EXHIBIT 10(E)
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is made as of this 1ST day of JANUARY, 1997, by and
between Iroquois Bancorp, Inc., a New York corporation ("Employer") and HENRY
O'REILLY, a New York State resident (the "Employee").
WHEREAS, the services of the Employee and the Employee's managerial
experience is of great value to the Employer; and
WHEREAS, the Employer and the Employee 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 hereby employs the Employee as DIRECTOR, INTERNAL AUDIT, with
all the powers and duties customary to such position in similar
corporations and banking institutions, and the Employee hereby accepts
such employment. The Employee shall perform such other duties and have
such other powers and responsibilities as may be assigned to the
Employee by the Employer and which are commensurate with the Employee's
position. The Employee 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 Employer, as appropriate.
(b) During the term of this Agreement, the Employee shall devote his or her
entire time and attention to the business and affairs of the Employer
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
Employee 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 Employer or any affiliate thereof.
2. TERM.
Unless sooner terminated as provided by Section 5 herein, the term of this
Agreement shall be one year commencing as of January 1, 1997. The term may be
renewed annually by affirmative action of the board of directors of the Employer
upon the same terms and conditions and at such compensation level determined
appropriate by the boards of directors at the time of renewal.
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Employer shall notify the Employee of the Employer's 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 of such term.
3. COMPENSATION.
(a) The annual base salary of the Employee during the initial term of this
Agreement shall be $57,000.00, subject to adjustment at the time of
renewal by the board of directors. The Employee 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 the board of directors,
and nothing herein contained shall be construed to provide the Employee
with any assurance that base salary will be increased upon affirmative
renewal of this Agreement.
(b) The Employee, 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 Employee shall be entitled to reimbursement of reasonable expenses
incurred in the performance of the duties required hereunder in
furtherance of the business of the Employer and affiliates of the
Employer, upon submission of appropriate invoices or vouchers
documenting such expenses and provided such expenditures were consistent
with the Employer's policies.
(b) The Employee shall be eligible for FOUR (4) weeks of paid vacation in
any calendar year, to be taken at such time or times as the Employee
shall elect in accordance with Employer's policies then in effect.
Unused vacation may not be accrued or carried over from year to year.
(c) The Employee 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 Employee 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 Employer
for salary and benefits shall not exceed an amount equal to the
Employee's full salary and benefits for such period.
(d) The Employee 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 Employer. The
Employee may also be entitled to special fringe benefits, if applicable,
as identified on Schedule A attached hereto, which Schedule may be
amended by the board of directors at the time of renewal or such other
time as the board of directors deems appropriate under the
circumstances. The foregoing benefits and
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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 Employee'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 Employee's death;
(ii) termination by the Employer of the Employee's employment for
reasons of Disability (as hereinafter defined) upon fifteen (15)
days written notice to the Employee;
(iii) termination by the Employer of the Employee's employment for
Cause (as hereinafter defined) upon written notice to the
Employee;
(iv) termination by the Employer of the Employee's employment other
than for Cause (as hereinafter defined) upon thirty (30) days
written notice to the Employee; or
(v) resignation of the Employee.
(b) Termination Definitions: The following words and phrases shall have the
meanings indicated below:
(i) Disability. "Disability" shall mean the Employee'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 mental health so as to
make it impossible or impractical for the Employee 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 Employee 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 Employee, 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;
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- with respect to termination by the Employer for Cause, the
date notice is given to the Employee, as referred to in
Section 5(a)(iii) above;
- with respect to termination by the Employer other than for
Cause, thirty (30) days following the giving of notice as
referred to in Section 5(a)(iv) above.
(c) Employer's Obligations Upon Termination:
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(i) Death. If the Employee's employment is terminated by reason of
the Employee's death during the term of this Agreement, this
Agreement shall terminate without further obligation to any legal
representative of the Employee, other than for any obligations
accrued prior to the Employee's death, which shall be payable (in
a lump sum) within thirty (30) days of the Date of Termination.
Notwithstanding such termination, the Employee's legal
representative shall be obligated to return Employer's property
pursuant to Section 7 herein.
(ii) Disability. If the Employee's employment is terminated by reason
of the Employee's Disability during the term of this Agreement,
this Agreement shall terminate (with the exception of Section 7
herein) without further obligation to the Employee, other than
for any obligations accrued prior to the Employee's Date of
Termination, which shall be payable (in a lump sum) within thirty
(30) days of the Date of Termination.
(iii) Cause. If the Employee'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 Employee other than for any obligations accrued
prior to the Employee's Date of Termination.
(iv) Termination by the Employer other than for Cause. If, during the
term of this Agreement, the Employee's employment shall be
terminated by Employer other than for Cause, or for reasons other
than the Employee's death, Disability or voluntary resignation,
then the Employee shall be entitled to the benefits provided
below:
(A) The Employer shall pay to the Employee 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 Employer shall pay to the Employee,
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 Employee's
annual base salary for the year in which the Employee is
terminated and the two years immediately preceding the
year of termination, divided by three, and (y) the
Employee's target annual incentive (under the Iroquois
Annual Management Incentive Compensation Plan) for the
year in which the Employee is terminated and
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the annual incentive earned by the Employee over the two
years immediately preceding the year of termination,
divided by three.
(C) The Employer shall continue to provide the Employee 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 Employee
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 Employee's becoming eligible to
receive substantially similar Welfare Benefits from a new
employer.
(D) For the period of months set forth in Schedule B attached,
the Employer shall reimburse all reasonable expenses (as
determined in the sole discretion of the board of
directors) incurred by the Employee for professional
outplacement services; provided, however, that such
reimbursement shall not exceed that percentage of the
Employee's annual base salary set forth in Schedule B and
that such reimbursement shall be discontinued once the
Employee 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 Employer.
(v) Resignation. If the Employee's employment is terminated by reason
of the Employee'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 Employee,
other than for any obligations accrued prior to the Employee's
resignation, which shall be payable (in a lump sum) within thirty
(30) days of the Date of Termination.
(d) In the event this Agreement is not renewed at the discretion of the
board and without cause pursuant to Section 2 above, the Employee 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) those benefits described in Subsections (A), (B), (C) and (D) of
Section 5(c)(iv) above.
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6. SUSPENSION.
If the Employee is suspended or temporarily prohibited from participating in the
conduct or the affairs of Iroquois or any affiliate 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 Employee shall be
entitled to reinstatement and any compensation withheld while the Employer's
obligations under this Agreement were suspended.
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 Employee
agrees to receive confidential and proprietary information of Employer
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 Employee and is a
consequence of employment by Employer, whether or not pursuant to this
Agreement.
(b) The Employee 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 Employee during employment, is and shall be the sole and
exclusive property of such Employer or affiliate. The Employee will
deliver the same (and every copy, disc, abstract, summary or
reproduction of same made by or for the Employee or acquired by the
Employee) whenever Employer may so require and in any event prior to or
at the termination of said employment.
(c) Employer and the Employee hereby acknowledge that the restrictions
stated herein above are reasonably necessary for the protection of
Employer's legitimate proprietary interests and Employer may enforce
such provisions through action for specific performance.
8. CHANGE OF CONTROL.
(a) In the event the Employee's employment is terminated (x) by the Employer
for any reason other than for Cause, death or Disability, or (y) by the
Employee for Good Reason (as defined in Section 8(d) below), within
twenty-four (24) months following a Change Of Control (as defined in
Section 8(b) below, or (z) by the Employee for any reason during the
thirty (30) day period beginning on the first anniversary of a Change of
Control, then:
(i) The Employer shall pay the Employee, within thirty (30) days
after the Date of Termination:
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(A) any accrued but unpaid base salary earned through the Date
of Termination; and
(B) a pro-rata incentive award in an amount equal to the
product of (x) the target incentive amount which the
Employee 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 Employee'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 Employee 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 Employee may have been
entitled to pursuant to this Agreement).
(ii) The Employer shall continue all Welfare Benefits received by the
Employee for the Severance Period; provided, however, that such
Welfare Benefits shall cease upon the Employee becoming eligible
to receive substantially similar benefits from a new employer.
(iii) For the period of months set forth in Schedule B attached, the
Employer shall reimburse all reasonable expenses (as determined
in the sole discretion of the board of directors) incurred by the
Employee for professional outplacement services; provided,
however, that such reimbursement shall not exceed that percentage
of the Employee's annual base salary set forth in Schedule B and
that such reimbursement shall be discontinued once the Employee
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
Employer.
(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 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
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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.
(c) Iroquois agrees that during the term of this Agreement, any options
granted to the Employee 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 Employer (collectively the "Plans"),
shall provide that the Employee 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 Employee
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 Employee of any duties inconsistent with his or
her status as an officer of Iroquois, or a substantial adverse
alteration in the nature or status of the Employee's
responsibilities from those in effect immediately prior to the
Change of Control;
(ii) reduction of the Employee's base salary as in effect immediately
preceding the Change of Control, or any reduction in the
Employee's normative incentive award percentage or any change in
the method for applying the normative incentive award percentage
to determine the Employee's incentive award, which would
materially reduce such incentive award;
(iii) failure by the Employer to continue to provide the Employee with
Welfare Benefits substantially similar to those received by the
Employee immediately preceding the Change of Control; or
(iv) the relocation of the Employer's principal executive offices and
the principal offices occupied by the Employee more than a
reasonable distance from their current location.
In the event the Employee terminates employment for Good Reason, the
Date of Termination shall mean the date on which the Employee notifies
the Employer 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 Employee 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 respect
to such excise tax (such excise tax, together with any such interest and
penalties are hereinafter collectively referred to as the
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"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 Employer 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 Employee pursuant to this Agreement, or otherwise, by
Iroquois, are subject to and conditioned upon compliance with all federal and
state laws and regulations as may be applicable at the time to Iroquois or any
other affiliate for which the Employee 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 Employee 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 Employee: Henry O'Reilly
6761 Mandy Rue
Auburn, New York 13021
If to Iroquois: Iroquois Bancorp, Inc.
115 Genesee Street
Auburn, New York 13021
Attn: Chairman of the Board
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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.
12. ENTIRE AGREEMENT.
This Agreement contains the entire agreement between the parties hereto and
supersedes all other discussions and understandings, oral or written, between
the parties hereto with respect to the subject matter hereof.
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.
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/ Richard D. Callahan /s/ Henry M. O'Reilly
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Its: President & CEO [the Employee]
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SCHEDULE A
In accordance with Section 4(d) of the Agreement, the Employee shall be entitled
to the following "special fringe benefits" in addition to his or her regular
benefits:
1) Bi-annual physical examination per the Iroquois Bancorp Physical
Examination Policy
SCHEDULE B
In accordance with Sections 5(c)(iv)(C) and 8(a)(iii) of the Agreement, the
Employee shall be entitled, based upon his or her position, to the reimbursement
of outplacement expenses for the number of months set forth in the table below
and up to the percentage (also set forth below) of the Employee's annual base
salary immediately preceding his or her Date of Termination:
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NUMBER OF PERCENTAGE OF
POSITION MONTHS BASE SALARY
- --------------------------------------------------------------------------------
Other Executives 6 10%