jun2007_10qex103.htm


    Exhibit
      10.3

    


    


    State
      Bancorp, Inc.

    EXHIBIT
      A

    Voluntary
      Exit Window Program

    


    ELECTION
      FORM

    


    


    
      	
               

              INSTRUCTIONS

               

              PLEASE
                CAREFULLY READ THE MEMORANDUM DATED MARCH 30, 2007 THAT DESCRIBES
                THE
                TERMS OF THE VOLUNTARY EXIT WINDOW PROGRAM.   PLEASE
                COMPLETE THIS FORM, SIGN AND DATE IT AND RETURN IT TO MARY E. DURKIN
                TO
                INFORM US OF YOUR DECISION WHETHER TO PARTICIPATE.  PLEASE
                RETURN THE COMPLETED AND SIGNED FORM NO LATER THAN MAY 31,
                2007.

               

            


    

    


    I
      have
      received and read the Memorandum dated March 30, 2007 regarding the Voluntary
      Exit Window Program.  I understand that I am eligible to participate
      in this Program and understand the benefits available to me if I elect to
      participate.  I make the following election [check one
      box]:

    


    
      	
              [X]

            	
              YES.  I
                elect to participate in the Voluntary Exit Window Program and voluntarily
                terminate my employment at the close of business on June 29,
                2007.  I understand that the following actions are needed to
                perfect my participation:

               

              1.           I
                have signed and attach to this Election Form my Employment
                TerminationAgreement.

               

              2.           I
                understand that I must sign and deliver the Release attached to the
                Memorandum asExhibit C on June 29, 2007.

               

              3.           I
                understand that I must allow the Release to become
                irrevocable.

            
	
               

              □

               

            	
               

              NO.
                I elect not to participate in the Voluntary Exit Window
                Program.
                

               

            


    

    I
      acknowledge that (a) the election to terminate my employment that I have made
      above is a voluntary decision on my part; (b) I may not change my election
      once
      have I filed this Form and the Employment Termination Agreement; and (c) I
      have
      been advised to consult an attorney before signing the Employment Termination
      Agreement and Release.

    


    /s/
      Daniel T.
      Rowe                                                                                                                     5/31/07

    Your
      Signature                                                                                                                          
Date

    


    


    Daniel
      T. Rowe

    Print
      Your Name

     

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      EXHIBIT
        B

       

      


       

      EMPLOYMENT
        TERMINATION AGREEMENT

       

      This
        EMPLOYMENT TERMINATION AGREEMENT (hereinafter referred to as
        the “Agreement”) is made and entered into by and between Daniel T.
        Rowe (referred to below as “You”) and State Bank of Long Island
        (referred to below as the “Company”).

       

      PRELIMINARY
        STATEMENT

       

      You
        are
        being offered the chance to participate in a voluntary exit window
        program.  If You choose to participate by signing and returning this
        Agreement on or before May 31, 2007, and by signing and returning the attached
        Release on June 29, 2007, You will receive severance benefits under Section
        4 of
        this Agreement.  This Agreement was given to You on or before April 2,
        2007 (the “Date of Receipt”).  This Agreement will be of no force or
        effect unless it is properly signed and returned to the Company no later
        than
        May 31, 2007.

       

      YOU
        SHOULD THOROUGHLY REVIEW AND UNDERSTAND THE TERMS, CONDITIONS AND EFFECT
        OF THIS
        AGREEMENT.  YOU ARE ADVISED TO CONSULT WITH AN ATTORNEY BEFORE YOU
        SIGN.

       

      AGREEMENT

       

      1.  Your
        employment with the Company shall cease effective at the close of business
        on
        June 29, 2007 (“Termination Date”).  From and after the Termination
        Date, You shall have no authority to sign documents or otherwise act on the
        Company's behalf.  You shall promptly return to the Company all
        property of the Company (including but not limited to documents, records,
        laptop
        computers, building passes, telephone and other credit cards, computer network
        access cards) and, upon request, will certify in writing that all such property
        has been returned or, in the case of documents, records, computer files,
        and
        like items, all copies thereof in Your possession have been
        destroyed.  Your compensation and fringe benefits as an employee will
        continue through the Termination Date in accordance with the Company's customary
        practices.  By signing this Agreement, You tender your resignation,
        effective as of the Termination Date, from any and all positions that You
        hold
        as a director (other than as a director of State Bancorp, Inc. or State Bank
        of
        Long Island, if applicable), officer, employee, representative or agent of
        the
        Company and any and all of its direct and indirect subsidiaries and
        affiliates.

       

      2.  Following
        the termination of Your employment, You will receive the compensation and
        benefits to which You may be entitled as a former employee of the Company
        under
        its various employee benefit plans and programs.

       

      3.  Following
        the termination of Your employment, provided that you properly sign and return
        the Release attached hereto as Exhibit C (the “Release”) on the
        Termination Date and allow the Release to become irrevocable, You will
        receive:

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      (a)           Cash
        Incentive Payment.  A lump sum payment in the amount of
Two Hundred Thousand Two Hundred and Fifty
        Dollars($200,250.00), payable on July 12, 2007, plus
One Hundred and Twenty Thousand Dollars
        ($120,000.00) to be
        credited to an unfunded deferred compensation account (the "Account") on
        July
        12, 2007, in each case provided that You have not revoked your
        Release.  As of the last day of each calendar quarter thereafter, the
        balance credited to the Account shall be credited with interest at an annualized
        rate equal to the Bank's weighted average cost of funds for such quarter,
        as
        determined by the Bank for financial reporting purposes, until December 31,
        2007.  The balance credited to the Account shall be distributed in a
        single lump sum payment on January 1, 2008.  Notwithstanding anything
        herein contained to the contrary:  (i) in the event of Your death
        before the Account has been fully distributed, the remaining balance credited
        to
        the Account shall be distributed to the beneficiary designated by You (or
        if no
        such beneficiary has been designated, to your estate) (the "Beneficiary")
        as of
        the first day of the calendar quarter following the quarter in which your
        death
        occurs. and (ii) in the event a change in control (within the meaning of
        section
        409A of the Code) occurs with respect to the Bank or the Company before the
        Account has been fully distributed, the remaining balance credited to the
        Account shall be distributed on the first day of the first calendar quarter
        to
        begin after the change in control occurs.  You may designate a
        Beneficiary, and change or revoke a prior designation, given prior to Your
        death
        by written notice to the Bank given in such form and manner as the Bank may
        prescribe.  If You designate more than one Beneficiary, each shall
        have an equal share of any payment to which a Beneficiary may be entitled,
        unless expressly stated to the contrary in the designation of the
        Beneficiary.  If you and a Beneficiary die in circumstances which
        cause the Bank to be uncertain which shall have been the first to die, You
        shall
        be deemed to have survived the Beneficiary.

      


       

                 (b)           Group
        Health Benefits.

       

      (i)           If
        you will be age 55 or older on December 31, 2007, You will be eligible to
        continue the coverage in effect for you on the Termination Date under the
        Company’s basic group health plan.  This coverage may continue through
        December 31, 2014 or, if earlier and to the extent permitted by law, the
        last
        day of the earliest month in which you and your spouse are eligible for coverage
        under Medicare or the group health plan of a new employer (the “Continuation
        Period”).  The type of coverage in effect for You is Family
        Coverage;  This coverage continuation applies only to basic
        group health plan benefits and not to ancillary benefits such as dental or
        vision insurance.

       

      (ii)           During
        the portion of the Continuation Period that precedes January 1, 2010, the
        Company will contribute the same percentage of the premium cost of your coverage
        that it currently pays; provided, however, that the Company will not
        pay more than the monthly dollar amount that it currently pays toward your
        coverage.  This dollar amount is Nine Hundred Eighty-seven
        Dollars and Fifty-seven Cents ($987.57) (the “Premium
        Share”).  To continue your coverage You must pay any difference
        between the monthly premium cost and the Premium Share.  You will be
        responsible for the full premium cost of coverage after December 31,
        2009.

       

      (iii)           If
        you do not have coverage under  the company’s group benefit plan, or
        if you elect not to receive coverage under this Paragraph (b), the Company
        will
        make an additional lump sum payment to you in the amount of Twenty Thousand
        Dollars ($20,000) at the same time that it pays You the Cash Incentive
        Payment.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      (c)           Outplacement.  You
        may avail yourself of outplacement/career counseling through a service selected
        by the Company for the period beginning upon accepting the exit package and
        continuing through December 31, 2007.

       

      All
        such
        compensation and benefits shall be subject to deductions for applicable federal,
        state and local withholding taxes. The lump sum payment to be made on July
        12,
        2007 is intended to be treated as separation pay due to participation in
        a
        window program under section 1.409A-1(b)(9)(iii) of the Treasury
        Regulations.  As such, it is anticipated that this lump sum payment
        does not provide for a deferral of compensation and is excepted from the
        requirements of section 409A of the Internal Revenue Code of 1986, as amended
        (the “Code”).    The lump sum payment to be made on January
        1, 2008 is intended to be treated as deferred compensation that complies
        with
        the requirements of section 409A of the Internal Revenue Code of 1986, as
        amended (the “Code”), including the requirement under section 409A(a)(2)(B)(i)
        of the Code that deferred compensation payable on account of “separation from
        service” may not be distributed to a “specified employee” earlier than the date
        which is six months after the date of “separation from service.”  The
        Group Health Benefits are intended to be treated as medical benefits under
        section  1.409A(b)(9)(v)(B) of the Treasury Regulations that are not
        subject to the requirements of 409A of the Code.

      


      4.  You
        acknowledge that:

       

      (a)  in
        the
        absence of this Agreement, You are not contractually entitled to severance
        benefits or termination pay under any contract, plan program or arrangement
        of
        the Company.

       

      (b)  the
        payments and benefits provided in Section 3 of this Agreement are contingent
        on
        and in consideration for the Employment Release Agreement to be provided
        by the
        Company on the Termination and are in addition to what You are otherwise
        entitled from the Company (“Additional Benefits”);

       

      (c)  You
        have
        been advised to consult an attorney before signing this Agreement and have
        been
        afforded the opportunity to do so;

       

      (d)  You
        have
        had the opportunity to consider this Agreement for at least 60
        days;

       

      (e)  You
        have
        read this Agreement in its entirety, understand its terms, and knowingly
        and
        voluntarily consent to its terms and conditions.

       

      5.           You
        will not, at any time during the one-year period beginning on the Termination
        Date, knowingly solicit or assist any other person in soliciting any employee
        of
        the Company for employment by You or any other person.

       

      6.           You
        will not, at any time during the one-year period beginning on the Termination
        Date, knowingly solicit or assist any other persons in soliciting business
        in
        competition with the Company from any customer of the Company with whom you
        had
        personal contact during the final two (2) years of your employment with the
        Company.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      7.           Unless
        You obtain the prior written consent of the Company, You shall keep confidential
        and shall refrain from using for the benefit of Yourself, or any person or
        entity other than the Company or any entity which is a subsidiary of the
        Company
        or of which the Company is a subsidiary, any material document or information
        (including but not limited to client lists) obtained from the Company, or
        from
        its parent or subsidiaries, in the course of Your employment with any of
        them
        concerning their properties, operations or business (unless such document
        or
        information is readily ascertainable from public or published information
        or
        trade sources or has otherwise been made available to the public through
        no
        fault of Your own) until the same ceases to be material (or becomes so
        ascertainable or available); provided, however, that nothing in this
        Section 7 shall prevent You, with or without the Company's consent, from
        participating in or disclosing documents or information in connection with
        any
        judicial or administrative investigation, inquiry or proceeding to the extent
        that such participation or disclosure is required under applicable
        law.

       

      8.           This
        Agreement constitutes the entire understanding between the parties, and
        supersedes any and all prior understandings and agreements between the
        parties.

       

      9.           The
        parties acknowledge that no representations, promises, consideration or
        inducements have been made by the Company to You other than what is contained
        in
        this Agreement.

       

      10.           This
        Agreement may not be modified except by a writing signed by all
        parties.

       

      11.           The
        parties acknowledge that this Agreement does not constitute or imply any
        admission of liability by the Company.

       

      12.           If
        any provision in this Agreement is declared or determined by any court to
        be
        illegal, void, or unenforceable, the illegality or unenforceability of such
        provision shall have no effect upon, and shall not impair, the enforceability
        or
        validity of any other provisions in this Agreement.

       

      13.           This
        Agreement may be executed in any number of counterparts, each of which shall
        be
        deemed an original and all of which together shall constitute one and the
        same
        instrument.

       

      14.           This
        Agreement may not be revoked after You have signed it and delivered it to
        the
        Company.

       

      


      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      15.           If
        you will be age 55 or older on December 31, 2007 and are covered under our
        group
        health plan, please check one of the following boxes:

       

      ■           Continued
        coverage under Paragraph 3(b) of this Agreement.

       

       ̈           Additional
        cash payment in lieu of continued group heath coverage

       

      In
        Witness Whereof, the parties hereto have executed this Agreement on the
        day and year first herein written.

       

       

       STATE
        BANK OF LONG
        ISLAND

       

      


       

      


       

      /s/
        Daniel T.
        Rowe                                                                                
By  /s/ Mary E. Durkin

       

      Employee
        Signature                                                                                              Name:  Mary
        E. Durkin

       

       
        Title:  Director of H/R

       

      Daniel
        T. Rowe

       

      


       

      


       

      5/31/07                                                                                                   
        5/31/07

       

      Date
        of
        Signature                                                                                  Date
        of Delivery of Signed Agreement

      


      


       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

     

    
      EXHIBIT
        C

       

      RELEASE

       

      This
        RELEASE (referred to below as the “Release”) is made and
        entered into by Daniel T. Rowe (referred to below as “You”) in favor of State
        Bank of Long Island (referred to below as the “Company”) and certain other
        parties (collectively referred to below as the “Releasees”).

       

      PRELIMINARY
        STATEMENT

       

      Your
        employment with the Company is terminating under the terms of an Employment
        Termination Agreement between You and the Company.  The Company is
        prepared to pay You severance benefits, but will do so only if You give up
        Your
        rights to bring or participate in certain types of lawsuits.  By
        signing this Release, You will give up those rights, and the Company will
        pay
        You severance benefits.  This Release was given to You on or before
        April 2, 2007 (the “Date of Receipt”).  This Release will be of no
        force or effect unless it is properly signed and returned to the Company
        on June
        29, 2007.

       

      YOU
        SHOULD THOROUGHLY REVIEW AND UNDERSTAND THE TERMS, CONDITIONS AND EFFECT
        OF THIS
        RELEASE.  THEREFORE, YOU HAVE UNTIL 5:30 P.M. ON JUNE 29, 2007 TO
        CONSIDER THIS RELEASE BEFORE SIGNING AND RETURNING IT.  YOU ARE
        ADVISED TO CONSULT WITH AN ATTORNEY BEFORE YOU SIGN.

       

      RELEASE

       

      1.  You,
        on
        behalf of Yourself and also on behalf of any other person or persons claiming
        or
        deriving a right from You, unconditionally and irrevocably forever release
        and
        discharge the Company, its owners, agents, servants, employees, directors,
        officers, affiliates and/or subsidiaries, and any shareholders, agents,
        servants, employees, directors and officers of the Company's affiliates and/or
        subsidiaries, and their respective heirs, successors or assigns (the
“Releasees”) from any and all charges, complaints, claims, liabilities,
        obligations, promises, agreements, controversies, actions, demands, debts,
        costs, expenses, damages, injuries or causes of action (“Claims”) which You now
        have, or ever have had, arising out of Your employment by, or termination
        of
        employment with, the Company, up to and including the date on which You sign
        this Release, whether arising in equity or pursuant to any law, rule or
        regulation, including any Claims of which You are not aware or do not suspect
        to
        exist as of the date on which You sign this Release.

       

      2.  The
        release contained in Section 1 of this Release includes, but is not limited
        to,
        any Claims that You (or any person or persons claiming or deriving a right
        from
        You) may have based on discrimination due to age, race, sex, religion or
        national origin, or any other claims pursuant to the Worker Adjustment and
        Retraining Notification Act, the Age Discrimination in Employment Act of
        1967,
        as amended (“ADEA”), the National Labor Relations Act, Title VII of the Civil
        Rights Act of 1964, the Civil Rights Act of 1866, the Family and Medical
        Leave
        Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act,
        the
        Equal Pay Act, the Fair Labor Standards Act, the Employee Retirement Income
        Security Act of 1974, as amended, the Internal Revenue Code of 1986, Executive
        Orders Nos. 11246 and 11141, the New York Human Rights Law, the New York
        Equal
        Pay Law, the New York Equal Rights Law, and any other federal, state or local
        statute, rule, constitutional provision, regulation, ordinance or common
        law,
        including, but not limited to, those for wrongful discharge, fraud, intentional
        or negligent infliction of emotional distress and breach of any expressed
        or
        implied covenant of good faith and fair dealing, and including but not limited
        to, any Claims for recovery of attorney's fees.  YOU
        UNDERSTAND THAT BY SIGNING THIS RELEASE, YOU ARE GIVING UP ALL RIGHTS AGAINST
        THE RELEASEES THAT YOU HAVE UNDER THESE AND OTHER SIMILAR
        LAWS.

       

      3.           This
        Release does not apply to Your rights under the Employment Termination
        Agreement.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      4.           You
        acknowledge that:

       

      (a)             the
        payments and benefits provided in the Employment Termination Agreement are
        in
        consideration for the release contained herein and are in addition to what
        You
        are otherwise entitled from the Company (“Additional Benefits”);

       

      (b)             You
        have been advised to consult an attorney before signing this Release and
        have
        been afforded the opportunity to do so;

       

      (c)             You
        have had the opportunity to consider this Release for at least forty-five
        (45)
        days;

       

      (d)             You
        have read this Release in its entirety, understand its terms, and knowingly
        and
        voluntarily consent to its terms and conditions;

       

      (e)             You
        have been provided with information  including the titles and ages of
        all employees of the Company and its parents and subsidiaries and an indication
        whether each is eligible for participation in the program under which Your
        employment is terminating; and

       

      (f)             the
        releases made by You in Sections 1 and 2 of this Release are made knowingly
        and
        voluntarily, and without coercion by the Company or any of the
        Releasees.

       

      5.           The
        parties acknowledge that no representations, promises, consideration or
        inducements have been made by the Company or by any of the Releasees to You
        other than what is contained in this Release and the Employment Termination
        Agreement.

       

      6.           This
        Release may not be modified except by a writing signed by all
        parties.

       

      7.           The
        parties acknowledge that this Release does not constitute or imply any admission
        of liability by the Company, or by any of the Releasees, to You or to anyone
        deriving or claiming a right through You or on Your behalf.

       

      8.           If
        any provision in this Release is declared or determined by any court to be
        illegal, void, or unenforceable, the illegality or unenforceability of such
        provision shall have no effect upon, and shall not impair, the enforceability
        or
        validity of any other provisions in this Release.

       

      9.           This
        Release may be executed in any number of counterparts, each of which shall
        be
        deemed an original and all of which together shall constitute one and the
        same
        instrument.

       

      10.           The
        parties acknowledge that this Release will be effective only if it is properly
        signed and returned to the Company on June 29, 2007 and it becomes
        irrevocable.  This Release is revocable until 5:30 p.m. on July 9,
        2007.  To revoke this Release, You must notify the Company in writing,
        delivered personally or by facsimile, addressed as follows:  State
        Bank of Long Island, 699 Hillside Avenue, New Hyde Park, New
        York  11040, Attention: Mary Durkin, facsimile:  (516)
        437-1032.  If you do not give a timely notice, the Release will become
        irrevocable at 5:30 p.m. on July 9, 2007.  No payments or benefit will
        be provided under the Employment Termination Agreement until this Release
        has
        become irrevocable.  Any payments or benefits that otherwise become
        due prior to the effective date of this Release shall be paid or provided
        as
        soon as practicable after the effective date.

       

      In
        Witness Whereof, You have executed this Release on June 29,
        2007.

       

      


      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

       

      STATE
        BANK OF LONG
        ISLAND

       

      


       

      /s/
        Daniel T.
        Rowe                                                               
By  /s/ Mary E.
        Durkin

       

      Employee
        Signature                                                                         
Name:  Mary E.
        Durkin

       

                   
        Title:  Director of H/R

       

      


       

      


       

      6/29/07                                                                                   
        6/29/07

       

      Date
        of
        Signature                                                                  Date
        of Delivery of Signed Release

       

      


       

      
        
           

        

        
          3