Exhibit 10(i)
This CHANGE IN CONTROL SEVERANCE AGREEMENT (as modified, extended or
supplemented from time to time, this "Agreement") is entered into as of the 8th
day of June 2004 by and between Sterling Bancorp, a New York corporation (the
"Company"), and ___ ("Executive").
WITNESSETH:
WHEREAS, the Company considers the establishment and maintenance of a
sound and vital management to be essential to protecting and enhancing the best
interests of the Company and its shareholders;
WHEREAS, the Company recognizes that, as is the case with many publicly
held corporations, the possibility of a Change in Control may arise and that
such possibility may result in the departure or distraction of management
personnel to the detriment of the Company and its shareholders;
WHEREAS, the Board (as defined in Section 1of Appendix A) has determined
that it is in the best interests of the Company and its shareholders to secure
Executive's continued services and to ensure Executive's continued dedication to
his duties in the event of any threat or occurrence of a Change in Control (as
defined in Section 4 of Appendix A) of the Company; and
WHEREAS, the Board has authorized the Company to enter into this
Agreement:
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained, the Company and Executive hereby
agree as follows:
1. Definitions. As used in this Agreement, capitalized terms will have the
respective meanings set forth in Appendix A.
2. Obligation of Executive. In the event of a tender or exchange offer,
proxy contest, or the execution of any agreement which, if consummated, would
constitute a Change in Control, Executive agrees not to voluntarily leave the
employ of the Company, other than as a result of Disability, retirement or an
event which would constitute Good Reason if a Change in Control had occurred,
until the Change in Control occurs or, if earlier, such tender or exchange
offer, proxy contest, or agreement is terminated or abandoned.
3. Term of Agreement.
(a) Subject to Section 3(b), this Agreement shall be effective on
the date hereof and shall continue in effect until the Company shall have given
three (3) years written notice of cancellation; provided, that, notwithstanding
the delivery of any such notice, this
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Exhibit 10(i)
Agreement shall continue in effect for a period of two (2) years after a Change
in Control, if such Change in Control shall have occurred during the term of
this Agreement.
(b) Notwithstanding Section 3(a), this Agreement shall terminate if
Executive or the Company terminates Executive's employment prior to a Change in
Control; provided that, if (1) Executive's employment is terminated prior to a
Change in Control for reasons that would have constituted a Qualifying
Termination if they had occurred following a Change in Control; (2) Executive
reasonably demonstrates (or the Company agrees) that such termination (or Good
Reason event) was at the request of a third party who had indicated an intention
or taken steps reasonably calculated to effect a Change in Control; and (3) a
Change in Control involving such third party (or a party competing with such
third party to effectuate a Change in Control) does occur, then (A) for purposes
of this Agreement, the date immediately prior to the date of such termination of
employment or event constituting Good Reason shall be treated as a Change in
Control and (B) for purposes of determining the timing of payments and benefits
to Executive under Section 4, the date of the actual Change in Control shall be
treated as Executive's Date of Termination.
4. Payments Upon Termination of Employment. (a) If during the Termination
Period the employment of Executive shall terminate pursuant to a Qualifying
Termination, then the Company shall provide to Executive:
(1) Within ten (10) days following the Date of Termination a
lump-sum cash amount equal to the sum of (A) Executive's base salary
through the Date of Termination and any bonus amounts which have become
payable, to the extent not theretofore paid or deferred, (B) a pro rata
portion of Executive's annual bonus for the fiscal year in which
Executive's Date of Termination occurs in an amount at least equal to (i)
Executive's Bonus Amount multiplied by (ii) a fraction, the numerator of
which is the number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination and the denominator of
which is three hundred sixty-five (365), and reduced by (iii) any amounts
paid from the Company's annual incentive plan for the fiscal year in which
Executive's Date of Termination occurs; plus
(2) Within ten (10) days following the Date of Termination, a
lump-sum cash amount equal to (A) two (2) times Executive's highest annual
rate of base salary during the 12-month period immediately prior to
Executive's Date of Termination, plus (B) two (2) times Executive's Bonus
Amount
(b) If during the Termination Period the employment of Executive
shall terminate pursuant to a Qualifying Termination, the company shall continue
to provide, for a period of two (2) years following Executive's Date of
Termination, Executive (and Executive's dependents, if applicable) with the same
level of medical, dental, accident, disability and life insurance benefits upon
substantially the same terms and conditions
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Exhibit 10(i)
(including contributions required by Executive for such benefits) as existed
immediately prior to Executive's Date of Termination (or, if more favorable to
Executive, as such benefits and terms and conditions existed immediately prior
to the Change in Control); provided that, if Executive cannot continue to
participate in the company plans providing such benefits, the Company shall
otherwise provide such benefits on the same after-tax basis as if continued
participation had been permitted. Notwithstanding the foregoing, in the event
Executive becomes reemployed with another employer and becomes eligible to
receive welfare benefits from such employer, the welfare benefits described
herein shall be secondary to such benefits during the period of Executive's
eligibility, but only to the extent that the Company reimburses Executive for
any increased cost and provides any additional benefits necessary to give
Executive the benefits provided hereunder.
(c) If during the Termination Period the employment of Executive
shall terminate pursuant to a Qualifying Termination, the company shall pay to
Executive, within 30 days following his Date of Termination, a lump sum payment
in an amount equal to the sum of:
(1) The excess, if any, of (A) the present value of the benefits to
which Executive would be entitled under Company's pension and retirement
plans (qualified and nonqualified), if Executive had continued in the
employ of the company for an additional two (2) years following his Date
of Termination earning during such two-year period the rate of base salary
and bonus in effect as of his date of Termination, over (B) the present
value of the benefit to which Executive is actually entitled under such
pension and retirement plans as of his Date of Termination;
(2) The present value of the Company contributions (including any
allocations of securities of the Company) that would have been made under
all Company savings programs (qualified and nonqualifed), if Executive had
continued in the employ of the Company for an additional two (2) years
following his Date of Termination earning during such two-year period the
rate of base salary and bonus in effect as of his Date of Termination,
assuming that the Company would have made the maximum contributions
permitted under such savings programs, and assuming, for purposes of
determining the amount of any Company matching contributions, that
Executive would have contributed that amount necessary to receive the
maximum matching contributions available under such savings programs); and
(3) If contributions to the Company's employee stock ownership plan
(the "ESOP") will continue after the Date of Termination, the value of the
allocations that would have been made to Executive under the ESOP, if
Executive had continued in the employ of the Company for an additional two
(2) years following his Date of Termination, determined by multiplying (A)
two (2) times the number of shares of stock of the Company (or, if
applicable, the Surviving Person or the Parent Corporation, as such terms
are defined below) allocated to the Executive's account
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Exhibit 10(i)
under the ESOP for the last full calendar year prior to the Date of
Termination by (B) the fair market value of one share of such stock on the
Date of Termination.
For purposes of the preceding sentence, "present value" shall be determined as
of the Date of Termination and shall be calculated based upon a discount rate of
the base rate referred to in Section 7 and without reduction for mortality.
(d) If during the Termination Period the employment of Executive
shall terminate other than by reason of a Qualifying Termination, then the
Company shall pay to executive within thirty (30) days following the Date of
Termination, a lump-sum cash amount equal to the sum of (1) Executive's base
salary through the Date of Termination and any bonus amounts which have become
payable, to the extent not theretofore paid or deferred and (2) any accrued
vacation pay, in each case to the extent not theretofore paid. The Company may
make such additional payments, and provide such additional benefits, to
Executive as the Company and Executive may agree in writing.
5. Certain Additional Payments by the Company. (a) Anything in this
Agreement to the contrary notwithstanding in the event 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 the benefit of Executive (whether pursuant
to the terms of this Agreement or otherwise, but determined without regard to
any additional payments required under this Section 5) (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
Executive 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 Executive an additional payment ( a
"Gross-Up Payment") in an amount such that after payment by Executive of all
taxes (including any Excise Tax) imposed upon the Gross-Up Payment Executive
retains an amount of the Gross-Up Payment equal to the sum of (1) the Excise Tax
imposed upon the Payments and (2) the product of any deductions disallowed
because of the inclusion of the Gross-Up Payment in Executive's 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, the Executive shall be deemed to
(1) 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, (2)
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 (3) have otherwise allowable
deductions for federal income tax purposes at least equal to those which could
be disallowed because of the inclusion of the Gross-up Payment in the
Executive's adjusted gross income. Notwithstanding the foregoing provisions of
this Section 5(a), if it shall be determined that Executive is entitled to a
Gross-Up Payment, but that the Payments would not be subject to the Excise Tax
if the Payments were reduced by an amount that is less than 5% of the portion of
the Payments that would be treated as "parachute payments" under Section 280G of
the Code, then the amounts payable to Executive under
74
Exhibit 10(i)
this Agreement shall be reduced (but not below zero) to the maximum amount that
could be paid to Executive without giving rise to the Excise Tax (the "Safe
Harbor Cap"), and no Gross-Up Payment shall be made to Executive. The reduction
of the amounts payable hereunder, if applicable, shall be made by reducing first
the payments under Section 4(a)(2), unless an alternative method of reduction is
elected by Executive. For purposes of reducing the Payments to the Safe Harbor
Cap, only amounts payable under this Agreement (and no other Payments) shall be
reduced. If the reduction of the amounts payable hereunder would not result in a
reduction of the Payments to the Safe Harbor Cap, no amounts payable under this
Agreement shall be reduced pursuant to this provision.
(b) Subject to the provisions of Section 5(a), all determinations
required to be made under this Section 5, including whether and when a Gross-Up
Payment is required, the amount of such Gross-Up Payment, the reduction of the
Payments to the Safe Harbor Cap and the assumption 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 the Company and Executive within fifteen (15) business days
of the receipt of notice from the Company or the Executive 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,
Executive 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 under this Section 5
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 Executive, it shall furnish Executive with a written opinion to such
effect and to the effect that that failure to report the Excise Tax, if any, on
Executive's applicable federal income tax return will not result in the
imposition of a negligence or similar penalty. In the event the Accounting Firm
determines that the Payments shall be reduced to the Safe Harbor Cap, it shall
furnish Executive with a written opinion to such effect. The Determination by
the Accounting Firm shall be binding upon the Company and Executive. 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 are made by the Company which should not have been made
("Overpayment"), consistent with the calculations required to be made hereunder.
In the event that the Executive thereafter is 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 the benefit of Executive. In the event
the amount of the Gross-up Payment exceeds the amount necessary to reimburse the
Executive for his 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
75
Exhibit 10(i)
promptly paid by Executive (to the extent he has received a refund if the
applicable Excise Tax has been paid to the Internal Revenue Service) to or for
the benefit of the Company. Executive shall cooperate, to the extent his
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.
6. Withholding Taxes. The Company may withhold from all payments due
to Executive (or his beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local or other law, the Company is required to
withhold therefrom.
7. Reimbursement of Expenses. If any contest or dispute shall arise
under this Agreement involving termination of Executive's employment with the
Company or involving the failure or refusal of the Company to perform fully in
accordance with the terms hereof, the Company shall reimburse Executive, on a
current basis, for all reasonable legal fees and expenses, if any, incurred by
Executive in connection with such contests or dispute (regardless of the result
thereof), together with interest in an amount equal to the base rate of Sterling
National Bank (or any successor) from time to time in effect, but in no event
higher than the maximum legal rate permissible under applicable law, such
interest to accrue from the date the Company receives Executive's statement for
such fees and expenses through the date of payment thereof by the Company,
regardless of whether or not Executive's claim is by a court of competent
jurisdiction/arbitration panel; provided, however, Executive shall be required
to pay any such amounts to the company to the extent that a court/arbitration
panel issues a final and non-appealable order setting forth the determination
that the position taken by Executive was frivolous or advanced by Executive in
bad faith.
8. Scope of Agreement. Nothing in this Agreement shall be deemed to
entitle Executive to continued employment with the Company or its Subsidiaries,
and if Executive's employment with the company shall terminate prior to a Change
in Control, Executive shall have no further rights under this Agreement (except
as otherwise provided hereunder); provided, however, that after termination of
Executive's employment during the Termination Period shall be subject to all of
the provisions of this Agreement.
9. Successors: Binding Agreement. (a) This Agreement shall not be
terminated by any reorganization, merger or consolidation involving the Company
(each, a "Business Combination"). In the event of any Business Combination, the
provisions of this Agreement shall be binding upon the Person resulting from
such Business Combination (the "Surviving Person"), and the Surviving Person
shall be treated as the Company hereunder.
(b) The Company agrees that in connection with any Business
Combination, it will cause any successor entity to the Company unconditionally
to assume (and, if applicable, the ultimate parent entity that directly or
indirectly has beneficial ownership of a majority of the voting securities
eligible to elect directors of the successor entity (the "Parent Corporation")
to guarantee) by written instrument delivered to Executive ( or his beneficiary
or estate), all of the obligations of the Company hereunder. Failure of the
company to obtain such assumption and guarantee prior to the effectiveness of
any such Business Combination that constitutes a Change in Control, shall be a
breach of this Agreement and shall constitute
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Exhibit 10(i)
Good Reason hereunder and shall entitle Executive to compensation and other
benefits from the Company in the same amount and on the same terms as Executive
would be entitled hereunder if Executive's employment were terminated following
a Change in Control by reason of a Qualifying Termination. For purposes of
implementing the foregoing, the date on which any such Business Combination
becomes effective shall be deemed the date Good Reason occurs, and shall be the
Date of Termination if requested by Executive.
(c) This Agreement shall inure to the benefit of and be enforceable
by Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If executive shall die
while any amounts would be payable to Executive hereunder had Executive
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to such person or persons
appointed in writing by Executive to receive such amounts or, if no person is so
appointed, to Executive's estate.
10. Notice. (a) For purposes of this Agreement all notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given (1) on the date of delivery if delivered
personally or by telefacsimile upon confirmation of receipt, (2) on the first
business day following the date of dispatch if delivered by a recognized
next-day courier service or (3) five days after deposit in the United States
mail, certified and return receipt requested, postage prepaid. All such notices
and communications shall be delivered as set forth below.
If to the executive:
__________________________
__________________________
_______________,___ _____
If to the Company:
Sterling Bancorp
000 Xxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxx, X.X. 00000
Attn: Chairman of the Board
with a copy addressed to the attention of the General Counsel of the
Company at the above address.
Or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
(b) A written notice of Executive's Date of Termination by the
Company or Executive, as the case may be, to the other, shall (1) indicate the
specific termination provision in this Agreement relied upon, (2) to the extent
applicable, set forth in reasonable
77
Exhibit 10(i)
detail the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated and (3) specify the
termination date (which date shall be not less than fifteen (15) if termination
is by the Company for Disability, nor more than sixty (60) days after the giving
of such notice). The failure by Executive or the Company to set forth in such
notice any fact or circumstance which contributes to a showing of Good Reason or
Cause shall not waive any right of Executive or the Company hereunder or
preclude Executive or the Company from asserting such fact or circumstance in
enforcing Executive's or the Company's rights hereunder.
11. Full Settlement; Resolution of Disputes. In the event of a
Qualifying Termination, the Company's obligation to make any payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
be in lieu and in full settlement of all other severance payments to Executive
under any other severance or employment agreement between Executive and the
Company. The Company's obligations hereunder shall not be affected by any
set-off, counterclaim recoupment defense or other claim, right or action which
the Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take other action by way of mitigation of
the amounts payable to Executive under any of the provisions of this Agreement
and, except as provided in Section 4(b), such amounts shall not be reduced
whether or not Executive obtains other employment.
12. Employment with Subsidiaries. Employment with the Company for
purposes of this Agreement shall include employment with any Subsidiary.
13. Survival. The respective obligations and benefits afforded to
the Company and Executive as provided in Sections 4 (to the extent that payments
or benefits are owed as a result of a termination of employment that occurs
during the term of this Agreement), 5 (to the extent that Payments are made to
Executive as a result of a Change in Control that occurs during the term of this
Agreement), 6, 7, 9(c) and 11 shall survive the termination of this Agreement.
14. GOVERNING LAW: VALIDITY. THE INTERPRETATION, CONSTRUCTION AND
PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLE OF CONFLICTS OF LAWS. THE INVALIDITY OR UNENFORCEABILITY OF ANY
PROVISION OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF
ANY OTHER PROVISION OF THIS AGREEMENT, WHICH OTHER PROVISIONS SHALL REMAIN IN
FULL FORCE AND EFFECT.
15. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and all of which together shall
constitute one, and the same instrument.
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Exhibit 10(i)
16. Miscellaneous. No provision of this Agreement may be modified or
waived unless such modification or waiver is agreed to in writing and signed by
Executive and by a duly authorized officer of the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Failure by Executive
or the Company to insist upon strict compliance with any provision of this
Agreement or to assert any right Executive or the Company may have hereunder,
including without limitation, the right of Executive to terminate employment for
Good Reason, shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement. Except as otherwise specifically
provided herein, the rights of, and benefits payable to, Executive, his estate
or his beneficiaries pursuant to this Agreement are in addition to any rights
of, or benefits payable to, Executive, his estate or his beneficiaries under any
other employee benefit plan or compensation program of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized officer of the Company and Executive has executed
this Agreement as of the day and year first above written.
STERLING BANCORP
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chairman of the Board
EXECUTIVE
------------------------------------
Executive
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Exhibit 10 (i)
Appendix A
(Certain Defined Terms)
As used in the Agreement the following terms shall have the respective
meanings set forth below:
1. "Board" means the Board of Directors of the Company.
2. "Bonus Amount" means the highest annual bonus earned by Executive from
the Company (and/or its affiliates) during the last three (3) completed fiscal
years of the Company immediately preceding Executive's Date of Termination
(annualized in the event Executive was not employed by the Company (or its
affiliates) for the whole of any such fiscal year).
3. "Cause" means (a) the willful and continued failure of Executive to
perform substantially his duties with the Company (other than any such failure
resulting from Executive's incapacity due to physical or mental illness or any
such failure subsequent to Executive being delivered a Notice of Termination
without Cause by the Company or delivering a Notice of Termination for Good
Reason to the Company) after a written demand for substantial performance is
delivered to Executive by the Board which specifically identifies the manner in
which the Board believes that Executive has not substantially performed
Executive's duties, (b) the willful engaging by Executive in illegal conduct or
gross misconduct which is demonstrably and materially injurious to the Company
or its affiliates or (c) the final, non-appealable conviction of Executive for
criminal violation of Title 12 or 18 of the United States Code. For purpose of
this definition, no act or failure to act by Executive shall be considered
"willful" unless done or omitted to be done by Executive in bad faith and
without reasonable belief that Executive's action or omission was in the best
interest of the Company or its affiliates. Any act, or failure to act (1) based
upon authority given pursuant to a resolution duly adopted by the Board, (2)
based upon the advice of counsel for the Company or (3) based upon the
instructions of the Company's Chief Executive Officer or another senior officer
of the Company shall be conclusively presumed to be done, or omitted to be done,
by Executive in good faith and in the best interests of the Company. For purpose
of clauses (a) and (b) of the first sentence of this definition, "cause" shall
not exist unless and until the Company has delivered to Executive a copy of a
resolution duly adopted by three-quarters (3/4) of the entire Board (excluding
Executive if Executive is a Board member) at a meeting of the Board called and
held for such purpose (after reasonable notice to Executive and an opportunity
for Executive, together with counsel, to be heard before the Board), finding
that in the good faith opinion of the Board an event set forth in clauses (a) or
(b) has occurred and specifying the particulars thereof in detail. The Company
must notify Executive of any event constituting Cause within sixty (60) days
following the Company's knowledge of its existence or such event shall not
constitute Cause under this Agreement.
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Exhibit 10 (i)
4. "Change in Control" means the occurrence of any one of the following
events:
(a) The acquisition by any individual, entity or group (within the
meaning of section 13(d)(3) or 14(d)(1) of the securities Exchange Act of 1934
(the "Exchange Act") ( a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of voting securities which
together with the beneficial ownership of voting securities theretofore held
comprises 20% or more of either (1) the then outstanding common shares of the
Company (the "Outstanding Company Common Shares") or (2) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that the following acquisitions will not
constitute a Change in Control: (1) any acquisition directly from the Company
(other than acquisition by virtue of the exercise of a conversion privilege(,
(2) any acquisition by the Company, (3) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (4) any acquisition by any corporation
pursuant to a reorganization, merger or consolidation, if, following such
reorganization, merger or consolidation, the conditions described in clauses
(1), (2) and (3) of subsection (c) of this definition are satisfied;
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least two-thirds
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
shareholders of the Company, was approved by a vote of at least two-thirds of
the Directors then comprising the Incumbent Board will be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in rule 14a-11 of Regulations 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a person other than the Board;
(c) A reorganization, merger or consolidation of the Company, in
each case, unless, following such reorganization, merger or consolidation, (1)
more than 60% of, respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger or consolidation and
the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of Directors is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
outstanding Company Common Shares and Outstanding Company Voting Securities
immediately prior to such reorganization, merger or consolidation, in
substantially the same proportions as their ownership, immediately prior to such
reorganization, merger or consolidation, in substantially the same proportions
as their ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Shares and Outstanding Company
Voting Securities, as the case may be, (2) no Person (excluding the Company, any
employee benefit plan (or related trust) of the Company or such corporation
81
Exhibit 10 (i)
resulting from such reorganization, merger or consolidation) beneficially owns,
directly or indirectly, 10% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such reorganization,
merger or consolidation or the combined voting power of the then outstanding
voting securities of such corporation, entitled to vote generally in the
election of directors and (3) at least two-thirds of the members of the board of
directors of the corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time of the execution
of the initial agreement providing for such reorganization, merger or
consolidation;
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or
(e) The sale or other disposition of all or substantially all of the
assets or deposits of the Company, other than to a corporation, with respect to
which following such sale or other disposition, (A) more than 60% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially any of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Shares and Outstanding Company Voting Securities
immediately prior to such sale or other disposition of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (B)
no Person (excluding the Company and any employee benefit plan (or related
trust) of the Company or such corporation) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors and (C) at least two-thirds of the members of the board of
directors of such corporation were members of the Incumbent Board at the time of
the execution of the initial agreement or action of the Board providing for such
sale or other disposition of assets of the Company; or
(f) Reorganization, merger or consolidation of Sterling National
Bank or sale or other disposition of all or substantially all of the assets or
deposits of Sterling National Bank unless, in the case of a reorganization,
merger or consolidation, the resulting entity is wholly owned by a corporation
meeting the following requirements or, in the case of a sale or disposition, the
sale or disposition is to a corporation meeting the following requirements (in
each case after giving effect to the reorganization, merger, consolidation, sale
or disposition and any related transactions); (A) more than two-thirds of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Shares and Outstanding Company Voting Securities
immediately prior to such reorganization, merger, consolidation, sale or
disposition, as the case may be, (B) no Person (excluding the Company and any
employee benefit plan (or related trust) of the Company or such corporation)
beneficially owns,
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Exhibit 10 (i)
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors and (C) at least two-thirds of the
members of the board of directors of such corporation were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such reorganization, merger, consolidation, sale or
disposition.
5. "Date of Termination" means (a) the effective date on which Executive's
employment by the Company terminates as specified in a prior written notice by
the Company or Executive, as the case may be, to the other, delivered pursuant
to Section 10 or (b) if Executive's employment by the Company terminates by
reason of death, the date of death of Executive.
6. "Disability" means termination of Executives employment by the Company
due to Executive's absence from Executive's duties with the Company on a
full-time basis for at least on hundred eighty (180) consecutive days as a
result of Executive's incapacity due to physical or mental illness.
7. "Good reason" means, without Executive's express written consent, the
occurrence of any of the following events after a Change in Control:
(a) (1) Any change in the duties or responsibilities (including
reporting responsibilities) of Executive that is inconsistent in any material
and adverse respect with Executive's position(s), duties, responsibilities or
status with the Company immediately prior to such Change in Control (including
any material and adverse diminution of such duties or responsibilities) or (2) a
material and adverse change in Executive's titles or offices (including, if
applicable, membership on the Board) with the, Company or its affiliates as in
effect immediately prior to such Change in Control;
(b) A reduction by the Company in Executive's rate of annual base
salary, annual bonus or annual bonus opportunity (including any material and
adverse change in the formula for such annual bonus or bonus opportunity) as in
effect immediately prior to such Change in Control or as the same may be
increased from time to time thereafter;
(c) Any requirement of the Company that Executive (1) be based
anywhere other than the Company's principal executive offices (or the principal
executive office of a subsidiary or division of the Company, if Executive is
based at such office immediately prior to such Change in Control) or more than
ten (10) miles from the office where Executive is located at the time of the
Change in Control or (2) travel on Company business to an extent substantially
greater than the travel obligations of Executive immediately prior to such
Change in Control;
(d) The failure of the Company to (1) continue in effect any
employee, benefit plan, compensation plan, welfare benefit plan or material
fringe benefit plan in
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Exhibit 10 (i)
which Executive is participating immediately prior to such Change in Control or
the taking of any action by the Company which would adversely affect Executive's
participation in or reduce Executive's benefits under any such plan, unless
Executive is permitted to participate in other plans providing Executive with
substantially equivalent benefits (at substantially equivalent cost with respect
to welfare benefit plans), or (2) provide Executive with paid vacation in
accordance with the most favorable vacation policies of the Company and its
affiliated companies as in effect for Executive immediately prior to such Change
in Control, including the crediting of all service for which Executive had been
credited under such vacation policies prior to the Change in Control;
(e) Any refusal by the Company to continue to permit Executive to
engage in activities not directly related to the business of the Company which
Executive was permitted to engage in prior to the Change in Control
(f) Any purported termination of Executive's employment which is not
effectuated pursuant to Section 10(b) (and which will not constitute a
termination hereunder); or
(g) The failure of the Company to obtain the assumption (and, if
applicable, guarantee) agreement from any successor (and Parent Corporation) as
contemplated in Section 9(b).
Notwithstanding anything herein to the contrary, termination of
employment by Executive for any reason during the 30-day period commencing one
(1) year after the date of a Change in Control shall constitute good Reason.
An isolated, insubstantial and inadvertent action taken in good
faith and which is remedied by the Company within ten (10) days after receipt of
notice thereof given by Executive shall not constitute Good Reason. Executive's
right to terminate employment for Good Reason shall not be affected by
Executive's incapacities due to mental or physical illness and Executive's
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any event or condition constituting Good Reason.
8. "Qualifying Termination" means a termination of Executive's employment
(a) by the Company other than for Cause or (b) by Executive for Good Reason.
Termination of Executive's employment on account of death, Disability or
Retirement shall not be treated as a Qualifying Termination, unless such death
or Disability shall occur during the 30-day period referred to in the second
paragraph of the definition of "Good Reason" (in which case it will constitute a
Qualifying Termination).
9. "Retirement" means Executive's retirement (not including any mandatory
early retirement) in accordance with the Company's retirement policy generally
applicable to its salaried employees (if any), as in effect immediately prior to
the Change in Control, or in accordance with any retirement arrangement
established with respect to Executive with Executive's written consent.
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Exhibit 10 (i)
10. "Subsidiary" means any corporation or other entity in which the
Company has a direct or indirect ownership interest of 50% or more of the total
combined voting power of the then outstanding securities or interests of such
corporation or other entity entitled to vote generally in the election of
directors or in which the Company has the right to receive 50% or more of the
distribution of profits or 50% of the assets on liquidation or dissolution.
Consent.
11. "Termination Period" means the period of time beginning with a Change
in Control and ending two (2) years following such Change in Control.
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