of Officer.
D. FLIC may elect to discharge its obligation to make the Termination
Payment and provide such insurance coverage by causing FNBLI, its wholly owned
subsidiary, to do so.
3. Non-Waiver.
The failure of Officer to resign upon the occurrence of a particular event
constituting Good Reason hereunder shall not bar the Officer from resigning upon
the subsequent occurrence of any other or further event constituting Good
Reason, and thereby becoming eligible to receive the Termination Payment,
provided that such resignation occurs within twenty-four months after a Change
of Control Event.
4. Ineligibility For Termination Payment.
Regardless of whether a Change of Control Event shall have occurred,
Officer shall not be entitled to any Termination Payment in the event that his
employment is terminated (i) by reason of his death, normal retirement or
disability, or (ii) by FNBLI for Cause (as hereinafter defined).
5. Definitions.
A. "Good Reason" for resignation by Officer of his employment shall mean
the occurrence (without the Officer's express written consent) of any one of the
following acts or omissions to act by FLIC or FNBLI:
(i) The assignment to Officer of any duties materially inconsistent
with the nature and status of his responsibilities immediately prior to a
Change of Control Event, or a substantial adverse alteration in the nature
or status of his responsibilities from those in effect immediately prior to
the Change of Control Event; provided, however, that a redesignation of his
title shall not in and of itself constitute Good Reason if his overall
duties and status within FLIC and FNBLI are not substantially adversely
affected.
(ii) A reduction in his annual base salary as in effect at the time of
a Change of Control Event. For purposes hereof, "annual base salary" shall
mean regular basic annual compensation prior to any reduction therein under
a salary reduction agreement pursuant to Section 401(k) or Section 125 of
the Internal Revenue Code and, without limitation, shall exclude fees,
bonuses, incentive awards or similar payments.
(iii) The failure by FLIC or FNBLI to pay Officer any portion of his
current compensation, or to pay him any portion of an installment of a
deferred compensation amount under any deferred compensation program,
within fourteen (14) days of the date such compensation is due.
B. "Cause" shall mean any of the following:
(i) The willful and continued failure by Officer to substantially
perform his duties, as they may be defined by FLIC or FNBLI from time to
time, or to abide by the written policies of FLIC or FNBLI after a written
demand for substantial performance
33
is delivered to him by the Chief Executive Officer of FLIC or FNBLI, as the
case may be, which specifically identifies the manner in which he has
failed substantially to perform his duties or has failed to abide by such
written policies, and
(ii) The willful engaging by Officer in conduct which is materially
injurious to FLIC or FNBLI, monetarily or otherwise. For the purpose of the
preceding sentence, no act, or failure to act, on the part of Officer shall
be deemed "willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his act, or failure to act, was in
the best interest of FLIC or FNBLI, as the case may be.
C. "Change of Control Event" shall mean the occurrence of any one of the
following:
(i) Continuing Outside Directors (as hereinafter defined) no longer
constitute at lease two-thirds (2/3) of Outside Directors (as hereinafter
defined) of FLIC;
(ii) There shall be consummated a merger or consolidation of FLIC,
unless at least two-thirds (2/3) of Continuing Outside Directors are to
continue to constitute at least two-thirds (2/3) of Continuing Directors;
(iii) At least two-thirds (2/3) of Continuing Outside Directors
determine that action taken by stockholders constitutes a Change of Control
Event; or
(iv) FNBLI is no longer a wholly-owned subsidiary of FLIC.
D. "Continuing Outside Director" shall mean any individual who is not an
employee of FLIC or FNBLI and who (i) is a director of FLIC as of the date
hereof, (ii) prior to election as a director is nominated by at least two-thirds
(2/3) of the Continuing Outside Directors, or (iii) following election as a
director is designated a Continuing Outside Director by at least two-thirds
(2/3) of Continuing Outside Directors.
E. "Outside Director" shall mean an individual who is not an employee of
FLIC or FNBLI who is a director of FLIC.
6. Withholding Taxes; Other Deductions.
FLIC and FNBLI shall have the right (i) to deduct from any payments due
under this Agreement amounts sufficient to cover withholding as required by law
for any federal, state or local taxes and any amounts due from the Officer to
FLIC or FNBLI and (ii) to take such other action as may be necessary to satisfy
any such withholding or other obligations, including but not limited to
withholding amounts equal to such taxes or obligations from any other amounts
due or to become due from FLIC or FNBLI to Officer.
7. Miscellaneous.
A. Prior Agreement Superseded. This Agreement supersedes and replaces the
Special Severance Agreement between FNBLI and Officer dated November 20, 1998.
B. Employment at Will. Nothing contained herein shall be construed as an
agreement that Officer will continue to be employed by FNBLI for any particular
period of time and the employment of Officer may be terminated by FNBLI at any
time.
C. Accrued Rights. The determination of the Board of Directors of FLIC not
to renew this Agreement shall not
34
deprive Officer of any right that has accrued to Officer during the term hereof
by reason of the occurrence during the term of this Agreement of an event
described in Section "2" hereof.
D. Notices. Any notices required to be given under this Agreement shall be
in writing and shall be sent by certified mail, return receipt requested, to
FLIC at 00 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxx Xxxx 00000, Attention: Chief Executive
Officer, and to you at your residence address as reflected in the records of
FLIC; or to such other address as either party may designate by written notice
to the other.
E. Controlling Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed therein.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
THE FIRST OF LONG ISLAND CORPORATION
By: /s/ J. Xxxxxxx Xxxxxxx, Chairman
--------------------------------
J. Xxxxxxx Xxxxxxx, Chairman
/s/ Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx X. Xxxxx
35
