AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This
Amended and Restated
Employment Agreement
(the "Agreement") is
made
effective as of September 29, 2008 (the "Effective Date"), by and
between Seneca
Falls Savings Bank, a federally chartered savings bank with its
principal office
in Seneca Falls,
New York (the "Bank"), and Menzo D. Case ("Executive").
References to
the "Company" mean Seneca-Cayuga Bancorp, Inc. a federal
corporation that owns 100% of the common stock of the Bank. The
Company shall be
a signatory to this
Agreement for the sole purpose of guaranteeing the Bank's
performance hereunder.
WHEREAS, the
Executive is currently employed as President and Chief
Executive Officer of the Bank and is a party to an employment
agreement entered
into on January 1, 2006 (the "Original Agreement"); and
WHEREAS, the Bank
desires to amend and restate the Original Agreement in
order to make changes to comply with Section 409A of the Internal
Revenue Code
of 1986, as amended (the "Code") and the final regulations
issued thereunder
in
April 2007; and
WHEREAS, the
Executive is willing to serve the Bank on the terms and
conditions hereinafter set forth and has agreed to such changes;
and
WHEREAS, the Board of Directors of the Bank and the Executive
believe it is
in the best interests
of the Bank to enter
into this Agreement in order to
reinforce and
reward the
Executive for his service and dedication to the
continued success of
the Bank and incorporate the changes required by Section
409A of the Code.
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.
During the period of his employment hereunder, Executive agrees to
serve as
President and Chief Executive Officer of the Bank (the
"Executive
Position").
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 to Executive Position without the consent of Executive
during the term
of this Agreement
(except for any
termination for Cause,
as defined
herein)
shall constitute a breach of this Agreement.
2. TERM AND
DUTIES.
(a)
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 36 full
calendar months
thereafter, provided
that all changes
intended to comply with
Code Section
409A shall be
retroactively
effective to January 1, 2006; and
provided further that
no retroactive change
shall affect the
compensation or
benefits previously
provided to the Executive. Commencing on the first
anniversary date of
this Agreement,
and continuing at each
anniversary
date
thereafter, the
Agreement shall renew for an additional year such that the
remaining term shall be 36 full
<PAGE>
calendar months; provided, however, if written notice of
nonrenewal is provided
to Executive
at least ten days and not more than 30 days prior to any
anniversary date, the
term of this Agreement
shall not so renew. On
an annual
basis prior to the deadline for the notice period referenced above,
the board of
directors of the Company (the "Board of Directors") shall conduct a performance
review of Executive
for purposes of
determining whether to
provide notice of
nonrenewal.
(b)
During the period of his employment hereunder, except for periods of
absence occasioned by
illness, reasonable
vacation periods, and reasonable
leaves of absence
approved by the board
of directors
of the Bank
("Board"),
Executive shall devote
substantially all his business time, attention, skill,
and efforts
to the faithful performance of his duties hereunder including
activities and services related to the organization, operation and
management of
the Bank; provided,
however, that, with
the approval of the Board of the Bank,
as evidenced by a resolution of such Board, from time to time, Executive may
serve, or continue to
serve, on the boards
of directors of, and hold any other
offices or positions in, business companies or business
organizations, which, in
such Board's judgment,
will not present any conflict of interest with the Bank,
or materially affect
the performance
of Executive's
duties pursuant to this
Agreement it being
understood
that membership in and service on boards or
committees of social,
religious, charitable
or similar
organizations does not
require Board
approval pursuant to this Section 2(b). For purposes of this
Section 2(b), Board
approval shall be deemed to have been granted as to service
with any such business company or organization that Executive was serving as
of
the date of this Agreement.
3. COMPENSATION,
BENEFITS AND REIMBURSEMENT.
(a)
The compensation
specified under this
Agreement shall
constitute the
salary and benefits
paid for the duties
described in Section
2(b). The Bank
shall pay Executive as
compensation a salary of not less than $175,000 per year
("Base Salary"). Such
Base Salary shall be payable biweekly, or with such other
frequency as officers and employees are generally paid. During the period of
this Agreement,
Executive's
Base Salary shall be
reviewed at least
annually.
Such review may be conducted by a Committee designated by the Board, and the
Bank may increase,
but not decrease (except a decrease that is generally
applicable to all employees) Executive's Base Salary (with any
increase in Base
Salary to become "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
qualified and
nonqualified
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, except as
to any changes that are applicable to all participating
employees or as
reasonably
or customarily available. Without limiting the
generality of the foregoing provisions of this Subsection (b),
Executive will be
entitled to participate in or receive benefits under any
<PAGE>
employee benefit
plans including, but not limited to, retirement plans,
supplemental
retirement
plans, pension
plans,
profit-sharing
plans,
health-and-accident
insurance plans,
medical coverage or any other employee
benefit plan or
arrangement
made available by the Bank or the
Company 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
bonuses as provided in any plan of the Bank or the Company in which
Executive is
eligible to
participate.
Nothing paid to Executive under 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 or the Company shall pay or reimburse Executive for all
reasonable travel and other reasonable expenses incurred by
Executive 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. The Bank
shall reimburse
Executive for his ordinary and necessary
business expenses,
including, without
limitation, fees for memberships in such
clubs and
organizations as
Executive and the
Board shall mutually
agree are
necessary and appropriate for business purposes, and travel and entertainment
expenses, incurred in
connection with the
performance of his duties under this
Agreement, upon presentation to the Bank of an itemized account of
such expenses
in such form as the Bank may reasonably require. All reimbursements shall be
paid promptly
by the Bank and in any
event no later than
March 15 of the year
immediately following the year in which the expense was
incurred.
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
a termination for Cause, as defined in Section 8 hereof,
or a termination
upon
Retirement as defined in Section 7 hereof, or a termination for Disability as
set forth in Section 6(a) hereof; and (ii) to the extent
permitted under Code
Section 409A, Executive's resignation from the Bank's employ
for "Good Reason."
Good Reason shall mean any of the following: (A) failure to elect or reelect
or
to appoint or reappoint Executive to Executive Position,
unless consented to
by
Executive, (B)
a 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
Sections 1 and 2 above, to which Executive has not
agreed
in writing (and any such material change shall be deemed a
continuing breach
of
this Agreement), (C) a
relocation of Executive's principal place of employment
to a location
that is more
than 25 miles
from the location of the Bank's
principal executive
offices as of the date of this
Agreement,
or a material
reduction in
Base Salary (except for any reduction that is part of an
employee-wide
reduction in pay or
benefits), 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
within ninety (90)
days) after the event giving rise to said right to elect,
which termination by
Executive shall be an
Event of Termination.
The Bank shall have at
least (30)
days to remedy any condition set forth in clause (ii) (A)
through
<PAGE>
(D), provided, however, that the Bank shall be entitled to waive
such period and
make an immediate payment hereunder. If the Bank remedies the condition
within
such thirty (30) day cure period, then no Good Reason shall be
deemed to exist
with respect to such condition. If the Bank does not remedy the
condition within
such thirty
(30) day cure
period, then Executive may deliver a Notice of
Termination, as
defined in Section
9(c) below, for Good Reason at any time
within sixty (60) days following the expiration of such cure
period. No payments
or benefits shall be due to Executive under this Agreement upon the
termination
of Executive's employment except as provided in Section 4 or 5
hereof.
(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 lump sum cash amount equal to one and one-half (the
"Multiplier") times
the sum of (A) the highest annual rate of Base Salary
paid
to Executive
at any time under the
Agreement,
and (B) the greater of
(x) the
average annual cash bonus paid to Executive with respect to the
three 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 such Event of Termination
shall occur
within three months prior to, or 24 months following, a Change in Control, the
Multiplier shall equal
three. Such payments
shall not be reduced
in the event
Executive obtains
other employment
following termination of employment,
and
shall be payable
within thirty (30)
days following the
Executive's
Event of
Termination, except
if the payment is made due to an Event of Termination
occurring within three months prior to a Change in Control, such
payment will be
made on the effective
date of the Change in Control. Notwithstanding the
foregoing, in the
event the Executive
is a Specified Employee (as defined
herein), then,
solely, to the extent required to avoid penalties under Code
Section 409A, the
Executive's payment
under this Section 4(b) shall be delayed
until the first day of the seventh month following the Executive's Event of
Termination. A
"Specified Employee"
shall be interpreted to comply with
Code
section 409A and shall
mean a key employee
within the meaning of
Code Section
416(i) (without
regard to paragraph 5 thereof) but an
individual
shall be a
"Specified Employee" only if the Bank or Company is or becomes a
publicly traded
company.
(c)
Upon the occurrence of an Event of Termination, the Bank will provide
at the Bank's
expense, life insurance and non-taxable medical and dental
coverage substantially
comparable, as
reasonably or customarily available, 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 18 months following the Event of
Termination; provided, however, that if the Event of Termination
occurs within 3
months prior to, or 24 months following, a Change in Control, then
such coverage
shall cease 36 months after the Event of Termination. In the alternative, the
Company shall pay to
Executive a cash amount equal to Executive's cost of
obtaining such
benefits on his own,
adjusted for any federal or state
income
taxes Executive has to pay on the cash amount.
(d)
Upon the occurrence of an Event of Termination, any non-vested stock
options granted to
Executive under any
stock option plan or
restricted stock
plan of the Bank will fully vest.
<PAGE>
(e)
Notwithstanding the
foregoing, to the
extent necessary to comply with
OTS regulations,
payments upon an Event
of Termination shall
not exceed three
times the Executive's
average annual compensation over the most recent five
taxable years.
(f)
For purposes of this
Agreement, "Event of
Termination" as used herein
shall mean "Separation
from Service" as defined in Code
Section 409A and
the
Treasury Regulations
promulgated
thereunder, such that
the Bank and Executive
reasonably anticipate
that the level of bona
fide services Executive would
perform after
termination would
permanently
decrease to a level
that is less
than 50% of the average level of bona fide services performed (whether as an
employee or an independent contractor) over the immediately
preceding 36-month
period.
5. CHANGE IN
CONTROL.
(a)
"Change in Control" shall mean any of the following:
(1) "Change in Control" shall mean (i) a change in the
ownership of
the
Bank or Company, (ii)
a change in the effective control of the Bank or
Company, or (iii) a change in the ownership of a substantial
portion of the
assets of the Bank or Company, as described below.
(2) A change in the ownership of a corporation occurs on the date
that
any
one person,
or more than one
person acting as a
group (as defined in
Final Regulations
section 1.409A-3(i)(5)(v)(B)),
acquires ownership of
stock of the Bank or Company that, together with stock held by such
person
or
group, constitutes
more than 50 percent
of the total fair market value
or
total voting power of the stock of such corporation. For these
purposes,
a
change in ownership
will not be deemed to
have occurred if no
stock of
the
Bank or Company is outstanding.
(3) A change in the effective control of the Bank or Company occurs
on
the
date that either (i) any one person, or more than one person acting
as
a
group (as defined in
Final Regulations
section 1.409A-3(i)(5)(vi)(D))
acquires (or has acquired during the 12-month period ending
on the date of
the
most recent
acquisition by such person or persons) ownership of stock
of
the Bank or Company
possessing 30 percent
or more of the total
voting
power of the stock of
such Bank or
Company, or (ii) a majority of the
members of the Bank's or Company's board of directors is replaced during
any
12-month period by directors whose appointment or election is not
endorsed by a majority of the members of the Bank's or Company's board of
directors prior to the date of the appointment or election,
provided that
this
subsection "(ii)" is inapplicable where a majority shareholder of the
Bank
or Company is another corporation.
(4) A change in a
substantial portion
of the Bank's or Company's
assets occurs
on the date that any
one person
or more than one person
acting as
a group (as defined in Final Regulations section
1.409A-3(i)(5)(vii)(C)) acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or
persons) assets
from the Bank or
Company that have a total gross fair
market value
equal to or more than
40 percent
of the total
gross fair
market value of (i)
all of the assets of the Bank or Company, or (ii) the
value of the assets
being disposed of, either of which is determined
without regard to any
liabilities
associated
with such assets.
For all
purposes hereunder,
the definition of Change in Control shall be construed
to
be consistent with the requirements of Final Regulations
section
<PAGE>
1.409A-3(i)(5), ex
