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FORM OF
SUN BANCORP, INC.
MANAGEMENT CHANGE IN CONTROL SEVERANCE
AGREEMENT
Amended
and Restated
THIS CHANGE IN CONTROL
SEVERANCE AGREEMENT ("Agreement") entered into this 18
th day
of October, 2007 ("Effective Date"), by and between Sun
Bancorp, Inc. (the "Company") and(A. Bruce Dansbury,
Executive Vice President and Chief Operating Officer; Dan A.
Chila, Executive Vice President and Chief Financial Officer;
and Bart A. Speziali, Executive Vice President) (the
"Executive").
WHEREAS, the Executive is
currently employed by the Company as Executive Vice President
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 the Executive
with respect to if the Company should undergo a change in
control (as defined hereinafter in the Agreement) after the
Effective Date and other circumstances that might result in
the termination of the Executive’s employment with the
Company.
NOW,
THEREFORE, each party, intending to be legally bound, does
hereby agree, as follows:
1. Employment
. The Executive is employed in the capacity as
Executive Vice President the Company. The
Executive’s employment shall be for no definite period
of time and the Executive or the Company may terminate such
employment relationship at any time for any reason or no
reason. The employment at-will relationship
remains in full force and effect regardless of any statements
to the contrary made by company personnel or set forth in any
documents other than those explicitly made to the contrary
and signed by the President or the 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 twenty-four
(24) 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
twenty-four (24) 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 or the Bank during the Term of this Agreement
following any Change in Control of the Company or Bank, or
within 18 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 and
the Bank 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 (which annual aggregate compensation amount for
any year shall be annualized if during any of such years such
term of employment during such period is less than for the
full calendar year and any such year shall be disregarded if
no compensation was paid during any such
year. 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 to the extent not
otherwise paid by the Bank. 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 18 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 President; (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; or (v) if Executive's responsibilities or
authority have in any way been materially diminished or
reduced. 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-Up Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in the state
and locality of residence of the Executive on the date the
Payment is made, net of the maximum reduction in federal
income taxes that could reasonably be obtained from the
deduction of such state and local taxes related to such
Gross-up Payment.
(ii)Subject
to the provisions of this Section 3(c), all determinations required
to be made under this Section 3(c), including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a certified public accounting firm
(the "Accounting Firm") reasonably acceptable to the Executive as
may be designated by the Company which shall provide detailed
supporting calculations both to the Company and the Executive
within 15 business days of the receipt of notice from the Executive
that there has been a Payment, or such earlier time as is requested
by the Company. All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 3(c), shall be paid by the Company to the
Executive, or withheld on the Executive’s behalf, within five
days of the later of (A) the due date for the payment of any Excise
Tax, and (B) the receipt of the Accounting Firm's determination.
Any determination by the Accounting Firm shall be binding upon the
Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by t
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