Exhibit 10.29
EMPLOYMENT AGREEMENT
This sets forth the terms of the Employment Agreement made
effective
as of December 1, 2005 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) MARK E. TRYNISKI, an
individual
currently residing at 1964 Penfold Way, Baldwinsville, New York
("Employee").
This Agreement is effective as of December 1, 2005 and supersedes
the Employment
Agreement between the parties dated as of March 8, 2004.
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 for a term commencing
on December 1, 2005 and ending on December 31, 2008 ("Period of
Employment"),
subject to termination as provided in paragraph 3 hereof. Employee
shall serve
as Chief Operating Officer and Executive Vice President of
Community Bank
System, Inc. and Community Bank, N.A., from December 1, 2005 until
the earlier
of (i) the retirement of Sanford A. Belden as Employer's President
and Chief
Executive Officer, or (ii) August 1, 2006, at which earlier time
Employee will
succeed Sanford A. Belden as President and Chief Executive Officer
of Employer.
(b) Salary. During the period of December 1, 2005 through the
date Employee assumes the duties of President and Chief Executive
Officer of
Employer, Employer shall pay Employee base salary at the annual
rate of
$325,000.00 ("Base Salary"). Employee's Base Salary shall increase
to an annual
rate of $400,000.00 when Employee assumes the duties of President
and Chief
Executive Officer of Employer. Employee's Base Salary for periods
after Employee
assumes the duties of President and Chief
<PAGE>
Executive Officer of Employer shall be reviewed and adjusted in
accordance with
Employer's regular payroll practices for executive employees.
(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.
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.
2. Duties during the Period of Employment. Employee shall have
responsibility, subject to the control of Employer's Board of
Directors for the
supervision of all assigned aspects of Employer's business and
operations,
including all banking, operations, financial services, technology,
treasury
management and human resources activities, 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. Employee
shall report to
the President and Chief Executive Officer of Employer until
Employee assumes the
duties of President and Chief Executive Officer of Employer and
thereafter shall
report to Employer's Board of Directors. Upon assuming the duties
of President
and Chief Executive Officer, Employee shall have responsibility,
subject to the
control of Employer's Board of Directors, for the supervision of
all aspects of
Employer's business and operations, and such other duties and
responsibilities
as may from time to time be reasonably assigned to Employee by
Employer's Board
of Directors. 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, business and civic organizations;
provided that such
affiliations are not inconsistent with and do interfere with the
performance of
Employee's duties under this Agreement. In connection with the
Employee assuming
the duties of President and Chief Executive Officer, the
Employee
<PAGE>
shall be appointed to serve as a Director of Community Bank System,
Inc. and
Community Bank, NA, provided that such appointment and subsequent
re-nomination
to serve as a Director shall be subject to (i) Employee being
qualified to serve
under applicable law, regulations, and the Employer's bylaws, and
(ii) the
exercise of the fiduciary duties of the Employer's Board of
Directors and
nominating committee of the Board of Directors. 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 or
any of its affiliates.
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 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
<PAGE>
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 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 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;
<PAGE>
(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 violation 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. In the event
Employer terminates Employee prior to December 31, 2008 for reasons
other than
cause, Employee shall be entitled to a severance benefit equal to
the greater of
(i) 200 percent of 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 biweekly 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 biweekly
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
pursuant to paragraph 1(i) of the separate "Supplemental Retirement
Plan
Agreement" between Employee and Employer, as amended, for benefits
payable
pursuant to that separate agreement; and (vi)
<PAGE>
cover Employee and his eligible dependents under all Employer
benefit plans and
programs available to Employer's retired employees.
If Employer's Board of Directors shall determine, in its sole
discretion, to appoint someone other than Employee to succeed
Sanford A. Belden
as Employer's President and Chief Executive Officer, and if
Employee shall
remain employed until the effective date of the successor's
appointment, then
(x) Employee's employment with Employer shall terminate
automatically upon the
effective date of the successor's appointment without any further
action by
either Employee or Employer, unless a new employment agreement is
reached
between Employee and Employer, and (y) Employee's termination under
such
circumstances shall be treated as a termination for reasons other
than cause as
described in this paragraph 3(e) (resulting in Employee's
entitlement to the
benefits described in the first paragraph of this
paragrap
