Exhibit 10.10
EMPLOYMENT AGREEMENT
This sets forth the terms of the Employment Agreement between (i)
COMMUNITY BANK SYSTEM, INC., a Delaware corporation and registered bank holding
company, and COMMUNITY BANK, N.A., a national banking association, both having
offices located in Dewitt, New York (collectively, the "Employer"), and (ii)
THOMAS A. McCULLOUGH, an individual currently residing at Laceyville,
Pennsylvania ("Employee"). This Agreement shall become effective upon the
closing of the merger of Community Bank System, Inc. and Grange National Banc
Corp.
W I T N E S S E T H
IN CONSIDERATION of the promises and mutual agreements and covenants
contained herein, and other good and valuable consideration, the parties agree
as follows:
1. Employment.
(a) Term. Employer shall employ Employee, and Employee shall
serve, as President, Pennsylvania Banking for Community Bank System, Inc. and
Community Bank, N.A. for the period that begins on the date of the closing of
the merger of Community Bank System, Inc. and Grange National Banc Corp. and
that ends on December 31, 2007 ("Period of Employment"), subject to termination
as provided in paragraph 3 hereof.
1
(b) Salary. From the effective date of this Agreement through
December 31, 2004, Employer shall pay Employee base salary at the annual rate of
not less than $185,000 ("Base Salary"). Employee's Base Salary for calendar
years after 2004 shall be reviewed and adjusted annually in accordance with
Employer's regular payroll practices for executive employees; provided that the
annual Base Salary rate shall be at least $185,000.
(c) Incentive Compensation. Employee shall be entitled to
annual incentive compensation opportunities pursuant to the terms of the
Management Incentive Plan which has been approved by the Board of Directors of
Employer to cover Employee and other key personnel of Employer; provided that,
for 2003 and 2004, Employee shall be entitled to a minimum incentive bonus of
$45,000 (prorated for 2003, based on the number of weeks of Employee's
employment with Employer in 2003). Upon termination of Employee's employment
pursuant to subparagraph 3(a), 3(b), 3(c) or 6, Employee shall be entitled to a
pro rata portion (based on Employee's complete months of active employment in
the applicable year) of the annual incentive award that is payable with respect
to the year during which the termination occurs or, in the case of a termination
upon Employee's disability pursuant to subparagraph 3(c), the date the
Disability Period began.
(d) Signing Bonus. Employer shall pay Employee $430,000 (less
applicable withholding), as a one-time signing bonus, within 10 days of the
commencement of Employee's employment with Employer. Employee acknowledges that
the payment made pursuant to this paragraph 1(d) is in satisfaction of and
replaces all "Change in Control" payments and benefits Employee might have been
entitled to pursuant to the March 25, 1998 Employment Agreement between
Employee, Grange National Bank and Grange National Banc
2
Corp. ("Grange Employment Agreement"). Employee agrees that he will not make any
claim for Change in Control payments or benefits described in the Grange
Employment Agreement.
2. Duties during the Period of Employment. Employee shall have full
responsibility, subject to the control of Employer's Board of Directors or the
authorized designee of the Board of Directors, for the supervision of
substantially all aspects of Employer's business and operations in the State of
Pennsylvania, and the discharge of such other duties and responsibilities to
Employer as may from time to time be reasonably assigned to Employee by
Employer's Board of Directors or the authorized designee of the Board of
Directors. Employee shall report to the President and Chief Executive Officer of
Employer. Employee shall devote Employee's best efforts to the affairs of
Employer, serve faithfully and to the best of Employee's ability and devote all
of Employee's working time and attention, knowledge, experience, energy and
skill to the business of Employer, except that Employee may affiliate with
professional associations, and business, civic and charitable organizations,
provided that such affiliations do not interfere with the performance of
Employee's duties under this Agreement. Employee shall serve on the Board of
Directors of, or as an officer of Employer's affiliates, without additional
compensation if requested to do so by the Board of Directors of Employer.
Employee shall receive only the compensation and other benefits described in
this Agreement for Employee's duties as a Director of Employer.
3. Termination. Employee's employment by Employer shall be subject
to termination as follows:
(a) Expiration of the Term. This Agreement shall terminate
automatically at the expiration of the Period of Employment unless the parties
enter into a
3
written agreement extending Employee's employment, except for the continuing
obligations of the parties as specified hereunder.
(b) Termination Upon Death. This Agreement shall terminate
upon Employee's death. In the event this Agreement is terminated as a result of
Employee's death, Employer shall continue payments of Employee's Base Salary for
a period of 90 days following Employee's death to the beneficiary designated by
Employee on the "Beneficiary Designation Form" attached to this Agreement as
Appendix A. Employee's beneficiary shall be free to dispose of any restricted
stock previously granted to Employee by Employer. Additionally, Employer shall
treat as immediately exercisable all unexpired stock options issued by Employer
and held by Employee that are not exercisable or that have not been exercised,
so as to permit the Beneficiary to purchase the balance of Community Bank
System, Inc. ("CBSI") Stock not yet purchased pursuant to said options until the
end of the full exercise period provided in the original grant of the option
right, determined without regard to Employee's death or termination of
employment.
(c) Termination Upon Disability. Employer may terminate this
Agreement upon Employee's disability. For the purpose of this Agreement,
Employee's inability to perform Employee's duties hereunder by reason of
physical or mental illness or injury for a period of 26 successive weeks (the
"Disability Period") shall constitute disability. The determination of
disability shall be made by a physician selected by Employer and a physician
selected by Employee; provided, however, that if the two physicians so selected
shall disagree, the determination of disability shall be submitted to
arbitration in accordance with the rules of the American Arbitration Association
and the decision of the arbitrator shall be binding and
4
conclusive on Employee and Employer. During the Disability Period, Employee
shall be entitled to 100% of Employee's Base Salary otherwise payable during
that period, reduced by any other benefits to which Employee may be entitled for
the Disability Period on account of such disability (including, but not limited
to, benefits provided under any disability insurance policy or program, worker's
compensation law, or any other benefit program or arrangement). Upon termination
pursuant to this disability provision, Employee shall be free to dispose of any
restricted stock granted to Employee. Additionally, Employer shall treat as
immediately exercisable all unexpired stock options issued by Employer and held
by Employee that are not exercisable or that have not been exercised, so as to
permit the Employee to purchase the balance of CBSI Stock not yet purchased
pursuant to said options until the end of the full exercise period provided in
the original grant of the option right, determined without regard to Employee's
disability or termination of employment.
(d) Termination for Cause. Employer may terminate Employee's
employment immediately for "cause" by written notice to Employee. For purposes
of this Agreement, a termination shall be for "cause" if the termination results
from any of the following events:
(i) Material breach of this Agreement;
(ii) Documented misconduct as an executive or director
of Employer, or any subsidiary or affiliate of Employer for which Employee is
performing services hereunder including, but not limited to, misappropriating
any funds or property of any such company, or attempting to obtain any personal
profit (x) from any transaction to which such company is a party or (y) from any
transaction with any third party in which Employee has an
5
interest which is adverse to the interest of any such company, unless, in either
case, Employee shall have first obtained the written consent of the Board of
Directors of Employer;
(iii) Unreasonable neglect or refusal to perform the
duties assigned to Employee under or pursuant to this Agreement, unless cured
within 60 days;
(iv) Conviction of a crime involving moral turpitude;
(v) Adjudication as a bankrupt, which adjudication has
not been contested in good faith, unless bankruptcy is caused directly by
Employer's unexcused failure to perform its obligations under this Agreement;
(vi) Documented failure to follow the reasonable,
written instructions of the Board of Directors of Employer, provided that the
instructions do not require Employee to engage in unlawful conduct; or
(vii) Any documented intentional violation by Employee
of the rules or regulations of the Office of the Comptroller of the Currency or
of any other regulatory agency.
Notwithstanding any other term or provision of this Agreement to the
contrary, if Employee's employment is terminated for cause, Employee shall
forfeit all rights to payments and benefits otherwise provided pursuant to this
Agreement; provided, however, that Base Salary shall be paid through the date of
termination.
(e) Termination For Reasons Other Than Cause. If Employee is
involuntarily replaced by Employer as President, Pennsylvania Banking for
Community Bank System, Inc. and Community Bank, N.A. prior to December 31, 2007
for reasons other than cause, or if Employer terminates Employee prior to
December 31, 2007 for reasons other than
6
cause, then Employee shall be entitled to a severance benefit equal to the
greater of (i) the sum of the annual Base Salary in effect at the time of
termination and the most recent payment to Employee under the Management
Incentive Plan, payable in equal monthly or semi-monthly installments over the
12-month period following Employee's termination, or (ii) amounts of Base Salary
and expected Management Incentive Plan payments that otherwise would have been
payable through the balance of the unexpired term of this Agreement, payable in
monthly or semi-monthly installments through the balance of the unexpired term
of this Agreement. In addition, Employer shall: (iii) permit Employee to dispose
of any restricted stock granted to Employee; (iv) treat as immediately
exercisable all unexpired stock options held by Employee that are not
exercisable or that have not been exercised, so as to permit Employee to
purchase the balance of CBSI Stock not yet purchased pursuant to said options
until the end of the full exercise period provided in the original grant of the
option right determined without regard to Employee's termination of employment;
(v) fully fund the grantor trust created to provide a source of funds to pay
benefits payable pursuant to the separate "Supplemental Executive Retirement
Agreement" between Employee and Employer, as amended; and (vi) cover Employee
and his eligible dependents under all Employer benefit plans and programs
available to Employer's former employees.
Notwithstanding the foregoing, if Employer terminates Employee
prior to December 31, 2007 for reasons other than cause and under circumstances
that entitle Employee to payments and benefits under paragraph 6 of this
Agreement (regarding "Change of Control"), then amounts payable under clauses
(i) or (ii) of this paragraph 3(e) shall be reduced by payments made to Employee
under paragraphs 6(a)(i) and (ii).
7
(f) Expiration of Term Without Renewal. In the event that
Employee's employment ends on December 31, 2007 solely because Employer chooses
not to renew or extend this Agreement beyond December 31, 2007 for reasons other
than cause, then Employee shall be entitled to a severance benefit equal to the
sum of (i) 175 percent of the annual Base Salary in effect at the time of
termination, and (ii) the most recent payment to Employee under the Management
Incentive Plan, such sum to be payable in equal biweekly installments over the
six-month period following Employee's termination of employment. Amounts payable
under this paragraph 3(f) shall be reduced by any payments made to Employee
under paragraphs 6(a)(i) and (ii).
(g) Employer shall have the right of first refusal to purchase
from Employee or Employee's estate, shares of CBSI stock acquired pursuant to
the exercise of stock options after the date of Employee's termination of
employment for any reason. In the event Employee or Employee's estate elects to
dispose or transfer such acquired shares, Employee or Employee's estate shall
provide Employer with 30 days advance written notice of his or its intention to
sell or transfer the shares. Employer may exercise its right of first refusal to
purchase by providing Employee or Employee's estate with written notice of such
exercise within 30 days of Employer's receipt of the written notice from
Employee or Employee's estate. If Employer exercises its right to purchase, the
purchase shall be completed within 10 days following Employee's or Employee's
estate's receipt of Employer's notice of exercise and the purchase price per
share shall equal the closing price per share of CBSI stock on the immediately
preceding date on which CBSI stock was traded on a national exchange. Such right
of first refusal shall expire ten years from the date of termination.
8
4. Fringe Benefits.
(a) Benefit Plans. During the Period of Employment, Employee
shall be eligible to participate in any employee pension benefit plans (as that
term is defined under Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended), Employer-paid group life insurance plans, medical
plans, dental plans, long-term disability plans, business travel insurance
programs and other fringe benefit programs maintained by Employer for the
benefit of its executive employees. Participation in any of Employer's benefit
plans and programs shall be based on, and subject to satisfaction of, the
eligibility requirements and other conditions of such plans and programs.
Employer may require Employee to submit to an annual physical, to be performed
by a physician of his own choosing. Employee shall be reimbursed for related
expenses not covered by Employer's health insurance plan, or any other plan in
which Employee is enrolled. Employee shall not be eligible to participate in
Employer's Severance Pay Plan maintained for other employees not covered by
employment agreements.
(b) Expenses. Upon submission to Employer of vouchers or other
required documentation, Employee shall be reimbursed for Employee's actual
out-of-pocket travel and other expenses reasonably incurred and paid by Employee
in connection with Employee's duties hereunder. Reimbursable expenses must be
submitted to the President and Chief Executive Officer of Employer for review on
a quarterly basis.
(c) Other Benefits. During the Period of Employment, Employee
also shall be entitled to receive the following benefits:
9
(i) Paid vacation of 4 weeks during each calendar year
(with no carry over of unused vacation to a subsequent year) and any holidays
that may be provided to all employees of Employer in accordance with Employer's
holiday policy;
(ii) Reasonable sick leave;
(iii) Employer paid membership for Employee at a country
club in the Scranton/Wilkes Barre, Pennsylvania area, subject to the approval of
the President and Chief Executive Officer of Employer. Although it is
contemplated that the membership shall be utilized for marketing and promotion
of Employer's business interests, in the event that any part of this membership
shall be treated as taxable compensation to Employee, Employer shall reimburse
Employee for any federal, state or local income tax owed by Employee, including
such taxes owed as a result of any reimbursement under this subparagraph (iii),
in connection with such membership.
(iv) The use of an Employer-owned automobile of
Employee's choice, the purchase and replacement of which shall be subject to the
approval of the Compensation Committee of the Board of Directors of Employer;
(v) Reimbursement of the purchase price of a car
telephone and all Employer-related business charges incurred in connection with
the use of such telephone;
(vi) Continuation of the March 13, 1991 Split Dollar
Insurance Agreement between Grange National Banc Corp., Grange National Bank and
Employee; and
(vii) Reimbursement, up to an aggregate maximum of
$10,000, for the following relocation expenses, contingent upon the completion
of Employee's relocation
10
to the Clarks Summit, Pennsylvania area within six weeks of the effective date
of this Agreement:
(A) the cost of moving Employee's normal household goods
from Employee's Laceyville, Pennsylvania residence to the Clarks
Summit, Pennsylvania area;
(B) the closing costs on the purchase of a residence in
the Clarks Summit, Pennsylvania area, which for this purpose shall
mean legal fees, abstract and title fees, city, county and state
stamps, survey fee, loan application fees, termite inspection fee,
engineering inspection fee, title search fee, and title insurance
premium; and
(C) the closing costs on the sale of Employee's
Laceyville, Pennsylvania residence, which for this purpose shall
mean legal fees, appraisal costs, and licensed real estate broker's
commission up to six percent of the gross selling price of
Employee's Wyalusing, Pennsylvania residence.
(viii) Reimbursement, up to an aggregate monthly maximum
of $350, for reasonable travel expenses incurred by Employee through June 2005
to permit Employee's son, Luke McCullough, to complete high school in Wyalusing,
Pennsylvania.
(d) Supplemental Retirement Benefits. The terms and conditions
for the payment of supplemental retirement benefits are set forth in a separate
"Amended and Restated Supplemental Executive Retirement Agreement," dated
January 17, 2003 and amended as of March 26, 2003, between Employee and Grange
National Bank, which agreement shall be assumed and continued by Employer;
provided that the parties agree that the Amended and
11
Restated Supplemental Executive Retirement Agreement shall be amended further to
include offsets for contributions and benefits provided to Employee pursuant to
Employer's tax-qualified retirement plans.
5. Stock Options. Employer shall cause the Compensation Committee of
the Board of Directors of Employer to review whether Employee should be granted
options to purchase shares of common stock of CBSI. Such review may be conducted
pursuant to the terms of the Community Bank System, Inc. 1994 Long-Term
Incentive Compensation Program, a successor plan, or independently, as the
Compensation Committee shall determine. Reviews shall be conducted no less
frequently than annually.
6. Change of Control.
(a) If Employee's employment with Employer (as an employee)
shall cease for any reason, including Employee's voluntary termination for "good
reason" (as defined in paragraph 6(c) below), but not including Employee's
termination for "cause" (as described in paragraph 3(d)) or Employee's voluntary
termination without "good reason," within 2 years following a "Change of
Control" that occurs during the Period of Employment, Employer shall:
(i) Retain the services of Employee, on an independent
contractor basis, as a consultant to Employer for a period of no less than 36
months at an annual consulting fee rate equal to the total of Employee's Base
Salary in effect at the time of Employee's termination plus an amount equal to
the Management Incentive paid to the Employee in the year prior to the "Change
of Control";
(ii) Provide Employee with fringe benefits, or the cash
equivalent of such benefits, identical to those described in paragraph 4(a) for
the period during
12
which Employee is retained as a consultant pursuant to (i) above. To the extent
the benefits provided to Employee in this paragraph 6(a)(ii) are deemed taxable
benefits, Employer shall reimburse Employee for taxes owed by Employee on the
benefits and tax reimbursement; and
(iii) Treat as immediately exercisable all unexpired
stock options issued by Employer and held by Employee that are not otherwise
exercisable or that have not been exercised (so as to permit Employee to
purchase the balance of CBSI Stock not yet purchased pursuant to said options
until the end of the full exercise period provided in the original grant of the
option right, determined without regard to Employee's termination of employment)
and permit Employee to dispose of any restricted stock granted to Employee.
(iv) Subject to Employer's right to make the single lump
sum payment described in paragraph 6(a)(v) below, if any portion of the amounts
paid to, or value received by, Employee following a "Change of Control" (whether
paid or received pursuant to this paragraph 6 or otherwise) constitutes an
"excess parachute payment" within the meaning of Internal Revenue Code Section
280G, then the parties shall negotiate a restructuring of payment dates and/or
methods (but not payment amounts) to minimize or eliminate the application of
Internal Revenue Code Section 280G, with any restructured payments being made to
Employee as soon as practicable. If an agreement to restructure payments cannot
be reached within 60 days of the date the first payment is due under this
paragraph 6, then payments shall be made without restructuring. Subject to
paragraph 6(a)(v), Employee shall be responsible for all taxes that are payable
by Employee as a result of Employee's receipt of an "excess parachute payment."
Notwithstanding the foregoing, Employee shall have the option of receiving a
portion of the amounts otherwise required to be paid to, or the value otherwise
required to be received by,
13
Employee following a "Change of Control" (whether paid or received pursuant to
this paragraph 6 or otherwise), as determined by Employee, so that aggregate
present value of such portion, as determined under Internal Revenue Code 280G,
of the amounts otherwise required to be paid to, or the value otherwise required
to be received by, Employee is equal to 2.99 of Employee's "base amount" of
compensation within the meaning of Internal Revenue Code Section 280G.
(v) Notwithstanding the foregoing of this paragraph
6(a), the Board of Directors of Employer may elect, in its sole discretion, to
pay all benefits due Employee pursuant to this paragraph 6 in a single lump sum
payment within 90 days following a Change of Control and Employee's termination
of employment with Employer. In the event a single lump sum payment is made
pursuant to the foregoing sentence, the amount of the payment shall be increased
to the extent necessary to hold Employee harmless from all income and excise tax
liability attributable to such single lump sum payment, including, but not
limited to, all taxes that are payable by Employee as a result of Employee's
receipt of an "excess parachute payment" and as a result of any payment made to
Employee pursuant to this sentence.
(b) For purposes of this paragraph 6, a "Change of Control"
shall be deemed to have occurred if:
(i) any "person," including a "group" as determined in
accordance with the Section 13(d)(3) of the Securities Exchange Act of 1934
("Exchange Act"), is or becomes the beneficial owner, directly or indirectly, of
securities of Employer representing 30% or more of the combined voting power of
Employer's then outstanding securities;
(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
14
directors of Employer before the Transaction shall cease to constitute a
majority of the Board of Directors of Employer or any successor to Employer;
(iii) Employer is merged or consolidated with another
corporation and as a result of the merger or consolidation less than 70% of the
outstanding voting securities of the surviving or resulting corporation shall
then be owned in the aggregate by the former stockholders of Employer, 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 Employer representing 30% or more
of the combined voting power of Employer's then outstanding voting securities;
or
(v) Employer transfers substantially all of its assets
to another corporation which is not controlled by Employer.
(c) For purposes of this paragraph 6, "good reason" shall mean
action taken by Employer that results in:
(i) An involuntary and material adverse change in
Employee's title, duties, responsibilities, or total remuneration;
(ii) An involuntary and material relocation of the
office from which Employee is expected to perform his duties; or
(iii) An involuntary and material adverse change in the
general working conditions (including travel requirements and clerical support)
applicable to Employee.
15
7. Withholding. Employer shall deduct and withhold from compensation
and benefits provided under this Agreement all necessary income and employment
taxes and any other similar sums required by law to be withheld.
8. Covenants.
(a) Confidentiality. Employee shall not, without the prior
written consent of Employer, disclose or use in any way, either during his
employment by Employer or thereafter, except as required in the course of his
employment by Employer, any confidential business or technical information or
trade secret acquired in the course of Employee's employment by Employer.
Employee acknowledges and agrees that it would be difficult to fully compensate
Employer for damages resulting from the breach or threatened breach of the
foregoing provision and, accordingly, that Employer shall be entitled to
temporary preliminary injunctions and permanent injunctions to enforce such
provision. This provision with respect to injunctive relief shall not, however,
diminish Employer's right to claim and recover damages. Employee covenants to
use his best efforts to prevent the publication or disclosure of any trade
secret or any confidential information concerning the business or finances of
Employer or Employer's affiliates, or any of its or their dealings, transactions
or affairs which may come to Employee's knowledge in the pursuance of his duties
or employment.
(b) No Competition. Employee's employment is subject to the
condition that during the term of his employment hereunder and for the period
specified in paragraph 8(c) below, Employee shall not, directly or indirectly,
own, manage, operate, control or participate in the ownership, management,
operation or control of, or be connected as an officer, employee, partner,
director, individual proprietor, lender, consultant or otherwise with, or
16
have any financial interest in, or aid or assist anyone else in the conduct of,
any entity or business (a "Competitive Operation") which competes in the banking
industry or with any other business conducted by Employer or by any group,
affiliate, division or subsidiary of Employer, in the states of New York and
Pennsylvania. Employee shall keep Employer fully advised as to any activity,
interest, or investment Employee may have in any way related to the banking
industry. It is understood and agreed that, for the purposes of the foregoing
provisions of this paragraph, (i) no business shall be deemed to be a business
conducted by Employer or any group, division, affiliate or subsidiary of
Employer unless 5% or more of Employer's consolidated gross sales or operating
revenues is derived from, or 5% or more of Employer's consolidated assets are
devoted to, such business; (ii) no business conducted by any entity by which
Employee is employed or in which he is interested or with which he is connected
or associated shall be deemed competitive with any business conducted by
Employer or any group, division or subsidiary of Employer unless it is one from
which 2% or more of its consolidated gross sales or operating revenues is
derived, or to which 2% or more of its consolidated assets are devoted; and
(iii) no business which is conducted by Employer at the Date of Termination and
which subsequently is sold by Employer shall, after such sale, be deemed to be a
Competitive Operation within the meaning of this paragraph. Ownership of not
more than 5% of the voting stock of any publicly held corporation shall not
constitute a violation of this paragraph.
(c) Non-Competition Period. If Employee's employment with
Employer shall cease for any reason during the Period of Employment as defined
in paragraph 1(a) of this Agreement, the "non-competition period" shall begin on
the date the first payment is made pursuant to the terms of this Agreement and
shall end on the earlier of (i) the date that is 18
17
months after the date the final payment is made pursuant to the terms of this
Agreement, or (ii) December 31, 2007.
(d) Certain Affiliates of Employer. It is understood that
Employee may have access to technical knowledge, trade secrets and customer
lists of affiliates of Employer or companies which Employer's parent may acquire
in the future and may serve as a member of the board of directors or as an
officer or employee of an affiliate of Employer. Employee covenants that he
shall not, during the term of his employment by Employer or for the period
specified in 8(c) above, in any way, directly or indirectly, own, manage,
operate, control or participate in the ownership, management, operation or
control of, or be connected as an officer, employee, partner, director,
individual proprietor, lender, consultant or otherwise aid or assist anyone else
in any business or operation which competes with or engages in the business of
such an affiliate.
(e) Termination of Payments. Upon the breach by Employee of
any covenant under this paragraph 8, Employer may offset immediately any and all
amounts payable to Employee under this Agreement in addition to any and all
other remedies available to Employer under the law or in equity.
9. Notices. Any notice which may be given hereunder shall be
sufficient if in writing and mailed by overnight mail, or by certified mail,
return receipt requested, to Employee at his residence and to Employer at 5790
Widewaters Parkway, Dewitt, New York 13214, or at such other addresses as either
Employee or Employer may, by similar notice, designate.
18
10. Rules, Regulations and Policies. Employee shall abide by and
comply with all of the rules, regulations, and policies of Employer, including
without limitation Employer's policy of strict adherence to, and compliance
with, any and all requirements of the banking, securities, and antitrust laws
and regulations.
11. No Prior Restrictions. Employee affirms and represents that
Employee is under no obligations to any former employer or other third party
which is in any way inconsistent with, or which imposes any restriction upon,
the employment of Employee by Employer, or Employee's undertakings under this
Agreement.
12. Return of Employer's Property. After Employee has received
notice of termination or at the end of the term hereof, whichever first occurs,
Employee shall promptly return to Employer all documents and other property in
his possession belonging to Employer.
13. Construction and Severability. 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, shall not affect the validity of
any other provisions to this Agreement; and in the event that one or more
provisions contained herein shall be invalid, as determined by a court of
competent jurisdiction, the court shall have authority to modify such provision
in a manner that most closely reflects the intent of the parties and is valid.
14. Governing Law. This Agreement was executed and delivered in New
York and shall be construed and governed in accordance with the laws of the
State of New York.
15. Assignability and Successors. This Agreement may not be assigned
by Employee or Employer, except that this Agreement shall be binding upon and
shall inure to the benefit of the successor of Employer through merger or
corporate reorganization.
19
16. Miscellaneous. This Agreement constitutes the entire
understanding and agreement between the parties with respect to the subject
matter hereof and shall supersede all prior understandings and agreements,
including the Grange Employment Agreement. Employee hereby waives all claims
Employee may have under the Grange Employment Agreement. This Agreement cannot
be amended, modified, or supplemented in any respect, except by a subsequent
written agreement entered into by the parties hereto. The services to be
performed by Employee are special and unique; it is agreed that any breach of
this Agreement by Employee shall entitle Employer (or any successor or assigns
of Employer), in addition to any other legal remedies available to it, to apply
to any court of competent jurisdiction to enjoin such breach. The provisions of
paragraphs 6 and 8 hereof shall survive the termination of this Agreement.
17. Counterparts. This Agreement may be executed in counterparts
(each of which need not be executed by each of the parties), which together
shall constitute one and the same instrument.
18. Jurisdiction, Venue and Fees. The jurisdiction of any proceeding
between the parties arising out of, or with respect to, this Agreement shall be
in a court of competent jurisdiction in New York State, and venue shall be in
Onondaga County. Each party shall be subject to the personal jurisdiction of the
courts of New York State. If Employee is the prevailing party in a proceeding to
collect payments due pursuant to this Agreement, Employer shall reimburse
Employee for reasonable attorneys' fees incurred by Employee in connection with
such proceeding.
20
The foregoing is established by the following signatures of the
parties.
COMMUNITY BANK SYSTEM, INC.
By:____________________________
Its:___________________________
COMMUNITY BANK, N.A.
By:____________________________
Its:___________________________
_______________________________
THOMAS A. McCULLOUGH
21
APPENDIX A
BENEFICIARY DESIGNATION FORM
Pursuant to the Employment Agreement between (i) Community Bank
System, Inc. and Community Bank, N.A., and (ii) Thomas A. McCullough
("Agreement"), I, Thomas A. McCullough, hereby designate _________________, my
__________, as the beneficiary of amounts payable upon my death in accordance
with paragraph 3(b) of the Agreement. My beneficiary's current address is
_____________________________________.
Dated: _____________ _________________________________
Thomas A. McCullough
______________________________
Witness
22