mgmtagree1.htm


    FORM
      OF

    


    SUN
      BANCORP, INC.

    


    MANAGEMENT
      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(A.
      Bruce Dansbury, Executive Vice President and Chief Operating Officer; Dan A.
      Chila, Executive Vice President and Chief Financial Officer; and Bart A.
      Speziali, Executive Vice President) (the "Executive").

    


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

    


    WHEREAS,
      the parties desire by this writing to set forth the continuing rights and
      responsibilities of the Company and the Executive with respect to if the Company
      should undergo a change in control (as defined hereinafter in the Agreement)
      after the Effective Date and other circumstances that might result in the
      termination of the Executive’s employment with the Company.

    


    NOW,
      THEREFORE, each party, intending to be legally bound, does hereby agree, as
      follows:

    


    


    1.Employment.  The
      Executive is employed in the capacity as Executive Vice President the
      Company.  The Executive’s employment shall be for no definite period
      of time and the Executive or the Company may terminate such employment
      relationship at any time for any reason or no reason.  The employment
      at-will relationship remains in full force and effect regardless of any
      statements to the contrary made by company personnel or set forth in any
      documents other than those explicitly made to the contrary and signed by the
      President or the Chairman of the Company. The Executive shall render such
      administrative and management services to the Company and Sun National Bank
      ("Bank"),  as are currently rendered and as are customarily performed
      by persons situated in a similar executive capacity.  The Executive's
      other duties shall be such as the Board of Directors for the Company (the "Board
      of Directors" or "Board") may from time to time reasonably direct, including
      normal duties as an officer of the Company and the Bank.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

                2.Term
      of Agreement. The term of this Agreement shall be for the period commencing
      on the Effective Date and ending twenty-four (24) months thereafter
      ("Term").   Additionally, as of each December 31, thereafter, the
      Term of this Agreement shall be extended for an additional period such that
      the
      Term of the Agreement as of such date of extension shall be for a new period
      of
      twenty-four (24) months thereafter; provided, however, such Term shall not
      be
      automatically extended as of December 31 of any given year if the Board shall
      give the Executive written notice not later October 1 immediately prior to
      such
      December 31 date that the Board has made a determination by an affirmative
      vote
      of not less than a majority of the members of the full Board then in office
      that
      such Agreement shall not be extended thereafter absent a future affirmative
      determination and resolution of the Board of Directors that the Term of such
      Agreement shall be extended beyond the then in effect expiration date of such
      Agreement.  The Term shall refer to the initial Term or any subsequent
      extension of such Term thereafter.

    


    
      	
               

            	
              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 or the Bank during the Term of this Agreement
      following any Change in Control of the Company or Bank, or within 18 months
      thereafter of such Change in Control, absent Just Cause,  Executive
      shall be paid an amount equal to the product of (2.999) times the Executive's
      average annual aggregate taxable compensation paid by the Company and the Bank
      as reported, or to be reported, on the IRS Form W-2, box 1, or IRS Form 1099
      for
      the most recently completed five calendar years ending on, or before, the date
      of such Change in Control (which annual aggregate compensation amount for any
      year shall be annualized if during any of such years such term of employment
      during such period is less than for the full calendar year and any such year
      shall be disregarded if no compensation was paid during any such
      year.  Said sum shall be paid by the Company to the Executive in one
      (1) lump sum not later than the date of Executive's termination of service
      to
      the extent not otherwise paid by the Bank.    In addition,
      the Executive and his dependents shall be eligible to continue coverage under
      the Company's  (or its successor's) medical and dental insurance
      reimbursement plans similar to that in effect on the date of termination of
      employment at the participants' election and expense. Notwithstanding the
      forgoing, all sums payable hereunder shall be reduced in such manner and to
      such
      extent that the Bank shall have made payments to the Executive upon termination
      of employment in accordance with any Employment Agreement between the Executive
      and the Bank related to such Change in Control.  The term "Change in
      Control" shall refer to (i) the sale of all, or a material portion, of the
      assets of the Company or the Bank; (ii) the merger or recapitalization of the
      Company or the Bank whereby the Company or the Bank is not the
      surviving  entity; (iii) a change in control of the Company or the
      Bank, as otherwise defined or determined by the Office of the Comptroller of
      the
      Currency or regulations promulgated by it; or (iv) the acquisition, directly
      or
      indirectly, of the beneficial ownership (within the meaning of that term as
      it
      is used in Section 13(d) of the Securities Exchange Act of 1934 and the rules
      and regulations promulgated thereunder) of twenty-five percent (25%) or more
      of
      the outstanding voting securities of the Company or the Bank by any person,
      trust, entity or group.  The term "person" means an individual other
      than the Executive, or a corporation, partnership, trust, association, joint
      venture, pool, syndicate, sole proprietorship, unincorporated organization
      or
      any other form of entity not specifically listed herein.  The
      provisions of this  Section 3(a) shall survive the expiration of this
      Agreement occurring after a Change in Control.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)Notwithstanding
      any other provision
      of this Agreement to the contrary, Executive may voluntarily terminate his
      employment during the Term of this Agreement following a Change in Control
      of
      the Company or Bank, or within 18 months following such Change in Control,
      and
      Executive shall thereupon be entitled to receive the payment described in
      Section 3(a) of this Agreement, upon the occurrence, or within six months
      thereafter, of any of the following events, which have not been consented to
      in
      advance by the Executive in writing: (i) if Executive would be required to
      move
      his personal residence or perform his principal executive functions more than
      thirty-five (35) miles from the Executive's primary office as of the signing
      of
      this Agreement; (ii) if in the organizational structure of the Company,
      Executive would be required to report to a person or persons other than the
      Board of Directors of the Company or its President; (iii) if the Company should
      fail to maintain Executive's base compensation in effect as of the date of
      the
      Change in Control and the existing Executive benefits plans, including material
      fringe benefit, stock option and retirement plans; (iv) if Executive would
      be
      assigned duties and responsibilities other than those normally associated with
      his position as referenced at Section 1, herein; or (v) if Executive's
      responsibilities or authority have in any way been materially diminished or
      reduced.  The provisions of this  Section 3(b) shall survive
      the expiration of this Agreement occurring after a Change in
      Control.

    


    (c)Additional
      Payments by the Company
      related to Section 280G of the Code.

    


    (i)Anything
      in this Agreement to the
      contrary notwithstanding, in the event it shall be determined that any payment
      or distribution by the Company or otherwise to or for the benefit of the
      Executive (whether paid or payable or distributed or distributable pursuant
      to
      the terms of this Agreement or by any other compensation plan or arrangement
      of
      the Company or the Bank (a "Payment") would be subject to the excise tax imposed
      by Section 4999 of the Code or any interest or penalties are incurred by the
      Executive with respect to such excise tax (such excise tax, together with any
      such interest and penalties, are hereinafter collectively referred to as the
      "Excise Tax"), then the Executive shall be entitled to receive an additional
      payment (a "Gross-Up Payment") in an amount such that after payment by the
      Executive of all taxes (including all federal, state and local tax and any
      interest or penalties imposed with respect to such taxes), including, without
      limitation, any income taxes (and any interest and penalties imposed with
      respect thereto) and any excise tax imposed under Section 4999 of the Code
      imposed upon the Gross-Up Payment, the Executive retains an amount of the
      Gross-Up Payment equal to the Excise Tax imposed upon the Payments; provided
      that for purposes of determining the amount of any Gross-Up Payment, the
      Executive shall be deemed to pay federal income taxes at the highest marginal
      rate of federal income taxation in the calendar year in which the Gross-Up
      Payment is to be made and state and local income taxes at the highest marginal
      rate of taxation in the state and locality of residence of the Executive on
      the
      date the Payment is made, net of the maximum reduction in federal income taxes
      that could reasonably be obtained from the deduction of such state and local
      taxes related to such Gross-up Payment.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

                           
(ii)Subject
      to the provisions of this Section 3(c), all determinations required to be made
      under this Section 3(c), including whether and when a Gross-Up Payment is
      required and the amount of such Gross-Up Payment and the assumptions to be
      utilized in arriving at such determination, shall be made by a certified public
      accounting firm (the "Accounting Firm") reasonably acceptable to the Executive
      as may be designated by the Company which shall provide detailed supporting
      calculations both to the Company and the Executive within 15 business days
      of
      the receipt of notice from the Executive that there has been a Payment, or
      such
      earlier time as is requested by the Company. All fees and expenses of the
      Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
      as
      determined pursuant to this Section 3(c), shall be paid by the Company to the
      Executive, or withheld on the Executive’s behalf, within five days of the later
      of (A) the due date for the payment of any Excise Tax, and (B) the receipt
      of
      the Accounting Firm's determination. Any determination by the Accounting Firm
      shall be binding upon the Company and the Executive. As a result of the
      uncertainty in the application of Section 4999 of the Code at the time of the
      initial determination by the Accounting Firm hereunder, it is possible that
      Gross-Up Payments which will not have been made by the Company should have
      been
      made ("Underpayment"), consistent with the calculations required to be made
      hereunder. In the event that the Company exhausts its remedies pursuant to
      Section 3(c) and the Executive thereafter is required to make a payment of
      any
      Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
      that has occurred and any such Underpayment shall be promptly paid by the
      Company to or for the benefit of the Executive.

    


    (iii)The
      Executive shall notify the
      Company in writing of any claim by the Internal Revenue Service that, if
      successful, would require the payment by the Company of the Gross-Up Payment.
      Such notification shall be given as soon as practicable but no later than ten
      business days after the Executive is informed in writing of such claim and
      shall
      apprise the Company of the nature of such claim and the date on which such
      claim
      is requested to be paid. The Executive shall not pay such claim prior to the
      expiration of the 30-day period following the date on which it gives such notice
      to the Company (or such shorter period ending on the date that any payment
      of
      taxes with respect to such claim is due). If the Company notifies the Executive
      in writing prior to the expiration of such period that it desires to contest
      such claim, the Executive shall:

    


    (A)give
      the Company any information
      reasonably requested by the Company relating to such claim,

    


    (B)take
      such action in connection with
      contesting such claim as the Company shall reasonably request in writing from
      time to time, including, without limitation, accepting legal representation
      with
      respect to such claim by an attorney reasonably selected by the
      Company,

    
      
         

      

      
         

        
          

        

      

      
         

      

    

                                       
(C)cooperate
      with the Company in good faith in order effectively to contest such claim,
      and

    (D)permit
      the Company to participate
      in any proceedings relating to such claim;

    


    provided,
      however, that the Company shall bear and pay directly all costs and expenses
      (including additional interest and penalties) incurred in connection with such
      contest and shall indemnify and hold the Executive harmless, on an after-tax
      basis, for any Excise Tax or income tax (including interest and penalties with
      respect thereto) imposed as a result of such representation and payment of
      costs
      and expenses. Without limitation on the foregoing provisions of this Section
      3(c), the Company shall control all proceedings taken in connection with such
      contest and, at its sole option, may pursue or forgo any and all administrative
      appeals, proceedings, hearings and conferences with the taxing authority in
      respect of such claim and may, at its sole option, either direct the Executive
      to pay the tax claimed and sue for a refund or contest the claim in any
      permissible manner, and the Executive agrees to prosecute such contest to a
      determination before any administrative tribunal in a court of initial
      jurisdiction and in one or more appellate courts, as the Company shall
      determine; provided, however, that if the Company directs the Executive to
      pay
      such claim and sue for a refund, the Company shall (to the extent permitted
      by
      law) advance the amount of such payment to the Executive, on an interest-free
      basis and shall indemnify and hold the Executive harmless, on an after-tax
      basis, from any Excise Tax or income tax (including interest or penalties with
      respect thereto) imposed with respect to such advance or with respect to any
      imputed income with respect to such advance; and further provided that any
      extension of the statute of limitations relating to payment of taxes for the
      taxable year of the Executive with respect to which such contested amount is
      claimed to be due is limited solely to such contested amount. Furthermore,
      the
      Company's control of the contest shall be limited to issues with respect to
      which a Gross-Up Payment would be payable hereunder and the Executive shall
      be
      entitled to settle or contest, as the case may be, any other issue raised by
      the
      Internal Revenue Service or any other taxing authority.

    


    (iv)If,
      after the receipt by the Executive of an amount advanced by the Company pursuant
      to Section 3(c), the Executive becomes entitled to receive any refund with
      respect to such claim, the Executive shall (subject to the Company's complying
      with the requirements of Section 3(c)) promptly pay to the Company the amount
      of
      such refund (together with any interest paid or credited thereon after taxes
      applicable thereto). If, after the receipt by the Executive of an amount
      advanced by the Company pursuant to Section 3(c), a determination is made that
      the Executive shall not be entitled to any refund with respect to such claim
      and
      the Company does not notify the Executive in writing of its intent to contest
      such denial of refund prior to the expiration of 30 days after such
      determination, then such advance shall be forgiven and shall not be required
      to
      be repaid and the amount of such advance shall offset, to the extent thereof,
      the amount of Gross-Up Payment required to be paid.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

                          
(v)The
      Executive shall cooperate in good faith with all reasonable requests by the
      Company to assist the Company in minimizing the effect of Section 4999 and
      Section 280G of the Code, provided that the Executive shall not be required
      to
      take actions that adversely affect his rights hereunder.

    


    4.Other
      Changes in Employment Status.  

    


    (a)Except
      as provided for at Section 3, herein, the Board of Directors may terminate
      the
      Executive's employment at any time with or without Just Cause within its sole
      discretion.  This Agreement shall not be deemed to give the Executive
      any right to be retained in the employment or service of the Company, or to
      interfere with the right of the Company to terminate the employment of the
      Executive at any time for any reason.  In the event that the
      Executive's employment with the Company is terminated for reasons other than
      in
      conjunction with or within eighteen months following a Change in Control (in
      accordance with Section 3 herein) or for Just Cause during the Term of the
      Agreement, the Executive shall receive a lump-sum severance payment (“Severance
      Payment”) equal to: the sum of his highest annual base salary in effect during
      the prior twelve (12) month period, plus an amount equal to
      his  average bonus payment received during the prior 3 years, all
      multiplied by the number (1.25); provided that the Executive shall comply with
      the limitations and restrictions set forth at Section 4(b), herein.
      Notwithstanding the forgoing, all sums payable hereunder shall be reduced in
      such manner and to such extent that the Bank shall have made duplicate severance
      payments to the Executive upon termination of employment in accordance with
      any
      Employment Agreement between the Executive and the Bank.  In addition,
      the Executive and his dependents shall be eligible to continue coverage under
      the Company’s or the Bank's medical and dental insurance reimbursement plans
      similar to that in effect on the date of termination of employment for a period
      of eighteen months following the date of termination of employment at the
      Company’s expense. Such Severance Payment shall be made as soon as
      administratively feasible and in accordance with the limitations set forth
      at
      Section 5(b) herein.  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, but is not limited
      to, termination because of the Executive's personal dishonesty, 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 Bank or Company, or a material breach of any provision of
      the
      Agreement.

    


    (b)Following
      termination of employment, the Executive will not, without the express written
      consent of Company, directly or indirectly communicate or divulge to, or use
      for
      his own benefit or for the benefit of any other person, firm, association,
      or
      corporation, any of the trade secrets, proprietary data or other confidential
      information communicated to or otherwise learned or acquired by the Executive
      from the Company, the Bank, or any subsidiary of such entities, except that
      Executive may disclose such matters to the extent that disclosure is required
      by
      a court or other governmental agency of competent jurisdiction.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

                 
      (c)     During the seven and one-half month period
      following termination of employment in accordance with Section 4(a), absent
      termination for Just Cause or termination in conjunction with or within eighteen
      months following a Change in Control (in accordance with Section 3
      herein):

    


    (i)Executive
      will not contact (with a
      view toward selling any product or service competitive with any product or
      service sold or proposed to be sold by the Company, the Bank, or any subsidiary
      of such entities) any person, firm, association or corporation (A) to which
      the
      Company, the Bank, or any subsidiary of such entities sold any product or
      service, (B) which Executive solicited, contacted or otherwise dealt with on
      behalf of the Company, the Bank, or any subsidiary of such entities, or (C)
      which Executive  was otherwise aware was a client of the
      Company,  the Bank, or any subsidiary of such
      entities.  Executive will not directly or indirectly make any such
      contact, either for his own benefit or for the benefit of any other person,
      firm, association, or corporation.

    


    (ii)Executive
      hereby agrees that he shall not engage in providing professional services or
      enter into employment as an employee, director, consultant, representative,
      or
      similar relationship to any financial services enterprise (including but not
      limited to a savings and loan association, bank, credit union, or insurance
      company) whereby the Executive will have a work location within the State of
      New
      Jersey, and is within 50 miles of the home office of the Company and
      the  Bank located in Vineland, New Jersey or is within 15 miles of any
      office of the Company, the Bank,  or any subsidiary of such entities
      existing as of the date of such termination of employment.

    


    (iii)Executive
      hereby agrees that
      he shall not, on his own behalf or on behalf of others, employ, solicit,
      or induce, or attempt to employ, solicit or induce, any employee of the Company,
      the Bank, or any subsidiary of such entities, for employment with any financial
      services enterprise (including but not limited to a savings and loan
      association, bank, credit union, or insurance company), nor will the Executive
      directly or indirectly, on his behalf or for others, seek to influence any
      employee of the Company, the Bank,  or any subsidiary of such
      entities  to leave the employ of the Company, the Bank, or any
      subsidiary of such entities.

    


    (iv)Executive
      will not make any public statements regarding the Company, the Bank, or any
      subsidiary of such entities without the prior consent of the Company or the
      Bank, and the Executive shall not make any statements that disparage the
      Company, the Bank, or any subsidiary of such entities or the business practices
      of the Company, the Bank, or any subsidiary of such entities.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

                (v)Executive
      acknowledges and agrees that irreparable injury will result to the Bank in
      the
      event of a breach of any of the provisions of Sections 4(b) and 4(c) (the
      "Designated Provisions") and that the Company will have no adequate remedy
      at
      law with respect thereto.  Accordingly, in the event of a material
      breach of any Designated Provision, and in addition to any other legal or
      equitable remedy the Company may have, the Company shall be entitled to the
      entry of a preliminary and a permanent injunction (including, without
      limitation, specific performance by a court of competent jurisdiction located
      in
      Cumberland County, New Jersey, or elsewhere), to restrain the violation or
      breach thereof by Executive, and Executive shall submit to the jurisdiction
      of
      such court in any such action.

    


    (vi)The
      provisions of Sections 4(b) and 4(c) shall survive the expiration of this
      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.