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EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this "Agreement") dated as of January 1, 2007, by
and between, Greater Buffalo Savings Bank, a New York
chartered savings bank having its principal place of business
at 2421 Main Street, Buffalo, New York 14214 ("GBSB"), and
Lawrence Schiavi, an individual residing at 9199 Beech Meadow
Court, Clarence Center, NY 14032 (the "Executive"). GBSB and
the Executive are collectively the Parties and individually a
Party.
WITNESSETH:
WHEREAS,
Executive currently serves as Executive Vice President -
Mortgage Banking Division of GBSB;
WHEREAS,
GBSB (the "Employer") desire to continue to employ the
Executive, and the Executive desires to continue to be
employed by the Employer, all in accordance with the terms and
subject to the conditions set forth herein; and
WHEREAS,
the Parties are entering into this Agreement to set forth and
confirm their respective rights and obligations with respect
to the Executive's employment by the Employer.
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Parties hereto, intending to
be legally bound hereby, mutually agree as
follows:
1.
Employment and Term .
(a)
Effective as of [January 1, 2007] (the "Effective Date"), GBSB
shall continue to employ the Executive, and the Executive shall
continue to be employed by GBSB, as the Executive Vice President
Mortgage Banking Division of GBSB (with such position being
referred to herein as the "Position"), in accordance with the terms
and subject to the conditions set forth herein for a term (the
"Term") that shall commence on the Effective Date and, subject to
the provisions of this Section 1, shall continue for a period of
three years.
(b)
Unless written notice in accordance with Section 1(c) or 1(d), as
the case may be, terminating the Executive's employment under this
Agreement is given by (i) the Employer or (ii) the Executive, the
Employer shall have the option to renew this Agreement for
additional one year terms (“Renewal Term”) on an annual
basis thereafter by providing the Executive with one hundred eighty
(180) days written notice of the intent to renew. Unless otherwise
provided in this Agreement or as agreed by the Employer and the
Executive, all of the terms and conditions of this Agreement shall
continue in full force and effect throughout the Term and any
Renewal Term. In the event Employer does not exercise its right to
a Renewal Term, the Executive shall use his best efforts during the
remaining period of the Term to effectuate the orderly transition
of his duties in whatever manner the Employer directs.
(c)
Notwithstanding Section 1(b), the Employer, by action of its Board
of Directors (the "Board") or its President and effective as of the
date specified in a written notice to the Executive in accordance
with the terms of this Agreement, shall have the right to terminate
the Executive's employment under this Agreement at any time during
the Term or any Renewal Term (i) for Cause (as hereafter defined),
(ii) other than for Cause, or (iii) on account of the Executive's
death or Permanent Disability (as defined in this
Agreement).
(d)
Notwithstanding Section 1(b), the Executive, effective as of the
date specified in a written notice provided no less than 30 days in
advance, shall have the right to terminate his employment under
this Agreement at any time during the Term (i) for Good Reason (ii)
without Good Reason or (iii) in the event a Change in Control
occurs.
(e)
As used in this Agreement,
(i)
"Cause" shall mean (A) the Executive's willful and continued
failure substantially to perform his duties with the Employer as
set forth in this Agreement, or the commission by the Executive of
any act constituting a violation under any federal, state or local
law or regulation applicable to the activities of GBSB, in each
case, after notice thereof from the Employer to the Executive and a
reasonable opportunity for the Executive to cease such failure,
breach or violation in all material respects, (B) an act of
dishonesty, fraud or material misrepresentation, breach of
fiduciary duty, or other acts that cause material damage to the
property or business of GBSB by the Executive, (C) the Executive's
repeated absences from work such that he is unable to perform his
duties under this Agreement other than for physical or mental
impairment or illness, (D) the Executive's conviction of, or plea
of nolo contendere to, any crime referenced in Section 19 of the
Federal Deposit Insurance Act, (E) the Executive's conviction of,
or plea of nolo contendere to, any felony or any other crime that,
in the reasonable judgment of the Board, adversely affects GBSB's
reputation or the Executive's ability to carry out his obligations
under this Agreement, (F) the Executive's non-compliance with the
provisions of Section 2(b) of this Agreement after notice thereof
from the Employer to the Executive and a reasonable opportunity for
the Executive to cure such non-compliance or (G) the
Executive’s failure to achieve or attain the goals and
objectives as established from time to time by the Board or the
President and agreed to by the Executive.
(ii)
"Permanent Disability" shall mean: a physical or mental disability
such that the Executive is, with or without reasonable
accommodation, substantially unable to perform the duties of his
Position and the nonperformance of such duties has continued for a
period of six months extending beyond the Executive’s total
sick leave entitlement, provided, however, that in order to
terminate the Executive's employment under this Agreement on
account of Permanent Disability, the Employer must provide the
Executive with written notice, not less than 60 days prior to the
date of termination specified in such notice, of the Board's good
faith determination, based on a medical opinion of a physician
selected by the Employer and reasonably acceptable to the
Executive, to terminate the Executive's employment under this
Agreement for reason of Permanent Disability. Until the specified
effective date of termination by reason of Permanent Disability,
the Executive shall continue to receive compensation at the rates
set forth in Section 3. No termination of the Executive's
employment under this Agreement because of Permanent Disability
shall impair any rights of the Executive under any disability
insurance policy maintained by the Employer.
(iii)
"Good Reason" shall mean: (A) the Executive's Position or the scope
of the Executive's authority, duties or responsibilities as
described in this Agreement are materially diminished without the
Executive's written consent, excluding for this purpose any action
not taken by the Employer in bad faith and that is remedied by the
Employer promptly following written notice thereof from the
Executive to the Employer; (B) a material breach by the Employer of
its obligations to the Executive under this Agreement, which breach
is not cured in all material respects to the reasonable
satisfaction of the Executive within 30 days (except in the case of
a payment default for which the cure period shall be 10 days), in
each case following written notice thereof from the Executive to
the Employer, (C) any termination of the Executive's employment
under this Agreement without Cause or (D) failure of the Employer
to renew the Term of this Agreement under Section 1(b);
and
(iv)
"Change of Control" shall mean: (A) the acquisition of shares of
Great Lakes Bancorp, Inc. (“GLB”) by any "Person" or
"Group" (as such terms are used in Rule 13d-3 under the Securities
Exchange Act of 1934 as now or hereafter amended) in a transaction
or series of transactions that result in such person or group
directly or indirectly first owning beneficially more than 50% of
GLB's Common Stock after the date of this Agreement, or (B) the
consummation of a merger or other business combination after which
the holders of voting capital stock of GLB immediately prior to the
transaction do not collectively own 50% or more of the voting
capital stock (immediately following the transaction) of the entity
surviving such merger or other business combination, or (C) a sale
of all or substantially all of the assets or earning power of GLB,
taken as a whole (with the stock or other ownership interests of
GLB in any of its Affiliates constituting assets of GLB for this
purpose) to a Person that is not an Affiliate of GLB, or (D) as the
result of or in connection with any cash tender offer or exchange
offer, merger or other business combination, sale of assets or
contested election of directors or any combination of the foregoing
transactions (a "Transaction"), the persons who constituted a
majority of the members of the Board of Directors of GLB on the
Effective Date and persons whose election as members of the Board
of Directors of GLB was approved by such members then still in
office or whose election was previously so approved after the
Effective Date, but before the event that constitutes a
Transaction, no longer constitute such a majority of the members of
the Board of Directors of GLB then in office. A Transaction
constituting a Change of Control shall be deemed to have occurred
only upon the closing of the Transaction.
(v)
An “Affiliate” of, or a Person “Affiliated”
with, a specified Person, shall mean: a Person that directly, or
indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Person
specified.
2.
Duties of the Executive .
(a)
Subject to the ultimate control and discretion of the Board of the
Employer, the Executive shall serve in the Position and perform all
duties and services commensurate with the Position. Throughout the
Term, the Executive shall perform all duties reasonably assigned or
delegated to him under the by-laws of the Employer or from time to
time by the Board consistent with the Position. Except for travel
normally incidental and reasonably necessary to the business of the
Employer and the duties of the Executive under this Agreement, the
duties of the Executive shall be performed from an office location
not greater than 20 miles from the Greater Buffalo, New York
area.
(b)
The Executive shall devote substantially all of the Executive's
business time and attention to the performance of the Executive's
duties under this Agreement and, during the term of his employment
under this Agreement, the Executive shall not engage in any other
business enterprise that requires any significant amount of the
Executive's personal time or attention, unless granted by the prior
permission of the Board. The foregoing provision shall not prevent
the Executive's purchase, ownership or sale of any interest in, or
the Executive's engaging, but not to exceed an average of five
hours per week, in any business that does not compete with the
business of the Employer or the Executive's involvement in
charitable or community activities, provided, that the time and
attention that the Executive devotes to such business and
charitable or community activities does not interfere with the
performance of his duties under this Agreement and that the
greatest portion of the time devoted by the Executive to charitable
or community activities are devoted to charitable or community
activities within the Employer's market area and further provided
that such conduct complies in all respects with applicable policies
of the Employer.
(c)
The Executive shall be entitled to four weeks of vacation leave
during each calendar year with full compensation, and to be taken
at such time or times, as the Executive and the Employer shall
mutually determine. Earned but unused vacation shall accrue in
accordance with the Employer’s vacation policy as in effect
from time to time.
3.
Compensation .
For all services to be rendered by the Executive under this
Agreement:
(a)
The Employer shall pay the Executive a base salary (the "Base
Salary") at an annual rate of $200,000, plus such other
compensation as may, from time to time, be determined by the
Employer in its sole discretion. At the end of each fiscal year of
the Employer, the Employer shall review the amount of the
Executive's Base Salary, and shall adjust such Base Salary for the
following year to such amount as the Board may determine in their
discretion. Such Base Salary and other compensation shall be
payable in accordance with the Employer’s normal payroll
practices as in effect from time to time.
(b)
The Executive will be entitled to participate in, subject to
eligibility requirements, the Employer’s health and medical
benefit plans, any pension, profit sharing and retirement plans,
and any insurance policies or programs from time to time generally
offered to all or substantially all executive employees who are
employed by the Employer. These plans, policies and programs are
subject to change at the sole discretion of the
Employer.
(c)
The Executive will be entitled to any other fringe benefit from
time to time generally offered to all or substantially all senior
executive employees who are employed by the Employer.
(d)
The Employer will deduct or withhold from all salary and bonus
payments, and from all other payments made to the Executive
pursuant to this Agreement, all amounts that may be required to be
deducted or withheld under any applicable Social Security
contribution, income tax withholding or other similar law now in
effect or that may become effective during the term of this
Agreement.
(e)
Annual Bonus. Effective
with Fiscal Year January 1, 2007, the Employer shall pay the
Executive an Annual Bonus (the “Annual Bonus”) equal to
five percent (5%) of the Pre-tax Profits of GBSB’s Mortgage
Banking Division (as defined in this Agreement). As used in this
Agreement, “Pre-tax Profits” shall mean: the before tax
profit of GBSB’s Mortgage Banking Division, calculated in
accordance with the methodology and guidelines set out in
Attachment A of the Agreement, as determined by GBSB’s
regularly engaged certified public accountants. The Executive shall
be entitled to his Annual Bonus as he earns it throughout any year,
whether or not he remains in the employ of GBSB. An Annual Bonus
paid to Executive in a year in which the Executive leaves the
employ of Employer shall be paid out at year-end on a prorata basis
based on year-end results.
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