|
Exhibit
10.1
A MENDED
AND R ESTATED E
MPLOYMENT A GREEMENT
This A
MENDED AND R ESTATED E
MPLOYMENT A GREEMENT (the
“Agreement”) is made and entered into as of
November 14, 2007 (the “Effective Date”) by and
between L AKE S HORE B
ANCORP , I NC . , a
federally-chartered corporation having an office at 128 East 4th
Street, Dunkirk, New York 14048 (the “Company”) and
D AVID C. M ANCUSO , an
individual residing at
(the “Executive”).
I
NTRODUCTORY S TATEMENT
L AKE S
HORE S AVINGS B
ANK , a federally-chartered savings bank having
an office at 128 East 4th Street, Dunkirk, New York 14048 (the
“Bank”) has reorganized from a New York-chartered
mutual savings and loan association to a federally-chartered stock
savings bank and has become a wholly-owned subsidiary of the
Company, a mid-tier stock holding company, which is majority owned
by L AKE S HORE , MHC , a
mutual holding company (the “Reorganization”). In
connection with the Reorganization, certain shares of the
Company’s common stock were sold in an initial public stock
offering. The Executive has served the Bank in an executive
capacity for many years and is familiar with the Bank’s
operations.
The Board of Directors of the
Company has concluded that it is in the best interests of the
Company and their prospective shareholders to secure a continuity
in management following the Reorganization. They also consider it
desirable to establish a working environment for the Executive
which minimizes the personal distractions that might result from
possible business combinations in which the Company might be
involved. For these reasons, the Board of Directors of the Company
has decided to offer to enter into a contract with the Executive
for his future services. The Executive has accepted this
offer.
The terms and conditions
which the Company and the Executive have agreed to are as
follows.
A
GREEMENT
Section 1.
Employment .
The Company hereby continues
to employ the Executive, and the Executive hereby accepts such
continued employment, during the period and upon the terms and
conditions set forth in this Agreement.
Section 2.
Employment Period; Remaining Unexpired Employment Period
.
(a) The Company shall employ
the Executive during an initial period of three (3) years
beginning on the effective date of the Reorganization (the
“Employment Commencement Date”) and ending on the day
before the third (3rd) anniversary of the Employment
Commencement Date, and during the period of any additional
extensions described in section 2(b) (the “Employment
Period”).
(b) The Board of Directors of
the Company shall conduct an annual review of the Executive’s
performance on or about each anniversary of the Employment
Commencement Date (each, an “Anniversary Date”) and
may, on the basis of such review and
by written notice to the Executive,
offer to extend the Employment Period through the day before the
third (3rd) anniversary of the relevant Anniversary Date. In
such event, the Employment Period shall be deemed extended in the
absence of objection from the Executive by written notice to the
Company given within ten (10) business days after his receipt
of the Company’s offer of extension.
(c) Except as otherwise
expressly provided in this Agreement, any reference in this
Agreement to the term “Remaining Unexpired Employment
Period” as of any date shall mean the period beginning on
such date and ending on the day before the third
(3rd) anniversary of the Employment Commencement Date or, if
later, on the day before the third (3rd) anniversary of the
last Anniversary Date as of which the Employment Period was
extended pursuant to section 2(b).
(d) Nothing in this Agreement
shall be deemed to prohibit the Company from terminating the
Executive’s employment before the end of the Employment
Period with or without notice for any reason. This Agreement shall
determine the relative rights and obligations of the Company and
the Executive in the event of any such termination. In addition,
nothing in this Agreement shall require the termination of the
Executive’s employment at the expiration of the Employment
Period. Any continuation of the Executive’s employment beyond
the expiration of the Employment Period shall be on an
“at-will” basis unless the Company and the Executive
agree otherwise.
Section 3.
Duties .
The Executive shall serve as
Chief Executive Officer and President of the Company, having such
power, authority and responsibility and performing such duties as
are prescribed by or under the Company’s By-Laws and as are
customarily associated with such positions. The Executive shall
devote his full business time and attention (other than during
weekends, holidays, approved vacation periods, and periods of
illness or approved leaves of absence) to the business and affairs
of the Company and shall use his best efforts to advance their
respective best interests.
Section 4. Cash
Compensation .
In consideration for the
services to be rendered by the Executive hereunder, the Company
shall pay to him a salary at an initial annual rate of TWO HUNDRED
THIRTEEN THOUSAND FIVE HUNDRED FIFTY DOLLARS ($213,550), payable in
approximately equal installments in accordance with their
respective customary payroll practices for senior officers. The
Company’s Board of Directors shall review the
Executive’s annual rate of salary at such times during the
Employment Period as it deems appropriate, but not less frequently
than once every twelve (12) months, and may, at its
discretion, approve a salary increase. In addition to salary, the
Executive may receive other cash compensation from the Company for
services hereunder at such times, in such amounts and on such terms
and conditions as the Board of Directors of the Company may
determine.
-2-
Section 5.
Employee Benefit Plans and Programs .
During the Employment Period,
the Executive shall be treated as an employee of the Company and
shall be entitled to participate in and receive benefits under any
and all qualified or non-qualified retirement, pension, savings,
profit-sharing or stock bonus plans, any and all group life, health
(including hospitalization, medical and major medical), dental,
accident and long-term disability insurance plans, and any other
employee benefit and compensation plans (including, but not limited
to, any incentive compensation plans or programs, stock option and
appreciation rights plans and restricted stock plans) as may from
time to time be maintained by, or cover employees of, the Company,
in accordance with the terms and conditions of such employee
benefit plans and programs and compensation plans and programs and
consistent with the Company’s customary practices.
Section 6.
Indemnification and Insurance .
(a) To the maximum extent
permitted under applicable law, during the Employment Period and
for a period of six (6) years thereafter, the Company shall
cause the Executive to be covered by and named as an insured under
any policy or contract of insurance obtained by them to insure
their directors and officers against personal liability for acts or
omissions in connection with service as an officer or director of
the Company or the Bank or service in other capacities at their
request. The coverage provided to the Executive pursuant to this
section 6 shall be of the same scope and on the same terms and
conditions as the coverage (if any) provided to other officers or
directors of the Company.
(b) To the maximum extent
permitted under applicable law, during the Employment Period and
for a period of six (6) years thereafter, the Company shall
indemnify the Executive against and hold him harmless from any
costs, damages, losses and exposures arising out of a bona fide
action, suit or proceeding in which he may be involved by reason of
his having been a director or officer of the Company to the fullest
extent and on the most favorable terms and conditions that similar
indemnification is offered to any director or officer of the
Company or any subsidiary or affiliate thereof.
(c) The Executive, the
Company and the Bank agree that the termination benefits described
in this Section 6 are intended to be exempt from
Section 409A (“Section 409A”) of the Internal
Revenue Code of 1986, as amended (the “Code”) pursuant
to Treasury Regulation Section 1.409A-1(b)(10) as certain
indemnification and liability insurance plans.
Section 7.
Outside Activities .
The Executive may serve as a
member of the boards of directors of such business, community and
charitable organizations as he may disclose to and as may be
approved by the Board of Directors of the Company (which approval
shall not be unreasonably withheld); provided, however, that such
service shall not materially interfere with the performance of his
duties under this Agreement nor shall it violate any applicable
laws or regulations. The Executive may also engage in personal
business and investment activities which do not materially
interfere with the performance of his duties hereunder; provided,
however, that such activities are not prohibited under any code of
conduct or investment or securities trading policy established by
the Company and generally applicable to all similarly situated
executives and that such activities are not prohibited by any
applicable laws or regulations.
-3-
Section 8.
Working Facilities and Expenses .
The Executive’s
principal place of employment shall be at the Company’s
executive offices at the address first above written, or at such
other location as the Company and the Executive may mutually agree
upon. The Company shall provide the Executive at his principal
place of employment with a private office, secretarial services and
other support services and facilities suitable to his positions
with the Company and necessary or appropriate in connection with
the performance of his assigned duties under this Agreement. The
Company shall reimburse the Executive for his ordinary and
necessary business expenses, including, without limitation, fees
for memberships in such clubs and organizations that are necessary
and appropriate for business purposes as mutually agreed by the
Company and the Executive, and his travel and entertainment
expenses incurred in connection with the performance of his duties
under this Agreement, in each case only if such expenses are
presented and approved in accordance with the Company’s
business reimbursement policy then in effect.
Section 9.
Termination Due to Death .
The Executive’s
employment with the Company shall terminate, automatically and
without any further action on the part of any party to this
Agreement, on the date of the Executive’s death. In such
event:
(a) The Company shall pay to
the Executive’s estate his earned but unpaid compensation
(including, without limitation, salary and all other items which
constitute wages under applicable law) as of the date of his
termination of employment as defined in Treasury Regulation
Section 1.409A-1(h)(1)(ii). This payment shall be made at the
time and in the manner prescribed by law applicable to the payment
of wages but in no event later than thirty (30) days after the
date of the Executive’s termination of employment.
(b) The Company shall provide
the benefits, if any, due to the Executive’s estate,
surviving dependents or his designated beneficiaries under the
employee benefit plans and programs and compensation plans and
programs maintained for the benefit of the officers and employees
of the Company. The time and manner of payment or other delivery of
these benefits and the recipients of such benefits shall be
determined according to the terms and conditions of the applicable
plans and programs.
The payments and benefits described in
sections 9(a) and (b) shall be referred to in this Agreement
as the “Standard Termination Entitlements.”
The Executive, the Company
and the Bank agree that the termination benefits described in this
section 9 are intended to be exempt from Section 409A pursuant
to Treasury Regulation Section 1.409A-1(b)(4) as short-term
deferrals or pursuant to Treasury Regulation
Section 1.409A-1(b)(1) as non-taxable benefits.
Section 10.
Termination Due to Disability .
The Company may terminate the
Executive’s employment upon a determination, by vote of a
majority of the members of the Board of Directors of the Company,
acting in reliance on the written advice of a medical professional
acceptable to them, that the Executive is suffering from a physical
or mental impairment which, at the date of the determination, has
prevented the Executive
-4-
from performing his assigned duties on a
substantially full-time basis for a period of at least one hundred
and eighty (180) days during the period of one (1) year
ending with the date of the determination or is likely to result in
death or prevent the Executive from performing his assigned duties
on a substantially full-time basis for a period of at least one
hundred and eighty (180) days during the period of one
(1) year beginning with the date of the determination. In such
event:
(a) The Company shall pay and
deliver to the Executive (or in the event of his death before
payment, to his estate and surviving dependents and beneficiaries,
as applicable) the Standard Termination Entitlements within the
timeframes contained in section 9.
(b) In addition to the
Standard Termination Entitlements, the Company shall continue to
pay the Executive his base salary, at the annual rate in effect for
him immediately prior to the termination of his employment, during
a period ending on the earliest of: (i) the expiration of one
hundred and eighty (180) days after the date of termination of
his employment; (ii) the date on which long-term disability
insurance benefits are first payable to him under any long-term
disability insurance plan covering employees of the Company (the
“LTD Eligibility Date”); (iii) the date of his
death; and (iv) the expiration of the Remaining Unexpired
Employment Period (the “Initial Continuation Period”).
If the end of the Initial Continuation Period is neither the LTD
Eligibility Date nor the date of his death, the Company shall
continue to pay the Executive his base salary, at an annual rate
equal to sixty percent (60%) of the annual rate in effect for
him immediately prior to the termination of his employment, during
an additional period ending on the earliest of the LTD Eligibility
Date, the date of his death and the expiration of the Remaining
Unexpired Employment Period.
A termination of employment due to
disability under this section 10 shall be effected by joint notice
of termination given to the Executive by the Company and shall take
effect on the later of the effective date of termination specified
in such notice or the date on which the notice of termination is
deemed given to the Executive.
The Executive, the Company
and the Bank agree that the termination benefits described in this
section 10 are intended to be exempt from Section 409A
pursuant to Treasury Regulation Section 1.409A-1(b)(4) as
short-term deferrals or pursuant to Treasury Regulation
Section 1.409A-1(b)(1) as non-taxable benefits.
Section 11.
Discharge with Cause .
(a) The Company may terminate
the Executive’s employment during the Employment Period, and
such termination shall be deemed to have occurred with
“Cause”, only if:
(i) The Board of Directors of
the Company, by majority vote of their entire membership, determine
that the Executive should be discharged because of personal
dishonesty, incompetence, willful misconduct, breach of fiduciary
duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) or final cease
and desist order, or any material breach of this Agreement;
and
-5-
(ii) at least forty-five
(45) days prior to the votes contemplated by section 11(a)(i),
the Company has provided the Executive with notice of its intent to
discharge the Executive for Cause, detailing with particularity the
facts and circumstances which are alleged to constitute Cause (the
“Notice of Intent to Discharge”); and
(iii) after the giving of the
Notice of Intent to Discharge and before the taking of the votes
contemplated by section 11(a)(i), the Executive (together with his
legal counsel, if he so desires) is afforded a reasonable
opportunity to make both written and oral presentations before the
Board of Directors of the Company for the purpose of refuting the
alleged grounds for Cause for his discharge; and
(iv) after the votes
contemplated by section 11(a)(i), the Company have furnished to the
Executive a notice of termination which shall specify the effective
date of his termination of employment (which shall in no event be
earlier than the date on which such notice is deemed given) and
include a copy of a resolution or resolutions adopted by the Board
of Directors of the Company, certified by its corporate secretary
and signed by each member of the Board of Directors voting in favor
of adoption of the resolution(s), authorizing the termination of
the Executive’s employment with Cause and stating with
particularity the facts and circumstances found to constitute Cause
for his discharge (the “Final Discharge
Notice”).
(b) If the Executive is
discharged during the Employment Period with Cause, the Company
shall pay and provide to him (or, in the event of his death, to his
estate, his surviving beneficiaries and his dependents) the
Standard Termination Entitlements only, within the timeframes
contained in section 9. Following the giving of a Notice of Intent
to Discharge, the Company shall temporarily suspend the
Executive’s duties and authority and, in such event, shall
also suspend the payment of salary and other cash compensation, but
not the Executive’s participation in retirement, insurance
and other employee benefit plans. If the Executive is not
discharged, or is discharged without Cause, within forty-five
(45) days after the giving of a Notice of Intent to Discharge,
payments of salary and cash compensation shall resume, and all
payments withheld during the period of suspension shall be promptly
restored. If the Executive is discharged with Cause not later than
forty-five (45) days after the giving of the Notice of Intent
to Discharge, all payments withheld during the period of suspension
shall be deemed forfeited and shall not be included in the Standard
Termination Entitlements. If the Company does not give a Final
Discharge Notice to the Executive within ninety (90) days
after giving a Notice of Intent to Discharge, the Notice of Intent
to Discharge shall be deemed withdrawn and any future action to
discharge the Executive with Cause shall require the giving of a
new Notice of Intent to Discharge.
Section 12.
Discharge without Cause .
The Company may discharge the
Executive at any time during the Employment Period and, unless such
discharge constitutes a discharge with Cause:
(a) The Company shall pay and
deliver to the Executive (or in the event of his death before
payment, to his estate and surviving dependents and beneficiaries,
as applicable) the Standard Termination Entitlements within the
timeframes contained in section 9.
-6-
(b) During the Remaining
Unexpired Employment Period, the Company shall provide for the
Executive and his dependents continued group life, health
(including hospitalization, medical and major medical), dental,
accident and long-term disability insurance benefits on
substantially the same terms and conditions (including any required
premium-sharing arrangements, co-payments and deductibles) in
effect for similarly situated employees of the Company. The
coverage provided under this section 12(b) may, at the election of
the Company, be secondary to the coverage provided as part of the
Standard Termination Entitlements and to any employer-paid coverage
provided by a subsequent employer or through Medicare, with the
result that benefits under the other coverages will offset the
coverage required by this section 12(b).
(c) The Company shall make a
lump sum payment to the Executive (or, in the event of his death
before payment, to his estate), in an amount equal to the value of
the salary, bonus, short-term and long-term cash compensation that
the Executive received in the calendar year preceding that in which
the termination of employment with the Company occurs divided by
twelve (12) and then multiplied by the number of months
remaining in the Remaining Unexpired Employment Period to
compensate the Executive for the payments the Executive would have
received during the Remaining Unexpired Employment Period. Such
lump sum shall be paid in lieu of all other payments of salary,
bonus, short-term and long-term cash compensation provided
for
| 
