Exhibit 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is entered
into as of July 19, 2001, between Oswego County Savings Bank, a New York
chartered stock savings bank (the "Bank"), organized and existing under the laws
of the State of New York with a principal place of business at 00 Xxxx Xxxxxx
Xxxxxx, Xxxxxx, Xxx Xxxx 00000 and Xxxxxxx X. Xxxxx, an individual residing at
000 Xxxxxx Xxxxx 00, Xxxxxx, Xxx Xxxx 00000 (the "Executive").
WHEREAS, the Executive is one of the officers of the Bank, which
has been organized for the purpose of providing individuals and businesses in
Central New York with personal, professional and innovative financial services
delivered by an organization of undisputed integrity in a manner able to fulfill
their expectations of the Bank. Further, the Bank's goal is to maximize the
Bank's equity by helping customers attain their financial goals and potential
with a pledge of sound management of entrusted resources for the benefit of
depositors, shareholders, customers, communities and staff; and,
WHEREAS, the Bank desires to employ the Executive, and the
Executive desires to be employed by the Bank, as President and Chief Executive
Officer ("CEO") upon the terms and conditions set forth, below:
NOW, THEREFORE, the parties hereto agree as follows:
1. EMPLOYMENT, POSITION, DUTIES, AND TERM.
1.1 Employment and Position. The Bank hereby employs the
Executive, and the Executive accepts employment, as the Bank's President and CEO
or such other executive officer's position as may from time to time be entrusted
to the Executive by the Board of Directors.
1.2 Duties and Responsibilities. As President and CEO of the
Bank, the Executive shall manage and direct the business and affairs of the
Bank, and shall perform all such duties as are generally associated with the
position of President and CEO, or as may be specifically entrusted to the
Executive, from time to time by the Board of Directors. The Executive agrees
that, during the term of this Agreement, he will serve the Bank faithfully,
exclusively and to the best of this ability and will to the best of his ability,
promote the Bank's business and affairs. The parties recognize and agree that
the Executive shall also serve as President and CEO of Oswego County Bancorp,
Inc., a New York bank holding company which is the owner of 100% of the
outstanding common shares of the Bank (hereinafter referred to as the "Parent").
1.3 Term of Employment. Subject to the provisions of Section 3
of this Agreement, the term of the Executive's employment hereunder small
continue for three years (the "Term"), commencing as of the date first above
written (the "Commencement Date"), and, commencing with the expiration of the
Term shall be renewed automatically for additional periods of one year each
(each one year renewal period a "Renewal Term"); unless terminated by notice
given by either party to the other not less than three months prior to the end
of the Term or any Renewal Term, or unless terminated pursuant to Section 3 of
this Agreement.
2. COMPENSATION.
2.1 Base Salary. Beginning with the Commencement Date, for each
year or partial year this Agreement is in effect, the Bank agrees to pay the
Executive a minimum base salary, before the customary and proper payroll
deductions, at the rate of One Hundred Seventy Five Thousand Dollars ($175,000)
per annum or such higher amount as the Board of Directors of the Bank may in its
discretion determine from time to time during the Term of any Renewal Term (the
"Base Salary"). The Board shall review the Executive's Base Salary at such times
as it deems appropriate, but not less frequently than once during each twelve
month period during the Term and any Renewal Term commencing with the
Commencement Date. The Base Salary shall be payable on the same payroll schedule
as that of other exempt employees of the Back, but not less frequently than
monthly. Where necessary to conform to the Bank payroll schedule at the
commencement or termination of this Agreement, the Base Salary shall be computed
on a per diem basis.
2.2 Bonuses. The Executive shall be paid, in addition to the
Base Salary described in Section 2.1, such bonuses as may be approved by the
Bank's Board of Directors in their absolute discretion.
2.3 Standard Benefits. While this Agreement is in effect, the
Executive shall be entitled to participate in any benefit programs instituted,
maintained, or provided by the Bank for its employees and executive officers,
including, without limitation, life insurance plans, medical and health plans,
pension and retirement plans, the Executive Supplemental Retirement Income Plan,
disability plans, and similar plan or plans, all on the same terms as such
benefits are now and hereafter available to the Bank's employees and executive
officers. The Executive shall be afforded reasonable paid vacation time, but, in
any event, not less than 25 work days per annum.
2.4 Reimbursement of Expenses. The Executive shall be entitled
to reimbursement by the Bank for reasonable expenses incurred by the Executive
in the performance of his duties under this Agreement. The Executive shall
submit reimbursement claims, with appropriate supporting documentation, to the
Bank within 30 days of the date an expense is incurred.
3. TERMINATION.
3.1 Termination by the Bank. The Bank may terminate the
Executive's employment under this Agreement only as provided in this Section
3.1.
(a) For Cause. The Bank may terminate the Executive's
employment for Cause, as defined in this subsection 3.1(a) "Cause" shall mean
(1) the failure of Executive to perform his duties hereunder due to his willful
or intentional act, or (2) the refusal of the Executive to follow the reasonable
directives of the Bank's Board of Directors, or (3) the Executive's conviction
of or guilty plea to a felony, or (4) the Executive's conviction of or guilty
plea to a misdemeanor which could reasonably be considered to compromise the
best interests of the Bank or render the Executive unfit or unable to perform
his duties, or (5) the Executive's commission of any unambiguous act of
dishonesty or disloyalty toward the Bank Termination
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under this subsection 3.1(a) shall be effective on the date selected by the
Board of Directors unless a majority of the Board, by that day, concludes that
the breach has been satisfactorily resolved; provided, however, that such
Termination shall, not be effective unless and until the Bank delivers to the
Executive written notice of his termination setting forth therein the following:
(1) the item or items of Cause which constitute the basis for the termination
and a description of each; (2) confirmation that the Bank's Board of Directors
by majority vote (excluding the Executive's vote, the Executive not being
entitled to vote on his own termination) has determined in its good faith
judgment that Cause exists for such termination; and (3) the effective date of
termination.
(b) Disability. The Bank may terminate the Executive's
employment hereunder if the Executive is unable, as the result of any physical
or mental disability, to render service to the Bank effectively and on a full
time basis, in the manner required by this Agreement for 150 days (the
"Disability Period") in any period of 365 consecutive days. Upon expiration of
the Disability Period, termination shall thereafter become effective on the 30th
day following delivery of written notice of termination by the Bank to the
Executive, unless the Executive is no longer disabled, as confirmed to the Bank
by written opinion of Executive's physician who has been treating the Executive
for the disabling illness. The Bank reserves the right to require the Executive
to obtain, at Bank's expense, a second opinion regarding the absence of such
liability from a physician selected by Executive who specializes in the field of
the disabling illness within 30 days after request by Bank, Executive fails to
provide such second opinion confirming that Executive is no longer disabled, the
termination shall become effective upon expiration of said 30 day period.
3.2 Death. The Executive's employment under this Agreement
shall terminate upon the Executive's death, effective on the date of death
3.3 Termination by the Executive. The Executive may terminate
the Executive's employment under this Agreement only as provided in this Section
3.3.
(a) Election of the Executive. The Executive may
terminate this Agreement at any time after its Commencement Date, at his sole
discretion, upon written notice to the Bank, such termination to be effective on
the date stated in the notice which shall be at least 60 days after the notice
is received by the Bank. The Bank, in its discretion, may accelerate the
effective date of termination.
(b) Good Reason. The Executive may terminate his
employment for Good Reason following a Change in Control of the employer. "Good
Reason" shall mean any one of the following without Executive's express written
consent:
(i) Failure of Bank to elect or re-elect or to
appoint or re-appoint the Executive to the office of President and CEO of the
Bank or a material adverse change made by the Bank in the Executive's functions,
duties or responsibilities as President and CEO of the Bank:
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(ii) A material reduction by the Bank in the
Executive's Base Salary as the same may be increased from time to time or a
material reduction in the package of fringe benefits provided to the Executive,
taken as a whole;
(iii) The Bank requires the Executive to relocate his
principal office more than 50 miles from the location of the Bank's current
principal executive office, except for required travel on business of the
Employer;
(iv) Any purported termination of the Executive's
employment for Cause or Disability which is not effected pursuant to the
requirements of paragraph 3.1 above; or
(v) The failure by the Bank to obtain the
assumption of and agreement to perform this Agreement by any successor to Bank
as contemplated herein.
"Change in Control of the Bank" shall mean, a change in control
of the Bank of a nature that would be required to be reported in response to
items (6)e of Schedule 14A of Regulation 14A or Item 1 of Form 8-K promulgated
under the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any
successor thereto, whether or not the Bank is registered under the Exchange Act;
provided that, without limitation, such a change in control shall be deemed to
have occurred if (i) any "person" (as such term is used in Section 13(d) and
14(d) of the Exchange Act) other than Oswego County MHC ("MHC") is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act);
directly or indirectly, of securities of the Parent representing 25% or more of
the combined voting power of the Parent's then outstanding securities; or (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Bank cease for any reason
to constitute at least a majority thereof unless the election, or the nomination
for election by stockholders, of each new director was approved by a vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of the period; provided further, however, that no change in control of
the Bank shall be deemed to have occurred in the event that the Bank undergoes a
mutual to stock conversion.
4. COMPENSATION UPON TERMINATION.
4.1 Change of Control. In the event that the Executive's
employment is terminated by Executive for Good Reason subsequent to a Change in
Control of Bank or by Bank following a Change in Control of Bank, then the Bank
shall:
(a) Pay to the Executive, at the Executive's election,
either a lump sum cash payment equal to the sum of Executive's Base Salary plus
any bonus received in the immediately prior year multiplied by the number 2.99,
or three equal annual installment payments not to exceed the total amount of the
heretofore described lump sum payment option; and
(b) Maintain and provide for a period ending at the
earlier of: (1) Executive's 65th birthday or (2) the date of the Executive's
full-time employment by another employer, benefits substantially similar to
those described herein, at no cost to the Executive, the continued participation
of the Executive and his spouse in all life insurance, health, accident and
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disability plans, programs and arrangements in which the Executive and his
spouse were entitled to participate immediately prior to the date of
termination. If the Executive's or his spouse's participation in any plan,
program or arrangement as provided herein is barred or during such period any
such plan, program or arrangement is discontinued or the benefits thereunder are
materially reduced, the Employer shall arrange to provide the Executive and/or
his spouse with benefits substantially similar to those which the Executive
and/or his spouse were entitled to receive under such plans, programs and
arrangements immediately prior to the date of termination.
4.2 Without Cause or Disability. If Bank terminates Executive's
Employment without Cause (including without disability), Bank shall continue to
pay Executive's base salary and provide Executive fringe benefits for the
remainder of the Term or any then-effective Renewal Term provided in this
Agreement.
4.3 All Other Terminations. If termination of Executive's
employment under this Agreement occurs for any reason, other than those covered
in 4.1 or 4.2 above, including the expiration of this Agreement at the end of
the Term or any Renewal Term, Executive, or his estate, as the case may be,
shall be entitled to receive that portion of the Base Salary then owing the
Executive as of the effective date of the termination, adjusted for any
customary and proper payroll deductions, prorated on a per diem basis as
necessary.
5. NON-COMPETITION, INVENTIONS, AND CONFIDENTIALITY.
5.1 Non-Competition. In the event the Executive elects to
terminate his employment for any reason or Bank terminates his employment
Following a Change in Control of Bank or Bank terminates his employment without
Cause or without disability, Executive agrees that, for one year thereafter
within the geographic areas identified in Schedule A annexed to and made part of
this Agreement, Executive will not (a) engage in any direct, substantial
competition with the Bank; (b) contract or solicit, or attempt to contract or
solicit, any person, business or enterprise which has been contacted, orally or
in writing, by the Bank as a potential customer on or prior to the date of
termination of employment; or (c) hire, subcontract, employ or engage, or
contact or solicit, or attempt to contact or solicit, for the purpose of hiring,
contracting, employing or engaging, any person or entity who was an executive or
subcontractor of the Bank on or prior to the date of termination of his
employment. However, in the event that the Bank elects to terminate the
Executive for Cause or for disability, all Section 5.1 restrictions shall be
null and void. Except for the imitations set forth in this Agreement, this
Agreement does not and will not prevent Executive from working for any other
firm subsequent to termination of his Employment with the Bank as long as
Executive does not compete with the Bank, as herein set forth, or use or
disclose any Confidential Information, as more particularly set forth below.
Nothing contained in this Section 5.1 shall prohibit Executive from (a) serving
on the Board of Directors or other governing body of a civic or charitable
organization, or (b) owning or controlling shares of stock or other ownership
interest in another bank corporation or entity competitive with the Bank if: (1)
such stock or other ownership interest of such entity is in a public market
which is reported on the NASDAQ National Market System or in consolidated
trading on the New York Stock Exchange or in any other public market where
shares of stock or ownership are traded, and (2) Executive does not own or
control more than a five percent equity interest in such entity.
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5.2 Confidential Information. Executive acknowledges that he has
been and will be provided with information about, and his employment with the
Bank will directly involve, confidential affairs of the Bank, including
proprietary information regarding costs, profits, markets, sales, products,
pricing policies, operations methods, customer lists, plans for future
developments, and other information not readily available to the Bank's
competitors, all of which are highly confidential and proprietary ("Confidential
Information"). In recognition of the foregoing, Executive covenants and agrees:
(a) That he will keep secret all Confidential Information of
the Bank and not disclose any Confidential Information to anyone outside of the
Bank, either during or after his employment with the Bank, except with the
Bank's prior written consent or as required by law;
(b) That he will not make use of any Confidential
Information for his own purposes or the benefit of anyone other than the Bank;
(c) That he will deliver promptly to the Bank upon
termination of his employment with the Bank or at any time the Bank may so
request, all memoranda, notes, records, reports, manuals, and other documents,
and all paper and electronic copies thereof which he may then possess or have
under his control, regarding any Confidential Information; and
(d) That in the event that any Confidential Information
released by, or as a consequence of any actions taken or failed to be taken by
Executive, such release shall be deemed to be a material breach of the terms of
this Agreement unless Executive can show that the release was solely or
substantially due to the actions of another party or parties, or that the
Confidential Information has passed, at the time of release, into the public
domain.
5.3 Equitable Relief. If Executive commits a breach of any of the
provisions of Section 5.1 or 5.2 of this Agreement, the Bank shall have (a) the
right to have such provisions specifically enforced by any court having equity
jurisdiction, without the posting of a bond, it being acknowledged and agreed
that any such breach will cause irreparable injury to the Bank and that money
damages will not provide an adequate remedy to the Bank, and (b) in addition to
any other remedies available to the Bank at law or in equity, the right to
require Executive to account for and pay over to the Bank all compensation,
profits, monies, accruals, increments and other benefits (collectively,
"Benefits") derived or received by Executive as a result of any transaction
constituting a breach of any of the provisions of Section 5.1 or 5.2, and
Executive will account for and pay over such Benefits to the Bank.
5.4 Survival. The terms of Section 5.1 through 5.4 shall survive
termination of this Agreement.
5.5 Jurisdiction. Any suit, action or other legal proceeding
arising out of this Agreement may be brought in the courts of record of the
State of New York, or in the courts of the United States, Northern District of
New York and the Executive (a) consents to the jurisdiction of each such court,
(b) agrees to accept service of any and all process, and (c) waives any
objections which may be claimed to the laying of venue in any such court.
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6. MISCELLANEOUS PROVISIONS.
6.1 Assignment. This Agreement shall not be assignable, in whole or
in part, by either party without the written consent of the other, except that
the Bank may, without the consent of the Executive, assign its rights and
obligations under this Agreement to a corporation, firm, or other business
entity with which or into which the Bank mergers or consolidates or to which the
Bank sells or transfers all or substantially all of its assets; provided,
however, that after any such assignment by the Bank, the Bank shall remain
liable to Executive, together with any such assignee, and provided further that
any such assignee becomes a party to this Agreement.
6.2 Governing Law. This Agreement is made under and shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to the conflict of laws provisions thereof.
6.3 Prior Agreements. This Agreement contains the entire agreement
of the parties relating to the subject matter hereof and supersedes all prior
agreements and understandings with respect to such subject matter.
6.4 Successors. This Agreement shall extend to and be binding upon
Executive, his legal representatives, heirs, and distributees and upon the Bank
and its successors and assigns.
6.5 Amendments. No amendment or modification of this Agreement
shall be effective unless in writing and signed by the parties hereto.
6.6 Waiver. No term or condition of the Agreement shall be waived,
nor shall there be any estoppel to enforce any provisions of this Agreement,
except by a statement, in writing, signed by the party against whom enforcement
of the waiver or estoppel is sought. Any written waiver shall not be a
continuing waiver unless specifically stated, shall operate only as to the
specific term or condition waived, and shall not constitute a wavier of such
term or condition for the future or as to any act other than specifically
waived.
6.7 Severability. To the extent any provision of this Agreement
shall be invalid or unenforceable, it shall be considered modified to the extent
necessary to become valid and enforceable or, if such modification is
impracticable, deleted from this Agreement; and the remainder of such provision
and of this Agreement shall be unaffected and shall continue in fall force and
effect.
6.8 Headings. The section headings of this Agreement are solely for
the convenience of reference and shall not control the meaning or interpretation
of any provisions in this Agreement.
6.9 Notice. All notices required or permitted hereunder shall be in
writing and may be personally delivered; or mailed by registered or certified
mail, postage prepaid; or forwarded by any nationally recognized overnight
courier service; or transmitted by facsimile with a copy sent first class mail,
to such address as may be from time to time designated by the respective
parties. Notice shall be effective upon receipt.
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6.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which, when executed and delivered, shall be an original,
but such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement his been duly authorized and
approved by the Bank's Board of Directors, and executed and delivered by the
undersigned as of the date and year first written above.
/s/ Xxxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Oswego County Savings Bank
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Chairman
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SCHEDULE A
GEOGRAPHIC AREA
Including any banking institution, branch or outlet within 100 statute
miles of 00 Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000.
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