AMENDED AND
RESTATED
CHANGE OF CONTROL
EMPLOYMENT AGREEMENT
AGREEMENT by
and between State Bancorp, Inc., a New York corporation (the
"Company") and Frederick C. Braun, III (the "Executive"), dated as
of October 3, 2006.
The Board of
Directors of the Company (the "Board"), has determined that it is
in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the
Executive, notwithstanding the possibility, threat or occurrence of
a Change of Control (as defined below) of the Company. The Board
believes it is imperative to diminish the inevitable distraction of
the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to
encourage the Executive's full attention and dedication to the
Company currently and in the event of any threatened or pending
Change of Control, and to provide the Executive with compensation
and benefits arrangements upon a Change of Control which ensure
that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives,
the Board has caused the Company to enter into this
Agreement.
NOW, THEREFORE,
IT IS HEREBY AGREED AS FOLLOWS:
1. Certain
Definitions . (a) The "Effective Date" shall mean the first
date during the Change of Control Period (as defined in Section
1(b)) on which a Change of Control (as defined in Section 2)
occurs. Anything in this Agreement to the contrary notwithstanding,
if a Change of Control occurs and if the Executive's employment
with the Company is terminated prior to the date on which the
Change of Control occurs, and if it is reasonably demonstrated by
the Executive that such termination of employment (i) was at the
request of a third party who has taken steps reasonably calculated
to effect a Change of Control or (ii) otherwise arose in connection
with or anticipation of a Change of Control, then for all purposes
of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of
employment.
(b) The "Change
of Control Period" shall mean the period commencing on the date
hereof and ending on the third anniversary of the date hereof;
provided, however, that commencing on the date one year after the
date hereof, and on each annual anniversary of such date (such date
and each annual anniversary thereof shall be hereinafter referred
to as the "Renewal Date"), unless previously terminated, the Change
of Control Period shall be automatically extended so as to
terminate three years from such Renewal Date, unless at least 60
days prior to the Renewal Date the Company shall give notice to the
Executive that the Change of Control Period shall not be so
extended.
2. Change of
Control . For the purpose of this Agreement, a "Change of
Control" shall mean a change in the ownership or effective
control of the Company or State Bank of Long Island (the
“Bank”) or a change in the ownership of a substantial
portion of the assets of the Company or State Bank of Long Island
within the meaning of regulations implementing Section
409A(a)(2)(A)(v) of the Internal Revenue Code (the
“Code”).
3.
Employment Period . The Company hereby agrees to continue
the Executive in its employ, and the Executive hereby agrees to
remain in the employ of the Company subject to the terms and
conditions of this Agreement, for the period commencing on the
Effective Date and ending on the third anniversary of such date
(the "Employment Period").
4. Terms of
Employment . (a) Position and Duties. (i) During the Employment
Period, (A) the Executive's position (including status, offices,
titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and
assigned to the Executive at any time during the 120-day period
immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or any office or
location less than 10 miles from such location.
(ii) During the
Employment Period, and excluding any periods of vacation and sick
leave to which the Executive is entitled, the Executive agrees to
devote reasonable attention and time during normal business hours
to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive's reasonable best efforts
to perform faithfully and efficiently such responsibilities. During
the Employment Period it shall not be a violation of this Agreement
for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage
personal investments, so long as such activities do not
significantly interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the
extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Company.
(b)
Compensation. (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base
Salary"), which shall be paid at a monthly rate, at least equal to
twelve times the highest monthly base salary paid or payable,
including any base salary which has been earned but deferred, to
the Executive by the Company and its affiliated companies in
respect of the twelve-month period immediately preceding the month
in which the Effective Date occurs. During the Employment Period,
the Annual Base Salary shall be reviewed no more than 12 months
after the last salary increase awarded to the Executive prior to
the Effective Date and thereafter at least annually. Any increase
in Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term
Annual Base Salary as utilized in this Agreement shall refer to
Annual Base Salary as so increased. As used in this Agreement, the
term "affiliated companies" shall include any company controlled
by, controlling or under common control with the
Company.
(ii) Annual
Bonus. In addition to Annual Base Salary, the Executive shall be
awarded, for each fiscal year ending during the Employment Period,
an annual bonus (the "Annual Bonus") in cash at least equal to the
Executive's highest bonus for the last three full fiscal years
prior to the Effective Date (annualized in the event that the
Executive was not employed by the Company for the whole of such
fiscal year) (the "Recent Annual Bonus"). Each such Annual Bonus
shall be paid no later than the end of the third month of the
fiscal year next following the fiscal year for which the Annual
Bonus is awarded, unless the Executive shall elect to defer the
receipt of such Annual Bonus.
(iii)
Incentive, Savings and Retirement Plans. During the Employment
Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and
programs applicable generally to other peer executives of the
Company and its affiliated companies, but in no event shall such
plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company
and its affiliated companies for the Executive under such plans,
practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or if
more favorable to the Executive, those provided generally at any
time after the Effective Date to other peer executives of the
Company and its affiliated companies.
(iv) Welfare
Benefit Plans. During the Employment Period, the Executive and/or
the Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable
generally to other peer executives of the Company and its
affiliated companies, but in no event shall such plans, practices,
policies and programs provide the Executive with benefits which are
less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive
at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to other
peer executives of the Company and its affiliated
companies.
(v) Expenses.
During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and its affiliated
companies in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies.
(vi) Fringe
Benefits. During the Employment Period, the Executive shall be
entitled to fringe benefits, including, without limitation, tax and
financial planning services, payment of club dues, and, if
applicable, use of an automobile and payment of related expenses,
in accordance with the most favorable plans, practices, programs
and policies of the Company and its affiliated companies in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
(vii) Office
and Support Staff. During the Employment Period, the Executive
shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal
secretarial and other assistance, at least equal to the most
favorable of the foregoing provided to the Executive by the Company
and its affiliated companies at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
(viii)
Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable
plans, policies, programs and practices of the Company and its
affiliated companies as in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the
Company and its affiliated companies.
(ix) Equity
Compensation Awards. On the Effective Date, all awards of stock
options and stock appreciation rights previously granted to the
Executive shall become fully vested and immediately exercisable,
all restrictions on shares of restricted stock previously awarded
to the Executive shall immediately lapse and all performance based
equity compensation awards previously made to the Executive shall
be deemed fully earned as if all performance goals had been fully
attained and the performance period ended on the Effective Date. In
the event of any conflict between the terms of this Agreement and
the terms of any award agreement, the terms of this Agreement shall
govern.
5.
Termination of Employment . (a) Death or Disability. The
Executive's employment shall terminate automatically upon the
Executive's death during the Employment Period. If the Company
determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition
of Disability set forth below), it may give to the Executive
written notice in accordance with Section 12(b) of this Agreement
of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate
effective on the 30 th day after receipt of such notice
by the Executive (the "Disability Effective Date"), provided that,
within the 30 days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall mean the absence of
the Executive from the Executive's duties with the Company on a
full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness which is determined to
be total and permanent by a physician selected by the Company or
its insurers and acceptable to the Executive or the Executive's
legal representative.
(b) Cause. The
Company may terminate the Executive's employment during the
Employment Period for Cause. For purposes of this Agreement,
"Cause" shall mean:
(i) fraud,
misappropriation or intentional material damage to the property or
business of the Company, or
(ii) commission
of a felony as determined by a court of competent jurisdiction,
whose determination is final and non-appealable.
For purposes of
this provision, no act or failure to act, on the part of the
Executive, shall be considered "intentional" unless it is done, or
omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executive's action or omission was in
the best interests of the Company. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by
the Board or upon the instructions of the Chief Executive Officer
or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done,
or omitted to be done, by the Executive in good faith and in the
best interests of the Company. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to t
