Exhibit 10(L)
Modified Trigger
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is made as of this 14th day of June, 1999, by and among
Iroquois Bancorp, Inc., a New York corporation ("Iroquois"), Cayuga Bank
("Member Bank") (Iroquois and Member Bank each an "Employer" and collectively,
"Employers") and Xxxxxx X. Xxxxxx a New York State resident (the "Executive").
WHEREAS, Executive's managerial experience is of great value to the
Employers; and
WHEREAS, the Employers and the Executive desire and agree to enter into
and/or continue the employment relationship by means of this Employment
Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually covenanted and
agreed by and among the parties as follows:
1. Employment and Duties.
(a) Iroquois and Member Bank each hereby employ the Executive as Senior Vice
President: Human Resources, Marketing and Planning, with all the powers
and duties customary to such position in similar corporations and banking
institutions, and the Executive hereby accepts such employment. The
Executive shall perform such other duties and have such other powers and
responsibilities as may be assigned to the Executive by the Employers and
which are commensurate with the Executive's position. The Executive shall
report directly to the president/chief executive officer of Iroquois or
such other executive officer as the president/chief executive officer may
designate or to the board of directors of the Employers, as appropriate.
(b) During the term of this Agreement, the Executive shall devote his or her
entire time and attention to the business and affairs of the Employers and
shall do all that is reasonably in his or her power to promote, develop,
and extend the business of Iroquois and its affiliates. The Executive
shall at all times during employment hereunder, conduct himself or herself
faithfully and diligently in a manner consistent with the position and
shall not knowingly perform any act contrary to the best interests of the
Employers or any affiliate thereof.
2. Term.
Unless sooner terminated as provided by Section 5 herein, the term of this
Agreement shall commence June 14, 1999 and end December 31, 1999. The term may
be renewed annually thereafter, each renewal term for a period of twelve (12)
months, by affirmative action of the boards of directors of the Employers upon
the same terms and conditions and at such compensation level determined
appropriate by the boards of directors at the time of renewal. Employers shall
notify the Executive of the Employers' intention not to renew this Agreement not
less than thirty (30) days prior to expiration of the initial term of this
Agreement or any renewal term.
3. Compensation.
(a) The annual base salary of the Executive during the initial term of this
Agreement shall be $115,000.00, subject to adjustment at the time of
renewal by the appropriate board of directors. The Executive will be
advised of any adjustment to base salary not later than forty-five (45)
days after the commencement of the renewal term. Any such adjustment in
base salary however, shall be made in the sole discretion of such board of
directors, and nothing herein contained shall be construed to provide the
Executive with any assurance that base salary will be increased upon
affirmative renewal of this Agreement. Base salary shall be prorated for
any year in which employment under this Agreement does not consist of a
full year of service.
(b) The Executive, if otherwise eligible under any particular program or plan,
shall participate in any bonus or incentive compensation plan, stock
purchase or stock option plan, profit sharing plan, retirement plan,
supplemental retirement plan or other plan or program designed for or
available generally to senior management of Iroquois and its affiliates.
4. Additional Benefits.
(a) The Executive shall be entitled to reimbursement of reasonable expenses
incurred in the performance of the duties required hereunder in furtherance
of the business of the Employers and affiliates of the Employers, upon
submission of appropriate invoices or vouchers documenting such expenses
and provided such expenditures were consistent with the Employers'
policies.
(b) The Executive shall be eligible for four (4) weeks of paid vacation in any
calendar year, to be taken at such time or times as the Executive shall
elect in accordance with Employers' policies then in effect. Unused
vacation may not be accrued or carried over from year to year.
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(c) The Executive shall be eligible to receive full salary during any period of
disability, subject to a limitation of eighteen (18) months of continued
salary and benefits with respect to any single disability. In the event
that the Executive is entitled to payments under any disability insurance
policy during such period of disability, the aggregate payments from such
disability insurance coverage and from the Employers for salary and
benefits shall not exceed an amount equal to the Executive's full salary
and benefits for such period.
(d) The Executive shall be eligible to participate in any Employer group
medical or hospitalization insurance plan and in any other fringe benefit
plan generally available to employees of the Employers. The Executive may
also be entitled to special fringe benefits, if applicable, as identified
on Schedule A attached hereto, which Schedule may be amended by the
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appropriate board of directors at the time of renewal or such other time as
such boards of directors deem appropriate under the circumstances. The
foregoing benefits and special benefits described in clauses (a) through
(d) of this Section 4 shall be known collectively as the "Welfare
Benefits".
5. Termination.
(a) Termination Events: the Executive's employment shall terminate during the
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term of this Agreement upon the occurrence of any of the following events:
(i) the Executive's death;
(ii) termination by the Employers of the Executive's employment for reasons
of Disability (as hereinafter defined) upon fifteen (15) days written
notice to the Executive;
(iii) termination by the Employers of the Executive's employment for Cause
(as hereinafter defined) upon written notice to the Executive;
(iv) termination by the Employers of the Executive's employment other than
for Cause (as hereinafter defined) upon thirty (30) days written
notice to the Executive; or
(v) resignation of the Executive.
(b) Termination Definitions: The following words and phrases shall have the
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meanings indicated below:
(i) Disability. "Disability" shall mean the Executive's incapacity or
inability to further perform services contemplated under this
Agreement for a period of at least eighteen (18) months because of an
impairment of his or her physical or
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mental health so as to make it impossible or impractical for the
Executive to perform the duties and responsibilities contemplated
hereunder.
(ii) Cause. "Cause" shall mean personal dishonesty, willful or negligent
misconduct, breach of fiduciary duty, intentional failure to perform
stated duties, willful violation of any law, rule, or regulation
(other than traffic violations or similar minor offenses) or court or
administrative order, or any removal or permanent prohibition of the
Executive from participating in the conduct or affairs of Iroquois or
a Member Bank by an order of any regulatory authority having
jurisdiction.
(iii) Date of Termination. "Date of Termination" shall mean:
- with respect to termination due to the death or resignation of the
Executive, the date of death or resignation;
- with respect to termination due to Disability, fifteen (15) days
following the giving of notice as referred to in Section 5(a)(ii)
above;
- with respect to termination by the Employers for Cause, the date
notice is given to the Executive, as referred to in Section
5(a)(iii) above;
- with respect to termination by the Employers other than for Cause,
thirty (30) days following the giving of notice as referred to in
Section 5(a)(iv) above.
(c) Employers' Obligations Upon Termination:
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(i) Death. If the Executive's employment is terminated by reason of the
Executive's death during the term of this Agreement, this Agreement
shall terminate without further obligation to any legal representative
of the Executive, other than for any obligations accrued prior to the
Executive's death, which shall be payable (in a lump sum) within
thirty (30) days of the Date of Termination. Notwithstanding such
termination, the Executive's legal representative shall be obligated
to return Employer's property pursuant to Section 7 herein.
(ii) Disability. If the Executive's employment is terminated by reason of
the Executive's Disability during the term of this Agreement, this
Agreement shall terminate (with the exception of Section 7 herein)
without further obligation to the Executive, other than for any
obligations accrued prior to the Executive's Date of Termination,
which shall be payable (in a lump sum) within thirty (30) days of the
Date of Termination.
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(iii) Cause. If the Executive's employment is terminated for Cause during
the term of this Agreement, this Agreement shall terminate (with the
exception of Section 7 herein) without further obligation to the
Executive other than for any obligations accrued prior to the
Executive's Date of Termination.
(iv) Termination by the Employers other than for Cause. If, during the
term of this Agreement, the Executive's employment shall be terminated
by Employers other than for Cause, or for reasons other than the
Executive's death, Disability or voluntary resignation, then the
Executive shall be entitled to the benefits provided below:
(A) The Employers shall pay to the Executive any accrued but unpaid
base salary through the Date of Termination.
(B) In lieu of any further base salary and annual incentive payments
for periods subsequent to the Date of Termination, the Employers
shall pay to the Executive, within thirty (30) days of the Date
of Termination, a cash payment in an amount equal to 100 percent
(hereinafter the "Severance Percentage") of the sum of (x) the
Executive's annual base salary for the year in which the
Executive is terminated and the two years immediately preceding
the year of termination, divided by three, and (y) the
Executive's target annual incentive (under the Iroquois Annual
Management Incentive Compensation Plan) for the year in which the
Executive is terminated and the annual incentive earned by the
Executive over the two years immediately preceding the year of
termination, divided by three. For purposes of this computation,
in the event Executive has been employed less than three years,
the annual base salary and annual incentive in the initial year
of Executive's employment (without regard to adjustment for a
partial year of employment) shall be deemed to be annual base
salary and annual incentive for any year prior to employment.
(C) The Employers shall continue to provide the Executive with
Welfare Benefits in the amounts and upon the terms and conditions
present immediately prior to the Date of Termination (and only to
the extent the benefit is permissible under such contract or
plan), for a Severance Period consisting of a number of months
calculated based on the Severance Percentage applicable to the
Executive where a Severance Percentage of 100% results in a
Severance Period of twelve (12) months (the "Severance Period");
provided, however, that such Welfare Benefits shall cease upon
the Executive's becoming eligible to receive substantially
similar Welfare Benefits from a new employer.
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(D) For the period of months set forth in Schedule B attached, the
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Employers shall reimburse all reasonable expenses (as determined
in the sole discretion of the appropriate board of directors)
incurred by the Executive for professional outplacement services;
provided, however, that such reimbursement shall not exceed that
percentage of the Executive's annual base salary set forth in
Schedule B and that such reimbursement shall be discontinued once
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the Executive attains employment in a position with duties,
responsibilities and level of compensation substantially similar
to his or her duties, responsibilities and level of compensation
with the Employers.
(v) Resignation. If the Executive's employment is terminated by reason of
the Executive's voluntary resignation during the term of this
Agreement, this Agreement shall terminate (with the exception of
Section 7 herein) without further obligation to the Executive, other
than for any obligations accrued prior to the Executive's resignation,
which shall be payable (in a lump sum) within thirty (30) days of the
Date of Termination.
(d) In the event the Executive's employment is terminated for any reason with
either Iroquois or Member Bank, employment shall be terminated
automatically with both Employers unless the non-terminating Employer shall
agree in writing to continue the terms of this Agreement solely between the
Executive and such non-terminating Employer.
(e) In the event this Agreement is not renewed at the discretion of the Board
and without cause pursuant to Section 2 above, the Executive shall be
entitled to:
(i) the compensation and benefits described in Sections 3 and 4 above, for
the remainder of the term of this Agreement; and
(ii) if the Executive is no longer employed by the Employers or any
affiliates of the Employers, those benefits described in Subsections
(A), (B), (C) and (D) of Section 5(c)(iv) above.
6. Suspension.
If the Executive is suspended or temporarily prohibited from participating in
the conduct or the affairs of Iroquois or Member Bank by action of any
regulatory authority having jurisdiction, the obligations of the Employers under
this Agreement shall be suspended as of the date of service of written notice of
such suspension by such regulatory agency, unless stayed by appropriate
proceedings. If the charges underlying such actions are dismissed, the
Executive shall be entitled to reinstatement and any compensation withheld while
the Employers' obligations under this Agreement were suspended.
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7. Confidential Information and Business Materials.
(a) During the term of this Agreement and for a period of two years following
the termination or non-renewal of this Agreement, the Executive agrees to
receive confidential and proprietary information of Employers and any
affiliates in confidence, and not to disclose such information to others
except as authorized by the relevant Employer or affiliate. Confidential
and proprietary information shall mean information not generally known to
the public that is disclosed to the Executive and is a consequence of
employment by either Employer, whether or not pursuant to this Agreement.
(b) The Executive further covenants and agrees that every document, computer
disc, computer software program, notation, record, diary, memorandum,
development, investigation, file, or the like, and any method or manner of
doing business of either Employer or any affiliate made or acquired by the
Executive during employment, is and shall be the sole and exclusive
property of such Employer or affiliate. The Executive will deliver the
same (and every copy, disc, abstract, summary or reproduction of same made
by or for the Executive or acquired by the Executive) whenever either
Employer may so require and in any event prior to or at the termination of
said employment.
(c) Employers and the Executive hereby acknowledge that the restrictions stated
herein above are reasonably necessary for the protection of Employers'
legitimate proprietary interests and Employers may enforce such provisions
through action for specific performance.
8. Change of Control.
(a) In the event the Executive's employment is terminated (x) by the Employers
for any reason other than for Cause, death or Disability, or (y) by the
Executive for Good Reason (as defined in Section 8(d) below), in either
event within twenty-four (24) months following a Change Of Control (as
defined in Section 8(b) below, or (z) by the Executive for any reason
during the thirty (30) day period beginning on the first anniversary of a
Change of Control, then:
(i) The Employers shall pay the Executive, within thirty (30) days after
the Date of Termination:
(A) any accrued but unpaid base salary earned through the Date of
Termination; and
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(B) a pro-rata incentive award in an amount equal to the product of
(x) the target incentive amount which the Executive could earn
for the year in which the Date of Termination occurs pursuant to
the Iroquois Annual Management Incentive Plan, and (y) a
fraction, the numerator of which is the number of days in the
fiscal year through the Date of Termination, and the denominator
of which is 365; and
(C) a lump-sum cash payment equal to 2.99 times the sum of: (x) the
Executive's base salary immediately preceding the Date of
Termination, or immediately preceding the Change of Control,
whichever is greater, and (y) the average annual incentive
received by the Executive during the three years immediately
preceding the Date of Termination (such cash payment being in
lieu of any further base salary and annual incentive payments the
Executive may have been entitled to pursuant to this Agreement).
(ii) The Employer shall continue all Welfare Benefits received by the
Executive for the Severance Period; provided, however, that such
Welfare Benefits shall cease upon the Executive becoming eligible to
receive substantially similar benefits from a new employer.
(iii) For the period of months set forth in Schedule B attached, the
Employers shall reimburse all reasonable expenses (as determined in
the sole discretion of the appropriate board of directors) incurred by
the Executive for professional outplacement services; provided,
however, that such reimbursement shall not exceed that percentage of
the Executive's annual base salary set forth in Schedule B and that
such reimbursement shall be discontinued once the Executive attains
employment in a position with duties, responsibilities and level of
compensation substantially similar to his or her duties,
responsibilities and level of compensation with the Employers.
(b) For the purposes of this Agreement, a "Change Of Control" shall mean: (i)
any "person," including a "group" as determined in accordance with the
Section 13(d) of the Securities Exchange Act of 1934 (the "Exchange Act"),
is or becomes the beneficial owner, directly or indirectly, of securities
of Iroquois representing 20% or more of the combined voting power of the
then outstanding securities of Iroquois; (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
Iroquois before the Transaction shall cease to constitute a majority of the
board of directors of Iroquois or any successor of Iroquois, (iii) Iroquois
is merged or consolidated with another corporation and as a result of the
merger or consolidation less than 80% of the outstanding voting securities
of the surviving or resulting corporation shall then be owned in the
aggregate by the former shareholders of
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Iroquois, other than (A) affiliates within the meaning of the Exchange Act,
or (B) any party to the merger or consolidation; (iv) a tender offer or
exchange offer is made and consummated for the ownership of securities of
Iroquois representing 20% or more of the combined voting power of Iroquois'
then outstanding voting securities; or (v) Iroquois transfers substantially
all of its assets to another corporation which is not controlled by
Iroquois.
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(c) Iroquois agrees that during the term of this Agreement, any options granted
to the Executive under the 1988 Stock Option Plan, as amended, or the 1996
Stock Option Plan, as amended, or any other similar plan subsequently
instituted by the Employers (collectively the "Plans"), shall provide that
the Executive may, upon a Change Of Control of Iroquois, and without regard
to any restrictions on exercise that may otherwise apply, within twelve
(12) months of the date the Executive receives written notice of such
Change Of Control, (i) surrender such option or options for a cash payment
equal to the difference between the aggregate option exercise price and the
aggregate fair market value of the shares of stock subject to the option,
as such fair market value is determined in accordance with the Plan, or
(ii) exercise such option or options, whether or not such options are
exercisable pursuant to the terms of the Plans.
(d) For purposes of this Section 8, "Good Reason" shall mean:
(i) assignment to the Executive of any duties inconsistent with his or her
status as an executive officer of Iroquois or a Member Bank, or a
substantial adverse alteration in the nature or status of the
Executive's responsibilities from those in effect immediately prior to
the Change Of Control;
(ii) reduction of the Executive's base salary as in effect immediately
preceding the Change of Control, or any reduction in the Executive's
normative incentive award percentage or any change in the method for
applying the normative incentive award percentage to determine the
Executive's incentive award, which would materially reduce such
incentive award;
(iii) failure by the Employers to continue to provide the Executive with
Welfare Benefits substantially similar to those received by the
Executive immediately preceding the Change of Control; or
(iv) the relocation of the Employers principal executive offices and the
principal offices occupied by the Executive more than a reasonable
distance from their current location.
In the event the Executive terminates employment for Good Reason, the Date
of Termination shall mean the date on which the Executive notifies the
Employers of such termination.
(e) Notwithstanding anything contained in this Agreement to the contrary, to
the extent that the payments and benefits provided under this Agreement or
provided for the benefit of the Executive under any other plan or agreement
of or with the Employers (each such payment of benefit, a "Payment," and
such payments and benefits collectively, the "Payments"), would be subject
to the excise tax imposed under Sections 4999 and 280G of the Internal
Revenue Code, or any interest or penalties with
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respect to such excise tax (such excise tax, together with any such
interest and penalties are hereinafter collectively referred to as the
"Excise Tax"), the Payments shall be reduced to the maximum amount which
may be paid so that no such Payment shall be subject to the Excise Tax. If
necessary, the Employers shall reduce or eliminate the Payments by first
reducing or eliminating the payments due under Section 8(a)(i)(B) above,
then by reducing or eliminating the amounts payable under Section
8(a)(i)(C), and then by reducing or eliminating benefits which are not
payable in cash, in each case, in reverse order beginning with payments or
benefits which are to be paid the farthest in time from the Date of the
Termination.
9. Compliance With Laws.
Any payments made to the Executive pursuant to this Agreement, or otherwise, by
Iroquois or a Member Bank, are subject to and conditioned upon compliance with
all federal and state laws and regulations as may be applicable at the time to
Iroquois, the Member Bank or any other affiliate for which the Executive has
been assigned direct duties or responsibilities, including without limitation,
Section 18(k) of the Federal Deposit Insurance Act.
10. Binding Effect; Benefits.
This Agreement shall inure to the benefit of, and shall be binding upon, the
parties hereto and their respective successors, assigns, heirs, and legal
representatives, except that insofar as the Executive is concerned, this
Agreement, being personal, cannot be assigned.
11. Notices.
All notices and other communications which are required or permitted hereunder
shall be in writing and shall be sufficient if delivered or mailed by registered
or certified mail, postage prepaid, to the following addresses or such other
address as any party hereto shall have specified by a notice in writing to the
other parties hereto:
If to the Executive: Xxxxxx X. Xxxxxx
Xxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
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If to Iroquois: Iroquois Bancorp, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attn: Chairman of the Board
If to Member Bank: Cayuga Bank
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attn: Chairman of the Board
All such notices and communications shall be deemed to have been received on the
date of delivery thereof or the fifth business day after the mailing thereof,
whichever is earlier. A copy of any notice to either Iroquois or to Member Bank
shall be sent promptly by the Executive to the other.
12. Entire Agreement.
This Agreement and the Incentive Agreement, a copy of which is attached hereto,
contain the entire agreement between the parties hereto and supersede all other
discussions and understandings, oral or written, between the parties hereto with
respect to the subject matter hereof, except that in the event there is any
conflict during the initial term of this Agreement between a letter dated March
23, 1999 from Iroquois to Executive and this Agreement, the letter shall
control.
13. Amendment and Waivers.
This Agreement may not be modified or amended except by an instrument or
instruments in writing signed by the party against whom enforcement or any such
modification or amendment is sought. The waiver by any party hereto of a breach
of any term or provision of this Agreement shall not be construed as a waiver of
any subsequent breach.
14. Section and Other Headings.
This section and other headings contained in this Agreement are for reference
purposes only and shall not be deemed to be a part of this Agreement or to
control or affect the meaning or construction of any provision of this
Agreement.
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15. Severability.
If any term or provision of this Agreement is held or deemed to be invalid or
unenforceable, in whole or in part, by a court of competent jurisdiction, this
Agreement shall be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforeceable the remaining terms
and provisions of this Agreement.
16. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York.
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IN WITNESS WHEREOF, the parties hereto have duly executed this agreement as
of the date first above written.
IROQUOIS BANCORP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxx
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Its: President & CEO Xxxxxx X. Xxxxxx
MEMBER BANK
By /s/ Xxxxxxx X. Xxxxxxxx
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Its: President & CEO
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SCHEDULE A TO EMPLOYMENT AGREEMENT
pursuant to Section 4(d)
During the initial term of this Agreement, benefits described in a letter dated
March 23, 1999 from Iroquois Bancorp, Inc. to Xxxxxx X. Xxxxxx.
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SCHEDULE B TO EMPLOYMENT AGREEMENT
pursuant to Section 5(c)(iv)(D)
12 months of outplacement services.
Reimbursement shall not exceed 12% of base salary.
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