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EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this "Agreement") dated as of
March
12, 2007 among Great Lakes Bancorp, Inc. a Delaware corporation
having its principal place of business at 2421 Main Street,
Buffalo, New York 14214 ("GLB"), 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
Peter B. Babiarz, an individual residing at 106 Viscount
Drive,
Williamsville, New York 14221 (the "Executive"). GLB, GBSB and the
Executive are collectively the Parties and individually a
Party.
WITNESSETH:
WHEREAS,
GBSB is a wholly owned subsidiary of GLB;
WHEREAS,
GLB and GBSB (collectively, the "Employers") desire to employ
the Executive, and the Executive desires to be employed by the
Employers, 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 Employers.
NOW,
THEREFORE, in consideration of the promises 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 March 12, 2007 (the "Effective Date"), (i) GLB
shall employ the Executive, and the Executive shall be employed by
GLB, as the Executive Vice President and Chief Credit Officer of
GLB and (ii) GBSB shall employ the Executive, and the Executive
shall be employed by GBSB, as the Executive Vice President and
Chief Credit Officer of GBSB (with all such positions described in
clauses (i) and (ii) hereof being collectively 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 Sections 1(b), l(c),
and l(d), shall continue for a period of two years. The Employers
shall be jointly and severally liable to the Executive with respect
to (i) all liabilities of GBSB to the Executive hereunder and (ii)
all liabilities of GLB to the Executive hereunder; provided,
however, that GLB shall not be responsible for any liability of
GBSB to the Executive to the extent that such liability has been
discharged by GBSB, and GBSB shall not be responsible for any
liability of GLB to the Executive to the extent that such liability
has been discharged by GLB.
(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) either of the Employers or (ii) the
Executive, the Employers 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 ninety (90) days written notice of the intent to
renew. Unless otherwise provided in this Agreement or as agreed by
the Employers and the Executive, all of the terms and conditions of
this Agreement shall continue in force and effect throughout the
Term and any Renewal Term. In the event the Employers do not
exercise their 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
Employers direct.
(c)
Notwithstanding Section 1(b), the Employers, by action of their
Boards of Directors (the "Boards") 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 Employers 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 or GLB, in
each case, after notice thereof from the Employers 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 damage to the property or
business of GBSB or GLB 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 Boards, adversely affects GBSB's
or GLB'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 Employers 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 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 or for an aggregate of nine months during any
12 month period, provided, however, that in order to terminate the
Executive's employment under this Agreement on account of Permanent
Disability, the Employers must provide the Executive with written
notice, not less than 30 days prior to the date of termination
specified in such notice, of the Boards' good faith determination,
based on a medical opinion of a physician selected by the Employers
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
Employers.
(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 Employers in bad faith and that is remedied by the
Employers promptly following written notice thereof from the
Executive to the Employers; (B) a material breach by either
Employer of its respective 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 Employers, or (C) any termination of the
Executive's employment under this Agreement without Cause;
and
(iv)
"Change of Control" shall mean: (A) the acquisition of shares of
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 Boards of the
Employers, the Executive shall serve in the Position and perform
all duties and services commensurate with the Position. Throughout
the Term or Renewal Term, the Executive shall perform all duties
reasonably assigned or delegated to him under the by-laws of the
Employers or from time to time by the Boards consistent with the
Position. Except for travel normally incidental and reasonably
necessary to the business of the Employers 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 Boards. 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 Employers 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 GBSB's market area and further provided that such
conduct complies in all respects with applicable policies of the
Employers.
(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 Employers shall
mutually determine. Earned but unused vacation shall be accrued in
accordance with the Employers' 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 Employers shall pay the Executive a base salary (the "Base
Salary") at an annual rate of $140,000, plus such other
compensation as may, from time to time, be determined by the
Employers in their sole discretion. The Base Salary will be
increase to an annual rate of $150,000 at the end of the month
during which the Executive completed six months of employment. At
the end of each fiscal year of the Employers, the Employers shall
review the amount of the Executive's Base Salary, and shall
consider increasing but not decreasing such Base Salary for the
following year to such amount as the Boards may determine in their
sole discretion. Such Base Salary and other compensation shall be
payable in accordance with the Employers' normal payroll practices
as in effect from time to time.
(b)
The Executive will be entitled to participate in the
Employers’ 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
Employers. These plans, policies and programs are subject to change
at the sole discretion of the Employers.
(c)
The Executive will be entitled to any other fringe benefit from
time to time generally offered to all or substantially all
executive employees who are employed by the Employers.
(d)
The Employers 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)
The Employers may develop incentive cash bonus and stock-based
award programs in the future and the Executive will be entitled to
participate in these performance-based programs consistent with the
participation in such programs offered to other executive employees
who are employed by the Employers. These programs are subject to
development and change at the sole discretion of the
Employers.
(f)
Signing Bonus .
GLB agrees to grant to the Executive as a signing bonus (the
"Signing Bonus") an award of incentive stock options on 10,000
shares of GLB Common Stock pursuant to the terms and conditions of
GLB’s stock option plans as soon as practicable following the
Effective Date. The options will become vested and exercisable with
respect to 2,000 shares on the first anniversary of the date of
grant, and on each anniversary of the date of grant thereafter, the
option will become vested and exercisable with respect to an
additional 2,000 shares. Notwithstanding the foregoing, immediate
and complete vesting and exercisability of any unvested options of
the Common Stock shall take place in the event that a Change in
Control as defined in this Agreement occurs within the initial
two-year Term of the Agreement or the first one-year Renewal Term
of the Agreement. For purposes of this Section 3(f), the
Employers’ failure to renew this Agreement at a time when
Cause does not exist, will allow the Executive to terminate his
employment at such time and such termination will be a termination
of employment by the Employers without Cause.
4.
Expenses .
The Employers shall promptly reimburse the Executive for (a) all
reasonable expenses paid or incurred by the Executive in connection
with the performance of the Executive's duties and responsibilities
under this Agreement, upon presentation of expense vouchers or
other appropriate documentation therefore and (b) all reasonable
professional expenses, such as licenses and dues and professional
educational expenses paid or incurred by the Executive during the
Term.
5.
Termination .
(a)
Termination After Change of Control by Employers without Cause
or Termination by Executive with Good Reason
. If (A) the Employers terminate the Executive's employment under
this Agreement for any reason other than (i) for Cause, (ii) death
or (iii) Permanent Disability and such termination occurs as of a
date that is within one year after the occurrence of a Change of
Control (such one-year period being referred to as a "Change in
Control Period"), and such termination occurs within the initial
two-year Term of the Agreement or the first one-year Renewal Term
of the Agreement or (B) the Executive terminates his employment
hereunder for Good Reason effective as of a date within a Change in
Control Period and such termination occurs within the initial
two-year Term of the Agreement or the first one-year Renewal Term
of the Agreement, the Employers shall, provided the Executive
concurrently signs and delivers a general release and waiver in a
form reasonably acceptable to the Employers, pay to the Executive,
or his estate, promptly after the event giving rise to such payment
occurs: (1) the Executive's then current Base Salary (as defined in
this Agreement) accrued but unpaid through the date the termination
of the Executive's employment under this Agreement is effective,
(2) any cash bonuses or stock-based awards required to be paid to
the Executive pursuant to Section 3(e), prorated for the period of
employment, and (3) an amount equal to the Base Sal
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