Exhibit 10.3
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This AGREEMENT is made as of this
_ 25th _ day of January, 2006, by and among PARTNERS TRUST
BANK, a federally chartered stock savings bank (the "Employer") and
a wholly owned subsidiary of PARTNERS trust financial group, inc.,
a Delaware corporation ("Partners Trust"), Partners Trust and
RICHARD F. CALLAHAN, an individual residing in Clinton, New York
(the "Executive").
WHEREAS, the Executive is serving
as Senior Vice President/Retail Banking of the Employer;
WHEREAS, the Executive and the
Employer previously entered into an Employment Agreement, dated
December 1, 2004 (the "Prior Agreement"), which the Employer and
the Executive intend to be replaced and superceded by this
Agreement;
WHEREAS, the Board of Directors
of the Employer, have approved and authorized the Employer to enter
into this Agreement with the Executive; and
WHEREAS, the parties desire to
enter into this Agreement, setting forth the terms and conditions
for the employment relationship of the Executive with the
Employer;
NOW, THEREFORE, in consideration
of the foregoing and the mutual promises, covenants and agreements
set forth in this Agreement, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties agree as follows:
1.
Employment.
(a)
Term. The initial term of employment under this Agreement
shall be for the period commencing on the date hereof and ending on
March 31, 2008 (the "Initial Term"). Subject to annual review and
approval by the Board of Directors of the Employer, this Agreement
may be extended by written notice from the Employer to the
Executive for an additional consecutive 12-month period (the
"Extended Term") no later than March 31, 2007 and every subsequent
March thereafter, unless the Executive has given contrary written
notice to the Employer at least 90 days before any such renewal
date. The Initial Term and all such Extended Terms are collectively
referred to herein as the "Employment Term."
(b)
Duties. The Executive is employed as Senior Vice
President/Retail Banking during the Employment Term. As Senior Vice
President/Retail Banking, the Executive shall render executive,
policy and other management services to the Employer consistent
with the Executive's position and experience and of the type
customarily performed by persons serving in a similar Senior Vice
President/Retail Banking capacity, and shall be responsible for
implementing the policies of the employer, and shall report to the
person(s) designated by the Board of Directors of the Employer to
give direction to the Executive. During the Employment Term, there
shall be no material decrease in the duties and responsibilities of
the Executive otherwise than as provided herein, unless the parties
otherwise agree in writing; provided , that if the Executive
temporarily assumes some or all of the duties and responsibilities
of another key executive of the Employer due to such key
executive's death, disability or termination of employment, the
reassignment of such duties and responsibilities back to the key
executive or his or her replacement shall not constitute a material
decrease in the duties and responsibilities of the Executive.
During the Employment Term, the Executive shall not be required to
relocate, without his consent, his place of employment to a
location more than 90 miles away from the Employer's Utica, New
York headquarters location to perform his duties hereunder, except
for reasonably required travel by the Executive on the business of
the Employer. The Executive is encouraged to affiliate with
professional associations, business and civic organizations in
support of his role as Senior Vice President/Retail Banking,
provided that Executive's involvement in such activities does not
adversely affect the performance of his duties on behalf of the
Employer.
2.
Compensation and Benefits.
(a)
Base Salary. The Executive shall initially be paid a base
salary at an annualized rate of $150,000 (as may be adjusted from
time to time in accordance with this Agreement, "Base Salary"),
payable in accordance with the Employer's regular payroll practices
for its executive employees. On an annual basis, prior to June 30
of each year during the Employment Term, the Executive's Base
Salary shall be reviewed by the Chief Executive Officer in
conjunction with the Board of Directors of the Employer and may be
increased in the discretion of the Board of Directors of the
Employer. In reviewing the Executive's Base Salary, the Chief
Executive Officer and Board of Directors of the Employer shall
consider the Executive's performance, scope of responsibility, and
such other matters as they deem appropriate. The Base Salary of the
Executive shall not be decreased at any time during the Employment
Term from the amount then in effect, unless the Executive otherwise
agrees in writing.
(b)
Bonuses and Incentive Compensation. The Executive shall be
eligible to participate with all other executive employees of the
Employer in any bonus or other incentive programs as may be
authorized and declared by the Employer for executive employees
generally. No other compensation provided for in this Agreement
shall be deemed a substitute for the Executive's right to
participate in such bonuses and incentive programs when and as
declared by the Board of Directors of the Employer. This provision
shall not preclude the grant of any other bonus to the Executive as
determined by the Board of Directors of the Employer.
(c)
Benefit Plans. The Executive 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), group life insurance plans,
medical plans, dental plans, long-term disability plans, business
travel insurance programs and other fringe benefit plans or
programs maintained by the Employer or Partners Trust for the
benefit of its executive employees. The Executive's participation
in any such benefit plans and programs shall be based on, and
subject to satisfaction of, the eligibility requirements and other
conditions of such plans and programs. If the Executive's
employment by the Employer shall cease for any reason other than by
voluntary termination (as described in Section 3(b) below) or for
"Cause" (defined in Section 3(e) below), the Executive shall
receive continued group life, health, dental, accident and long
term disability insurance coverage for the remaining Employment
Term, equivalent to the coverage to which he would have been
entitled under such plans (as in effect on the date of his
termination of employment, or, if his termination of employment
occurs after a "Change of Control" (defined in Section 4(b) below),
on the date of such Change of Control, whichever benefits are
greater, if he had continued working for the Employer during the
remaining Employment Term at the highest rate of salary achieved
during the Employment Term, but taking into account any coverage
provided from any subsequent employer.
(d)
Expenses. The Executive is expected and is authorized to
incur reasonable expenses in the performance of his duties
hereunder, including the costs of business entertainment, travel,
and attendance at conventions and meetings. The Employer shall
reimburse the Executive for all such expenses promptly upon
periodic presentation by the Executive of an itemized account of
such expenses.
(e)
Other Benefits. During the period of employment, the
Executive shall also be entitled to receive the following
benefits:
(i)
Paid vacation of at least four weeks during each calendar year
(prorated for partial years) (with no carry over of unused vacation
to a subsequent year) and any holidays that may be provided to
substantially all employees of the Employer in accordance with the
Employer's holiday policy;
(ii)
Reasonable sick leave consistent with the Employer's policy in that
regard for other executive officers; and
(iii)
Reimbursement of fees or dues (but not personal expenses) for one
club membership at a dining or country club as may be beneficial to
the Executive's roles with the Employer. The choice of clubs shall
be subject to prior review and approval by the Chief Executive
Officer of the Employer, and shall be subject to subsequent review
and disapproval by the Chief Executive Officer.
3.
Termination.
Prior to a Change of Control, the
Executive's employment by the Employer shall be subject to
termination as follows:
(a)
Expiration of the Employment Term . The Executive's
employment with the Employer shall not terminate prior to the
expiration of the established term, except as provided below in
Section 3.
(b)
Voluntary Termination . The Executive may terminate this
Agreement upon not less than 60 days prior written notice delivered
to the Employer, in which event the Executive shall be entitled
only to the compensation and benefits the Executive has earned or
accrued through the effective date of the voluntary
termination.
(c)
Termination Upon Death . This Agreement shall terminate upon
the Executive's death. In the event this Agreement is terminated as
a result of the Executive's death, the Employer shall continue
payments of the Executive's Base Salary which should have otherwise
been due for a period of 30 days following the Executive's death to
the Executive's estate.
(d)
Termination Upon Disability . The Employer may terminate
this Agreement upon the Executive's disability. For purposes of
this Agreement, the Executive's inability to perform the
Executive's duties hereunder by reason of physical or mental
illness or injury for a period of 26 consecutive weeks that follows
the Executive's use of all available sick leave (the "Disability
Period") shall constitute disability. The determination of
disability shall be made by a physician selected by the Employer.
During the Disability Period, the Executive shall be entitled to
100% of the Executive's Base Salary otherwise payable during that
period, reduced by any other Employer provided benefits to which
the Executive may be entitled with respect to the Disability Period
which benefits are specifically payable solely 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).
(e)
Termination for Cause . The Employer may terminate the
Executive's employment for Cause by written notice to the
Executive. For purposes of this Agreement, "Cause" shall mean the
Executive's (1) personal dishonesty, incompetence, willful
misconduct; (2) breach of fiduciary duty involving personal profit,
intentional failure to perform material stated duties; (3) willful
violation of any law, rule, or regulation (other than traffic
violations or similar offenses); (4) being a specific subject of a
final cease and desist order from, written agreement with, or other
order or supervisory direction from, any federal or state
regulatory authority; or (5) conduct tending to bring the Employer
or Partners Trust into substantial public disgrace or disrepute. In
determining incompetence, the acts or omissions shall be measured
against standards generally prevailing in the financial
institutions industry; provided, it shall be the burden of the
Employer to prove the alleged acts and omissions and the prevailing
nature of the standards the Employer shall have alleged are
violated by such acts or omissions.
Notwithstanding any other term or
provision of this Agreement to the contrary, if the Executive's
employment is terminated for Cause, the Executive 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.
(f)
Termination Without Cause. The Employer may terminate the
Executive's employment for reasons other than Cause upon not less
than 60 days prior written notice delivered to the Executive, in
which event the Employer shall pay to the Executive, within 30 days
of the date of termination, a lump sum payment equal to the unpaid
Base Salary that would have been paid to or earned by the Executive
pursuant to this Agreement, if the Executive had remained employed
under the terms of this Agreement through the end of the Initial
Term, or for a period of 12 months following the date of
termination, whichever period is longer. If the Executive
terminates his employment with the Employer during the Employment
Term for "Good Reason" (defined in Section 4(c) below), other than
following a Change of Control, such termination shall be deemed to
have been a termination by the Employer of the Executive's
employment without Cause.
(g)
Change of Control. If the Executive's employment by the
Employer shall cease for any reason other than Cause within six
months prior to, or 24 months following, a Change of Control that
occurs during the Employment Term, the provisions of paragraph 4
below shall apply.
(h)
Resignation. Effective upon the Executive's termination of
employment for any reason, the Executive hereby resigns from any
and all offices and positions related to the Executive's employment
with the Employer and any subsidiaries or affiliates thereof, and
held by the Executive at the time of termination.
(i)
Regulatory Limits. Notwithstanding any other provision in
this Agreement, (i) the Employer may terminate or suspend this
Agreement and the employment of the Executive hereunder, as if such
termination were for Cause under Section 3(e) hereof, to the extent
required by the applicable Federal or state related to banking,
deposit insurance or bank or savings institution holding companies
or by regulations or orders issued by the Office of Thrift
Supervision, the Federal Deposit Insurance Corporation or any other
state or federal banking regulatory agency having jurisdiction over
Partners Trust or the Employer and (ii) no pa
