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Exhibit 10.1
CHANGE
OF CONTROL
EMPLOYMENT
AGREEMENT 1
AGREEMENT
by and between State Bancorp, Inc., a New York corporation
(the “Company”) and [NAME] (the
“Executive”), dated as [DATE].
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 [YEARS]
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 [YEARS] 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) The
acquisition by any individual, entity or group (within the
meaning of Section 13(d) (3) or 14(d) (2) of the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (ii) 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 for purposes of
this subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly
from the Company, (ii) any acquisition by the Company, (iii)
any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition
pursuant to a transaction which complies with clauses (i),
(ii) and (iii) of subsection (c) of this Section 2;
or
(b) Individuals
who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by
the Company’s shareholders, was approved by a vote of at
least a majority of the directors then comprising the
Incumbent Board shall 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 an actual or threatened election
contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
or
(c) Consummation
by the Company of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the
assets of the Company or the acquisition of assets of another
entity (a “Business Combination”), in each case,
unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 60% of, respectively,
the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no Person
(excluding any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business
Combination) beneficial owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business
Combination or the combined voting power of the then
outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business
Combination and (iii) at least a majority of the members of
the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination;
or
(d) Approval
by the shareholders of the Company of a complete liquidation
or dissolution of the Company.
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 [YEARS] 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. The
Annual Base Salary will be 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 any such fiscal year and
received a pro-rated bonus as a consequence) (the
“Recent Annual Bonus”). Each such Annual Bonus
shall be paid no later than two and one-half months after the
end of the fiscal year for which the Annual Bonus is awarded,
unless the Executive shall elect to defer the receipt of such
Annual Bonus pursuant to a written deferred compensation plan
of the Company or an affiliated company.
(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 granted
to the Executive prior to the date of this Agreement shall
become fully vested and immediately exercisable, all
restrictions on shares of restricted stock awarded to the
Executive prior to the date of this Agreement shall
immediately lapse and all performance based equity
compensation awards made to the Executive prior to the date of
this Agreement shall be deemed fully earned as if all
performance goals had been fully attained and the performance
period ended prior to the date of this Agreement on the
Effective Date. The treatment of awards of stock
options, stock appreciation rights, restricted stock,
performance based equity awards or similar equity awards made
on or after the date of this Agreement shall be determined
under the terms of the instruments evidencing such
awards.
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 whose determination is final and non-appealable,
or entry of a plea of guilty or no contest to the commission
of a felony, or
(iii) material
violation of any material law, rule or regulation applicable
to the Company or its business.
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 the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to
be heard before the Board), finding that, in the good faith
opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) or (iii) above, and
specifying the particulars thereof in detail.
(c) Good
Reason. The Executive’s employment may be
terminated by the Executive for Good Reason. For purposes of
this Agreement, “Good Reason” shall
mean:
(i) without
the express written consent of the Executive, the assignment
to the Executive of any duties inconsistent in any respect
with the Executive’s position (including status,
offices, titles and reporting requirements), authority, duties
or responsibilities as contemplated by Section 4(a) of this
Agreement, or any other action by the Company which results in
a diminution in such position, authority, duties
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