EMPLOYMENT AGREEMENT
This
Employment Agreement (“Agreement”) was originally made
and entered into as of the 26 th day of June, 2006
(“Effective Date”), by and between Bridgehampton
National Bank, a bank organized and existing under the laws of the
United States of America and having its executive offices at 2200
Montauk Highway, Bridgehampton, New York (“Bank”),
Bridge Bancorp, Inc., the holding company for the Bank (the
“Company”), and Howard H. Nolan
(“Executive”). The Agreement is hereby amended
effective as of January 1, 2008, as provided below, in order to
conform the Agreement to Section 409A of the Internal Revenue Code,
as amended (the “Code”) and the final regulations (the
“Final Regulations”) promulgated thereunder, and for
certain other purposes.
WITNESSETH:
WHEREAS
, Executive has been offered a
position as Senior Executive Vice President and Chief Operating
Officer of the Bank and the Company;
WHEREAS , the Executive is willing to accept the offer of
employment on the terms and conditions set forth in this Agreement;
and
WHEREAS , Code Section 409A deems certain severance and
other payments to Executive herein to be nonqualified deferred
compensation that must comply with its terms or subject Executive
to additional taxes and penalties, and the Bank, the Company and
Executive wish to update the Agreement to comply with Code Section
409A and the Final Regulations and for certain other
purposes.
NOW, THEREFORE , in consideration of the premises and the
mutual covenants and obligations hereinafter set forth, the Bank,
the Company and the Executive hereby agree as follows:
1. Employment Period.
(a)
Three Year Contract . The Executive’s period of
employment with the Bank under the terms of this Agreement shall
begin on the Effective Date and shall continue for a period of
thirty-six months thereafter (the “Employment Period”).
Unless extended, the Employment Period shall end on the date that
is thirty-six (36) months after the Effective Date. On or prior to
the second anniversary date of the Effective Date, the Bank and the
Company shall notify the Executive in writing whether the
Employment Period will be extended and for what period, if any, the
Employment Period will be extended.
(b)
Annual Performance Evaluation . On a calendar year basis,
the Bank and/or the Company (acting through the full Board or a
committee thereof) shall conduct an annual performance evaluation
of the Executive, the results of which shall be included in the
minutes of the Board or committee meeting and communicated to the
Executive. The first such annual performance evaluation shall occur
in January 2007.
(c)
Continued Employment Following Termination of Employment
Period . Nothing in this Agreement shall mandate or prohibit a
continuation of the Executive’s employment following the
expiration of the Employment Period.
2. Duties .
(a)
Title; Responsibility . During the Employment Period, the
Executive shall serve as the Senior Executive Vice President and
Chief Operating Officer of the Bank and Company, and shall perform
such administrative and management services as customarily
performed by person in a similar executive capacity and as may be
directed from time to time by the CEO and/or the Board. In his
capacity as Senior Executive Vice President and Chief Operating
Officer, the Executive shall directly report to the President and
Chief Executive Officer and to the Board of Directors. The
Executive shall also be appointed as a member of the Board of
Directors of the Bank and the Company, subject in the case of the
Company to election by the shareholders.
(b)
Time Commitment . The Executive shall devote his full
business time and attention to the business and affairs of the Bank
and the Company and shall use his best efforts to advance the
interests of the Bank and Company.
3. Annual Compensation .
(a)
Annual Salary . In consideration for the services performed
by the Executive under this Agreement, the Bank shall pay to the
Executive an annual salary (“Base Salary”) of not less
than $200,000. The Base Salary shall be paid in approximately equal
installments in accordance with the Bank’s customary payroll
practices. The Bank shall review the Executive’s Base Salary
at least annually and such Base Salary may be increased, but may
not be decreased without the Executive’s consent (any
increase in Base
Salary shall become the new
“Base Salary” for purposes of this Agreement). The
first such annual review of Executive’s Base Salary shall
occur in January 2007.
(b)
Board Meeting Fees . For his attendance at meetings of the
Board of Directors of the Bank and the Company (but not for
committee meetings), the Executive shall receive such fees as are
paid to directors of the Bank and the Company for such
attendance.
(c)
Incentive Compensation . The Executive shall be eligible to
participate in any incentive compensation programs established by
the Bank and/or the Company from time to time for senior executive
officers, in accordance with the terms of such plans as they may
exist from time to time.
(d)
Equity Compensation . The Executive shall be eligible to
participate in any equity compensation programs established by the
Bank and/or the Company from time to time for senior executive
officers, including, but not limited to, the 2006 Stock-Based
Incentive Plan.
Nothing
paid to Executive under any plan, program or arrangement referenced
in (c) or (d) above shall be deemed to be in lieu of other
compensation to which Executive is entitled under this
Agreement.
4.
Employee Benefit Plans; Paid Time Off
(a)
Benefit Plans . During the Employment Period, the Executive
shall be an employee of the Bank and shall be entitled to
participate in the Bank’s (i) tax-qualified retirement plans
(i.e., the defined benefit plan and 401(k) plan; (ii) the
Bank’s Supplemental Executive Retirement Plan; (iii) group
life, health and disability insurance plans; and (iv) any other
employee benefit plans and programs in accordance with the
Bank’s customary practices, provided he is a member of the
class of employees authorized to participate in such plans or
programs.
(b)
Paid Time Off . The Executive shall be entitled to paid
vacation time each year during the Employment Period, as well as
sick leave, holidays and other paid absences, in accordance with
the Bank’s policies and procedures for executive
employees.
5.
Outside Activities and Board
Memberships
During
the term of this Agreement, the Executive shall not, directly or
indirectly, provide services on behalf of any financial
institution, any insurance company or agency, any mortgage or loan
broker or any other entity or on behalf of any subsidiary or
affiliate of any such entity engaged in the financial services
industry, as an employee, consultant, independent contractor,
agent, sole proprietor, partner, joint venturer, corporate officer
or director; nor shall the Executive acquire by reason of purchase
during the term of this Agreement the ownership of more than 5% of
the outstanding equity interest in any such entity. Subject to the
foregoing, and to the Executive’s right to continue to serve
as an officer and/or director or trustee of any business
organization as to which he was so serving on the Effective Date of
this Agreement (as described in an attachment to this Agreement),
the Executive may serve on boards of directors of unaffiliated,
for-profit business corporations, subject to Board approval, which
shall not be unreasonably withheld, and such services shall be
presumed for these purposes to be for the benefit of the Bank and
the Company. Except as specifically set forth herein, the Executive
may engage in personal business and investment activities,
including real estate investments and personal investments in the
stocks, securities and obligations of other financial institutions
(or their holding companies). Notwithstanding the foregoing, in no
event shall the Executive’s outside activities, services,
personal business and investments materially interfere with the
performance of his duties under this Agreement.
6.
Working Facilities and Expenses
(a)
Working Facilities . The Executive’s principal place
of employment shall be at the Bank’s principal executive
office or at such other location upon which the Bank and the
Executive may mutually agree.
(b)
Expenses .
(1)
Ordinary Expenses . The Bank shall reimburse the Executive
for his ordinary and necessary business expenses, incurred in
connection with the performance of his duties under this Agreement,
upon presentation to the Bank of an itemized account of such
expenses in such form as the Bank may reasonably require. Any such
expenses shall be reimbursed no later than two and one-half months
following the end of the year in whch the expense was
incurred.
(2)
Automobile . The Bank shall provide the Executive with an
automobile suitable to the Executive’s position and such
automobile may be used by the Executive in carrying out his duties
under this Agreement, including commuting between his
residence and his principal place
of employment and other personal use. The Bank shall be responsible
for the cost of maintenance and servicing such automobile and for
insurance, gasoline and oil for such automobile. The Executive
shall be responsible for the payment of any taxes on account of his
personal use of such automobile.
7.
Termination of Employment with Bank
Liability
(a)
Reasons for Termination . In the event that the
Executive’s employment with the Bank and/or the Company shall
terminate during the Employment Period on account of any of the
events set forth in Sections 7(a)(i) or 7(a)(ii) below (an
“Event of Termination”):
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(i)
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The Executive’s voluntary
resignation from employment with the Bank and the Company after the
occurrence of any of the following events without Executive’s
consent, such that the Executive’s resignation shall be
treated as a resignation for “Good Reason,” provided
that for purposes of this Section 7(a)(i), the Executive must
provide not greater than ninety (90) days’ written notice to
the Bank of the initial existence of such condition and the Bank
shall have thirty (30) days to cure the condition giving rise to
the Event of Termination (but the Bank may elect to waive such
thirty (30) day period):
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(A)
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the failure to re-appoint the
Executive to the officer position set forth under Section 2(a)
and/or, the failure of Executive to be appointed to the Board of
Directors of the Bank, and with respect to the Executive’s
service as a director of the Company, the failure to re-nominate
the Executive for election to the Board;
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(B)
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a material change in
Executive’s functions, duties, or responsibilities, which
change would cause Executive’s position to become one of
lesser responsibility, importance, or scope;
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(C)
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a liquidation or dissolution of
the Bank or the Company other than a liquidation or dissolution
that is caused by a reorganization that does not affect the status
of the Executive;
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(D)
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a material breach of this
Agreement by the Bank and/or the Company; or
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(E)
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the relocation of
Executive’s principal place of employment to an office other
than one located in Southampton, East Hampton, Shelter Island,
Southhold or Riverhead, New York.
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(ii)
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the involuntary termination of
the Executive’s employment by the Bank and/or the Company for
any reason other than: for “Cause” as defined in
Section 8(a); for “Disability” as set forth in Section
7(d) below; following a Change in Control, as set forth in Section
7(c) below; or as a result of the death of the Executive, provided
that such termination of employment constitutes a “Separation
from Service” within the meaning of Section 409A and the
Final Regulations thereunder,
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then the Bank shall provide the
benefits and pay to the Executive the amounts provided for under
Section 7(b).
(b)
Severance Pay . Subject to the limitations set forth in
Section 7(e) below, upon an Event of Termination, the Bank shall
pay to the Executive (or, in the event of the Executive’s
death after the event described in Section 7(a) has occurred, the
Bank shall pay to the Executive’s surviving spouse,
beneficiary or estate) an amount equal to the following:
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(i)
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his earned but unpaid Base Salary
as of the date of his termination of employment with the
Bank;
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(ii)
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the benefits, if any, to which he
is entitled as a former employee under the Bank’s employee
benefit plans;
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(iii)
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if the Event of Termination
occurs within the first 18 months following the Effective Date (the
“Initial Period”), continued non-taxable group health
and medical insurance benefits (on the same terms as such benefits
are made available to other executive employees of the Bank) for
the greater of six months or the remainder of the Initial
Period;
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(iv)
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if the Event of Termination
occurs following the “Initial Period”, continued
non-taxable group health and medical insurance benefits (on the
same terms as such benefits are made available to other executive
employees of the Bank) for the greater of six months or the
remainder of the Employment Period;
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(v)
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if the Event of Termination
occurs within the Initial Period, a lump sum cash payment, as
liquidated damages, in an amount equal to the greater of (a) the
Base Salary that the Executive would have earned if he
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had continued working for the
Bank for the remainder of the Initial Period; or (b) one-half of
his annual Base Salary; and
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(vi)
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if the Event of Termination
occurs following the Initial Period, a lump sum cash payment, as
liquidated damages, in an amount equal to the greater of (a) the
Base Salary that the Executive would have earned if he had
continued working for the Bank for the remainder of the Employment
Period; or (b) one-half of his annual Base Salary.
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(c)
Change in Control . Upon the occurrence of a Change in
Control (as defined in Section 9 of this Agreement), the Bank
and/or the Company shall provide: (i) continuing non-taxable group
health and medical insurance benefits to Executive (on the same
terms as such benefits were made available to other executive
employees of the Bank immediately prior to the Change in Control)
for a period of 36 months following Executive’s termination
of employment at any time; and regardless of whether Executive has
a termination of employment in connection with a Change in Control,
(ii) a lump sum cash payment to Executive, as liquidated damages,
in an amount equal to 2.99 times Executive’s “Base
Amount,” as determined in accordance with Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”)
and regulations promulgated thereunder (the “280G
Regulations”), provided, however, that for purposes of such
calculations, (A) Executive’s “Base Period” under
Code Section 280G and the 280G Regulations shall be deemed to
commence as of the Effective Date of the Agreement, and (B) if
Executive’s Base Period includes a short taxable year or less
than all of a taxable year, compensation for such short or
incomplete taxable year shall be annualized.
(d)
Disability .
(i)
In the event that during the term of this Agreement, Executive is
unable to perform his duties hereunder because he is disabled
within the meaning of Code Section 409A and the Final Regulations
(a “Disability”), the Executive shall be entitled to
any and all benefits under the Bank’s short-term and/or
long-term disability insurance plan. During the first twenty-four
(24) months following termination of employment for Disability, the
Bank and/or the Company shall provide a supplemental monthly cash
payment to Executive such that the payments received by Executive
on a monthly basis, from both disability insurance and this
supplemental payment shall equal the monthly rate of after-tax Base
Salary being paid to Executive immediately prior to such
termination (the insurance payments may be taken into account on a
tax-adjusted basis if such payment are not subject to federal
and/or state taxes).
(ii)
Upon termination of Executive’s employment because of
Disability, the Executive shall be entitled continuing non-taxable
group health and medical insurance benefits for a period of
twenty-four months following such termination, on the same terms as
such benefits are made available to other executive employees of
Disability.
(e)
Timing of Severance Pay . Except as otherwise provided
herein, payment of severance benefits to Executive under Section
7(b) or 7(
