AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This
Agreement was originally effective as of March 1, 2006 by
and between
Fairport Savings Bank (the "Bank"), a federally-chartered savings association
with its principal executive office at 45 South Main Street,
Fairport, New York
14450, and Dana
Gavenda ("Executive"). The Agreement has been amended and
restated on September
24, 2008 and effective
as of March 1, 2006,
in order to
comply with
certain changes in the law made by Section
409A of the
Internal
Revenue Code of 1986, as amended (the "Code").
WHEREAS, the Bank
wishes to assure
itself of the
continued services of
Executive for the period provided in this Agreement; and
WHEREAS, Executive
is willing to
continue to serve in the employ of the
Bank on a full-time basis for said period.
NOW,
THEREFORE, in
consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the
parties hereby
agree as follows:
1. POSITION AND
RESPONSIBILITIES
(a)
During the period of
his employment
hereunder,
Executive agrees to
serve as President and Chief Executive Officer, and as a member of the Board
of
Directors (the "Board"), of the Bank. During said period,
Executive also
agrees
to serve, if elected,
as an officer and director of any subsidiary or affiliate
of the Bank. Failure
to reelect Executive
as the President and Chief Executive
Officer of the Bank
without the consent of
Executive during the term of this
Agreement shall constitute a breach of this Agreement.
(b)
During the period of his employment hereunder, except for periods of
absence occasioned by
illness, reasonable
vacation periods, and reasonable
leaves of absence,
Executive shall devote
substantially all his business time,
attention, skill,
and efforts to the faithful performance of his duties as
President and Chief
Executive Officer of
the Bank, including
overseeing
and
directing the
day-to-day
operations
and management of the Bank; making
recommendations to the Board regarding asset/liability management, long-range
planning and
compensation of officers; promoting the business of the
Bank; and
such other
duties as the Board may from time to time reasonably direct.
Provided, however,
that with the
approval of the Board, as evidenced by a
resolution of the
Board, Executive
may serve,
or continue
to serve, on the
boards of directors
of, and hold other
offices or positions
with business or
not-for-profit
organizations, which,
in the Board's
judgment, do not
compete
with the Bank or will not present any conflict of interest with the Bank, or
materially affect
the performance of Executive's duties pursuant to this
Agreement (for
purposes of this Section 1(b), Board approval shall be deemed
provided as to
service with any such business or other organizations that
Executive was serving as of the date of this Agreement).
2. TERM
The period of
Executive's employment under this Agreement shall begin as of
the date first above written and shall continue for a period of
thirty-six (36)
full calendar months
thereafter. Commencing
on the first
anniversary date
of
this Agreement
and continuing at each anniversary date thereafter, this
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Agreement shall renew
for an additional year such that the remaining term shall
be three (3) years;
provided, however,
that after the initial
thirty-six (36)
month term of this
Agreement, if written
notice of nonrenewal is provided to
Executive at least ten
(10) days and not more than sixty (60) days prior to any
anniversary date, the
employment of Executive hereunder shall cease at the
end
of twelve (12) months
following such
anniversary
date. Prior to each notice
period for non-renewal, the disinterested members of the Board will conduct
a
performance evaluation
and review of
Executive for purposes of determining
whether to extend the
Agreement, and the
results thereof shall
be included in
the minutes of the Board's meeting and communicated to
Executive.
3. COMPENSATION
AND REIMBURSEMENT
(a)
The compensation
specified under this
Agreement shall
constitute the
salary and benefits
paid for the duties
described in Section
1(b). The Bank
shall pay Executive as
compensation a salary of not less than $140,000 per year
("Base Salary"),
which Base
Salary shall be payable in accordance with the
normal and
customary payroll practices of the Bank, but in no event less
frequently than monthly. During the period of this
Agreement, Executive's
Base
Salary shall be
reviewed at least
annually and such Base
Salary shall not
be
less than $147,500 for the twelve (12) months beginning March 1, 2007, and not
less than $155,000
for the twelve (12)
months beginning
March 1, 2008.
Such
review shall be conducted by a Committee designated by the Board, and the
Board
may increase, but not
decrease, Executive's
Base Salary (any
increase in Base
Salary shall
become the "Base
Salary" for purposes of this Agreement). In
addition to the Base
Salary provided in this Section 3(a), the Bank shall
provide Executive, at no cost to Executive, with all such other benefits as
are
provided uniformly to
permanent full-time
employees of the Bank.
Base Salary
shall include
any amounts of compensation deferred by Executive under
tax-qualified and nontax-qualified plans maintained by the
Bank.
(b)
The Bank will provide Executive with employee benefit plans,
arrangements and
perquisites
substantially
equivalent
to those in which
Executive was participating or otherwise deriving benefit from
immediately prior
to the beginning of the term of this Agreement, and the Bank will not,
without
Executive's prior written consent, make any changes in such plans,
arrangements
or perquisites
which would
adversely affect Executive's rights or benefits
thereunder, unless such change is part of a change in benefits
applicable to all
employees of the Bank
in connection
with a bank-wide
benefit plan. Without
limiting the
generality of the foregoing provisions of this Subsection (b),
Executive will be
entitled to
participate
in or receive
benefits under any
employee benefit
plans including but not limited to, retirement plans,
supplemental
retirement plans,
pension plans, profit-sharing plans, stock
benefit plans,
health-and-accident
plans, medical coverage and any other
employee benefit plan or arrangement made available by the Bank in
the future to
its senior executives
and key management
employees, subject to
and on a basis
consistent with the terms, conditions and overall
administration of such
plans
and arrangements.
Executive will be entitled to incentive compensation and/or
bonuses as provided in
any plan of the Bank in which Executive is eligible to
participate (and he
shall be entitled
to a pro rata
distribution
under any
incentive compensation
or bonus plan as to
any year in which a termination of
employment
occurs, other
than termination for Cause). Such incentive
compensation and/or
bonuses shall be based on Executive's performance and the
performance and financial condition of the Bank. Nothing paid to
Executive under
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<PAGE>
any such plan or arrangement will be deemed to be in lieu of other
compensation
to which Executive is entitled under this Agreement.
(c)
In addition to the Base Salary provided for by paragraph (a) of this
Section 3, the Bank shall pay or reimburse Executive for all reasonable
travel
and other reasonable expenses incurred by Executive in performing his
obligations under this Agreement and may provide such additional
compensation in
such form and such amounts as the Board may from time to time
determine.
(d)
Executive shall be entitled to five (5) weeks of paid
vacation per
calendar year,
or such greater
period as may be
approved from time to time by
the Board of Directors. In the event that the full
vacation is not taken in any
year due to the work commitments of Executive, Executive may carry
over any such
unused vacation
time from year to year
unless such carryover
is prohibited by
law or regulation. Upon any termination of Executive, Executive
will be entitled
to be paid the value of any accrued or accumulated vacation time and shall be
required to reimburse
the Bank for the value of any vacation time taken but not
yet accrued.
(e)
Executive shall also be entitled to an automobile of the Bank's
selection to be used
by Executive
in rendering services to the Bank and for
limited personal use, together with reimbursement for all gas, oil,
maintenance,
insurance and repairs
required by reason of the use of such vehicle. Executive
shall be required
to account
for all costs of use
of such automobile
in the
manner prescribed by the Board.
4. PAYMENTS TO
EXECUTIVE UPON AN EVENT OF TERMINATION
(a)
Upon the occurrence
of an Event of
Termination
(as herein
defined)
during Executive's
term of employment
under this Agreement,
the provisions of
this Section shall apply. As used in this Agreement, an "Event of Termination"
shall mean and include any one or more of the following:
(i)
the termination by the Bank of Executive's full-time employment
hereunder for any reason other than following a Change in Control,
as
defined in Section 5(a) hereof, or termination for Cause, as defined
in Section 8 hereof,
or upon Retirement as defined in Section 7
hereof, or for Disability as set forth in Section 6 hereof; and
(ii)
Executive's
resignation from the Bank's employ, upon any (A) failure
to
elect or reelect or to appoint or reappoint Executive as President
and Chief Executive
Officer of the Bank, unless consented to by
Executive, (B)
material change in Executive's function, duties, or
responsibilities,
which change would
cause Executive's
position to
become one of lesser
responsibility,
importance,
or scope from the
position and attributes thereof described in Section 1 above, to
which
Executive has not
agreed in writing
(and any such
material change
shall be deemed a continuing breach of this Agreement), (C)
relocation
of Executive's
principal place of employment by more than 30
miles
from its location at the effective date of the Agreement, or a
material reduction in
the benefits and
perquisites to Executive from
those being
provided as of the effective date of this Agreement
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<PAGE>
(unless
such reduction is part of a reduction in benefits to all
employees of the Bank in connection with a bank-wide benefit plan),
or
(D) material breach of this Agreement by the Bank.
Upon
the occurrence of any
event described in
clauses (ii) (A), (B), (C),
or (D) above,
Executive shall have the right to elect to terminate his
employment under this
Agreement by
resignation upon not
less than thirty (30)
days prior written
notice given within a reasonable period of time (not to
exceed90 days)
after the event giving rise to said right to elect, which
termination by Executive shall be an Event of Termination;
provided, however,
that the Bank shall have 30 days following its receipt of such
written notice to
cure the situation
identified
by Executive as the basis for the Event of
Termination.
Notwithstanding the
preceding sentence, in the event of a
continuing breach of
this Agreement by the
Bank, Executive,
after giving due
notice within the
prescribed time frame
of an initial event
specified above,
shall not waive any rights solely under this Agreement and this Section by
virtue of the fact that Executive has submitted his resignation but
has remained
in the employment
of the Bank and is
engaged in good faith discussions to
resolve any occurrence
of an event
described in clauses
(A), (B), (C), or (D)
above.
(b)
Upon the occurrence
of an Event of
Termination,
the Bank shall pay
Executive, or,
in the event of his subsequent death, his beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay
or liquidated
damages, or both, a cash amount equal to the greater of the
payments due for the
remaining term of the Agreement, or three (3) times the sum of: (i)
the highest
annual rate of Base Salary paid to Executive at any time under this
Agreement,
and (ii) the greater of (x) the average annual cash bonus paid to
Executive with
respect to
the three (3) completed fiscal years prior to the Event of
Termination, or (y)
the cash bonus paid to Executive with respect to the fiscal
year ended prior to the Event of Termination; provided however,
that if the Bank
is not in compliance with its minimum capital requirements or if such
payments
would cause
the Bank's capital to be reduced below its minimum capital
requirements, such
payments shall be deferred until such time as the Bank is in
capital compliance; and provided further, that in no event shall
total severance
compensation from all sources exceed three (3) times Executive's
average annual
compensation over the
five (5) fiscal years
preceding the fiscal year in which
the termination
of employment
occurs (for purposes
of this provision and only
for purposes of this provision, compensation shall mean any
payment of money or
provision of any other thing of value in consideration of
employment, including,
without limitation,
base salary, commissions, bonuses, pension and profit
sharing plans,
severance payments, retirement, director or committee fees,
fringe benefits,
and the payment of
expense items without
accountability
or
business purpose
or that do not
meet the Internal Revenue Service ("IRS")
requirement for
deductibility
by the Bank).
The present value of
the payment
required hereunder shall be made in a lump sum within thirty (30)
days following
Executive's
"Separation from
Service," as defined in Code Section 409A,
provided, however,
if Executive is a
"Specified Employee,"
as defined in Code
Section 409A, then,
solely to the extent required to avoid penalties under Code
Section 409A,
such payment shall be
delayed until the first day of the seventh
full month following
Executive's Separation
from Service. For
these purposes,
present value shall be determined using the applicable federal rate under Code
Section 1274(d).
Such payments shall not be reduced in the event Executive
obtains other employment following termination of employment.
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(c)
Upon the occurrence of an Event of Termination, the Bank will cause to
be continued at the Bank's expense, life, insurance coverage and non-taxable
medical and dental
insurance that is
substantially
identical to the
coverage
maintained by the Bank for Executive prior to his termination, except to the
extent such coverage may be changed in its application to all Bank employees.
Such coverage
shall cease thirty-six (36) months following the Event of
Termination.
5. CHANGE IN
CONTROL
(a)
No benefit shall be
payable under this
Section 5 unless
there shall
have been a Change
in Control, as set forth below. For purposes of this
Agreement, a "Change
in Control" shall mean
a change in control of the Bank or
the Bank's mid-tier
holding company (the "Company") or mutual
holding company
(the "MHC"), of a
nature that: (i) would be required to be reported in response
to Item 1(a) of the current report on Form 8-K, as in effect on the
date hereof,
pursuant to Section
13 or 15(d) of the
Securities
Exchange Act of 1934 (the
"Exchange Act");
or (ii) without
limitation such a
Change in Control shall be
deemed to have occurred at such time as (a) any "person" (as the
term is used in
Sections 13(d) and
14(d) of the Exchange
Act) is or becomes
the "beneficial
owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Bank or the Company representing
25% or more of
the combined voting
power of Bank's or the
Company's outstanding securities
except for any securities purchased by the Bank's employee
stock ownership plan
or trust; or (b)
individuals
who constitute the
Board on the date hereof (the
"Incumbent Board")
cease for any
reason to constitute at least a majority
thereof, provided
that any person
becoming a director
subsequent to the
date
hereof whose election was approved by a vote of at least
three-quarters
of the
members of the entire Board of Directors then in office shall be
considered, for
purposes of this clause (b), as though he were a member of the
Incumbent Board;
or (c) a plan of reorganization, merger, consolidation, sale of all or
substantially all the
assets of the Bank or the Company or similar transaction
in which the Bank or Company is not the surviving institution occurs; or (d) a
proxy statement soliciting proxies from
