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EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this "Agreement") dated as of January 1, 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 Andrew W. Dorn, Jr., an individual residing at 5349
Columbia Avenue, Hamburg, New York 14075 (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,
Executive currently serves as President and Chief Executive
Officer of GLB;
WHEREAS,
GLB and GBSB (collectively, the "Employers") desire to
continue to employ the Executive, and the Executive desires to
continue 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 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"), (i) GLB
shall continue to employ the Executive, and the Executive shall
continue to be employed by GLB, as the President and Chief
Executive Officer of GLB and (ii) GBSB shall continue to employ the
Executive, and the Executive shall continue to be employed by GBSB,
as the President and Chief Executive 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, on each day this Agreement is in effect, the Term shall
be automatically extended for one additional day so that at all
time this Agreement shall have a then current two-year Term. Unless
otherwise provided in this Agreement or agreed by the Employers and
the Executive, all of the terms and conditions of this Agreement
shall continue in full force and effect throughout the Term and,
with respect to those terms and conditions that apply after the
Term, after the Term.
(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 for Cause (as hereafter defined) or other than for Cause or on
account of the Executive's death or Permanent Disability (as
defined in this Agreement), subject to the provisions of this
Section 1.
(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, 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 $265,000, plus such other
compensation as may, from time to time, be determined by the
Employers in their sole discretion. At the end of each fiscal year
of the Employers, the Employers shall review the amount of the
Executive's Base Salary, and shall increase such Base Salary for
the following year to such amount as the Boards may determine in
their 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
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
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 senior
executive employees who are employed by the Employers. The
Executive will be reimbursed for payment of dues, or other similar
fees, for membership in a social club (currently, The Buffalo Club)
appropriate for use by the Executive in performing his duties and
consistent with the Executive’s standing in the business
community. The Executive will be provided by the Employers with the
use of an automobile appropriate for use by the Executive in
performing his duties and consistent with Executive’s
standing in the business community.
(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 agree that the Executive shall receive, an annual
bonus in each of the three fiscal years in the period of January 1,
2007 through December 31, 2009 if the net earnings of GLBC and its
subsidiaries, computed on an aggregated basis and in accordance
with Generally Accepted Accounting Principles (“Aggregated
Net Earnings”), equal or exceed the Aggregated Net Earnings
budgeted for the fiscal year. The amount of the bonus will be equal
to 1% of the Aggregated Net Earnings (the "Bonus") and will payable
in cash, at the same time as bonuses are paid to other executive
officers of the Employers, but in no event later than March 15 of
the following year. For periods after December 31, 2009, the
foregoing provisions will not be applicable and a Bonus amount will
be paid only for such periods only in the amounts as the Employers
and the Executive may then agree.
(f)
Signing Bonus .
GLB agrees to grant to the Executive as a signing bonus (the
"Signing Bonus") an Award of incentive stock options on 20,000
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 4,000 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 4,000 shares. Notwithstanding the foregoing, immediate
and complete vesting and exercisability of any unvested options of
the Common Stock shall take place in the event of a Change in
Control as defined in this Agreement.
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 therefor 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"), or (B) the Executive terminates his employment
hereunder for Good Reason effective as of a date within a Change in
Control Period, the Employers shall:
(i)
pay to the Executive, or his estate, promptly after the event
giving rise to such payment occurs:
(A)
an amount equal to the sum of (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 Bonus required to be paid to the
Executive pursuant to Section 3(e), as it may be amended from time
to time, prorated for the period of employment, such payments being
collectively referred to herein as the "Accrued Obligations,"
and
(B)
an amount equal to 2.00 times the sum of (1) the Executive's annual
Base Salary as in effect on the effective date of termination of
the Executive's employment under this Agreement and (2) the Bonus
payable to the Executive pursuant to Section 3(e) of this
Agreement, as it may be amended from time to time, for the year in
which such termination is effective;
(ii)
continue to provide to the Executive and his spouse,
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