EMPLOYMENT AGREEMENT
--------------------
This
Employment Agreement
("Agreement") is entered into and made effective
as of the 9th day of October, 2007 ("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"), on the one hand, and Kevin O'Connor
("Executive").
WITNESSETH:
WHEREAS, Executive
has been offered a position as President and Chief
Executive 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
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
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and the Company under the terms of this Agreement shall begin on the Effective
Date and shall
continue for a period
of thirty-nine
months thereafter (the
"Employment Period").
On January 1, 2009,
the Employment Period shall renew
daily, such that the
remaining unexpired
term of the Agreement shall always be
twenty-four (24)
months, until the date
that the Company gives
the Executive
written notice of
non-renewal
("Non-Renewal
Notice"). The
Employment Period
shall end on the date
that is twenty-four
(24) months after the date of the
Non-Renewal Notice,
unless the parties
agree that the Employment Period shall
end on an earlier date.
(b)
Annual Performance
Evaluation.
On a calendar
year basis, the Bank
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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 2009.
<PAGE>
(c)
Continued Employment Following Termination of Employment Period.
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Nothing in this
Agreement shall
mandate or
prohibit a continuation of the
Executive's employment following the expiration of the Employment
Period.
2.
Duties.
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(a)
Title; Responsibility.
Commencing January 1, 2008, the Executive shall
---------------------
serve as the President and Chief Executive 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
Board. Between
October 1, 2007 and December 31, 2007,
Executive shall serve
with the title
"President and Chief
Executive Officer
Designee" and shall
perform administrative and management services work in
connection with his
transition
to President and Chief
Executive Officer and
perform such other
duties as directed
from time to time by the Board. In both
capacities, the Executive shall report directly to the Board of
Directors. As of
the Effective Date,
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. If Executive's employment
with the Bank
or the Company
is terminated for any reason, his service on the Board of
Directors of the Bank and the Company shall terminate, and this Agreement shall
serve as Executive's written resignation for that purpose.
(b)
Time Commitment. The
Executive shall devote his full business time and
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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
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Executive under this
Agreement,
the Bank shall pay to
the Executive an annual
salary ("Base Salary") of not less than $300,000. 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 performance and Base Salary shall occur in January
2009.
(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.
<PAGE>
(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 (the "2006 Plan"). In particular, effective as
of the Effective
Time, Executive shall be granted 5,000 shares of
restricted
stock under the 2006 Plan, which shares shall vest over a five year
period, with
the first one third of the shares first vesting on October 9, 2010, with one
third vesting on October 9, 2011 and 2012.
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
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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
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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
<PAGE>
(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.
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(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.
(2) Automobile.
The Bank shall provide the Executive with an
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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"), the
Bank shall provide the
benefits and pay to the
Executive the amounts provided for under Section 7(b).:
(i) The
Executive's voluntary
resignation from
employment with the
Bank and the Company during the term of this Agreement within
30
days 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 and
the Company of the initial existence of such condition and the
Bank and the Company shall have thirty (30) days to
cure the
condition giving rise to the Event of Termination (but the Bank
and the Company may elect to waive such thirty (30) day
period):
(A) 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;
<PAGE>
(B) 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;
(C) 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;
(D) a material breach
of this Agreement
by the Bank and/or
the
Company; or
(E) the relocation of Executive's principal place of employment
to an office other than one located in Southampton,
East
Hampton, Shelter
Island, Southold,
Riverhead or Brookhaven,
New York.
(ii) 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; in connection with 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 involuntary
termination
of
employment constitutes a "Separation from Service" within the
meaning of Section 409A and the Final Regulations thereunder.
(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:
(i) his earned
but unpaid
Base Salary as of the date of his
termination of employment with the Bank;
(ii) the benefits,
if any, to which he is entitled as a former
employee under the Bank's employee benefit plans;
(iii) if the Event of
Termination occurs
prior to January 1, 2008,
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) through December 31,
2008;
(iv) if the Event of
Termination occurs on
or after January 1,
2008
and on or before
December 31,
2008 (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 six months after
the Event of Termination;
<PAGE>
(v) 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 twenty-
four (24) months;
(vi) if the Event of
Termination
occurs prior to
January 1, 2008, a
lump sum cash
payment, as liquidated
damages,
in an amount
equal to the Base Salary that Executive would have earned
if he
had continued working
for the Bank
through December 31,
2008;
(vii) if the Event of Termination occurs within the Initial Period,
a
lump sum cash payment, as liquidated damages, in an amount
equal
to one half of the
Executive's Base Salary; and
(viii) if the Event of
Termination
occurs following the Initial
Period, a lump sum cash payment, as liquidated damages, in an
amount equal to the Base Salary that the Executive would have
earned if he had continued working for the Bank for twenty-four
(24) months following
the Event of
Termination.
(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
three times the
Executive's annual
compensation for the
last taxable
year immediately preceding the Change in
Control (which payment is subject to applicable withholding taxes).
For purposes
of this paragraph,
annual compensation shall include all compensation reported
in the Executive's
annual (IRS) Form W-2
(Box 5) for the taxable year. If the
Executive was employed for less than the entire prior taxable year,
Executive's
annual compensation
for the prior taxable
year as reported on Form W-2, Box 5,
shall be annualized
(based on the number of weeks of employment and assuming a
52 week year).
(d)
Disability.
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(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
<PAGE>
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. Any cash severance payments shall be made
in a
-----------------------
lump sum within ten (10) business days of Executive's termination
of employment,
or as to the cash payment under Section 7(c), upon the effective date of the
Change in Control, in either case subject to applicable
withholding taxes.
Such
payments shall
not be reduced in the event the Executive obtains other
employment following
termination of
employment with the
Bank or following the
Change in Control.
Notwithstanding the
foregoing, if
Executive is a Specified
Employee, as defined
in Code Section 409A,
and if any payment to be made under
Paragraph 7(b) shall
be determined to be subject to Code Section 409A, then if
required by Code Section 409A, such payment or a portion of such
payment (to the
minimum extent
possible) shall be delayed and shall be paid on the first day
of
the seventh month
following Executive's
Separation
from Service
pursuant to
Final Regulations Section 1.409A-1(b)(9)(iii).
(f)
Executive agrees that
upon any termination of his employment, whether
by Executive
or by the Bank or the
Company, his service as a director of
the
Bank and the Company
shall cease and he
shall be deemed to have resigned as a
director effective upon such termination.
8.
Termination without Additional Bank or Company Liability
--------------------------------------------------------
(a)
Termination for Cause.
(i) The Bank and/or the Company may terminate the Executive's
employment at any time, but any termination other than termination for
"Cause,"
as defined herein, 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 "Cause."
Termination for "Cause" shall mean termination because of: (i) the
conviction of
the Executive of a
felony or of any lesser criminal offense involving
moral
turpitude; (ii) the willful commission by the Executive of a criminal
or other
act that, in
the judgment of the
Board or the President
and Chief Executive
Officer will likely cause substantial economic damage to the Company,
the Bank
or any subsidiary or substantial injury to the business reputation of the
Company, the Bank or any subsidiary; (iii) the commission by the
Executive of an
act of fraud in the performance of his duties on behalf of the
Company, the Bank
or any subsidiary; (iv) the continuing willful failure of the Executive
to
perform his
duties to the Company, the Bank or any
subsidiary (other than any
such failure resulting from the Executive's incapacity due to
physical or mental
illness) after written notice thereof; (v) a material breach by the
Executive of
the Bank's Code of Ethics; or (vi) an order of a federal
or state regulatory
agency or a court of competent jurisdiction
requiring the
termination of the
Executive's employment with the Bank or the Company.
<PAGE>
(ii) Executive
shall not have the
right to receive
compensation or
other benefits
for any period after the date of Termination for Cause.
Notwithstanding the
foregoing,
Termination
for Cause shall not be deemed to
exist unless t
