SUN BANCORP, INC. CHANGE IN CONTROL SEVERANCE AGREEMENT Amended and Restated
SUN
BANCORP, INC.
Amended
and Restated
THIS
CHANGE IN CONTROL SEVERANCE
AGREEMENT (“Agreement”) entered into this 18th day of October,
2007 (“Effective Date”), by and between Sun Bancorp, Inc. (the “Company”) and
Xxxxxxx X. Xxxxx (the “Executive”).
WHEREAS,
the Executive is currently
employed by the Company as Chairman and is experienced in all phases of the
business of the Company; and
WHEREAS,
the parties desire by this
writing to set forth the continuing 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 Chairman of the Company. The
Executive shall render such administrative and 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 thirty-six (36) months thereafter
(“Term”). Additionally, as of each December 31, thereafter, the
Term of this Agreement shall be extended for an additional period such that
the
Term of the Agreement as of such date of extension shall be for a new period
of
thirty-six months thereafter; provided, however, such Term shall not be
automatically extended as of December 31 of any given year if the Board shall
give the Executive written notice not later October 1 immediately prior to
such
December 31 date that the Board has made a determination by an affirmative
vote
of not less than a majority of the members of the full Board then in office
that
such Agreement shall not be extended thereafter absent a future affirmative
determination and resolution of the Board of Directors that the Term of such
Agreement shall be extended beyond the then in effect expiration date of such
Agreement. The Term shall refer to the initial Term or any subsequent
extension of such Term thereafter.
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3.Termination
of Employment in Connection with or Subsequent to a Change in
Control.
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(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 24 months thereafter of
such
Change in Control, absent Just Cause, the Executive shall be paid an
amount equal to the product of 2.999 times the Executive's average annual
aggregate taxable compensation paid by the Company as reported, or to be
reported, on the IRS Form W-2, box 1, or IRS Form 1099 for the most recently
completed five calendar years 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 the Executive's termination of
service. 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 twenty-four months following such Change in
Control, and Executive shall 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; (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 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; (v) if Executive's responsibilities
or authority have in any way been materially diminished or reduced; or (vi)
if
Executive would not be reelected to the Board of Directors of the
Company. 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.
(a)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 USC
'1828(k)
and any regulations promulgated thereunder.
(b)Notwithstanding
anything herein to
the contrary, any payments to be made in accordance with Sections 3 or 4 of
the
Agreement shall not be made prior to the date that is 183 calendar days from
the
date of termination of employment, or such later date as determined in good
faith by the Bank or Company (“Payment Date”), if it is determined by the Bank
or the Company in good faith that the Executive is a “specified employee” within
the meaning of Section 409A of the Code, that such payments to be made to such
Executive are subject to the limitations at Section 409A of the Code and
regulations promulgated thereunder, and payments made in advance of such Payment
Date would result in the requirement for the Executive to pay additional
interest and taxes to be imposed in accordance with Section 409A(a)(1)(B) of
the
Code.
0.Xx
Duty to
Mitigate. The Executive shall not be required to mitigate the
amount of any payment of severance benefits if he or she 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.
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 or her
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, and shall supersede any prior
agreements or understandings with respect to the subject matter
herein.
