Exhibit 10.2
AGREEMENT
This AGREEMENT is made and entered into by and among Community Bank
System, Inc. and Community Bank, N.A. (collectively, the "Company"), and David
G. Wallace ("Wallace").
R E C I T A L S
WHEREAS, Wallace is currently employed by the Company as its Executive
Vice President and Chief Financial Officer pursuant to the terms of an
employment agreement, effective June 14, 2000 (the "Employment Agreement");
WHEREAS, Wallace desires to relocate to Florida with his family for
personal reasons, and the Company wishes to accommodate those desires in a
manner which benefits both the Company and Wallace;
WHEREAS, the Company and Wallace have agreed that it is in their mutual
interest for Wallace's employment with the Company to continue until December
31, 2002, and for the Company to thereafter engage Wallace as a consultant for a
period ending December 31, 2004, in order to provide for an orderly transition
of Wallace's duties and responsibilities;
WHEREAS, the parties have reached certain mutual agreements and
understandings with respect to the termination of Wallace's employment with the
Company under the Employment Agreement and with respect to their proposed
consulting arrangement;
WHEREAS, the parties desire to set forth their mutual agreements and
understandings in this Agreement and in a Consulting Agreement, attached hereto
as Appendix A;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements and covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Wallace's employment will continue under, and subject to, the terms of
the Employment Agreement until December 31, 2002. At that time, Wallace's
employment and the Employment Agreement will terminate and the renegotiation
provisions of his Employment Agreement will have no application. Notwithstanding
the foregoing, any change of control provisions contained in the Employment
Agreement (whether found in Section 6 of that Employment Agreement or elsewhere
in that Employment Agreement), as well as any change of control provisions
contained in his Supplemental Retirement Plan Agreement, effective as of October
31, 1999 and amended effective January 1, 2001 ("SERP"), or in any other
agreement with, or policy or plan of, the Company, are hereby waived and to be
treated as immediately null and void upon execution of this Agreement, whether
with respect to events occurring before or after the execution of this
Agreement, conditioned upon the Company's compliance with the payment provisions
of the accompanying Consulting Agreement between the parties.
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2. During the remainder of Wallace's employment under the Employment
Agreement (i.e., until December 31, 2002), Wallace will continue to receive the
salary, incentive compensation, fringe benefits and stock options set out
therein for the period ending December 31, 2002. In addition, Wallace will be
credited with deferred compensation credits for 2002 of $10,420.38, as described
in paragraph 1(a) of his SERP, but not for any subsequent period (except as may
be provided in his accompanying Consulting Agreement). As of December 31, 2002,
Wallace will become vested in any unexpired options granted prior to that date
(and options awarded for performance in 2002) and, for purposes of exercising
these options, he will be treated as if he were then terminating due to
retirement in "good standing." The exercise period for stock options shall not
otherwise be extended.
3. Provided Wallace's employment is not terminated on or before December
31, 2002 either by the Company for cause, as defined in the Employment Agreement
(except that before the "documented failure to follow the reasonable, written
instructions of the Board" can constitute cause those instructions must relate
in a significant and substantial way to Wallace's performance of his duties), or
by Wallace, the Consulting Agreement attached as Appendix A will become
effective. Neither time covered by nor the services or payments provided under
the Consulting Agreement will have any impact on Wallace's SERP or any SERP
benefits, except to the extent expressly provided therein, or on his benefits
under the Company's tax-qualified defined benefit pension plan. (Estimates of
Wallace's pension benefits under both his SERP and the Company's tax-qualified
defined benefit pension plan, reflecting the provisions of this Agreement and
the accompanying Consulting Agreement, are attached as Appendix B.) In the event
the Company terminates Wallace on or before December 31, 2002 for cause, this
Agreement and the Consulting Agreement will become null and void, as if never
entered into.
4. Wallace is free to communicate with potential employers and others
during the term of this Agreement regarding possible employment or consulting
work to begin after May 10, 2003 (subject to the terms of his Consulting
Agreement with the Company) provided those communications in no way interfere
with his duties and performance under this Agreement.
5. The parties agree to keep the terms of this Agreement, and the
accompanying Consulting Agreement confidential except to the extent disclosure
is (1) required by either party by law or as necessary in legal proceedings to
enforce this Agreement, (2) by the Company as deemed necessary by it in the
ordinary course of its business, or (3) by Wallace to his spouse and his legal
and/or financial advisors, provided they agree to keep its terms confidential
under this provision.
6. To the extent anything in this Agreement explicitly or implicitly
conflicts with either the Employment Agreement, Wallace's SERP, or any other
Company policy, plan or document, the terms of this Agreement control and the
terms of the Employment Agreement, SERP or other policy, plan or document are
superseded and modified by this Agreement.
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7. The invalidity of any one or more provisions of this Agreement or any
part thereof, all of which are inserted conditionally upon their being valid in
law, will not affect the validity of any other provisions in this Agreement; and
in the event that one or more provisions contained herein is invalid, as
determined by a court of competent jurisdiction, this instrument will be
construed as if such invalid provisions had not been inserted. If a provision
providing an economic benefit to Wallace is found invalid, the Company will
compensate Wallace for that loss by providing a payment equivalent to that loss.
8. This Agreement was executed and delivered in New York and will be
construed and governed in accordance with the laws of the State of New York.
9. This Agreement may not be assigned by Wallace or the Company, except
that this Agreement will be binding upon and will inure to the benefit of the
successor of the Company through merger or corporate reorganization.
10. This Agreement, including its attachments, constitutes the entire
understanding and agreement between the parties with respect to the subject
matter hereof. This Agreement cannot be amended, modified, or supplemented in
any respect, except by a subsequent written agreement entered into by the
parties hereto.
11. The Jurisdiction of any proceeding between the parties arising out of,
or with respect to, this Agreement will be in a court of competent jurisdiction
in New York State, and venue shall be in Onondaga County. Each party will be
subject to the personal jurisdiction of the courts of New York State.
The foregoing is established by the following signatures of the parties.
Dated: December 23, 2002 COMMUNITY BANK SYSTEM, INC.
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By: /s/ Sanford A. Belden
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Its: President and CEO
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Dated: December 23, 2002 COMMUNITY BANK, N.A.
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By: /s/ Sanford A. Belden
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Its: President and CEO
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Dated: December 23, 2002 /s/ David G. Wallace
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DAVID G. WALLACE
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