mgmtagree2.htm


    SUN
      BANCORP, INC.

    


    CHANGE
      IN CONTROL SEVERANCE AGREEMENT

    Amended
      and Restated

    


    THIS
      CHANGE IN CONTROL SEVERANCE
      AGREEMENT (“Agreement”) entered into this 18th day of October,
      2007 (“Effective Date”), by and between Sun Bancorp, Inc. (the “Company”) and
      Bernard A. Brown (the “Executive”).

    


    WHEREAS,
      the Executive is currently
      employed by the Company as Chairman and is experienced in all phases of the
      business of the Company; and

    


    WHEREAS,
      the parties desire by this
      writing to set forth the continuing rights and responsibilities of the Company
      and Executive if the Company should undergo a change in control (as defined
      hereinafter in the Agreement) after the Effective Date.

    


    NOW,
      THEREFORE, it is AGREED as
      follows:

    


    1.Employment.  The
      Executive is employed in the capacity as Chairman of the Company.  The
      Executive shall render such administrative and management services to the
      Company and Sun National Bank (“Bank”),  as are currently rendered and
      as are customarily performed by persons situated in a similar executive
      capacity.  The Executive's other duties shall be such as the Board of
      Directors for the Company (the “Board of Directors” or “Board”) may from time to
      time reasonably direct, including normal duties as an officer of the Company
      and
      the Bank.

    


    2.Term
      of
      Agreement.  The term of this Agreement shall be for the period
      commencing on the Effective Date and ending thirty-six (36) months thereafter
      (“Term”).   Additionally, as of each December 31, thereafter, the
      Term of this Agreement shall be extended for an additional period such that
      the
      Term of the Agreement as of such date of extension shall be for a new period
      of
      thirty-six months thereafter; provided, however, such Term shall not be
      automatically extended as of December 31 of any given year if the Board shall
      give the Executive written notice not later October 1 immediately prior to
      such
      December 31 date that the Board has made a determination by an affirmative
      vote
      of not less than a majority of the members of the full Board then in office
      that
      such Agreement shall not be extended thereafter absent a future affirmative
      determination and resolution of the Board of Directors that the Term of such
      Agreement shall be extended beyond the then in effect expiration date of such
      Agreement.  The Term shall refer to the initial Term or any subsequent
      extension of such Term thereafter.

    


    
      	
               

            	
              3.Termination
                of Employment in Connection with or Subsequent to a Change in
                Control.

            


    

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (a)Notwithstanding
      any provision herein
      to the contrary, in the event of the involuntary termination of Executive's
      employment with the Company during the term of this Agreement following any
      Change in Control of the Company or Bank, or within 24 months thereafter of
      such
      Change in Control, absent Just Cause,  the Executive shall be paid an
      amount equal to the product of 2.999 times the Executive's average annual
      aggregate taxable compensation paid by the Company as reported, or to be
      reported, on the IRS Form W-2, box 1, or IRS Form 1099 for the most recently
      completed five calendar years ending on, or before, the date of such Change
      in
      Control.  Said sum shall be paid by the Company to the Executive in
      one (1) lump sum not later than the date of the Executive's termination of
      service.  In addition, the Executive and his dependents shall be
      eligible to continue coverage under the Company's  (or its
      successor's) medical and dental insurance reimbursement plans similar to that
      in
      effect on the date of termination of employment at the participants' election
      and expense. Notwithstanding the forgoing, all sums payable hereunder shall
      be
      reduced in such manner and to such extent so that no such payments made
      hereunder when aggregated with all other payments to be made to the Executive
      by
      the Company or the Bank shall be deemed an “excess parachute payment” in
      accordance with Section 280G of the Internal Revenue Code of 1986, as amended
      (the “Code”) and regulations promulgated thereunder and be subject to the excise
      tax provided at Section 4999(a) of the Code.  The term “Change in
      Control” shall refer to  (i) the sale of all, or a material portion,
      of the assets of the Company or the Bank; (ii) the merger or recapitalization
      of
      the Company or the Bank whereby the Company or the Bank is not the
      surviving  entity; (iii) a change in control of the Company or the
      Bank, as otherwise defined or determined by the Office of the Comptroller of
      the
      Currency or regulations promulgated by it; or (iv) the acquisition, directly
      or
      indirectly, of the beneficial ownership (within the meaning of that term as
      it
      is used in Section 13(d) of the Securities Exchange Act of 1934 and the rules
      and regulations promulgated thereunder) of twenty-five percent (25%) or more
      of
      the outstanding voting securities of the Company or the Bank by any person,
      trust, entity or group.  The term “person” means an individual other
      than the Executive, or a corporation, partnership, trust, association, joint
      venture, pool, syndicate, sole proprietorship, unincorporated organization
      or
      any other form of entity not specifically listed herein.  The
      provisions of this  Section 3(a) shall survive the expiration of this
      Agreement occurring after a Change in Control.

    


    (b)Notwithstanding
      any other provision
      of this Agreement to the contrary, Executive may voluntarily terminate his
      employment during the term of this Agreement following a Change in Control
      of
      the Company or Bank, or within twenty-four months following such Change in
      Control, and Executive shall thereupon be entitled to receive the payment
      described in Section 3(a) of this Agreement, upon the occurrence, or within
      six
      months thereafter, of any of the following events, which have not been consented
      to in advance by the Executive in writing: (i) if Executive would be required
      to
      move his personal residence or perform his principal executive functions more
      than thirty-five (35) miles from the Executive's primary office as of the
      signing of this Agreement; (ii) if in the organizational structure of the
      Company, Executive would be required to report to a person or persons other
      than
      the Board of Directors of the Company; (iii) if the Company should fail to
      maintain Executive's base compensation in effect as of the date of the Change
      in
      Control and the existing Executive benefits plans, including material fringe
      benefit, stock option and retirement plans; (iv) if Executive would be assigned
      duties and responsibilities other than those normally associated with his
      position as referenced at Section 1, herein; (v) if Executive's responsibilities
      or authority have in any way been materially diminished or reduced; or (vi)
      if
      Executive would not be reelected to the Board of Directors of the
      Company.  The provisions of this  Section 3(b) shall survive
      the expiration of this Agreement occurring after a Change in
      Control.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

                4.Other
      Changes in Employment Status.  Except as provided for at Section
      3, herein, the Board of Directors may terminate the Executive's employment
      at
      any time, but any termination by the Board of Directors other than termination
      for Just Cause, shall not prejudice the Executive's right to compensation or
      other benefits under the Agreement.  The Executive shall have no right
      to receive compensation or other benefits for any period after termination
      for
      Just Cause.  Termination for “Just Cause” shall include termination
      because of the Executive's personal dishonesty, incompetence, willful
      misconduct, breach of 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 issued by a federal banking regulatory having regulatory
      authority over the Company or Bank, or a material breach of any provision of
      the
      Agreement.

    


    5.Regulatory
      Exclusions.


    


    (a)Notwithstanding
      anything herein to
      the contrary, any payments made to the Executive pursuant to the Agreement,
      or
      otherwise, shall be subject to and conditioned upon compliance with 12 USC
'1828(k)
      and any regulations promulgated thereunder.

    


    


    (b)Notwithstanding
      anything herein to
      the contrary, any payments to be made in accordance with Sections 3 or 4 of
      the
      Agreement shall not be made prior to the date that is 183 calendar days from
      the
      date of termination of employment, or such later date as determined in good
      faith by the Bank or Company (“Payment Date”), if it is determined by the Bank
      or the Company in good faith that the Executive is a “specified employee” within
      the meaning of Section 409A of the Code, that such payments to be made to such
      Executive are subject to the limitations at Section 409A of the Code and
      regulations promulgated thereunder, and payments made in advance of such Payment
      Date would result in the requirement for the Executive to pay additional
      interest and taxes to be imposed in accordance with Section 409A(a)(1)(B) of
      the
      Code.

    


    6.No
      Duty to
      Mitigate.  The Executive shall not be required to mitigate the
      amount of any payment of severance benefits if he or she accepts other
      compensation for employment with another entity.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

                7.Successors
      and Assigns.

    


    (a)This
      Agreement shall inure to the
      benefit of and be binding upon any corporate or other successor of the Company
      which shall acquire, directly or indirectly, by merger, consolidation, purchase
      or otherwise, all or substantially all of the assets or stock of the
      Company.

    (b)The
      Executive shall be precluded
      from assigning or delegating his rights or duties hereunder without first
      obtaining the written consent of the Company.

    


    8.Amendments.  No
      amendments or additions to this Agreement shall be binding upon the parties
      hereto unless made in writing and signed by both parties, except as herein
      otherwise specifically provided.

    


    9.Applicable
      Law.  This agreement shall be governed by all respects whether as
      to validity, construction, capacity, performance or otherwise, by the laws
      of
      the State of New Jersey, except to the extent that Federal law shall be deemed
      to apply.

    


    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.Arbitration.  Any
      controversy or claim arising out of or relating to this Agreement, or the breach
      thereof, shall be settled by arbitration in accordance with the rules then
      in
      effect of the district office of the American Arbitration Association (“AAA”)
      nearest to the home office of the Company, and judgment upon the award rendered
      may be entered in any court having jurisdiction thereof, except to the extend
      that the parties may otherwise reach a mutual settlement of such
      issue.  The Company shall reimburse Executive for all reasonable costs
      and expenses, including reasonable attorneys' fees, arising from such dispute,
      proceedings or actions, following the delivery of the decision of the arbitrator
      that the Executive's claim has merit, whether or not the arbitrator finds in
      favor of the Executive.    The provisions of this Section 11
      shall survive the expiration of this Agreement occurring after a Change in
      Control.

    


    12.Non-Disclosure.  Executive
      will not, during or after the Term of this Agreement, directly or indirectly,
      disseminate or disclose to any person, firm or entity, except to his or her
      legal  advisor, the terms of this Agreement without the written
      consent of the Company.

    


    13.Entire
      Agreement.  This Agreement together with any understanding or
      modifications thereof as agreed to in writing by the parties, shall constitute
      the entire agreement between the parties hereto, and shall supersede any prior
      agreements or understandings with respect to the subject matter
      herein.