Exhibit 10.3
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (the "Agreement") is made
and entered into as of this ___ day of __________, 1998 (the "Commencement
Date"), by and between ▇▇▇▇▇▇ River Bank & Trust Company (which, together with
any successor thereto which executes and delivers the assumption agreement
provided for in Section 5(a) hereof or which otherwise becomes bound by all of
the terms and provisions of this Agreement by operation of law, is hereinafter
referred to as the "Bank"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Executive").
WHEREAS, the Executive is currently serving as Vice President of
Compliance and Collections of the Bank; and
WHEREAS, the Board of Directors of the Bank (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
change in control of the Bank or of its holding company, ▇▇▇▇▇▇ River Bancorp,
Inc. (the "Company"), may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of management personnel to the detriment of the Bank, the Company
and its stockholders; and
WHEREAS, the Board believes it is in the best interests of the Bank to
enter into this Agreement with the Executive in order to assure continuity of
management of the Bank and to reinforce and encourage the continued attention
and dedication of the Executive to the Executive's assigned duties without
distraction in the face of potentially disruptive circumstances arising from the
possibility of a change in control of the Company and/or the Bank, although no
such change is now contemplated; and
WHEREAS, the Board has approved and authorized the execution of this
Agreement with the Executive;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. Certain Definitions.
(a) The term "Change in Control" means (i) any "person," as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than the Company, any Consolidated
Subsidiaries (as hereinafter defined), any person (as hereinabove defined)
acting on behalf of the Company as underwriter pursuant to an offering who is
temporarily holding securities in connection with such offering, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities; (ii) individuals who are members of the Board on the
Commencement Date (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the Commencement Date whose election was approved by a vote of at
least three-quarters of the directors comprising the Incumbent Board or whose
nomination for election by the Company's stockholders was approved by the
nominating committee serving under an Incumbent Board, shall be considered a
member of the Incumbent Board; (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
person (as hereinabove defined) acquires more than 25% of the combined voting
power of the Company's then outstanding securities; or (iv) the stockholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets (or any transaction having a similar effect).
(b) The term "Commencement Date" means __________ __, 1998.
(c) The term "Consolidated Subsidiaries" means any subsidiary
or subsidiaries of the Company that are part of the affiliated group (as defined
in Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code"),
without regard to subsection (b) thereof) that includes the Bank, including but
not limited to the Company.
(d) The term "Date of Termination" means the date specified in
the Notice of Termination (which, in the case of a Termination for Cause shall
not be less than 30 days from the date such Notice of Termination is given, and
in the case of a termination for Good Reason shall not be less than 15 nor more
than 60 days from the date such Notice of Termination is given); provided,
however, that if within 15 days after any Notice of Termination is given, or, if
later, prior to the Date of Termination (as determined without regard to this
proviso), the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, then the Date of
Termination shall be the date on which the dispute is finally determined,
whether by mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); and provided,
further, that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Bank will continue to pay
the Executive the Executive's full salary at the rate in effect when the notice
giving rise to the dispute was given and continue the Executive as a participant
in all benefit and fringe benefit plans in which the Executive was participating
when the notice giving rise to the dispute was given, until the dispute is
finally resolved in accordance with this Section 1(d).
(e) The term "Good Reason" means the occurrence, without the
Executive's express written consent, of a material diminution of or interference
with the Executive's duties, responsibilities or benefits, including (without
limitation) any of the following circumstances unless such circumstances are
fully corrected prior to the Date of Termination specified in the Notice of
Termination given by the Executive in respect thereof:
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(i) a requirement that the Executive be based at any
location not within 50 miles of Hudson, New York, or
that substantially increase travel on Company or Bank
business;
(ii) a material demotion of the Executive;
(iii) a material reduction in the number or seniority of
personnel reporting to the Executive or a material
reduction in the frequency with which, or in the nature
of the matters with respect to which such personnel are
to report to the Executive, other than as part of a
Company-wide or Bank-wide reduction in staff;
(iv) a reduction in the Executive's salary or a material
adverse change in the Executive's perquisites,
benefits, contingent benefits or vacation, other than
as part of an overall program applied uniformly and
with equitable effect to all members of the senior
management of the Company or the Bank;
(v) a material and extended increase in the required hours
of work or the workload of the Executive;
(vi) the failure of the Bank to obtain a satisfactory
agreement from any successor to assume the obligations
and liabilities under this Agreement, as contemplated
in Section 5(a) hereof; or
(vii) any purported termination of the Executive's
employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 4
hereof (and, if applicable, the requirements of Section
1(g) hereof), which purported termination shall not be
effective for purposes of this Agreement.
(f) The term "Notice of Termination" means a notice of
termination of the Executive's employment pursuant to Section 7 of this
Agreement.
(g) The term "Termination for Cause" means termination of the
employment of the Employee because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of a fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement. No act or failure to act by the Executive shall be considered
intentional unless the Executive acted or failed to act with an absence of good
faith and without a reasonable belief that action or failure to act was in the
best interest of the Bank. Notwithstanding the foregoing, no Termination for
Cause shall be deemed to have occurred 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
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Board at a meeting of the Board duly called and held for such purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board), stating
that in the good faith opinion of the Board the Executive has engaged in conduct
described in the preceding sentence and specifying the particulars thereof in
detail.
2. Term.
(a) The term of this Agreement shall be a period of two years
commencing on the Commencement Date, subject to extension or earlier termination
as provided herein.
(b) Except as provided in section 2(c), beginning on the date
of this Agreement, the term of this Agreement shall automatically be extended
for one additional day each day, unless either the Bank or the Executive elects
not to extend the Agreement further by giving written notice thereof to the
other party, in which case the term of this Agreement shall end on the second
anniversary of the date on which such written notice is given. Upon termination
of the Executive's employment with the Bank for any reason whatsoever, any daily
extensions provided pursuant to this section 2(b), if not theretofore
discontinued, shall automatically cease.
(c) Nothing in this Agreement shall be deemed to prohibit the
Bank at any time from terminating the Executive's employment during the term of
this Agreement with or without notice for any reason; provided, however, that
the relative rights and obligations of the Bank and the Executive in the event
of any such termination shall be determined under this Agreement.
3. Severance Benefits.
(a) In the event that the Bank shall terminate the Executive's
employment other than Termination for Cause, or the Executive shall terminate
employment for Good Reason, within 24 months following a Change in Control, the
Bank shall (i) pay the Executive salary through the Date of Termination at the
rate in effect at the time the Notice of Termination is given, at the time such
payments are due; and (ii) pay to the Executive in a lump sum in cash, within 25
days after the later of the date of such Change in Control or the Date of
Termination, an amount equal to 299% of the Executive's "base amount" as
determined under Section 280G of the Code, less the aggregate present value of
the payments or benefits, if any, in the nature of compensation for the benefit
of the Executive, arising under any other plans or arrangements (i.e., not this
Agreement) between the Company or any of the Consolidated Subsidiaries and the
Executive, which constitute "parachute payments" under Section 280G of the Code.
While it is not contemplated that the Executive will receive any
amounts or benefits that will constitute "excess parachute payments" under
Section 280G of the Code, in the event that any payments or benefits provided or
to be provided to the Executive pursuant to this Agreement, in combination with
payments or benefits, if any, from other plans or arrangements maintained by the
Company or any of the Consolidated Subsidiaries, constitute "excess parachute
payments" under Section 280G of the Code that are subject to the excise tax
under Section 4999 of the Code, the Bank shall pay to the Executive in cash an
additional amount equal to the amount of the Gross Up Payment (as hereinafter
defined). The "Gross Up Payment" shall be the amount needed to ensure that the
amount of such payments and the value of such benefits received by the Executive
(net of such excise tax and any federal, state and local tax on the Bank's
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payment to attributable to such excise tax) equals the amount of such payments
and value of such benefits as would receive in the absence of such excise tax
and any federal, state and local tax on the Bank's payment to attributable to
such excise tax. The Bank shall pay the Gross Up Payment within 30 days after
the Date of Termination. For purposes of determining the amount of the Gross Up
Payment, the value of any non-cash benefits and deferred payments or benefits
shall be determined by the Bank's independent auditors in accordance with the
principles of Section 280G(d)(3) and (4) of the Code. In the event that, after
the Gross Up Payment is made, the amount of the excise tax is determined to be
less than the amount calculated in the determination of the actual Gross Up
Payment made by the Bank, the Executive shall repay to the Bank, at the time
that such reduction in the amount of excise tax is finally determined, the
portion of the Gross Up Payment attributable to such reduction, plus interest on
the amount of such repayment at the applicable federal rate under Section 1274
of the Code from the date of the Gross Up Payment to the date of the repayment.
The amount of the reduction of the Gross Up Payment shall reflect any subsequent
reduction in excise taxes resulting from such repayment. In the event that,
after the Gross Up Payment is made, the amount of the excise tax is determined
to exceed the amount anticipated at the time the Gross Up Payment was made, the
Bank shall pay to the Executive, in immediately available funds, at the time
that such additional amount of excise tax is finally determined, an additional
payment ("Additional Gross Up Payment") equal to such additional amount of
excise tax and any federal, state and local taxes thereon, plus all interest and
penalties, if any, owed by the Executive with respect to such additional amount
of excise and other tax. The Bank shall have the right to challenge, on the
Executive's behalf, any excise tax assessment against as to which the Executive
is entitled to (or would be entitled if such assessment is finally determined to
be proper) a Gross Up Payment or Additional Gross Up Payment, provided that all
costs and expenses incurred in such a challenge shall be borne by the Bank and
the Bank shall indemnify the Executive and hold harmless, on an after-tax basis,
from any excise or other tax (including interest and penalties with respect
thereto) imposed as a result of such payment of costs and expenses by the Bank.
(b) The Executive shall not be required to mitigate the amount
of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment or benefit provided
for in this Agreement be reduced by any compensation earned by the Executive as
the result of employment by another employer, by retirement benefits after the
Date of Termination or otherwise. This Agreement shall not be construed as
providing the Executive any right to be retained in the employ of the Bank or
any affiliate of the Bank.
4. Notice of Termination. In the event that the Bank desires to
terminate the employment of the Executive during the term of this Agreement, the
Bank shall deliver to the Executive a written notice of termination, stating (i)
whether such termination constitutes Termination for Cause, and, if so, setting
forth in reasonable detail the facts and circumstances that are the basis for
the Termination for Cause, and (ii) specifying the Date of Termination. In the
event that the Executive desires to terminate employment and determines in good
faith that has experienced Good Reason to terminate employment, shall send a
written notice to the Bank stating the circumstances that constitute Good Reason
and the Date of Termination.
The Executive's right to terminate employment for Good Reason shall not
be affected by the Executive's incapacity due to physical or mental illness. The
Executive's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason under this
Agreement.
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5. No Assignments.
(a) This Agreement is personal to each of the parties hereto,
and neither party may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other party;
provided, however, that the Bank shall require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation, operation of law or
otherwise) to all or substantially all of the business and/or assets of the
Bank, by an assumption agreement in form and substance satisfactory to the
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Bank would be required to perform it if
no such succession or assignment had taken place. Failure of the Bank to obtain
such an assumption agreement prior to the effectiveness of any such succession
or assignment shall be a breach of this Agreement and shall entitle the
Executive to compensation and benefits from the Bank in the same amount and on
the same terms that would be entitled to hereunder if terminated employment for
Good Reason, in addition to any payments and benefits to which the Executive is
entitled under Section 3 hereof. For purposes of implementing the provisions of
this Section 5(a), the date on which any such succession becomes effective shall
be deemed the Date of Termination.
(b) This Agreement and all rights of the Executive hereunder
shall inure to the benefit of and be enforceable by the Executive's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. In the event of the death of the Executive,
unless otherwise provided herein, all amounts payable hereunder shall be paid to
the Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
6. Deferred Payments. If following a termination of the Executive, the
aggregate payments to be made by the Bank under this Agreement and all other
plans or arrangements maintained by the Company or any of the Consolidated
Subsidiaries would exceed the limitation on deductible compensation contained in
Section 162(m) of the Code in any calendar year, any such amounts in excess of
such limitation shall be mandatorily deferred with interest thereon at 7.0% per
annum to a calendar year such that the amount to be paid to the Executive in
such calendar year, including deferred amounts, does not exceed such limitation.
7. Delivery of Notices. For the purposes of this Agreement, all notices
and other communications to any party hereto shall be in writing and shall be
deemed to have been duly given when delivered or sent by certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive: [name]
At the address last appearing
on the personnel records of
the Executive
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If to the Bank: ▇▇▇▇▇▇ River Bank & Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
or to such other address as such party may have furnished to the other in
writing in accordance herewith, except that a notice of change of address shall
be effective only upon receipt.
8. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
9. Headings. The headings used in this Agreement are included solely
for convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.
10. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
11. Governing Law. This Agreement shall be governed by the laws of the
State of New York to the extent that federal law does not govern.
12. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by binding
arbitration, conducted before a panel of three arbitrators in a location
selected by the Executive within 100 miles of such Executive's job location with
the Bank, in accordance with the rules of the American Arbitration Association
then in effect; provided, however, that the Executive shall be entitled to seek
specific performance of rights under Section 1(d) during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
Judgment may be entered on the arbitrators= award in any court having
jurisdiction.
13. Reimbursement of Expenses. In the event any dispute shall arise
between the Executive and the Bank as to the terms or interpretation of this
Agreement, including this Section 13, whether instituted by formal legal
proceedings or otherwise, including any action taken by the Executive to enforce
the terms of this Section 13, or in defending against any action taken by the
Bank, the Bank shall reimburse the Executive for all costs and expenses incurred
by the Executive, including reasonable attorney's fees, arising from such
dispute, proceedings or actions, unless a court of competent jurisdiction
renders a final and nonappealable judgment against the Executive as to the
matter in dispute. Reimbursement of the Executive's expenses shall be paid
within ten days of the Executive furnishing to the Bank written evidence, which
may be in the form, among other things, of a canceled check or receipt, of any
costs or expenses incurred by the Executive.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
Attest: ▇▇▇▇▇▇ RIVER BANK & TRUST
COMPANY
------------------------------- ---------------------------------------
By:
Its:
EXECUTIVE
--------------------------------------
[name]
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CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (the "Agreement") is made
and entered into as of this ___ day of __________, 1998 (the "Commencement
Date"), by and between ▇▇▇▇▇▇ River Bank & Trust Company (which, together with
any successor thereto which executes and delivers the assumption agreement
provided for in Section 5(a) hereof or which otherwise becomes bound by all of
the terms and provisions of this Agreement by operation of law, is hereinafter
referred to as the "Bank"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the "Executive").
WHEREAS, the Executive is currently serving as Vice President of Human
Resources of the Bank; and
WHEREAS, the Board of Directors of the Bank (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
change in control of the Bank or of its holding company, ▇▇▇▇▇▇ River Bancorp,
Inc. (the "Company"), may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of management personnel to the detriment of the Bank, the Company
and its stockholders; and
WHEREAS, the Board believes it is in the best interests of the Bank to
enter into this Agreement with the Executive in order to assure continuity of
management of the Bank and to reinforce and encourage the continued attention
and dedication of the Executive to the Executive's assigned duties without
distraction in the face of potentially disruptive circumstances arising from the
possibility of a change in control of the Company and/or the Bank, although no
such change is now contemplated; and
WHEREAS, the Board has approved and authorized the execution of this
Agreement with the Executive;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. Certain Definitions.
(a) The term "Change in Control" means (i) any "person," as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than the Company, any Consolidated
Subsidiaries (as hereinafter defined), any person (as hereinabove defined)
acting on behalf of the Company as underwriter pursuant to an offering who is
temporarily holding securities in connection with such offering, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities; (ii) individuals who are members of the Board on the
Commencement Date (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the Commencement Date whose election was approved by a vote of at
least three-quarters of the directors comprising the Incumbent Board or whose
nomination for election by the Company's stockholders was approved by the
nominating committee serving under an Incumbent Board, shall be considered a
member of the Incumbent Board; (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
person (as hereinabove defined) acquires more than 25% of the combined voting
power of the Company's then outstanding securities; or (iv) the stockholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets (or any transaction having a similar effect).
(b) The term "Commencement Date" means __________ __, 1998.
(c) The term "Consolidated Subsidiaries" means any subsidiary
or subsidiaries of the Company that are part of the affiliated group (as defined
in Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code"),
without regard to subsection (b) thereof) that includes the Bank, including but
not limited to the Company.
(d) The term "Date of Termination" means the date specified in
the Notice of Termination (which, in the case of a Termination for Cause shall
not be less than 30 days from the date such Notice of Termination is given, and
in the case of a termination for Good Reason shall not be less than 15 nor more
than 60 days from the date such Notice of Termination is given); provided,
however, that if within 15 days after any Notice of Termination is given, or, if
later, prior to the Date of Termination (as determined without regard to this
proviso), the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, then the Date of
Termination shall be the date on which the dispute is finally determined,
whether by mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); and provided,
further, that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Bank will continue to pay
the Executive the Executive's full salary at the rate in effect when the notice
giving rise to the dispute was given and continue the Executive as a participant
in all benefit and fringe benefit plans in which the Executive was participating
when the notice giving rise to the dispute was given, until the dispute is
finally resolved in accordance with this Section 1(d).
(e) The term "Good Reason" means the occurrence, without the
Executive's express written consent, of a material diminution of or interference
with the Executive's duties, responsibilities or benefits, including (without
limitation) any of the following circumstances unless such circumstances are
fully corrected prior to the Date of Termination specified in the Notice of
Termination given by the Executive in respect thereof:
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(i) a requirement that the Executive be based at any
location not within 50 miles of Hudson, New York, or
that substantially increase travel on Company or Bank
business;
(ii) a material demotion of the Executive;
(iii) a material reduction in the number or seniority of
personnel reporting to the Executive or a material
reduction in the frequency with which, or in the nature
of the matters with respect to which such personnel are
to report to the Executive, other than as part of a
Company-wide or Bank-wide reduction in staff;
(iv) a reduction in the Executive's salary or a material
adverse change in the Executive's perquisites,
benefits, contingent benefits or vacation, other than
as part of an overall program applied uniformly and
with equitable effect to all members of the senior
management of the Company or the Bank;
(v) a material and extended increase in the required hours
of work or the workload of the Executive;
(vi) the failure of the Bank to obtain a satisfactory
agreement from any successor to assume the obligations
and liabilities under this Agreement, as contemplated
in Section 5(a) hereof; or
(vii) any purported termination of the Executive's
employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 4
hereof (and, if applicable, the requirements of Section
1(g) hereof), which purported termination shall not be
effective for purposes of this Agreement.
(f) The term "Notice of Termination" means a notice of
termination of the Executive's employment pursuant to Section 7 of this
Agreement.
(g) The term "Termination for Cause" means termination of the
employment of the Employee because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of a fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement. No act or failure to act by the Executive shall be considered
intentional unless the Executive acted or failed to act with an absence of good
faith and without a reasonable belief that action or failure to act was in the
best interest of the Bank. Notwithstanding the foregoing, no Termination for
Cause shall be deemed to have occurred 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
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Board at a meeting of the Board duly called and held for such purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board), stating
that in the good faith opinion of the Board the Executive has engaged in conduct
described in the preceding sentence and specifying the particulars thereof in
detail.
2. Term.
(a) The term of this Agreement shall be a period of two years
commencing on the Commencement Date, subject to extension or earlier termination
as provided herein.
(b) Except as provided in section 2(c), beginning on the date
of this Agreement, the term of this Agreement shall automatically be extended
for one additional day each day, unless either the Bank or the Executive elects
not to extend the Agreement further by giving written notice thereof to the
other party, in which case the term of this Agreement shall end on the second
anniversary of the date on which such written notice is given. Upon termination
of the Executive's employment with the Bank for any reason whatsoever, any daily
extensions provided pursuant to this section 2(b), if not theretofore
discontinued, shall automatically cease.
(c) Nothing in this Agreement shall be deemed to prohibit the
Bank at any time from terminating the Executive's employment during the term of
this Agreement with or without notice for any reason; provided, however, that
the relative rights and obligations of the Bank and the Executive in the event
of any such termination shall be determined under this Agreement.
3. Severance Benefits.
(a) In the event that the Bank shall terminate the Executive's
employment other than Termination for Cause, or the Executive shall terminate
employment for Good Reason, within 24 months following a Change in Control, the
Bank shall (i) pay the Executive salary through the Date of Termination at the
rate in effect at the time the Notice of Termination is given, at the time such
payments are due; and (ii) pay to the Executive in a lump sum in cash, within 25
days after the later of the date of such Change in Control or the Date of
Termination, an amount equal to 299% of the Executive's "base amount" as
determined under Section 280G of the Code, less the aggregate present value of
the payments or benefits, if any, in the nature of compensation for the benefit
of the Executive, arising under any other plans or arrangements (i.e., not this
Agreement) between the Company or any of the Consolidated Subsidiaries and the
Executive, which constitute "parachute payments" under Section 280G of the Code.
While it is not contemplated that the Executive will receive any
amounts or benefits that will constitute "excess parachute payments" under
Section 280G of the Code, in the event that any payments or benefits provided or
to be provided to the Executive pursuant to this Agreement, in combination with
payments or benefits, if any, from other plans or arrangements maintained by the
Company or any of the Consolidated Subsidiaries, constitute "excess parachute
payments" under Section 280G of the Code that are subject to the excise tax
under Section 4999 of the Code, the Bank shall pay to the Executive in cash an
additional amount equal to the amount of the Gross Up Payment (as hereinafter
defined). The "Gross Up Payment" shall be the amount needed to ensure that the
amount of such payments and the value of such benefits received by the Executive
(net of such excise tax and any federal, state and local tax on the Bank's
4
payment to attributable to such excise tax) equals the amount of such payments
and value of such benefits as would receive in the absence of such excise tax
and any federal, state and local tax on the Bank's payment to attributable to
such excise tax. The Bank shall pay the Gross Up Payment within 30 days after
the Date of Termination. For purposes of determining the amount of the Gross Up
Payment, the value of any non-cash benefits and deferred payments or benefits
shall be determined by the Bank's independent auditors in accordance with the
principles of Section 280G(d)(3) and (4) of the Code. In the event that, after
the Gross Up Payment is made, the amount of the excise tax is determined to be
less than the amount calculated in the determination of the actual Gross Up
Payment made by the Bank, the Executive shall repay to the Bank, at the time
that such reduction in the amount of excise tax is finally determined, the
portion of the Gross Up Payment attributable to such reduction, plus interest on
the amount of such repayment at the applicable federal rate under Section 1274
of the Code from the date of the Gross Up Payment to the date of the repayment.
The amount of the reduction of the Gross Up Payment shall reflect any subsequent
reduction in excise taxes resulting from such repayment. In the event that,
after the Gross Up Payment is made, the amount of the excise tax is determined
to exceed the amount anticipated at the time the Gross Up Payment was made, the
Bank shall pay to the Executive, in immediately available funds, at the time
that such additional amount of excise tax is finally determined, an additional
payment ("Additional Gross Up Payment") equal to such additional amount of
excise tax and any federal, state and local taxes thereon, plus all interest and
penalties, if any, owed by the Executive with respect to such additional amount
of excise and other tax. The Bank shall have the right to challenge, on the
Executive's behalf, any excise tax assessment against as to which the Executive
is entitled to (or would be entitled if such assessment is finally determined to
be proper) a Gross Up Payment or Additional Gross Up Payment, provided that all
costs and expenses incurred in such a challenge shall be borne by the Bank and
the Bank shall indemnify the Executive and hold harmless, on an after-tax basis,
from any excise or other tax (including interest and penalties with respect
thereto) imposed as a result of such payment of costs and expenses by the Bank.
(b) The Executive shall not be required to mitigate the amount
of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment or benefit provided
for in this Agreement be reduced by any compensation earned by the Executive as
the result of employment by another employer, by retirement benefits after the
Date of Termination or otherwise. This Agreement shall not be construed as
providing the Executive any right to be retained in the employ of the Bank or
any affiliate of the Bank.
4. Notice of Termination. In the event that the Bank desires to
terminate the employment of the Executive during the term of this Agreement, the
Bank shall deliver to the Executive a written notice of termination, stating (i)
whether such termination constitutes Termination for Cause, and, if so, setting
forth in reasonable detail the facts and circumstances that are the basis for
the Termination for Cause, and (ii) specifying the Date of Termination. In the
event that the Executive desires to terminate employment and determines in good
faith that has experienced Good Reason to terminate employment, shall send a
written notice to the Bank stating the circumstances that constitute Good Reason
and the Date of Termination.
The Executive's right to terminate employment for Good Reason shall not
be affected by the Executive's incapacity due to physical or mental illness. The
Executive's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason under this
Agreement.
5
5. No Assignments.
(a) This Agreement is personal to each of the parties hereto,
and neither party may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other party;
provided, however, that the Bank shall require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation, operation of law or
otherwise) to all or substantially all of the business and/or assets of the
Bank, by an assumption agreement in form and substance satisfactory to the
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Bank would be required to perform it if
no such succession or assignment had taken place. Failure of the Bank to obtain
such an assumption agreement prior to the effectiveness of any such succession
or assignment shall be a breach of this Agreement and shall entitle the
Executive to compensation and benefits from the Bank in the same amount and on
the same terms that would be entitled to hereunder if terminated employment for
Good Reason, in addition to any payments and benefits to which the Executive is
entitled under Section 3 hereof. For purposes of implementing the provisions of
this Section 5(a), the date on which any such succession becomes effective shall
be deemed the Date of Termination.
(b) This Agreement and all rights of the Executive hereunder
shall inure to the benefit of and be enforceable by the Executive's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. In the event of the death of the Executive,
unless otherwise provided herein, all amounts payable hereunder shall be paid to
the Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
6. Deferred Payments. If following a termination of the Executive, the
aggregate payments to be made by the Bank under this Agreement and all other
plans or arrangements maintained by the Company or any of the Consolidated
Subsidiaries would exceed the limitation on deductible compensation contained in
Section 162(m) of the Code in any calendar year, any such amounts in excess of
such limitation shall be mandatorily deferred with interest thereon at 7.0% per
annum to a calendar year such that the amount to be paid to the Executive in
such calendar year, including deferred amounts, does not exceed such limitation.
7. Delivery of Notices. For the purposes of this Agreement, all notices
and other communications to any party hereto shall be in writing and shall be
deemed to have been duly given when delivered or sent by certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive: [name]
At the address last appearing
on the personnel records of
the Executive
6
If to the Bank: ▇▇▇▇▇▇ River Bank & Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
or to such other address as such party may have furnished to the other in
writing in accordance herewith, except that a notice of change of address shall
be effective only upon receipt.
8. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
9. Headings. The headings used in this Agreement are included solely
for convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.
10. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
11. Governing Law. This Agreement shall be governed by the laws of the
State of New York to the extent that federal law does not govern.
12. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by binding
arbitration, conducted before a panel of three arbitrators in a location
selected by the Executive within 100 miles of such Executive's job location with
the Bank, in accordance with the rules of the American Arbitration Association
then in effect; provided, however, that the Executive shall be entitled to seek
specific performance of rights under Section 1(d) during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
Judgment may be entered on the arbitrators= award in any court having
jurisdiction.
13. Reimbursement of Expenses. In the event any dispute shall arise
between the Executive and the Bank as to the terms or interpretation of this
Agreement, including this Section 13, whether instituted by formal legal
proceedings or otherwise, including any action taken by the Executive to enforce
the terms of this Section 13, or in defending against any action taken by the
Bank, the Bank shall reimburse the Executive for all costs and expenses incurred
by the Executive, including reasonable attorney's fees, arising from such
dispute, proceedings or actions, unless a court of competent jurisdiction
renders a final and nonappealable judgment against the Executive as to the
matter in dispute. Reimbursement of the Executive's expenses shall be paid
within ten days of the Executive furnishing to the Bank written evidence, which
may be in the form, among other things, of a canceled check or receipt, of any
costs or expenses incurred by the Executive.
7
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
Attest: ▇▇▇▇▇▇ RIVER BANK & TRUST
COMPANY
------------------------------- ---------------------------------------
By:
Its:
EXECUTIVE
--------------------------------------
[name]
8
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (the "Agreement") is made
and entered into as of this ___ day of __________, 1998 (the "Commencement
Date"), by and between ▇▇▇▇▇▇ River Bank & Trust Company (which, together with
any successor thereto which executes and delivers the assumption agreement
provided for in Section 5(a) hereof or which otherwise becomes bound by all of
the terms and provisions of this Agreement by operation of law, is hereinafter
referred to as the "Bank"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Executive").
WHEREAS, the Executive is currently serving as Vice President of
Commerical Lending of the Bank; and
WHEREAS, the Board of Directors of the Bank (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
change in control of the Bank or of its holding company, ▇▇▇▇▇▇ River Bancorp,
Inc. (the "Company"), may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of management personnel to the detriment of the Bank, the Company
and its stockholders; and
WHEREAS, the Board believes it is in the best interests of the Bank to
enter into this Agreement with the Executive in order to assure continuity of
management of the Bank and to reinforce and encourage the continued attention
and dedication of the Executive to the Executive's assigned duties without
distraction in the face of potentially disruptive circumstances arising from the
possibility of a change in control of the Company and/or the Bank, although no
such change is now contemplated; and
WHEREAS, the Board has approved and authorized the execution of this
Agreement with the Executive;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. Certain Definitions.
(a) The term "Change in Control" means (i) any "person," as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than the Company, any Consolidated
Subsidiaries (as hereinafter defined), any person (as hereinabove defined)
acting on behalf of the Company as underwriter pursuant to an offering who is
temporarily holding securities in connection with such offering, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities; (ii) individuals who are members of the Board on the
Commencement Date (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the Commencement Date whose election was approved by a vote of at
least three-quarters of the directors comprising the Incumbent Board or whose
nomination for election by the Company's stockholders was approved by the
nominating committee serving under an Incumbent Board, shall be considered a
member of the Incumbent Board; (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
person (as hereinabove defined) acquires more than 25% of the combined voting
power of the Company's then outstanding securities; or (iv) the stockholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets (or any transaction having a similar effect).
(b) The term "Commencement Date" means __________ __, 1998.
(c) The term "Consolidated Subsidiaries" means any subsidiary
or subsidiaries of the Company that are part of the affiliated group (as defined
in Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code"),
without regard to subsection (b) thereof) that includes the Bank, including but
not limited to the Company.
(d) The term "Date of Termination" means the date specified in
the Notice of Termination (which, in the case of a Termination for Cause shall
not be less than 30 days from the date such Notice of Termination is given, and
in the case of a termination for Good Reason shall not be less than 15 nor more
than 60 days from the date such Notice of Termination is given); provided,
however, that if within 15 days after any Notice of Termination is given, or, if
later, prior to the Date of Termination (as determined without regard to this
proviso), the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, then the Date of
Termination shall be the date on which the dispute is finally determined,
whether by mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); and provided,
further, that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Bank will continue to pay
the Executive the Executive's full salary at the rate in effect when the notice
giving rise to the dispute was given and continue the Executive as a participant
in all benefit and fringe benefit plans in which the Executive was participating
when the notice giving rise to the dispute was given, until the dispute is
finally resolved in accordance with this Section 1(d).
(e) The term "Good Reason" means the occurrence, without the
Executive's express written consent, of a material diminution of or interference
with the Executive's duties, responsibilities or benefits, including (without
limitation) any of the following circumstances unless such circumstances are
fully corrected prior to the Date of Termination specified in the Notice of
Termination given by the Executive in respect thereof:
2
(i) a requirement that the Executive be based at any
location not within 50 miles of Hudson, New York, or
that substantially increase travel on Company or Bank
business;
(ii) a material demotion of the Executive;
(iii) a material reduction in the number or seniority of
personnel reporting to the Executive or a material
reduction in the frequency with which, or in the nature
of the matters with respect to which such personnel are
to report to the Executive, other than as part of a
Company-wide or Bank-wide reduction in staff;
(iv) a reduction in the Executive's salary or a material
adverse change in the Executive's perquisites,
benefits, contingent benefits or vacation, other than
as part of an overall program applied uniformly and
with equitable effect to all members of the senior
management of the Company or the Bank;
(v) a material and extended increase in the required hours
of work or the workload of the Executive;
(vi) the failure of the Bank to obtain a satisfactory
agreement from any successor to assume the obligations
and liabilities under this Agreement, as contemplated
in Section 5(a) hereof; or
(vii) any purported termination of the Executive's
employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 4
hereof (and, if applicable, the requirements of Section
1(g) hereof), which purported termination shall not be
effective for purposes of this Agreement.
(f) The term "Notice of Termination" means a notice of
termination of the Executive's employment pursuant to Section 7 of this
Agreement.
(g) The term "Termination for Cause" means termination of the
employment of the Employee because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of a fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement. No act or failure to act by the Executive shall be considered
intentional unless the Executive acted or failed to act with an absence of good
faith and without a reasonable belief that action or failure to act was in the
best interest of the Bank. Notwithstanding the foregoing, no Termination for
Cause shall be deemed to have occurred 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
3
Board at a meeting of the Board duly called and held for such purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board), stating
that in the good faith opinion of the Board the Executive has engaged in conduct
described in the preceding sentence and specifying the particulars thereof in
detail.
2. Term.
(a) The term of this Agreement shall be a period of two years
commencing on the Commencement Date, subject to extension or earlier termination
as provided herein.
(b) Except as provided in section 2(c), beginning on the date
of this Agreement, the term of this Agreement shall automatically be extended
for one additional day each day, unless either the Bank or the Executive elects
not to extend the Agreement further by giving written notice thereof to the
other party, in which case the term of this Agreement shall end on the second
anniversary of the date on which such written notice is given. Upon termination
of the Executive's employment with the Bank for any reason whatsoever, any daily
extensions provided pursuant to this section 2(b), if not theretofore
discontinued, shall automatically cease.
(c) Nothing in this Agreement shall be deemed to prohibit the
Bank at any time from terminating the Executive's employment during the term of
this Agreement with or without notice for any reason; provided, however, that
the relative rights and obligations of the Bank and the Executive in the event
of any such termination shall be determined under this Agreement.
3. Severance Benefits.
(a) In the event that the Bank shall terminate the Executive's
employment other than Termination for Cause, or the Executive shall terminate
employment for Good Reason, within 24 months following a Change in Control, the
Bank shall (i) pay the Executive salary through the Date of Termination at the
rate in effect at the time the Notice of Termination is given, at the time such
payments are due; and (ii) pay to the Executive in a lump sum in cash, within 25
days after the later of the date of such Change in Control or the Date of
Termination, an amount equal to 299% of the Executive's "base amount" as
determined under Section 280G of the Code, less the aggregate present value of
the payments or benefits, if any, in the nature of compensation for the benefit
of the Executive, arising under any other plans or arrangements (i.e., not this
Agreement) between the Company or any of the Consolidated Subsidiaries and the
Executive, which constitute "parachute payments" under Section 280G of the Code.
While it is not contemplated that the Executive will receive any
amounts or benefits that will constitute "excess parachute payments" under
Section 280G of the Code, in the event that any payments or benefits provided or
to be provided to the Executive pursuant to this Agreement, in combination with
payments or benefits, if any, from other plans or arrangements maintained by the
Company or any of the Consolidated Subsidiaries, constitute "excess parachute
payments" under Section 280G of the Code that are subject to the excise tax
under Section 4999 of the Code, the Bank shall pay to the Executive in cash an
additional amount equal to the amount of the Gross Up Payment (as hereinafter
defined). The "Gross Up Payment" shall be the amount needed to ensure that the
amount of such payments and the value of such benefits received by the Executive
(net of such excise tax and any federal, state and local tax on the Bank's
4
payment to attributable to such excise tax) equals the amount of such payments
and value of such benefits as would receive in the absence of such excise tax
and any federal, state and local tax on the Bank's payment to attributable to
such excise tax. The Bank shall pay the Gross Up Payment within 30 days after
the Date of Termination. For purposes of determining the amount of the Gross Up
Payment, the value of any non-cash benefits and deferred payments or benefits
shall be determined by the Bank's independent auditors in accordance with the
principles of Section 280G(d)(3) and (4) of the Code. In the event that, after
the Gross Up Payment is made, the amount of the excise tax is determined to be
less than the amount calculated in the determination of the actual Gross Up
Payment made by the Bank, the Executive shall repay to the Bank, at the time
that such reduction in the amount of excise tax is finally determined, the
portion of the Gross Up Payment attributable to such reduction, plus interest on
the amount of such repayment at the applicable federal rate under Section 1274
of the Code from the date of the Gross Up Payment to the date of the repayment.
The amount of the reduction of the Gross Up Payment shall reflect any subsequent
reduction in excise taxes resulting from such repayment. In the event that,
after the Gross Up Payment is made, the amount of the excise tax is determined
to exceed the amount anticipated at the time the Gross Up Payment was made, the
Bank shall pay to the Executive, in immediately available funds, at the time
that such additional amount of excise tax is finally determined, an additional
payment ("Additional Gross Up Payment") equal to such additional amount of
excise tax and any federal, state and local taxes thereon, plus all interest and
penalties, if any, owed by the Executive with respect to such additional amount
of excise and other tax. The Bank shall have the right to challenge, on the
Executive's behalf, any excise tax assessment against as to which the Executive
is entitled to (or would be entitled if such assessment is finally determined to
be proper) a Gross Up Payment or Additional Gross Up Payment, provided that all
costs and expenses incurred in such a challenge shall be borne by the Bank and
the Bank shall indemnify the Executive and hold harmless, on an after-tax basis,
from any excise or other tax (including interest and penalties with respect
thereto) imposed as a result of such payment of costs and expenses by the Bank.
(b) The Executive shall not be required to mitigate the amount
of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment or benefit provided
for in this Agreement be reduced by any compensation earned by the Executive as
the result of employment by another employer, by retirement benefits after the
Date of Termination or otherwise. This Agreement shall not be construed as
providing the Executive any right to be retained in the employ of the Bank or
any affiliate of the Bank.
4. Notice of Termination. In the event that the Bank desires to
terminate the employment of the Executive during the term of this Agreement, the
Bank shall deliver to the Executive a written notice of termination, stating (i)
whether such termination constitutes Termination for Cause, and, if so, setting
forth in reasonable detail the facts and circumstances that are the basis for
the Termination for Cause, and (ii) specifying the Date of Termination. In the
event that the Executive desires to terminate employment and determines in good
faith that has experienced Good Reason to terminate employment, shall send a
written notice to the Bank stating the circumstances that constitute Good Reason
and the Date of Termination.
The Executive's right to terminate employment for Good Reason shall not
be affected by the Executive's incapacity due to physical or mental illness. The
Executive's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason under this
Agreement.
5
5. No Assignments.
(a) This Agreement is personal to each of the parties hereto,
and neither party may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other party;
provided, however, that the Bank shall require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation, operation of law or
otherwise) to all or substantially all of the business and/or assets of the
Bank, by an assumption agreement in form and substance satisfactory to the
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Bank would be required to perform it if
no such succession or assignment had taken place. Failure of the Bank to obtain
such an assumption agreement prior to the effectiveness of any such succession
or assignment shall be a breach of this Agreement and shall entitle the
Executive to compensation and benefits from the Bank in the same amount and on
the same terms that would be entitled to hereunder if terminated employment for
Good Reason, in addition to any payments and benefits to which the Executive is
entitled under Section 3 hereof. For purposes of implementing the provisions of
this Section 5(a), the date on which any such succession becomes effective shall
be deemed the Date of Termination.
(b) This Agreement and all rights of the Executive hereunder
shall inure to the benefit of and be enforceable by the Executive's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. In the event of the death of the Executive,
unless otherwise provided herein, all amounts payable hereunder shall be paid to
the Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
6. Deferred Payments. If following a termination of the Executive, the
aggregate payments to be made by the Bank under this Agreement and all other
plans or arrangements maintained by the Company or any of the Consolidated
Subsidiaries would exceed the limitation on deductible compensation contained in
Section 162(m) of the Code in any calendar year, any such amounts in excess of
such limitation shall be mandatorily deferred with interest thereon at 7.0% per
annum to a calendar year such that the amount to be paid to the Executive in
such calendar year, including deferred amounts, does not exceed such limitation.
7. Delivery of Notices. For the purposes of this Agreement, all notices
and other communications to any party hereto shall be in writing and shall be
deemed to have been duly given when delivered or sent by certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive: [name]
At the address last appearing
on the personnel records of
the Executive
6
If to the Bank: ▇▇▇▇▇▇ River Bank & Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
or to such other address as such party may have furnished to the other in
writing in accordance herewith, except that a notice of change of address shall
be effective only upon receipt.
8. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
9. Headings. The headings used in this Agreement are included solely
for convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.
10. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
11. Governing Law. This Agreement shall be governed by the laws of the
State of New York to the extent that federal law does not govern.
12. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by binding
arbitration, conducted before a panel of three arbitrators in a location
selected by the Executive within 100 miles of such Executive's job location with
the Bank, in accordance with the rules of the American Arbitration Association
then in effect; provided, however, that the Executive shall be entitled to seek
specific performance of rights under Section 1(d) during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
Judgment may be entered on the arbitrators= award in any court having
jurisdiction.
13. Reimbursement of Expenses. In the event any dispute shall arise
between the Executive and the Bank as to the terms or interpretation of this
Agreement, including this Section 13, whether instituted by formal legal
proceedings or otherwise, including any action taken by the Executive to enforce
the terms of this Section 13, or in defending against any action taken by the
Bank, the Bank shall reimburse the Executive for all costs and expenses incurred
by the Executive, including reasonable attorney's fees, arising from such
dispute, proceedings or actions, unless a court of competent jurisdiction
renders a final and nonappealable judgment against the Executive as to the
matter in dispute. Reimbursement of the Executive's expenses shall be paid
within ten days of the Executive furnishing to the Bank written evidence, which
may be in the form, among other things, of a canceled check or receipt, of any
costs or expenses incurred by the Executive.
7
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
Attest: ▇▇▇▇▇▇ RIVER BANK & TRUST
COMPANY
------------------------------- ---------------------------------------
By:
Its:
EXECUTIVE
--------------------------------------
[name]
8
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (the "Agreement") is made
and entered into as of this ___ day of __________, 1998 (the "Commencement
Date"), by and between ▇▇▇▇▇▇ River Bank & Trust Company (which, together with
any successor thereto which executes and delivers the assumption agreement
provided for in Section 5(a) hereof or which otherwise becomes bound by all of
the terms and provisions of this Agreement by operation of law, is hereinafter
referred to as the "Bank"), and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive").
WHEREAS, the Executive is currently serving as Vice President of
Mortgage Originations of the Bank; and
WHEREAS, the Board of Directors of the Bank (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
change in control of the Bank or of its holding company, ▇▇▇▇▇▇ River Bancorp,
Inc. (the "Company"), may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of management personnel to the detriment of the Bank, the Company
and its stockholders; and
WHEREAS, the Board believes it is in the best interests of the Bank to
enter into this Agreement with the Executive in order to assure continuity of
management of the Bank and to reinforce and encourage the continued attention
and dedication of the Executive to the Executive's assigned duties without
distraction in the face of potentially disruptive circumstances arising from the
possibility of a change in control of the Company and/or the Bank, although no
such change is now contemplated; and
WHEREAS, the Board has approved and authorized the execution of this
Agreement with the Executive;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. Certain Definitions.
(a) The term "Change in Control" means (i) any "person," as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than the Company, any Consolidated
Subsidiaries (as hereinafter defined), any person (as hereinabove defined)
acting on behalf of the Company as underwriter pursuant to an offering who is
temporarily holding securities in connection with such offering, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities; (ii) individuals who are members of the Board on the
Commencement Date (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the Commencement Date whose election was approved by a vote of at
least three-quarters of the directors comprising the Incumbent Board or whose
nomination for election by the Company's stockholders was approved by the
nominating committee serving under an Incumbent Board, shall be considered a
member of the Incumbent Board; (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
person (as hereinabove defined) acquires more than 25% of the combined voting
power of the Company's then outstanding securities; or (iv) the stockholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets (or any transaction having a similar effect).
(b) The term "Commencement Date" means __________ __, 1998.
(c) The term "Consolidated Subsidiaries" means any subsidiary
or subsidiaries of the Company that are part of the affiliated group (as defined
in Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code"),
without regard to subsection (b) thereof) that includes the Bank, including but
not limited to the Company.
(d) The term "Date of Termination" means the date specified in
the Notice of Termination (which, in the case of a Termination for Cause shall
not be less than 30 days from the date such Notice of Termination is given, and
in the case of a termination for Good Reason shall not be less than 15 nor more
than 60 days from the date such Notice of Termination is given); provided,
however, that if within 15 days after any Notice of Termination is given, or, if
later, prior to the Date of Termination (as determined without regard to this
proviso), the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, then the Date of
Termination shall be the date on which the dispute is finally determined,
whether by mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); and provided,
further, that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Bank will continue to pay
the Executive the Executive's full salary at the rate in effect when the notice
giving rise to the dispute was given and continue the Executive as a participant
in all benefit and fringe benefit plans in which the Executive was participating
when the notice giving rise to the dispute was given, until the dispute is
finally resolved in accordance with this Section 1(d).
(e) The term "Good Reason" means the occurrence, without the
Executive's express written consent, of a material diminution of or interference
with the Executive's duties, responsibilities or benefits, including (without
limitation) any of the following circumstances unless such circumstances are
fully corrected prior to the Date of Termination specified in the Notice of
Termination given by the Executive in respect thereof:
2
(i) a requirement that the Executive be based at any
location not within 50 miles of Hudson, New York, or
that substantially increase travel on Company or Bank
business;
(ii) a material demotion of the Executive;
(iii) a material reduction in the number or seniority of
personnel reporting to the Executive or a material
reduction in the frequency with which, or in the nature
of the matters with respect to which such personnel are
to report to the Executive, other than as part of a
Company-wide or Bank-wide reduction in staff;
(iv) a reduction in the Executive's salary or a material
adverse change in the Executive's perquisites,
benefits, contingent benefits or vacation, other than
as part of an overall program applied uniformly and
with equitable effect to all members of the senior
management of the Company or the Bank;
(v) a material and extended increase in the required hours
of work or the workload of the Executive;
(vi) the failure of the Bank to obtain a satisfactory
agreement from any successor to assume the obligations
and liabilities under this Agreement, as contemplated
in Section 5(a) hereof; or
(vii) any purported termination of the Executive's
employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 4
hereof (and, if applicable, the requirements of Section
1(g) hereof), which purported termination shall not be
effective for purposes of this Agreement.
(f) The term "Notice of Termination" means a notice of
termination of the Executive's employment pursuant to Section 7 of this
Agreement.
(g) The term "Termination for Cause" means termination of the
employment of the Employee because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of a fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement. No act or failure to act by the Executive shall be considered
intentional unless the Executive acted or failed to act with an absence of good
faith and without a reasonable belief that action or failure to act was in the
best interest of the Bank. Notwithstanding the foregoing, no Termination for
Cause shall be deemed to have occurred 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
3
Board at a meeting of the Board duly called and held for such purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board), stating
that in the good faith opinion of the Board the Executive has engaged in conduct
described in the preceding sentence and specifying the particulars thereof in
detail.
2. Term.
(a) The term of this Agreement shall be a period of two years
commencing on the Commencement Date, subject to extension or earlier termination
as provided herein.
(b) Except as provided in section 2(c), beginning on the date
of this Agreement, the term of this Agreement shall automatically be extended
for one additional day each day, unless either the Bank or the Executive elects
not to extend the Agreement further by giving written notice thereof to the
other party, in which case the term of this Agreement shall end on the second
anniversary of the date on which such written notice is given. Upon termination
of the Executive's employment with the Bank for any reason whatsoever, any daily
extensions provided pursuant to this section 2(b), if not theretofore
discontinued, shall automatically cease.
(c) Nothing in this Agreement shall be deemed to prohibit the
Bank at any time from terminating the Executive's employment during the term of
this Agreement with or without notice for any reason; provided, however, that
the relative rights and obligations of the Bank and the Executive in the event
of any such termination shall be determined under this Agreement.
3. Severance Benefits.
(a) In the event that the Bank shall terminate the Executive's
employment other than Termination for Cause, or the Executive shall terminate
employment for Good Reason, within 24 months following a Change in Control, the
Bank shall (i) pay the Executive salary through the Date of Termination at the
rate in effect at the time the Notice of Termination is given, at the time such
payments are due; and (ii) pay to the Executive in a lump sum in cash, within 25
days after the later of the date of such Change in Control or the Date of
Termination, an amount equal to 299% of the Executive's "base amount" as
determined under Section 280G of the Code, less the aggregate present value of
the payments or benefits, if any, in the nature of compensation for the benefit
of the Executive, arising under any other plans or arrangements (i.e., not this
Agreement) between the Company or any of the Consolidated Subsidiaries and the
Executive, which constitute "parachute payments" under Section 280G of the Code.
While it is not contemplated that the Executive will receive any
amounts or benefits that will constitute "excess parachute payments" under
Section 280G of the Code, in the event that any payments or benefits provided or
to be provided to the Executive pursuant to this Agreement, in combination with
payments or benefits, if any, from other plans or arrangements maintained by the
Company or any of the Consolidated Subsidiaries, constitute "excess parachute
payments" under Section 280G of the Code that are subject to the excise tax
under Section 4999 of the Code, the Bank shall pay to the Executive in cash an
additional amount equal to the amount of the Gross Up Payment (as hereinafter
defined). The "Gross Up Payment" shall be the amount needed to ensure that the
amount of such payments and the value of such benefits received by the Executive
(net of such excise tax and any federal, state and local tax on the Bank's
4
payment to attributable to such excise tax) equals the amount of such payments
and value of such benefits as would receive in the absence of such excise tax
and any federal, state and local tax on the Bank's payment to attributable to
such excise tax. The Bank shall pay the Gross Up Payment within 30 days after
the Date of Termination. For purposes of determining the amount of the Gross Up
Payment, the value of any non-cash benefits and deferred payments or benefits
shall be determined by the Bank's independent auditors in accordance with the
principles of Section 280G(d)(3) and (4) of the Code. In the event that, after
the Gross Up Payment is made, the amount of the excise tax is determined to be
less than the amount calculated in the determination of the actual Gross Up
Payment made by the Bank, the Executive shall repay to the Bank, at the time
that such reduction in the amount of excise tax is finally determined, the
portion of the Gross Up Payment attributable to such reduction, plus interest on
the amount of such repayment at the applicable federal rate under Section 1274
of the Code from the date of the Gross Up Payment to the date of the repayment.
The amount of the reduction of the Gross Up Payment shall reflect any subsequent
reduction in excise taxes resulting from such repayment. In the event that,
after the Gross Up Payment is made, the amount of the excise tax is determined
to exceed the amount anticipated at the time the Gross Up Payment was made, the
Bank shall pay to the Executive, in immediately available funds, at the time
that such additional amount of excise tax is finally determined, an additional
payment ("Additional Gross Up Payment") equal to such additional amount of
excise tax and any federal, state and local taxes thereon, plus all interest and
penalties, if any, owed by the Executive with respect to such additional amount
of excise and other tax. The Bank shall have the right to challenge, on the
Executive's behalf, any excise tax assessment against as to which the Executive
is entitled to (or would be entitled if such assessment is finally determined to
be proper) a Gross Up Payment or Additional Gross Up Payment, provided that all
costs and expenses incurred in such a challenge shall be borne by the Bank and
the Bank shall indemnify the Executive and hold harmless, on an after-tax basis,
from any excise or other tax (including interest and penalties with respect
thereto) imposed as a result of such payment of costs and expenses by the Bank.
(b) The Executive shall not be required to mitigate the amount
of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment or benefit provided
for in this Agreement be reduced by any compensation earned by the Executive as
the result of employment by another employer, by retirement benefits after the
Date of Termination or otherwise. This Agreement shall not be construed as
providing the Executive any right to be retained in the employ of the Bank or
any affiliate of the Bank.
4. Notice of Termination. In the event that the Bank desires to
terminate the employment of the Executive during the term of this Agreement, the
Bank shall deliver to the Executive a written notice of termination, stating (i)
whether such termination constitutes Termination for Cause, and, if so, setting
forth in reasonable detail the facts and circumstances that are the basis for
the Termination for Cause, and (ii) specifying the Date of Termination. In the
event that the Executive desires to terminate employment and determines in good
faith that has experienced Good Reason to terminate employment, shall send a
written notice to the Bank stating the circumstances that constitute Good Reason
and the Date of Termination.
The Executive's right to terminate employment for Good Reason shall not
be affected by the Executive's incapacity due to physical or mental illness. The
Executive's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason under this
Agreement.
5
5. No Assignments.
(a) This Agreement is personal to each of the parties hereto,
and neither party may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other party;
provided, however, that the Bank shall require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation, operation of law or
otherwise) to all or substantially all of the business and/or assets of the
Bank, by an assumption agreement in form and substance satisfactory to the
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Bank would be required to perform it if
no such succession or assignment had taken place. Failure of the Bank to obtain
such an assumption agreement prior to the effectiveness of any such succession
or assignment shall be a breach of this Agreement and shall entitle the
Executive to compensation and benefits from the Bank in the same amount and on
the same terms that would be entitled to hereunder if terminated employment for
Good Reason, in addition to any payments and benefits to which the Executive is
entitled under Section 3 hereof. For purposes of implementing the provisions of
this Section 5(a), the date on which any such succession becomes effective shall
be deemed the Date of Termination.
(b) This Agreement and all rights of the Executive hereunder
shall inure to the benefit of and be enforceable by the Executive's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. In the event of the death of the Executive,
unless otherwise provided herein, all amounts payable hereunder shall be paid to
the Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
6. Deferred Payments. If following a termination of the Executive, the
aggregate payments to be made by the Bank under this Agreement and all other
plans or arrangements maintained by the Company or any of the Consolidated
Subsidiaries would exceed the limitation on deductible compensation contained in
Section 162(m) of the Code in any calendar year, any such amounts in excess of
such limitation shall be mandatorily deferred with interest thereon at 7.0% per
annum to a calendar year such that the amount to be paid to the Executive in
such calendar year, including deferred amounts, does not exceed such limitation.
7. Delivery of Notices. For the purposes of this Agreement, all notices
and other communications to any party hereto shall be in writing and shall be
deemed to have been duly given when delivered or sent by certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive: [name]
At the address last appearing
on the personnel records of
the Executive
6
If to the Bank: ▇▇▇▇▇▇ River Bank & Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
or to such other address as such party may have furnished to the other in
writing in accordance herewith, except that a notice of change of address shall
be effective only upon receipt.
8. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
9. Headings. The headings used in this Agreement are included solely
for convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.
10. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
11. Governing Law. This Agreement shall be governed by the laws of the
State of New York to the extent that federal law does not govern.
12. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by binding
arbitration, conducted before a panel of three arbitrators in a location
selected by the Executive within 100 miles of such Executive's job location with
the Bank, in accordance with the rules of the American Arbitration Association
then in effect; provided, however, that the Executive shall be entitled to seek
specific performance of rights under Section 1(d) during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
Judgment may be entered on the arbitrators= award in any court having
jurisdiction.
13. Reimbursement of Expenses. In the event any dispute shall arise
between the Executive and the Bank as to the terms or interpretation of this
Agreement, including this Section 13, whether instituted by formal legal
proceedings or otherwise, including any action taken by the Executive to enforce
the terms of this Section 13, or in defending against any action taken by the
Bank, the Bank shall reimburse the Executive for all costs and expenses incurred
by the Executive, including reasonable attorney's fees, arising from such
dispute, proceedings or actions, unless a court of competent jurisdiction
renders a final and nonappealable judgment against the Executive as to the
matter in dispute. Reimbursement of the Executive's expenses shall be paid
within ten days of the Executive furnishing to the Bank written evidence, which
may be in the form, among other things, of a canceled check or receipt, of any
costs or expenses incurred by the Executive.
7
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
Attest: ▇▇▇▇▇▇ RIVER BANK & TRUST
COMPANY
------------------------------- ---------------------------------------
By:
Its:
EXECUTIVE
--------------------------------------
[name]
8
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT (the "Agreement") is made
and entered into as of this ___ day of __________, 1998 (the "Commencement
Date"), by and between ▇▇▇▇▇▇ River Bank & Trust Company (which, together with
any successor thereto which executes and delivers the assumption agreement
provided for in Section 5(a) hereof or which otherwise becomes bound by all of
the terms and provisions of this Agreement by operation of law, is hereinafter
referred to as the "Bank"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Executive").
WHEREAS, the Executive is currently serving as Vice President of
Finance; and
WHEREAS, the Board of Directors of the Bank (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
change in control of the Bank or of its holding company, ▇▇▇▇▇▇ River Bancorp,
Inc. (the "Company"), may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of management personnel to the detriment of the Bank, the Company
and its stockholders; and
WHEREAS, the Board believes it is in the best interests of the Bank to
enter into this Agreement with the Executive in order to assure continuity of
management of the Bank and to reinforce and encourage the continued attention
and dedication of the Executive to the Executive's assigned duties without
distraction in the face of potentially disruptive circumstances arising from the
possibility of a change in control of the Company and/or the Bank, although no
such change is now contemplated; and
WHEREAS, the Board has approved and authorized the execution of this
Agreement with the Executive;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. Certain Definitions.
(a) The term "Change in Control" means (i) any "person," as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than the Company, any Consolidated
Subsidiaries (as hereinafter defined), any person (as hereinabove defined)
acting on behalf of the Company as underwriter pursuant to an offering who is
temporarily holding securities in connection with such offering, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of stock
of the Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities; (ii) individuals who are members of the Board on the
Commencement Date (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the Commencement Date whose election was approved by a vote of at
least three-quarters of the directors comprising the Incumbent Board or whose
nomination for election by the Company's stockholders was approved by the
nominating committee serving under an Incumbent Board, shall be considered a
member of the Incumbent Board; (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
person (as hereinabove defined) acquires more than 25% of the combined voting
power of the Company's then outstanding securities; or (iv) the stockholders of
the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets (or any transaction having a similar effect).
(b) The term "Commencement Date" means __________ __, 1998.
(c) The term "Consolidated Subsidiaries" means any subsidiary
or subsidiaries of the Company that are part of the affiliated group (as defined
in Section 1504 of the Internal Revenue Code of 1986, as amended (the "Code"),
without regard to subsection (b) thereof) that includes the Bank, including but
not limited to the Company.
(d) The term "Date of Termination" means the date specified in
the Notice of Termination (which, in the case of a Termination for Cause shall
not be less than 30 days from the date such Notice of Termination is given, and
in the case of a termination for Good Reason shall not be less than 15 nor more
than 60 days from the date such Notice of Termination is given); provided,
however, that if within 15 days after any Notice of Termination is given, or, if
later, prior to the Date of Termination (as determined without regard to this
proviso), the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, then the Date of
Termination shall be the date on which the dispute is finally determined,
whether by mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); and provided,
further, that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Bank will continue to pay
the Executive the Executive's full salary at the rate in effect when the notice
giving rise to the dispute was given and continue the Executive as a participant
in all benefit and fringe benefit plans in which the Executive was participating
when the notice giving rise to the dispute was given, until the dispute is
finally resolved in accordance with this Section 1(d).
(e) The term "Good Reason" means the occurrence, without the
Executive's express written consent, of a material diminution of or interference
with the Executive's duties, responsibilities or benefits, including (without
limitation) any of the following circumstances unless such circumstances are
fully corrected prior to the Date of Termination specified in the Notice of
Termination given by the Executive in respect thereof:
2
(i) a requirement that the Executive be based at any
location not within 50 miles of Hudson, New York, or
that substantially increase travel on Company or Bank
business;
(ii) a material demotion of the Executive;
(iii) a material reduction in the number or seniority of
personnel reporting to the Executive or a material
reduction in the frequency with which, or in the nature
of the matters with respect to which such personnel are
to report to the Executive, other than as part of a
Company-wide or Bank-wide reduction in staff;
(iv) a reduction in the Executive's salary or a material
adverse change in the Executive's perquisites,
benefits, contingent benefits or vacation, other than
as part of an overall program applied uniformly and
with equitable effect to all members of the senior
management of the Company or the Bank;
(v) a material and extended increase in the required hours
of work or the workload of the Executive;
(vi) the failure of the Bank to obtain a satisfactory
agreement from any successor to assume the obligations
and liabilities under this Agreement, as contemplated
in Section 5(a) hereof; or
(vii) any purported termination of the Executive's
employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 4
hereof (and, if applicable, the requirements of Section
1(g) hereof), which purported termination shall not be
effective for purposes of this Agreement.
(f) The term "Notice of Termination" means a notice of
termination of the Executive's employment pursuant to Section 7 of this
Agreement.
(g) The term "Termination for Cause" means termination of the
employment of the Employee because of the Employee's personal dishonesty,
incompetence, willful misconduct, breach of a fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or material breach of any provision of this
Agreement. No act or failure to act by the Executive shall be considered
intentional unless the Executive acted or failed to act with an absence of good
faith and without a reasonable belief that action or failure to act was in the
best interest of the Bank. Notwithstanding the foregoing, no Termination for
Cause shall be deemed to have occurred 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
3
Board at a meeting of the Board duly called and held for such purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board), stating
that in the good faith opinion of the Board the Executive has engaged in conduct
described in the preceding sentence and specifying the particulars thereof in
detail.
2. Term.
(a) The term of this Agreement shall be a period of two years
commencing on the Commencement Date, subject to extension or earlier termination
as provided herein.
(b) Except as provided in section 2(c), beginning on the date
of this Agreement, the term of this Agreement shall automatically be extended
for one additional day each day, unless either the Bank or the Executive elects
not to extend the Agreement further by giving written notice thereof to the
other party, in which case the term of this Agreement shall end on the second
anniversary of the date on which such written notice is given. Upon termination
of the Executive's employment with the Bank for any reason whatsoever, any daily
extensions provided pursuant to this section 2(b), if not theretofore
discontinued, shall automatically cease.
(c) Nothing in this Agreement shall be deemed to prohibit the
Bank at any time from terminating the Executive's employment during the term of
this Agreement with or without notice for any reason; provided, however, that
the relative rights and obligations of the Bank and the Executive in the event
of any such termination shall be determined under this Agreement.
3. Severance Benefits.
(a) In the event that the Bank shall terminate the Executive's
employment other than Termination for Cause, or the Executive shall terminate
employment for Good Reason, within 24 months following a Change in Control, the
Bank shall (i) pay the Executive salary through the Date of Termination at the
rate in effect at the time the Notice of Termination is given, at the time such
payments are due; and (ii) pay to the Executive in a lump sum in cash, within 25
days after the later of the date of such Change in Control or the Date of
Termination, an amount equal to 299% of the Executive's "base amount" as
determined under Section 280G of the Code, less the aggregate present value of
the payments or benefits, if any, in the nature of compensation for the benefit
of the Executive, arising under any other plans or arrangements (i.e., not this
Agreement) between the Company or any of the Consolidated Subsidiaries and the
Executive, which constitute "parachute payments" under Section 280G of the Code.
While it is not contemplated that the Executive will receive any
amounts or benefits that will constitute "excess parachute payments" under
Section 280G of the Code, in the event that any payments or benefits provided or
to be provided to the Executive pursuant to this Agreement, in combination with
payments or benefits, if any, from other plans or arrangements maintained by the
Company or any of the Consolidated Subsidiaries, constitute "excess parachute
payments" under Section 280G of the Code that are subject to the excise tax
under Section 4999 of the Code, the Bank shall pay to the Executive in cash an
additional amount equal to the amount of the Gross Up Payment (as hereinafter
defined). The "Gross Up Payment" shall be the amount needed to ensure that the
amount of such payments and the value of such benefits received by the Executive
(net of such excise tax and any federal, state and local tax on the Bank's
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payment to attributable to such excise tax) equals the amount of such payments
and value of such benefits as would receive in the absence of such excise tax
and any federal, state and local tax on the Bank's payment to attributable to
such excise tax. The Bank shall pay the Gross Up Payment within 30 days after
the Date of Termination. For purposes of determining the amount of the Gross Up
Payment, the value of any non-cash benefits and deferred payments or benefits
shall be determined by the Bank's independent auditors in accordance with the
principles of Section 280G(d)(3) and (4) of the Code. In the event that, after
the Gross Up Payment is made, the amount of the excise tax is determined to be
less than the amount calculated in the determination of the actual Gross Up
Payment made by the Bank, the Executive shall repay to the Bank, at the time
that such reduction in the amount of excise tax is finally determined, the
portion of the Gross Up Payment attributable to such reduction, plus interest on
the amount of such repayment at the applicable federal rate under Section 1274
of the Code from the date of the Gross Up Payment to the date of the repayment.
The amount of the reduction of the Gross Up Payment shall reflect any subsequent
reduction in excise taxes resulting from such repayment. In the event that,
after the Gross Up Payment is made, the amount of the excise tax is determined
to exceed the amount anticipated at the time the Gross Up Payment was made, the
Bank shall pay to the Executive, in immediately available funds, at the time
that such additional amount of excise tax is finally determined, an additional
payment ("Additional Gross Up Payment") equal to such additional amount of
excise tax and any federal, state and local taxes thereon, plus all interest and
penalties, if any, owed by the Executive with respect to such additional amount
of excise and other tax. The Bank shall have the right to challenge, on the
Executive's behalf, any excise tax assessment against as to which the Executive
is entitled to (or would be entitled if such assessment is finally determined to
be proper) a Gross Up Payment or Additional Gross Up Payment, provided that all
costs and expenses incurred in such a challenge shall be borne by the Bank and
the Bank shall indemnify the Executive and hold harmless, on an after-tax basis,
from any excise or other tax (including interest and penalties with respect
thereto) imposed as a result of such payment of costs and expenses by the Bank.
(b) The Executive shall not be required to mitigate the amount
of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment or benefit provided
for in this Agreement be reduced by any compensation earned by the Executive as
the result of employment by another employer, by retirement benefits after the
Date of Termination or otherwise. This Agreement shall not be construed as
providing the Executive any right to be retained in the employ of the Bank or
any affiliate of the Bank.
4. Notice of Termination. In the event that the Bank desires to
terminate the employment of the Executive during the term of this Agreement, the
Bank shall deliver to the Executive a written notice of termination, stating (i)
whether such termination constitutes Termination for Cause, and, if so, setting
forth in reasonable detail the facts and circumstances that are the basis for
the Termination for Cause, and (ii) specifying the Date of Termination. In the
event that the Executive desires to terminate employment and determines in good
faith that has experienced Good Reason to terminate employment, shall send a
written notice to the Bank stating the circumstances that constitute Good Reason
and the Date of Termination.
The Executive's right to terminate employment for Good Reason shall not
be affected by the Executive's incapacity due to physical or mental illness. The
Executive's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason under this
Agreement.
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5. No Assignments.
(a) This Agreement is personal to each of the parties hereto,
and neither party may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other party;
provided, however, that the Bank shall require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation, operation of law or
otherwise) to all or substantially all of the business and/or assets of the
Bank, by an assumption agreement in form and substance satisfactory to the
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Bank would be required to perform it if
no such succession or assignment had taken place. Failure of the Bank to obtain
such an assumption agreement prior to the effectiveness of any such succession
or assignment shall be a breach of this Agreement and shall entitle the
Executive to compensation and benefits from the Bank in the same amount and on
the same terms that would be entitled to hereunder if terminated employment for
Good Reason, in addition to any payments and benefits to which the Executive is
entitled under Section 3 hereof. For purposes of implementing the provisions of
this Section 5(a), the date on which any such succession becomes effective shall
be deemed the Date of Termination.
(b) This Agreement and all rights of the Executive hereunder
shall inure to the benefit of and be enforceable by the Executive's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. In the event of the death of the Executive,
unless otherwise provided herein, all amounts payable hereunder shall be paid to
the Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
6. Deferred Payments. If following a termination of the Executive, the
aggregate payments to be made by the Bank under this Agreement and all other
plans or arrangements maintained by the Company or any of the Consolidated
Subsidiaries would exceed the limitation on deductible compensation contained in
Section 162(m) of the Code in any calendar year, any such amounts in excess of
such limitation shall be mandatorily deferred with interest thereon at 7.0% per
annum to a calendar year such that the amount to be paid to the Executive in
such calendar year, including deferred amounts, does not exceed such limitation.
7. Delivery of Notices. For the purposes of this Agreement, all notices
and other communications to any party hereto shall be in writing and shall be
deemed to have been duly given when delivered or sent by certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive: [name]
At the address last appearing
on the personnel records of
the Executive
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If to the Bank: ▇▇▇▇▇▇ River Bank & Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
or to such other address as such party may have furnished to the other in
writing in accordance herewith, except that a notice of change of address shall
be effective only upon receipt.
8. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
9. Headings. The headings used in this Agreement are included solely
for convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.
10. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
11. Governing Law. This Agreement shall be governed by the laws of the
State of New York to the extent that federal law does not govern.
12. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by binding
arbitration, conducted before a panel of three arbitrators in a location
selected by the Executive within 100 miles of such Executive's job location with
the Bank, in accordance with the rules of the American Arbitration Association
then in effect; provided, however, that the Executive shall be entitled to seek
specific performance of rights under Section 1(d) during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
Judgment may be entered on the arbitrators= award in any court having
jurisdiction.
13. Reimbursement of Expenses. In the event any dispute shall arise
between the Executive and the Bank as to the terms or interpretation of this
Agreement, including this Section 13, whether instituted by formal legal
proceedings or otherwise, including any action taken by the Executive to enforce
the terms of this Section 13, or in defending against any action taken by the
Bank, the Bank shall reimburse the Executive for all costs and expenses incurred
by the Executive, including reasonable attorney's fees, arising from such
dispute, proceedings or actions, unless a court of competent jurisdiction
renders a final and nonappealable judgment against the Executive as to the
matter in dispute. Reimbursement of the Executive's expenses shall be paid
within ten days of the Executive furnishing to the Bank written evidence, which
may be in the form, among other things, of a canceled check or receipt, of any
costs or expenses incurred by the Executive.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
Attest: ▇▇▇▇▇▇ RIVER BANK & TRUST
COMPANY
------------------------------- ---------------------------------------
By:
Its:
EXECUTIVE
--------------------------------------
[name]
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