EMPLOYMENT AGREEMENT
Exhibit
10.1
This sets
forth the terms of the Employment Agreement made effective as of January 1, 2008
between (i) COMMUNITY BANK SYSTEM, INC., a Delaware corporation and registered
bank holding company, and COMMUNITY BANK, N.A., a national banking association,
both having offices located in Dewitt, New York (collectively, the "Employer"),
and (ii) XXXXXX X. XXXXXX, an individual currently residing at Manlius, New York
("Employee"). This Agreement is effective as of January 1,
2008.
W I T N E S S E T
H
IN
CONSIDERATION of the promises and mutual agreements and covenants contained
herein, and other good and valuable consideration, the parties agree as
follows:
1.
Employment.
(a)
Term. Employer
shall employ Employee, and Employee shall serve, as Executive Vice President and
General Counsel, for CBSI and CBNA for a term commencing on January 1,
2008 and ending on December 31, 2010 ("Period of Employment"), subject
to termination as provided in paragraph 3 hereof.
(b)
Salary. From
the effective date of this Agreement through December 31, 2010, Employer shall
pay Employee a base salary at the annual rate of not less than $300,000 ("Base
Salary"). Employee's Base Salary for calendar years after 2008 shall
be reviewed and adjusted annually in accordance with Employer's regular practice
for executive employees. Employee’s Base Salary is payable in accordance with
Employer’s regular payroll practices for executive employees.
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(c)
Incentive
Compensation. During the Period of Employment, Employee shall
be entitled to annual incentive compensation as a Tier 2 Executive of the
Employer pursuant to the terms of the Management Incentive Plan, which has been
approved by the Board of Directors of Employer to cover Employee and other key
personnel of Employer, as well as other incentive plans that may be established
by Employer and that are applicable to Employer’s executives of similar salary
tier to Employee. Upon termination of Employee's employment pursuant to
subparagraph 3(a), 3(b), 3(c) or 6, Employee shall be entitled to a pro rata
portion (based on Employee's complete months of employment in the applicable
year) of the annual incentive awards that are payable with respect to the year
during which the termination occurs or, if the annual awards for such year are
not determinable at the termination date, then the immediately prior year’s
awards shall be used to determine such pro rata portion.
2.
Duties
during the Period of Employment. As Employer’s Executive Vice President
and General Counsel, Employee shall have full responsibility, subject to the
control of Employer's President and Chief Executive Officer and/or the
authorized designee of Employer’s Board of Directors, for the supervision of
substantially all aspects of Employer's corporate governance, legal affairs, and
Securities and Exchange Commission reporting activities, and the discharge of
such other duties and responsibilities to Employer, not inconsistent with such
position, as may from time to time be reasonably assigned to Employee by
Employer's President and Chief Executive Officer, or the authorized designee of
Employer’s Board of Directors. Employee shall report to the
Employer’s President and Chief Executive Officer. Employee shall
devote Employee's best efforts to the affairs of Employer, serve faithfully and
to the best of Employee's ability and devote all of Employee's working time and
attention, knowledge, experience and skill to the business of Employer, except
that Employee may affiliate with professional associations, and business, civic
and charitable organizations, provided that such services and affiliations do
not unreasonably interfere with the performance of Employee’s duties under this
Agreement. Employee shall serve on the Board of Directors of, or as
an officer of Employer’s affiliates, without additional compensation if
requested to do so by the Board of Directors of Employer. Employee shall receive
only the compensation and other benefits described in this Agreement for
Employee’s services to affiliates of Employer.
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3.
Termination. Employee's
employment by Employer shall be subject to termination as follows:
(a)
Expiration of
the Term. This Agreement shall terminate automatically at the
expiration of the Period of Employment unless the parties enter into a written
agreement extending Employee's employment, except for the continuing obligations
of the parties as specified hereunder.
(b)
Termination Upon
Death. This Agreement shall terminate upon Employee's
death. In the event this Agreement is terminated as a result of
Employee's death, Employer shall continue payments of Employee's Base Salary for
a period of 90 days following Employee's death to the beneficiary designated by
Employee on the "Beneficiary Designation Form" attached to this Agreement as
Appendix A. Any restrictions on shares of CBSI stock previously
granted to Employee shall be waived as of the date of death and Employee’s
beneficiary shall be free to dispose of any restricted stock previously granted
to Employee by Employer. Additionally, Employer shall treat as immediately
exercisable all unexpired stock options issued by Employer and held by Employee
that are not exercisable or that have not been exercised, so as to permit the
Beneficiary to purchase the balance of CBSI Stock not yet purchased pursuant to
said options until the end of the full exercise period provided in the original
grant of the option right, determined without regard to Employee’s death or
termination of employment.
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(c)
Termination Upon
Disability. Employer may terminate this Agreement upon
Employee's disability. For the purpose of this Agreement, Employee's
inability to perform substantially all of Employee's duties under this Agreement
by reason of physical or mental illness or injury for a period of 26 successive
weeks (the "Disability Period") shall constitute disability. The
determination of disability shall be made by a physician selected by Employer
and a physician selected by Employee; provided, however, that if the two
physicians so selected shall disagree, the determination of disability shall be
submitted to arbitration in accordance with the rules of the American
Arbitration Association and the decision of the arbitrator shall be binding and
conclusive on Employee and Employer. During the Disability Period,
Employee shall be entitled to 100% of Employee's Base Salary otherwise payable
during that period, reduced by all other Employer-provided income replacement
benefits to which Employee may be entitled for the Disability Period on account
of such disability (including, but not limited to, benefits provided under any
disability insurance policy or program, worker's compensation law, or any other
benefit program or arrangement). Upon termination pursuant to this
disability provision, any restrictions on shares of CBSI stock previously
granted to Employee shall be waived and Employee shall be free to dispose of any
restricted stock granted to Employee. Additionally, Employer shall
treat as immediately exercisable all unexpired stock options issued by Employer
and held by Employee that are not exercisable or that have not been exercised,
so as to permit the Employee to purchase the balance of CBSI Stock not yet
purchased pursuant to said options until the end of the full exercise period
provided in the original grant of the option right, determined without regard to
Employee’s disability or termination of employment.
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(d)
Termination for
Cause. Employer may terminate Employee's employment
immediately for "cause" by written notice to Employee. For purposes
of this Agreement, a termination shall be for "cause" if the termination results
from any of the following events:
(i)
The willful breach of any material provision of this Agreement, which breach
Employee shall have failed to cure within thirty (30) days following Employer’s
written notice to Employee specifying the nature of the breach;
(ii) Any
documented misconduct by Employee as an executive or director of Employer, or
any subsidiary or affiliate of Employer for which Employee is performing
services hereunder, which is material and adverse to the interests, monetary or
otherwise, of Employer or any subsidiary or affiliate of Employer;
(iii) Unreasonable
neglect or refusal to perform the duties assigned to Employee under or pursuant
to this Agreement, unless cured within thirty (30) days following Employer’s
written notice to Employee specifying the nature of the neglect or
refusal;
(iv) Conviction
of a crime involving any act of dishonesty, acts of moral turpitude, or the
commission of a felony;
(v) Adjudication
as a bankrupt, which adjudication has not been contested in good faith, unless
bankruptcy is caused directly by Employer's unexcused failure to perform its
obligations under this Agreement;
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(vi) Documented
failure to follow the reasonable, written instructions of the Board of Directors
of Employer or the Employer’s President and Chief Executive Officer, provided
that the instructions do not require Employee to engage in unlawful conduct;
or
(vii) A
willful violation of a material rule or regulation of the Office of the
Comptroller of the Currency or of any other regulatory agency governing Employer
or any subsidiary or affiliate of Employer.
Notwithstanding
any other term or provision of this Agreement to the contrary, if Employee's
employment is terminated for cause, Employee shall forfeit all rights to
payments and benefits otherwise provided pursuant to this Agreement; provided,
however, that Base Salary shall be paid through the date of
termination.
(e)
Termination For Reasons
Other Than Cause. In the event Employer terminates Employee’s
employment prior to December 31, 2010 for reasons other than “cause” (as defined
in paragraph 3(d)), then Employee shall be entitled to a severance benefit equal
to the greater of (i) the sum of Employee’s annual Base Salary in effect at the
time of termination and the aggregate sum of all payments made to Employee
during the 12 months preceding Employee’s termination pursuant to the Management
Incentive Plan (or equivalent successor plan), or (ii) amounts of Base Salary
and expected Management Incentive Plan ( or equivalent successor plan) payments
that otherwise would have been payable through the balance of the unexpired term
of this Agreement. Unless Employee is a “specified employee” (as determined in
accordance with Internal Revenue Code Section 409A), the benefit payable
pursuant to this paragraph 3(e) shall be payable in equal biweekly installments
over the 12- month period that begins on the first day of the month following
Employee’s termination. If Employee is a ”specified employee” ( as
determined in accordance with Internal Revenue Code Section 409A), then
installment payments during the first six months of the 12-month installment
period shall be limited to the extent required by Internal Revenue Code Section
409A, any unpaid installment amounts shall be paid immediately after such
six-month period and installment payments due during the remaining six months
shall be paid as scheduled.
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In
addition to the cash benefit described in the foregoing of this paragraph 3(e),
Employer shall: (iii) waive all restrictions on all restricted stock previously
granted to Employee and permit Employee to dispose of any restricted stock; and
(iv) treat as immediately exercisable all unexpired stock options held by
Employee that are not exercisable or that have not been exercised, so as to
permit Employee to purchase the balance of CBSI Stock not yet purchased pursuant
to said options until the end of the full exercise period provided in the
original grant of the option right determined without regard to Employee’s
termination of employment.
Notwithstanding
the foregoing, if Employer terminates Employee for reasons other than cause and
under circumstances that entitle Employee to payments and benefits under
paragraph 6 of this Agreement (regarding “Change of Control”) then amounts payable under
clauses (i) or (ii) of this paragraph 3(e) shall be reduced by any payments made
to Employee under paragraphs 6(a)(i) and (ii).
(f)
Expiration
of Term Without Renewal. In the event that
Employee’s employment ends on December 31, 2010 solely because Employer chooses
not to renew or extend this Agreement beyond December 31, 2010 for reasons other
than cause, then Employee shall be entitled to a severance benefit equal to the
sum of (i) 175 percent of Employee’s annual Base Salary in effect at the time of
termination, and (ii) the aggregate sum of all payments made to Employee during
2010 pursuant to the Management Incentive Plan ( or equivalent successor plan).
The benefit payable under this paragraph 3(f) shall be reduced by any amounts
payable to Employee under paragraphs 6(a)(i) and (ii). Any remaining
benefit described in this paragraph 3(f) shall be paid on or before March 15,
2011.
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(g)
Employer shall have the right of first refusal to purchase from
Employee or Employee’s estate, shares of CBSI stock acquired pursuant to the
exercise of stock options after the date of Employee’s termination of employment
for any reason, in the event Employee or Employee’s estate elects to dispose or
transfer such acquired shares. Such right of first refusal shall expire ten
years from the date of termination. Employee (or Employee’s estate,
as the case may be) shall provide Employer with not less than 30 days’ advance
written notice of any disposition or transfer. If Employer chooses to
exercise its right of first refusal, it shall do so by written notice within 15
days of receipt of notice of disposition or transfer. The purchase
price per share to be paid by Employer upon any such exercise shall equal the
closing price per share of shares of CBSI stock on the trading day that
immediately precedes the date of exercise.
4.
Fringe
Benefits.
(a)
Benefit
Plans. During the Period of Employment, Employee shall be
eligible to participate in any employee pension benefit plans (as that term is
defined under Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended), Employer-paid group life insurance plans, medical plans,
dental plans, long-term disability plans, business travel insurance programs and
other fringe benefit programs maintained by Employer for the benefit of (or
which are applicable to) its executive employees. Participation in
any of Employer's benefit plans and programs shall be based on, and subject to
satisfaction of, the eligibility requirements and other conditions of such plans
and programs. Employer may require Employee to submit to an annual
physical, to be performed by a physician of his own
choosing. Employee shall be reimbursed for related expenses not
covered by Employer's health insurance plan, or any other plan in which Employee
is enrolled. Employee shall not be eligible to participate in
Employer's Severance Pay Plan maintained for employees not covered by employment
agreements.
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(b)
Expenses. Upon
submission to Employer of vouchers or other required documentation, Employee
shall be reimbursed for (or Employer shall pay directly) Employee's actual
out-of-pocket travel and other expenses reasonably incurred and paid by Employee
in connection with Employee's duties hereunder. Reimbursable expenses
must be submitted to the President and Chief Executive Officer of Employer, or
the President and Chief Executive Officer’s designee, for review on no less than
a quarterly basis.
(c)
Other
Benefits. During the Period of Employment, Employee also shall
be entitled to receive the following benefits:
(i)
Paid time-off of twenty-one (21) days each calendar year (with no carry over of
unused time to a subsequent year) and any holidays that may be provided to all
employees of Employer in accordance with Employer's holiday policy;
(ii)
Reasonable sick leave;
(iii) Reimbursement
of membership fees and dues ( but not personal expenses) for up to two club
memberships and other appropriate professional associations, subject to the
approval of the President and Chief Executive Officer of
Employer. Although it is contemplated that the membership shall be
utilized for promotion of Employer’s business interests, in the event that any
part of any membership shall be treated as taxable compensation to Employee,
Employer shall reimburse Employee for any federal, state or local income tax
owed by Employee, including any such taxes owed as a result of any reimbursement
under this subparagraph, in connection with such
membership. Reimbursements shall be made on or before the last day of
Employee’s taxable year following the taxable year in which the expense was
incurred; and
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(iv)
The use of an Employer-owned cellular telephone and all Employer related
business charges incurred in connection with the use of such
telephone.
(d)
Supplemental
Retirement Benefits. The terms and conditions for the payment
of supplemental retirement benefits are set forth in a separate written
agreement between the parties.
5.
Restricted Stock
and Stock Options.
(a) Employer
shall grant to Employee 5,000 shares of restricted common stock of
CBSI. The grant of the restricted stock shall be effective as of the
first day of the Period of Employment and , subject to Employee’s continued
employment by Employer, the restrictions on such shares shall expire
in one- third increments on (i) January 1, 2009, (ii) January 1, 2010, and (iii)
December 31, 2010. The foregoing grant of restricted stock shall be
issued pursuant to, and subject to all the terms and conditions of the Community
Bank System, Inc. 2004 Long-Term Incentive Compensation Program or a comparable
successor program.
(b) In
addition, Employer shall cause the Compensation Committee of the Board of
Directors of Employer to review whether Employee should be granted additional
shares of restricted stock and/or options to purchase shares of common stock of
CBSI. Such review may be conducted pursuant to the terms of the
Community Bank System, Inc. 2004 Long-Term Incentive Compensation Program, a
successor plan, or independently, as the Compensation Committee shall
determine. Reviews shall be conducted no less frequently than
annually.
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6.
Change of
Control.
(a)
If Employee's employment with Employer shall cease for any reason,
including Employee's voluntary termination for “good reason” (as defined in
paragraph 6(d) below), but not including Employee's termination for “cause”(as
described in paragraph 3(d))or Employee’s voluntary termination without “good
reason”, within two years following a "Change of Control" that occurs
during the Period of Employment, then:
(i)
Employer shall pay to the Employee the greater of (A) 300 percent of
the sum of the annual Base Salary in effect at the time of termination and the
aggregate sum of all payments made to Employee during the 12 months preceding
Employee’s termination pursuant to the Management Incentive Plan (or equivalent
successor plan), or (B) amounts of Base salary and expected payments under the
Management Incentive Plan (or equivalent successor plan) that otherwise would
have been payable through the balance of the unexpired term of this Agreement
..Unless Employee is a “specified employee “ (as determined in accordance with
Internal Revenue Code Section 409A), the amount determined pursuant to this
paragraph 6(a)(i) shall be payable in a single lump-sum payment within 60 days
following Employee’s termination. If Employee is a “specified employee “(as
determined in accordance with Internal Revenue Code Section 409A), then the
single lump-sum payment shall be made on the first day of the seventh month
following Employee’s termination.
(ii)
Subject to the applicable limitations of Internal Revenue Code Section
409A that apply if Employee is a “specified employee “(as determined in
accordance with Internal Revenue Code Section 409A), Employer shall provide
Employee with fringe benefits, or the cash equivalents of such benefits,
identical to those described in paragraph 4(a) for a period of thirty-six (36)
months following Employee’s termination. To the extent the benefits
provided to Employee in this paragraph 6(a)(ii) are deemed taxable benefits;
Employer shall reimburse Employee for taxes owed by Employee on the benefits and
tax reimbursement. The reimbursement shall be made by the end of Employee’s
taxable year next following the taxable year in which Employee remits the
related taxes.
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(iii) Employer
shall treat as immediately exercisable all unexpired stock options issued by
Employer and held by Employee that are not otherwise exercisable or that have
not been exercised so as to permit Employee to purchase the balance of CBSI
Stock not yet purchased pursuant to said options until the end of the full
exercise period provided in the original grant of the option right, determined
without regard to Employee’s termination of employment.
(iv) Employer
shall waive all restrictions on any shares restricted stock granted to Employee
and permit Employee to dispose of such stock.
(b)
Notwithstanding any provision of this Agreement to the contrary, and
except as provided in the last sentence of this paragraph 6(b), in the event
that any payment or benefit received or to be received by the Employee in
connection with a Change of Control (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement) (all such payments and
benefits being hereinafter called “Total Benefits”) would be subject (in whole
or in part) to the excise tax imposed pursuant to Internal Revenue Code Section
4999, then the cash severance payments provided in this Agreement shall first be
reduced, and the other payments and benefits hereunder shall thereafter be
reduced, to the extent necessary so that no portion of the Total Benefits will
be subject to such excise tax, but only if (i) is greater than or equal to (ii),
where (i) equals the reduced amount of such Total Benefits minus the aggregate
amount of federal, state and local income taxes on such reduced Total Benefits ,
and (ii) equals the unreduced amount of such Total Benefits minus the sum of (A)
the aggregate amount of federal, state and local income taxes on such
Total Benefits, and (B) the amount of excise tax to which the Employee would be
subject in respect of such unreduced Total Benefits. Notwithstanding the
foregoing, and although Employee shall not have a legally binding right to any
such payment, the Board of Directors of Employer shall have the sole discretion
to waive the limitations described in this paragraph 6(b) and/or to increase the
amounts payable pursuant to this paragraph 6 to help cover some or all of the
taxes payable by Employee as a result of the receipt of unreduced payments and
benefits pursuant to this Agreement.
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(c)
For purposes of this paragraph 6, a "Change of Control" shall be deemed to have
occurred if:
(i)
any "person," including a "group" as determined in accordance with the Section
13(d)(3) of the Securities Exchange Act of 1934 ("Exchange Act"), is or becomes
the beneficial owner, directly or indirectly, of securities of Employer
representing 30% or more of the combined voting power of Employer's then
outstanding securities;
(ii) As
a result of, or in connection with, any tender offer or exchange offer, merger
or other business combination (a "Transaction"), the persons who were directors
of Employer before the Transaction shall cease to constitute a majority of the
Board of Directors of Employer or any successor to Employer;
(iii) Employer
is merged or consolidated with another corporation and as a result of the merger
or consolidation less than 70% of the outstanding voting securities of the
surviving or resulting corporation shall then be owned in the aggregate by the
former stockholders of Employer, other than (A) affiliates within the meaning of
the Exchange Act, or (B) any party to the merger or
consolidation;
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(iv) A
tender offer or exchange offer is made and consummated for the ownership of
securities of Employer representing 30% or more of the combined voting power of
Employer's then outstanding voting securities; or
(v) Employer
transfers substantially all of its assets to another corporation, which is not
controlled by Employer.
(d) For
purposes of this paragraph 6, “good reason” shall mean action taken
by Employer that results in :
(i)
An involuntary and material adverse change in Employee’s
authority, duties, responsibilities, or base
compensation;
(ii) An
involuntary relocation of the office from which Employee is expected to perform
his duties; or
(iii)
A
material breach of this Agreement .
Employee
must provide notice to Employer of the existence of a
condition described in (i), (ii) or (iii) above within thirty (30)
days of the initial existence of the condition , upon the notice
of which Employer shall have thirty (30) days thereafter in which to
remedy the condition.
7.
Withholding. Employer
shall deduct and withhold from compensation and benefits provided under this
Agreement all required income and employment taxes and any other similar sums
required by law to be withheld.
8.
Covenants.
(a)
Confidentiality. Employee
shall not, without the prior written consent of Employer, disclose or use in any
way, either during his employment by Employer or thereafter, except as required
in the course of his employment by Employer, any confidential business or
technical information or trade secret acquired in the course of Employee's
employment by Employer. Employee acknowledges and agrees that it would be
difficult to fully compensate Employer for damages resulting from the breach or
threatened breach of the foregoing provision and, accordingly, that Employer
shall be entitled to temporary preliminary injunctions and permanent injunctions
to enforce such provision. This provision with respect to injunctive
relief shall not, however, diminish Employer's right to claim and recover
damages. Employee covenants to use his best efforts to prevent the
publication or disclosure of any trade secret or any confidential information
that is not in the public domain concerning the business or finances of Employer
or Employer's affiliates, or any of its or their dealings, transactions or
affairs which may come to Employee's knowledge in the pursuance of his duties or
employment.
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(b) No
Competition. Employee's employment is subject to the condition
that during the term of his employment hereunder and for the period specified in
paragraph 8(c) below, Employee shall not, directly or indirectly, own, manage,
operate, control or participate in the ownership, management, operation or
control of, or be connected as an officer, employee, partner, director,
individual proprietor, lender, consultant or otherwise with, or have any
financial interest in, or aid or assist anyone else in the conduct of, any
entity or business (a "Competitive Operation") which competes in the banking
industry or with any other business conducted by Employer or by any group,
affiliate, division or subsidiary of Employer in the states of New York or
Pennsylvania. Employee shall keep Employer fully advised as to any
activity, interest, or investment Employee may have in any way related to the
banking industry. It is understood and agreed that, for the purposes
of the foregoing provisions of this paragraph, (i) no business shall be deemed
to be a business conducted by Employer or any group, division, affiliate or
subsidiary of Employer unless 5% or more of Employer's consolidated gross sales
or operating revenues is derived from, or 5% or more of Employer's consolidated
assets are devoted to, such business; (ii) no business conducted by any entity
by which Employee is employed or in which he is interested or with which he is
connected or associated shall be deemed competitive with any business conducted
by Employer or any group, division, affiliate or subsidiary of Employer unless
it is one from which 2% or more of its consolidated gross sales or operating
revenues is derived, or to which 2% or more of its consolidated assets are
devoted; and (iii) no business which is conducted by Employer at the Date of
Termination and which subsequently is sold by Employer shall, after such sale,
be deemed to be a Competitive Operation within the meaning of this
paragraph. Ownership of not more than 5% of the voting stock of any
publicly held corporation shall not constitute a violation of this
paragraph.
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(c) Non-Competition
Period. The "non-competition period" shall begin on January 1, 2008
and shall end 36 months after Employee’s termination of employment ; provided,
however, that the “non-competition period” shall end on the date Employee’s
employment ends in the event of Employee’s termination for “good reason” (as
defined in paragraph 6(d)), or Employee’s termination without “cause” (as
defined in paragraph 3(d)), within two years following a Change of Control that
occurs during the Period of Employment .
(d) Termination of
Payments. Upon the breach by Employee of any covenant under
this paragraph 8, Employer shall cease all payments to Employee and may offset
immediately any and all amounts payable to Employee under this Agreement against
any damages to which Employer is legally entitled in addition to any and all
other remedies available to Employer under the law or in
equity.
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9.
Notices. Any
notice which may be given hereunder shall be sufficient if in writing and mailed
by overnight mail, or by certified mail, return receipt requested, to Employee
at his residence and to Employer at 0000 Xxxxxxxxxx Xxxxxxx, Xxxxxx, Xxx Xxxx
00000, or at such other addresses as either Employee or Employer may, by similar
notice, designate.
10. Rules, Regulations and
Policies. Employee shall abide by and comply in all material
respects with all of the rules, regulations, policies and procedures of Employer
that may be in effect and amended from time to time, including without
limitation (i) Employer's policy of strict adherence to, and compliance with,
any and all requirements of the banking, securities, and antitrust laws and
regulations, and (ii) Employer’s human resources, personnel and benefits
policies.
11. No Prior
Restrictions. Employee affirms and represents that
Employee is under no obligations to any former employer or other third party
which is in any way inconsistent with, or which imposes any restriction upon,
the employment of Employee by Employer, or Employee's undertakings under this
Agreement.
12. Return of Employer's
Property. After Employee has received notice of termination or
at the end of the term hereof, whichever first occurs, Employee shall promptly
return to Employer all documents and other property in his possession belonging
to Employer.
13. Construction and
Severability. The invalidity of any one or more provisions of
this Agreement or any part thereof, all of which are inserted conditionally upon
their being valid in law, shall not affect the validity of any other provisions
to this Agreement; and in the event that one or more provisions contained herein
shall be invalid, as determined by a court of competent jurisdiction, the court
shall have authority to modify such provision in a manner that most closely
reflects the intent of the parties and is valid. This Agreement shall be
interpreted and applied in all circumstances in a manner that is consistent with
the intent of the parties that amounts earned and payable pursuant to this
Agreement shall not be subject to the premature income recognition or adverse
tax provisions of Internal Revenue Code Section 409A. Accordingly,
notwithstanding any other term or provision of this Agreement to the
contrary, distribution of benefits payable following employee’s termination of
employment shall commence as of the date required by this Agreement or, if
later, the earliest date permitted by Internal Revenue Code Section 409A (
generally six months after termination , if Employee is a “specified employee”
within the meaning of Internal Revenue Code Section 409A ).
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14. Governing
Law. This Agreement was executed and delivered in New York and
shall be construed and governed in accordance with the laws of the State of New
York.
15. Assignability and
Successors. This Agreement may not be assigned by Employee or
Employer, except that this Agreement shall be binding upon and shall inure to
the benefit of the successor of Employer through merger or corporate
reorganization. Any attempted assignment in violation of this
paragraph 15 shall be null and void and of no effect,
16.
Miscellaneous.
(a)
This
Agreement constitutes the entire understanding and
agreement
between the parties with respect to the subject matter hereof and shall
supersede all prior understandings and agreements.
(b) This
Agreement cannot be amended, modified, or supplemented in any respect, except by
a subsequent written agreement entered into by the parties hereto.
(c) The
services to be performed by Employee are special and unique; it is agreed that
any breach of this Agreement by Employee shall entitle Employer (or any
successor or assigns of Employer), in addition to any other legal remedies
available to it, to apply to any court of competent jurisdiction to enjoin such
breach.
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(d) The
provisions of paragraphs 6 and 8 hereof shall survive the termination of this
Agreement.
17. Counterparts. This
Agreement may be executed in counterparts (each of which need not be executed by
each of the parties), which together shall constitute one and the same
instrument.
18. Jurisdiction, Venue and
Fees. The jurisdiction of any proceeding between the parties
arising out of, or with respect to, this Agreement shall be in a court of
competent jurisdiction in New York State, and venue shall be in Onondaga
County. Each party shall be subject to the personal jurisdiction of
the courts of New York State. If Employee is the prevailing party in
a proceeding to collect payments due pursuant to this Agreement, Employer shall
reimburse Employee for reasonable attorneys' fees incurred by Employee in
connection with such proceeding. Reimbursement shall be made on or before the
last day of Employee’s taxable year following the taxable year in
which the expense was incurred. The foregoing right of reimbursement
shall expire on the fifth anniversary of Employee’s separation of Employment
with Employer.
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The
foregoing is established by the following signatures of the
parties.
|
COMMUNITY
BANK SYSTEM, INC.
|
||
|
By:
|
/s/ Xxxx X. Xxxxxxxx
|
|
|
Xxxx
X. Xxxxxxxx
|
||
|
President
and Chief Executive Officer
|
||
|
COMMUNITY
BANK, N.A.
|
||
|
By:
|
/s/ Xxxxxxxxxx X. Xxxxxx
|
|
|
Xxxxxxxxxx
X. Xxxxxx
|
||
|
Senior
Vice President and Chief HR Officer
|
||
|
/s/ Xxxxxx X. Xxxxxx
|
||
|
XXXXXX X.
XXXXXX
|
20
