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SUN BANCORP, INC.
CHANGE IN CONTROL SEVERANCE AGREEMENT
As
Amended and Restated
THIS CHANGE IN CONTROL
SEVERANCE AGREEMENT ("Agreement") entered into this 18th day
of October, 2007 ("Effective Date"), by and between Sun
Bancorp, Inc. (the "Company") and Sidney R. Brown (the
"Executive").
WHEREAS, the Executive is
currently employed by the Company as Vice Chairman and is
experienced in all phases of the business of the Company;
and
WHEREAS, the parties
desire by this writing to set forth the continuing rights and
responsibilities of the Company and Executive if the Company
should undergo a change in control (as defined hereinafter in
the Agreement) after the Effective Date.
NOW, THEREFORE, it is
AGREED as follows:
1. Employment
. The Executive is employed in the capacity as
Vice Chairman of the Company. The Executive shall
render such administrative and management services to the
Company and Sun National Bank ("Bank"), as are
currently rendered and as are customarily performed by
persons situated in a similar executive
capacity. The Executive's other duties shall be
such as the Board of Directors for the Company (the "Board of
Directors" or "Board") may from time to time reasonably
direct, including normal duties as an officer of the Company
and the Bank.
2. Term of
Agreement . The term of this Agreement shall
be for the period commencing on the Effective Date and ending
thirty-six (36) months thereafter
("Term"). Additionally, as of each December
31, thereafter, the Term of this Agreement shall be extended
for an additional period such that the Term of the Agreement
as of such date of extension shall be for a new period of
thirty-six months thereafter; provided, however, such Term
shall not be automatically extended as of December 31 of any
given year if the Board shall give the Executive written
notice not later October 1 immediately prior to such December
31 date that the Board has made a determination by an
affirmative vote of not less than a majority of the members
of the full Board then in office that such Agreement shall
not be extended thereafter absent a future affirmative
determination and resolution of the Board of Directors that
the Term of such Agreement shall be extended beyond the then
in effect expiration date of such Agreement. The
Term shall refer to the initial Term or any subsequent
extension of such Term thereafter.
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3.
Termination of Employment in Connection with or Subsequent to a
Change in Control .
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(a)Notwithstanding any
provision herein to the contrary, in the event of the
involuntary termination of Executive's employment with the
Company during the term of this Agreement following any
Change in Control of the Company or Bank, or within 24 months
thereafter of such Change in Control, absent Just
Cause, Executive shall be paid an amount equal to
the product of 2.999 times the Executive's average annual
aggregate taxable compensation paid by the Company as
reported, or to be reported, on the IRS Form W-2,
box 1, or IRS Form 1099 for the most recently completed five
calendar years ending on, or before, the date of such Change
in Control. Said sum shall be paid by the Company
to the Executive in one (1) lump sum not later than the date
of Executive's termination of service. In
addition, the Executive and his dependents shall be eligible
to continue coverage under the Company's (or its
successor's) medical and dental insurance reimbursement plans
similar to that in effect on the date of termination of
employment at the participants' election and expense.
Notwithstanding the forgoing, all sums payable hereunder
shall be reduced in such manner and to such extent that the
Bank shall have made payments to the Executive upon
termination of employment in accordance with any Employment
Agreement between the Executive and the Bank related to such
Change in Control. The term"Change in Control"
shall refer to (i) the sale of all, or a material portion, of
the assets of the Company or the Bank; (ii) the merger or
recapitalization of the Company or the Bank whereby the
Company or the Bank is not the surviving entity;
(iii) a change in control of the Company or the Bank, as
otherwise defined or determined by the Office of the
Comptroller of the Currency or regulations promulgated by it;
or (iv) the acquisition, directly or indirectly, of the
beneficial ownership (within the meaning of that term as it
is used in Section 13(d) of the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder) of
twenty-five percent (25%) or more of the outstanding voting
securities of the Company or the Bank by any person, trust,
entity or group. The term "person" means an
individual other than the Executive, or a corporation,
partnership, trust, association, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization
or any other form of entity not specifically listed
herein. The provisions of this Section
3(a) shall survive the expiration of this Agreement occurring
after a Change in Control.
(b)Notwithstanding any
other provision of this Agreement to the contrary, Executive
may voluntarily terminate his employment during the term of
this Agreement following a Change in Control of the Company
or Bank, or within twenty-four months following such Change
in Control, and Executive shall thereupon be entitled to
receive the payment described in Section 3(a) of this
Agreement, upon the occurrence, or within six months
thereafter, of any of the following events, which have not
been consented to in advance by the Executive in writing: (i)
if Executive would be required to move his personal residence
or perform his principal executive functions more than
thirty-five (35) miles from the Executive's primary office as
of the signing of this Agreement; (ii) if in the
organizational structure of the Company, Executive would be
required to report to a person or persons other than the
Board of Directors of the Company or its Chairman; (iii) if
the Company should fail to maintain Executive's base
compensation in effect as of the date of the Change in
Control and the existing Executive benefits plans, including
material fringe benefit, stock option and retirement plans;
(iv) if Executive would be assigned duties and
responsibilities other than those normally associated with
his position as referenced at Section 1, herein; (v) if
Executive's responsibilities or authority have in any way
been materially diminished or reduced; or (vi) if Executive
would not be reelected to the Board of Directors of the
Company. The
provisions of this Section 3(b) shall survive the
expiration of this Agreement occurring after a Change in
Control.
(c)Additional
Payments by the Company related to Section 280G of the
Code.
(i)Anything in this
Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by the
Company or otherwise to or for the benefit of the Executive
(whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or by any other
compensation plan or arrangement of the Company or the Bank
(a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are
incurred by the 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 Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of all taxes
(including all federal, state and local tax and any interest
or penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and any excise tax
imposed under Section 4999 of the Code imposed upon the
Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the
Payments; provided that for purposes of determining the
amount of any Gross-Up Payment, the Executive shall be deemed
to pay federal income taxes at the highest marginal rate of
federal income taxation in the calendar year in which the
Gross-
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