FIRST NIAGARA FINANCIAL GROUP, INC.
EMPLOYMENT AGREEMENT
WITH
Xxxx X. Xxxxxx
This AGREEMENT, dated as of January 18, 2005 ("Effective Date"), is
between FIRST NIAGARA FINANCIAL GROUP, INC., a Delaware corporation with its
executive offices at 0000 Xxxxx Xxxxxxx Xxxx, X.X. Xxx 000, Xxxxxxxx, Xxx Xxxx
00000-0000 (the "Corporation"), and Xxxx X. Xxxxxx, an individual residing at
000 Xxxxxxx Xxxx, Xxxxxx, Xxx Xxxx 00000 (the "Executive").
RECITALS:
a. The Executive will be employed by the Corporation as Regional
President - Eastern New York.
b. The Corporation and the Executive desire to set forth the
terms upon which the Executive will be employed by the
Corporation.
NOW, THEREFORE, in consideration of the promises and of the
covenants contained in this Agreement, the Corporation and the Executive agree
as follows:
1. Definitions.
(a) An "Affiliate" of, or a Person "Affiliated" with, a
specified Person, means a Person that directly, or indirectly through one
or more intermediaries, controls or is controlled by, or is under current
control with, the Person specified.
(b) "Board of Directors" or "Board" means the Board of
Directors of the Corporation.
(c) "Cause" means a finding by the Board of Directors that any
of the following conditions exist:
(i) The Executive's willful and continued failure
substantially to perform his duties under this Agreement
(other than as a result of Disability) that is not or cannot
be cured within 30 days of the Corporation giving the
Executive notice of the failure to so perform. In the case of
a termination by the Corporation within 6 months after a
Change in Control, no act or failure to act will be deemed
"willful" unless effected by the Executive not in good faith
and without a reasonable belief that his action or failure to
act was in or not opposed to the Corporation's best interests.
(ii) A willful act or omission by the Executive
constituting dishonesty, fraud or other malfeasance, breach of
fiduciary duty involving personal profit, and any act or
omission by the Executive constituting immoral conduct, which
in any such case is injurious to the financial condition or
business reputation of the Corporation.
(iii) The Executive's indictment for a felony offense
under the laws of the United States or any state.
(iv) Breach by the Executive of any restrictive covenant
in Sections 12 and 13.
The Executive will not be deemed to have been terminated for Cause
until there has been delivered to him a copy of a resolution, duly adopted by
the affirmative vote of not less than a majority of the Board at a meeting
called and held for that purpose (after reasonable notice to the Executive and
an opportunity for the Executive, with his counsel, to be heard before the
Board), stating that in the good faith opinion of the Board the Executive has
engaged in conduct described above and specifying the particulars in detail.
(d) "Change in Control" means:
(i) Any acquisition or series of acquisitions by any
Person other than the Corporation, any of its Affiliates, any
employee benefit plan of the Corporation or any of its
Affiliates, or any Person holding common shares of the
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Corporation for or pursuant to the terms of such an employee
benefit plan, that
(A) results in that Person becoming the beneficial
owner (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")),
directly or indirectly, of securities of the Corporation
representing 25% or more of either the then outstanding
shares of the common stock of the Corporation
("Outstanding Corporation Common Stock") or the combined
voting power of the Corporation's then outstanding
securities entitled to then vote generally in the
election of Directors of the Corporation ("Outstanding
Corporation Voting Securities"), except that any such
acquisition of Outstanding Corporation Common Stock or
Outstanding Corporation Voting Securities will not
constitute a Change in Control while that Person does
not exercise the voting power of its Outstanding
Corporation Common Stock or otherwise exercise control
with respect to any matter concerning or affecting the
Corporation, or Outstanding Corporation Voting
Securities, and promptly sells, transfers, assigns or
otherwise disposes of that number of shares of
Outstanding Corporation Common Stock necessary to reduce
its beneficial ownership (as defined in Rule 13d-3 under
the Exchange Act) of the Outstanding Corporation Common
Stock to below 25%,
(B) results in a change in control of the
Corporation within the meaning of the Home Owners' Loan
Act and the Rules and Regulations of the Office of
Thrift Supervision (or its predecessor agency) under
that Act, or
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(C) would be required to be reported in response
to Item 5.01 of the current report on Form 8-K, pursuant
to Section 13 or 15(d) of the Exchange Act;
(ii) At the time when, during any period not longer than
24 consecutive months, individuals who at the beginning of
that period constitute the Board cease to constitute at least
a majority of the Board, unless the election, or the
nomination for election by the Corporation's stockholders, of
each new Board member was approved by a vote of at least
2/3rds of the Board members then still in office who were
Board members at the beginning of that period (including, for
these purposes, new members whose election or nomination was
so approved);
(iii) Approval by the stockholders of the Corporation
of:
(A) a dissolution or liquidation of the
Corporation,
(B) a sale of all or substantially all of the
assets or earning power of the Corporation, taken as a
whole (with the stock or other ownership interests of
the Corporation in any of its Affiliates constituting
assets of the Corporation for this purpose) to a Person
that is not an Affiliate of the Corporation (for
purposes of this paragraph, "sale" means any change of
ownership), or
(C) an agreement to merge or consolidate or
otherwise reorganize, with or into one or more Persons
that are not Affiliates of the Corporation, as a result
of which less than 75% of the outstanding voting
securities of the surviving or resulting entity
immediately after any such merger, consolidation or
reorganization are, or will be, owned, directly or
indirectly, by stockholders of the Corporation
immediately before such merger, consolidation or
reorganization (assuming for purposes of that
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determination that there is no change in the record
ownership of the Corporation's securities from the
record date for that approval until that merger,
consolidation or reorganization and that those record
owners hold no securities of the other parties to that
merger, consolidation or reorganization), but including
in that determination any securities of the other
parties to that merger, consolidation or reorganization
held by Affiliates; or
(iv) A tender offer is made for 25% or more of the
Outstanding Corporation Voting Securities and the shareholders
owning beneficially or of record 25% or more of the
Outstanding Corporation Voting Securities have tendered or
offered to sell their shares pursuant to that tender offer, at
the time those shares have been accepted by the tender offer.
(v) However, a Change in Control will not be deemed to
have occurred under any of the preceding subparagraphs if the
action (agreement, acquisition or other) also is approved by a
majority of the Board, the Corporation or an Affiliate is the
resulting entity, and at least 51% of the ownership of voting
control of the Corporation, under any of the preceding
subparagraphs, remains unchanged from that ownership
immediately prior to such action
(e) "Chief Executive Officer" means the Chief Executive
Officer of First Niagara Financial Group, Inc.
(f) "Code" means the Internal Revenue Code of 1986, as
amended.
(g) "Corporation" means, collectively, First Niagara Financial
Group, Inc. and its Affiliates, except for purposes of subsection (d) or
where the context clearly requires otherwise. For example, payments made
by an Affiliate are considered payments made by the Corporation.
(h) "Disability" means long term disability as defined in the
Corporation's long term disability policy covering the Executive, or if
the Executive is not covered by any such policy, Disability of the
Executive will be determined by a qualified independent physician selected
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by the Executive and the Corporation. If they cannot agree, each will
select such a physician and those two physicians will select a third
physician who will make the determination. The physician's written
determination to the Corporation and to the Executive will be conclusive.
In the event of his Disability, the Executive will cease to be employed on
the last day of the month in which the Executive's disability is
determined in accordance with the Corporation's policy, by written
agreement of the Executive and the Corporation, or by the written
determination of the physician, as the case may be.
(i) "Good Reason" means:
(i) A significant reduction in the scope of the
Executive's duties.
(ii) A requirement that the Executive be required to
report to anyone other than the Chief Executive Officer.
(iii) Removal from, or failure to re-elect the Executive
to, the position of Regional President - Eastern New York.
(iv) A requirement, in the Executive's reasonable
judgment, that the services required to be performed by the
Executive would necessitate the Executive moving his residence
from within 100 miles of the Xxxxxx, New York.
(v) A material breach of this Agreement by the
Corporation that is not or cannot be cured within 30 days of
the Executive giving the Corporation notice of the breach.
(j) "Person" has the meaning given that term in Sections 13(d)
and 14(d) of the Exchange Act, but excluding any Person described in and
satisfying the conditions of Rule 13d-1(b)(1) of Section 13.
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(k) "Remaining Unexpired Term" means, as of any date during
the term of the Agreement, the period remaining from such date to the last
date of the Agreement, including extensions thereof, if any.
2. Employment; Duties. Subject to the terms and conditions set
forth in this Agreement, the Corporation agrees to employ the Executive, and the
Executive accepts employment, as Regional President - Eastern New York of the
Corporation subject at all times to the control of the Chief Executive Officer.
The Executive will perform those duties and discharge those responsibilities as
are commensurate with his position, and as the Chief Executive Officer from time
to time reasonably may direct, recognizing the executive nature and scope of the
Executive's employment. The Executive agrees to perform his duties and discharge
his responsibilities in a faithful manner and to the best of his ability and to
use all reasonable efforts to promote the interests of the Corporation. The
Executive may not accept other gainful employment except with the prior consent
of the Chief Executive Officer. With the prior consent of the Chief Executive
Officer, the Executive may become a director, trustee or other fiduciary of
other corporations, trusts or entities.
3. Compensation.
(a) Salary. During the term of the Executive's employment
under this Agreement, the Executive will receive a base salary at the rate
of $230,000 per year, payable in bi-weekly installments of $8,846.15, or
in accordance with the normal payroll practices of the Corporation. On an
annual basis, the Chief Executive Officer, in good faith, will review the
base salary of the Executive to consider appropriate increases, but not
decreases, in the base salary. The Chief Executive Officer then will
propose the base salary to the Board, subject to the Board's ratification.
(b) Signing Bonus. On the Effective Date, Executive will be
paid a one-time cash sign-on bonus of $300,000.
(c) Incentive Programs. During the term of the Executive's
employment under this Agreement, the Executive will be entitled to receive
an annual cash bonus from the Corporation calculated pursuant to the
Corporation's incentive programs for all executive officers of the
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Corporation, referred to herein as the Management Incentive Plan ("MIP"),
in effect from time to time. The projected "target" award available to the
Executive under the MIP shall be set at 35% of base salary for each
calendar year during the term of the Agreement.
(d) Withholding. The Corporation will deduct or withhold from
all salary and bonus payments, and from all other payments made to the
Executive, all amounts that may be required to be deducted or withheld
under any applicable Social Security contribution, income tax withholding
or other similar law now in effect or that may become effective during the
Executive's employment.
4. Other Benefits and Terms. During the term of the
Executive's employment under this Agreement, the Executive will be entitled to
the following other benefits and terms, following completion of the required
eligibility periods:
(a) The Executive will be entitled to participate in any
health and medical benefit plans, any pension, profit sharing and
retirement plans, and any insurance policies or programs from time to time
offered to executive employees of comparable status to the Executive who
are employed by the Corporation. These plans, policies and programs are
subject to change at the sole discretion of the Corporation.
(b) The Executive will be entitled to any other fringe benefit
from time to time offered to executive employees of comparable status to
the Executive who are employed by the Corporation.
5. Vacations. The Executive will be entitled to annual paid
vacation in accordance with the policies established by the Board for executive
employees and to voluntary leaves of absence, with or without pay, from time to
time at the times and conditions as the Chief Executive Officer may propose to
the Board for ratification, as determined in his or her and its discretion, but
not less than 4 weeks each calendar year. Such vacation must be used by December
31 of each such calendar year.
6. Reimbursement for Expenses. The Corporation, in accordance
with the policies and procedures applicable to executive officers of the
Corporation, will reimburse the Executive for expenses the Executive may
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reasonably incur from time to time on behalf of and at the request of the
Corporation in the performance of his responsibilities and duties including, but
not limited to, professional dues and attendance at professional conferences,
dues and business related expenses for membership in Xxxxxxx'x Roost Country
Club, the cost of a leased automobile suitable to the position of Regional
President - Eastern New York (up to a maximum payment or reimbursement of
$500.00 per month), and the cost of maintenance and servicing such automobile,
including, for example, insurance, repairs, gasoline and oil for such
automobile. The Executive must account for these expenses as required under
these policies and procedures.
7. Period of Employment. The period of employment of the
Executive under this Agreement is the period beginning on the Effective Date and
ending on December 31, 2007.
Notwithstanding the foregoing:
(a) The Executive's employment will terminate automatically
upon the death or Disability of the Executive, subject to the duty of the
Corporation to provide reasonable accommodation under the Americans with
Disabilities Act.
(b) The Corporation, at its sole option, may terminate the
Executive's employment at any time and for any reason by delivering
written notice to the Executive at least 30 days prior to the effective
date of the termination.
(c) The Corporation, at its sole option, may terminate the
Executive's employment at any time for Cause by delivering a written
notice to the Executive on or prior to the effective date of the
termination.
(d) The Executive, at his sole option, may terminate his
employment for Good Reason by providing written notice to the Corporation
at least 30 days prior to the effective date of the termination of
employment specified in the notice.
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(e) The Executive, at his sole option, may terminate his
employment absent Good Reason by providing written notice to the
Corporation at least 30 days prior to the effective date of the
termination of employment specified in the notice.
Any notice of termination of employment given by a party must
specify the particular termination provision of this Agreement relied upon by
the party and must set forth in reasonable detail the facts and circumstances
that provide a basis for the termination.
8. Benefits upon Termination. The Corporation will provide the
following benefits upon the termination of the Executive's employment with the
Corporation.
(a) Upon Termination by the Corporation or by the Executive
with Good Reason. Upon the Executive's termination of his employment for
Good Reason or the Corporation's termination of the Executive's employment
for any reason other than Cause, the Corporation will provide the
following:
(i) Salary and Fringe Benefits. The Executive will
receive his salary and health, medical and life insurance
benefits, if any, in effect on the date of either the
Corporation's or the Executive's receipt of a notice of
termination from the other party for the Remaining Unexpired
Term. If the Executive dies, the balance of the salary
payments will be made to his spouse, if surviving, or if not,
to the Executive's estate in addition to any other benefits
payable under this Agreement on the Executive's death. Bonus.
The Executive will receive a cash bonus for each fiscal year
in the Remaining Unexpired Term following Executive's
termination of employment. If the Executive's employment is
terminated prior to January 17, 2006, the bonus under this
subsection for the first fiscal year will be 35% of
Executive's annual rate of Base Salary for the fiscal year,
paid at the time and in the form as other executives receive
their bonus payments for that fiscal year, and thereafter, a
pro-rated monthly bonus paid each month during the Remaining
Unexpired Term equal to 1/12th of the bonus paid for the first
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fiscal year. If the Executive's employment is terminated after
January 17, 2006, the Executive will be paid a monthly bonus
for each month in the Remaining Unexpired Term equal to the
following: Executive's average annual bonus paid by the
Corporation prior to Executive's termination of employment
multiplied by the number of fiscal years in the Remaining
Unexpired Term and divided by the number of months in the
Remaining Unexpired Term. For these purposes, Executive's
annual average bonus will be equal to the average of any
bonuses paid to Executive prior to termination of employment.
(ii) Accrued Vacation. The Executive will receive
payment for accrued but unused vacation, which payment will be
equitably prorated based on the period of active employment
for that portion of the fiscal year in which the Executive's
termination of employment becomes effective. Payment for
accrued but unused vacation will be payable in one lump sum on
the effective date of the termination of employment.
(iii) Medical Benefits. For purposes of the Executive's
rights to continuation of health and medical benefits under
applicable law, state or federal ("COBRA"), if the Executive
is a participant in a plan of health and medical benefits on
the date of the qualifying event, the "qualifying event" will
be deemed to have occurred at the end of the period during
which health and medical benefits are provided under Section
8(a), unless the Corporation's agreements with third party
insurers or providers does not permit this extended beginning
date of an employee's COBRA rights.
(b) Upon Termination by the Executive Absent Good Reason or by
the Corporation for Cause. Upon the Executive's termination of his
employment absent Good Reason or by the Corporation for Cause, the
Corporation will provide only the following:
(i) Salary and Benefits. The Executive will receive his
salary and fringe benefits, but not bonus, through his
termination date.
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(ii) Accrued Vacation. The Executive will receive
payment for accrued but unused vacation, which payment will be
equitably prorated based on the period of active employment
for that portion of the fiscal year in which the Executive's
termination of employment becomes effective. Payment for
accrued but unused vacation will be payable in one lump sum on
the effective date of the termination of employment.
(iii) Medical Benefits. The Executive will be entitled
to continuation of health and medical benefits under
applicable law, state or federal ("COBRA"), at Executive's
expense, commencing on the first day of the month following
the month of Executive's termination of employment for the
applicable period under such laws.
(c) Upon Termination for Disability. Upon termination of the
Executive's employment because of Disability, the Corporation will provide
the following:
(i) Salary. The Executive will be entitled to the salary
that he would have earned for the Remaining Unexpired Term of
the Agreement, reduced by any disability insurance payment to
the Executive during such period on policies of insurance
maintained and paid for by the Corporation and by any
continuing salary payments paid under any other provision of
the Agreement.
(ii) Bonus. The Executive will receive a pro-rata bonus
for the fiscal year in which his Disability begins, based on
his period of active employment in that fiscal year. Payment
will be made at the time and in the form as other executives
receive their bonus payments for that fiscal year.
(iii) Fringe Benefits. The Executive will receive the
fringe benefits, if any, provided by the Corporation under its
executive disability policy in effect on the date his
Disability begins.
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(iv) Accrued Vacation. The Executive will receive
payment for accrued but unused vacation, which payment will be
equitably prorated based on the period of active employment
for that portion of the fiscal year in which the Executive's
Disability begins. Payment for accrued but unused vacation
will be payable in one lump sum on the date the Disability
begins (or as soon after that as practicable).
(d) Upon Termination for Death. Upon termination of the
Executive's employment because of death, the Corporation will provide the
following:
(i) Salary. The Executive's spouse, if surviving, or if
not, the Executive's estate, will receive the Executive's base
salary in effect on the date immediately before his death for
the Remaining Unexpired Term of the Agreement, reduced
proportionately, if applicable, by any death benefits paid to
Executive's spouse or estate under any life insurance policy
(other than group term life insurance) paid or provided by the
Corporation.
(ii) Bonus. The Executive's spouse, if surviving, or if
not, the Executive's estate, will receive a pro-rata bonus for
the fiscal year in which he dies, based on the Executive's
period of active employment for that fiscal year. Payment will
be made at the time and in the form as other executives
receive their bonus payments for that fiscal year.
(iii) Accrued Vacation. The Executive's spouse, if
surviving, or if not, the Executive's estate, will receive
payment for accrued but unused vacation, which payment will be
equitably prorated based on the period of active employment
for that portion of the fiscal year in which the Executive
dies. Payment for accrued but unused vacation will be payable
in one lump sum on the date of the Executive's death (or as
soon thereafter as practicable).
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(iv) Medical and Dental Benefits. For the Remaining
Unexpired Term of the Agreement, the Corporation shall
continue medical and dental benefits to the Executive's family
at least equal to those which would have been provided to them
in accordance with the Corporation's medical and dental plans
if the Executive had not died. For purposes of the rights of
the Executive's family to continuation of these benefits under
applicable law, state or federal ("COBRA"), the "qualifying
event" will be deemed to have occurred at the end of the
three-month period described above, unless the Corporation's
agreements with third party insurers or providers do not
permit this extended beginning date of COBRA rights.
(e) Upon Termination Following a Change in Control. The terms
of this Section 8(e) apply in the event of a Change in Control of the Bank
or the Corporation prior to December 31, 2007. Upon the Executive's
termination of employment by the Corporation without Cause or the
Executive's termination of employment for Good Reason, in either case in
connection with or within 12 months following a Change in Control, all
payments due the Executive under subsection (a) will be paid, without
reduction, in a lump sum within 30 days following that termination of
employment.
(f) Reduction in Fringe Benefits. Fringe benefits under this
Section will be reduced to the extent practicable for any similar fringe
benefits provided by and available to the Executive from any subsequent
employer but will not be limited by the terms of any fringe benefit of a
subsequent employer.
9. Effect of Regulatory Actions. Any actions by the
Corporation under this Agreement must comply with the law, including regulations
and other interpretive action, of the Federal Deposit Insurance Act, Federal
Deposit Insurance Corporation and Office of Thrift Supervision, or other
entities that supervise any of the activities of the Corporation ("regulatory
entities"). Specifically:
(a) Temporary Suspension or Prohibition. If the Executive is
suspended or temporarily prohibited from participating in the conduct of
the First Niagara Bank's (the "Bank") affairs by a notice served under
Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act ("FDIA"),
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12 U.S.C. ss. 1818(e)(3) and (g)(1), the Bank's obligations under this
Agreement will be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the
Bank, in its discretion, may (i) pay the Executive all or part of the
compensation withheld while its obligations under this Agreement were
suspended and (ii) reinstate in whole or in part any of its obligations
that were suspended.
(b) Permanent Suspension or Prohibition. If the Executive is
removed or permanently prohibited from participating in the conduct of the
Bank's affairs by an order issued under Section 8(e)(4) or (g)(1) of the
FDIA, 12 U.S.C. ss. 1818(e)(4) and (g)(1), all obligations of the Bank
under this Agreement will terminate as of the effective date of the order,
but vested rights of the contracting parties will not be affected.
(c) Default of the Bank. If the Bank is in default (as defined
in Section 3(x)(1) of the FDIA), all obligations under this Agreement will
terminate as of the date of default, but vested rights of the contracting
parties will not be affected.
(d) Termination by Regulators. All obligations under this
Agreement will be terminated, except to the extent determined that
continuation of this Agreement is necessary for the continued operation of
the Bank: (1) by the Federal Deposit Insurance Corporation (the "FDIC") at
the time the FDIC enters into an agreement to provide assistance to or on
behalf of the Bank under the authority contained in Section 13(c) of the
FDIA; or (2) when the Bank is determined by the FDIC to be in an unsafe or
unsound condition. However, vested rights of the contracting parties will
not be affected.
10. Non-exclusivity of Rights. Except as otherwise
specifically provided, nothing in this Agreement will prevent or limit the
Executive's continued or future participation in any benefit, incentive, or
other plan, practice, or program provided by the Corporation and for which the
Executive may qualify. Any amount of vested benefit or any amount to which the
Executive is otherwise entitled under any plan, practice, or program of the
Corporation will be payable in accordance with the plan, practice, or program,
except as specifically modified by this Agreement.
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11. No Obligation to Seek Other Employment. The Executive will
not be obligated to seek other employment or to take other action to mitigate
any amount payable to him under this Agreement.
12. Confidential Information.
(a) The Executive will hold in a fiduciary capacity for the
benefit of the Corporation all secret or confidential information,
knowledge or data relating to the Corporation and its respective
businesses, that was obtained by the Executive during the Executive's
employment by the Corporation ("Confidential Information") and that will
not be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After
termination of the Executive's employment with the Corporation, the
Executive, without prior written consent of the Corporation, will not
communicate or divulge any such information, knowledge or data to anyone
other than the Corporation and those designated by it. In addition, to the
extent the Executive is a party to any other agreement relating to
non-competition, confidential information, inventions or similar matters
with the Corporation, the Executive will continue to comply with the
provisions of those agreements.
(b) The Executive's obligations under subsection (a) will not
apply with respect to Confidential Information that (a) was in the public
domain at or subsequent to the time it was communicated to the Executive
by the Corporation through no fault of the Executive; (b) was rightfully
in the Executive's possession free of any obligation of confidence at or
subsequent to the time it was communicated to the Executive by the
Corporation, (c) was developed by employees or agents of the Executive's
independently of and without use of any Confidential Information of the
Corporation; or (d) was communicated by the Executive to an unaffiliated
third party free of any obligation of confidence. A disclosure of
Confidential Information (a) in response to a valid order by a court or
other governmental body, (b) otherwise required by law, or (c) necessary
to establish the rights of either party under this Agreement will not be
considered to be a breach of this Agreement or a waiver of confidentiality
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for other purposes; but the Executive must provide prompt written notice
of the disclosure to enable the Corporation to seek a protective order or
otherwise prevent that disclosure.
(c) The Executive agrees that, except as required by his
duties with the Corporation or as authorized by the Corporation in
writing, the Executive will not use or disclose to anyone at any time,
regardless of whether before or after the Executive ceases to be employed
by the Corporation, any of the Confidential Information obtained by him in
the course of his employment with the Corporation.
13. Non-Competition.
(a) In consideration of the compensation and other benefits to
be paid to the Executive during the term of and in connection with this
Agreement, the Executive agrees that, beginning on the date of this
Agreement and continuing until the Covenant Expiration Date (defined
below), he will not directly or indirectly, for his own account or as
agent, employee, officer, director, trustee, consultant, partner,
stockholder, member of any firm or equity owner of any corporation or any
other entity, (i) own or participate in any such entity that, in the
Restricted Territory, is in the business conducted by the Corporation or
any other business activity that is directly or indirectly competitive
with the business conducted by the Corporation or any Affiliate at the
Reference Date (except that he may own directly or indirectly interests
constituting less than 5% of any class of interests of any entity that is
in such competition with the Corporation or any Affiliate), (ii) otherwise
engage or attempt to engage, in the Restricted Territory, in the business
conducted by the Corporation or any other business activity that is
directly or indirectly competitive with the business conducted by any
Affiliate at the Reference Date, (iii) employ or solicit the employment of
any person who is employed by the Corporation or any Affiliate at the
Reference Date or at any time during the 6 month period preceding the
Reference Date, except that the Executive may employ or solicit the
employment of any person whose employment with the Corporation, or any
Affiliate has terminated for any reason (without any interference from the
Executive) and who has not been employed by the Corporation or any
Affiliate for at least 6 months, (iv) canvass or solicit business in
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competition with any business conducted by the Corporation or any
Affiliate at the Reference Date from any person or entity who during the 6
month period preceding the Reference Date has been a customer of the
Corporation or any Affiliate, or (v) willfully dissuade or discourage any
person or entity from using, employing or conducting business with the
Corporation or any Affiliate. However, in the case of the Executive's
termination of employment by the Corporation without Cause or by the
Executive for Good Reason, (i) and (ii) will not apply after the
Termination Date; and in the case of the Executive's termination of
employment by the Corporation with Cause, the Board, in its deliberations
at the meeting required to be called under Section 1(c), will determine
whether or not (i) and (ii) will apply, taking into account the
circumstances of the Cause.
(b) Reasonableness of Limitations. The Executive acknowledges,
warrants, represents and agrees that the restrictive covenants contained
in this Section are necessary for the protection of the Corporation's
legitimate business interests and are reasonable in scope and content. The
Executive acknowledges that the territorial, time and other limitations of
this Agreement are reasonable and properly required for the adequate
protection of the business and affairs of the Corporation, and, if any
such territorial, time or other limitations is found to be unreasonable by
a court of competent jurisdiction, the Executive agrees (i) to the
reduction of any of that territorial, time or other limitation, or all of
them, to an area, period or other wise as that court may determine to be
reasonable and (ii) that all of the other provisions of this Agreement
will remain valid, binding and in full force and effect.
(c) Definitions.
(i) "Covenant Expiration Date" means December 31, 2009,
or in the event Executive's employment is terminated prior to
December 31, 2007 by Executive absent Good Reason or by the
Corporation or the Bank for Cause, two (2) years following
such termination date.
(ii) "Reference Date" means (A) for purposes of applying
the covenants in subsection (a) at any time prior to the
Termination Date, the then current date, or (B) for purposes
of applying the covenants in subsection (a) at any time on or
after the Termination Date, the Termination Date.
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(iii) "Restricted Territory" means anywhere the
Corporation or any Affiliate conducts, or has immediate plans
of which the Executive is aware at the Reference Date to
conduct, any business activity at the Reference Date.
(iv) "Termination Date" means the date of termination of
the Executive's employment with the Corporation. The
Executive's employment will not be deemed to have terminated
so long as the Executive continues to be employed or engaged
as an employee or consultant of the Corporation or any
Affiliate, even if that employment or engagement continues
after the expiration of the term of this Agreement, whether
pursuant to this Agreement or otherwise.
(d) Provided the Executive remains in the continuous service
with the Corporation through December 31, 2007, except if terminated
earlier by the Executive for "Good Reason" or by the Corporation or the
Bank without Cause, and the Executive thereafter complies with the
covenants set forth in this Section 13 throughout the term of this
Agreement and until the Covenant Expiration Date, then in addition to any
salary, benefits or other perquisites the Executive may be entitled to
receive hereunder, the Corporation hereby agrees to pay the Executive as
additional consideration for such covenants, a payment of One Hundred
Fifty Thousand and 00/100 Dollars ($150,000) per year on December 31, 2008
and December 31, 2009. In the event that the Executive's employment is
terminated by the Executive prior to December 31, 2007 absent Good Reason
or by the Corporation or the Bank for Cause, and the Executive continues
to comply with the covenants set forth in this Section 13 for a two (2)
year period following termination of employment, then, the Corporation
hereby agrees to pay the Executive as additional consideration for such
covenants, a payment of One Hundred Fifty Thousand and 00/100 Dollars
($150,000) per year on the first and second annual anniversary of the
Executive's termination of employment
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14. Breach, Remedies and Jurisdiction.
(a) Other Agreements. In addition to the obligations under
Sections 12 and 13, the Executive will execute any documents relating to
confidentiality, non-solicitation and non-competition as required
generally by the Corporation of its executive officers. Nothing in this
Agreement will be construed as modifying any provisions of those
agreements or documents. In the case of any inconsistency between those
agreements and documents and this Agreement, the broader provision will
prevail. In no event will an asserted violation of the provisions of this
Section constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement, except if the
Executive materially breaches Section 12 or 13 or a covenant not to
compete or confidentiality provision in any such agreement or document,
that breach will be considered a material breach of this Agreement.
(b) Remedies. The Executive agrees that, because irreparable
damage could result from his breach of the covenants in Sections 12 and
13, in addition to all other remedies available to the Corporation, the
Corporation will have the remedies of a restraining order, injunction or
other equitable relief to enforce the provisions these Sections. The
Executive consents to jurisdiction in Niagara or Erie County, New York on
the date of the commencement of any action for purposes of any claims
under these Sections. In addition, the Executive agrees that the issues in
any action brought under either these Sections will be limited to claims
under that Section, and all other claims or counterclaims under other
provisions of this Agreement will be excluded.
15. Indemnification. The Corporation will provide the
Executive (including his heirs, executors and administrators) with coverage
under a standard directors' and officers' liability insurance policy at its
expense, and will indemnify the Executive (and his heirs, executors and
administrators) to the fullest extent permitted under, and subject to the terms
and conditions under, Delaware law against all expenses and liabilities
reasonably incurred by him in connection with or arising out of any action, suit
or proceeding in which he may be involved by reason of his having been a
director or officer of the Corporation (whether or not he continues to be a
director or officer at the time of incurring those expenses or liabilities).
Those expenses and liabilities include, but are not limited to, judgments, court
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costs and attorneys' fees and the cost of reasonable settlements (these
settlements must be approved by the Board). If such an action, suit or
proceeding is brought against the Executive in his capacity as an officer or
director of the Corporation, however, that indemnification will not extend to
matters as to which the Executive is finally adjudged to be liable for gross
negligence or willful misconduct in the performance of his duties.
16. Successors. This Agreement is personal to the Executive
and may not be assigned by the Executive other than by will or the laws of
descent and distribution. This Agreement will inure to the benefit of and be
enforceable by the Executive's legal representatives or successors in interest.
The Executive may designate a successor or successors in interest to receive any
amounts due under this Agreement after the Executive's death. A designation of a
successor in interest must be made in writing, signed by the Executive, and
delivered to the Employer pursuant the Notice provisions of this Agreement.
Except as otherwise provided in this Agreement, if the Executive has not
designated a successor in interest, payment of benefits under this Agreement
will be made to the Executive's estate. This Section will not supersede any
designation of beneficiary or successor in interest made by the Executive or
provided for under any other plan, practice, or program of the Employer.
This Agreement will inure to the benefit of and be binding upon the
Corporation and its successors and assigns.
The Corporation will require any successor (whether direct or
indirect, by acquisition of assets, merger, consolidation or otherwise) to all
or substantially all of the operations or assets of the Corporation or any
successor and without regard to the form of transaction used to acquire the
operations or assets of the Corporation, to assume and agree to perform this
Agreement in the same manner and to the same extent that the Corporation would
be required to perform it if no succession had taken place. "Corporation" means
the Corporation and any successor to its operations or assets as set forth in
this Section that is required by this clause to assume and agree to perform this
Agreement or that otherwise assumes and agrees to perform this Agreement.
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17. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or a breach of it, must be settled by final and
binding arbitration administered by the American Arbitration Association under
its National Rules for the Resolution of Employment Disputes, and judgment upon
the award rendered by the arbitrators may be entered by any court having
jurisdiction over it. The arbitration must take place in Buffalo, New York. The
arbitration must be conducted before 3 arbitrators.
18. Allocation of Payments, Etc., Between Corporation and
Bank. All payments, accruals and other benefits under this Agreement will be
allocated annually between the Corporation and the Bank. The Corporation and
Bank Management will recommend allocations supported by data they provide and
the Board will approve the allocations. This allocation will be based on data
supplied by, and recommendations made by, the Corporation and Bank management.
The allocation will make certain no amounts are paid or owed by the Bank that
are attributable to services performed by the Executive for the Corporation. The
Corporation nonetheless will remain jointly liable for all payments, accruals
and benefits under this Agreement. The Executive will not be entitled to any
additional compensation for service as a director or committee member of the
Corporation, the Bank or any other affiliated entity.
19. Benefit Claims. If the Executive, or his beneficiaries, as
the case may be, and the Corporation disagree as to their respective rights and
obligations under this Agreement, and the Executive or his beneficiaries are
successful in establishing, privately or otherwise, that his or their position
is substantially correct, or that the Corporation's position is substantially
wrong or unreasonable, the Corporation will pay all costs and expenses,
including counsel fees, the Executive or his beneficiaries may incur in
connection with the disagreement directly to the provider of the services or as
otherwise may be directed by the Executive or his beneficiaries. Except as
otherwise specifically provided in this Agreement, the Corporation will not
delay or reduce the amount of any payment provided for under this Agreement or
setoff or counterclaim against any such amount for any reason whatsoever,
because it is the intention of the Corporation and the Executive that, except as
otherwise specifically provided in this Agreement, the amounts payable to the
Executive or his beneficiaries under this Agreement will continue to be paid in
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all events in the manner and at the times provided in this Agreement. Except as
otherwise specifically provided in this Agreement, all payments made by the
Corporation under this Agreement will be final and the Corporation will not seek
to recover all or any part of any portion of any payments under this Agreement
for any reason.
20. Failure, Delay or Waiver. No course of action or failure
to act by the Corporation or the Executive will constitute a waiver by the party
of any right or remedy under this Agreement, and no waiver by either party of
any right or remedy under this Agreement will be effective unless made in
writing.
21. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such a manner as to be enforceable under
applicable law. However, if any provision of this Agreement is deemed
unenforceable under applicable law by a court having jurisdiction, the provision
will be unenforceable only to the extent necessary to make it enforceable
without invalidating the remainder of it or any of the remaining provisions of
this Agreement.
22. Notice. All written communications to parties required
hereunder must be in writing and (a) delivered in person, (b) mailed by
registered or certified mail, return receipt requested, (such mailed notice to
be effective 4 days after the date it is mailed) or (c) sent by facsimile
transmission, with confirmation sent by way of one of the above methods, to the
party at the address given below for the party (or to any other address as the
party designates in a writing complying with this Section, delivered to the
other party):
If to the Corporation:
First Niagara Financial Group, Inc.
0000 Xxxxx Xxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxx, Xxx Xxxx 00000-0000
Attention: President & CEO
Telephone: 000-000-0000
Telecopier: 000-000-0000
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with a copy to:
Xxxxxxx Xxxx LLP
Xxx X&X Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxxxx, Esq.
Telephone: 000-000-0000
Telecopier: 000-000-0000
If to the Executive:
Xxxx X. Xxxxxx
Telephone: __________
Telecopier: __________ (office)
with a copy to:
_________________________________
_________________________________
_________________________________
Attention: _____________________
Telephone: ( ) ___-____
Telecopier: ( ) ___-____
23. Miscellaneous. This Agreement (a) may not be amended,
modified or terminated orally or by any course of conduct pursued by the
Corporation or the Executive, but may be amended, modified or terminated only by
a written agreement duly executed by the Corporation and the Executive, (b) is
binding upon and inures to the benefit of the Corporation and the Executive and
each of their respective heirs, representatives, successors and assignees,
except that the Executive may not assign any of his rights or obligations
pursuant to this Agreement, (c) constitutes the entire agreement between the
Corporation and the Executive with respect to the subject matter of this
Agreement, and supersedes all oral and written proposals, representations,
understandings and agreements previously made or existing with respect to such
subject matter, and (d) will be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of law.
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24. Termination of this Agreement. This Agreement will
terminate when the Corporation has made the last payment provided for under it.
However, the obligations set forth under Section 12 and 13 will survive any
termination and will remain in full force and effect. Without the written
consent of the Executive, the Corporation has no right to terminate this
Agreement prior to the date of the last payment.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
CORPORATION: By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President & CEO
EXECUTIVE: /s/ Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Xxxxxx
