Exhibit 10.1
EMPLOYMENT AGREEMENT
This AGREEMENT
("Agreement") is made as of June 1, 2009, by and between
The Oneida Savings Bank (the "Bank"), a New York chartered savings
bank, Michael
R. Kallet, an individual residing in Oneida, New York,
("Executive") and Oneida
Financial Corp. (the "Company"), a
federally-chartered corporation and the
holding company of the Bank, as guarantor. The Bank and Company are
collectively
referred to as the "Employer".
WHEREAS,
Executive and the Board of Directors of the Bank
desire to
enter into an agreement setting forth the terms and
conditions of Executive's
employment and provide for the continued service of the Executive;
and
WHEREAS, the
Bank recognizes the importance of Executive to the Bank's
operations, and desires to assure the continuity of
its management and enable
the Executive to devote his full attention to management
responsibilities when
faced with a possible change in control of the Bank or the
Company.
NOW,
THEREFORE, in consideration of the mutual promises and
covenants
herein contained, it is hereby agreed as follows:
1. Employment.
(a) Term. The
initial term of employment under this Agreement shall be
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for the period commencing on the date hereof and ending
on May 31, 2012. Not
later than six months prior to the expiration of
this Agreement, the parties
agree to commence discussions regarding a renewal
of this Agreement. If the
parties cannot reach agreement regarding the terms for a renewal
agreement, this
Agreement shall automatically renew for a 12
month period unless either party
provides written notice of intent not to renew at
least 60 days prior to the
expiration of this Agreement. The
initial term and any renewal term
are
collectively referred to herein as the "Employment Term."
(b) Duties.
The Executive shall serve as President and Chief Executive
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Officer of the Bank and Company during the Employment
Term and shall have such
responsibilities, duties and authority as is customary
for persons serving in
similar chief executive officer
positions and as may from time to time be
reasonably assigned by the respective Boards of the Employer. As
Chief Executive
Officer of the Company and the Bank, the
Executive shall be responsible for
implementing the policies of the Board of Directors of the Company
and the Board
of Directors of the Bank, and shall
report to such respective Boards, as
applicable. In such capacity, Executive agrees to
discharge his duties to the
best of his abilities and to devote substantially
all of his working time and
attention to the performance of his duties under
this Agreement. During the
Employment Term, there shall be no
material decrease in the duties
and
responsibilities of the Executive other than as
provided herein, unless the
parties otherwise agree in writing. During the
Employment Term, the Executive
shall not be required to relocate, without his
<PAGE>
consent, his place of employment to a location more than 25
miles away from the
Employer's Oneida, New York location to perform his duties
hereunder, except for
reasonably required travel by the Executive on the business of the
Employer. The
Executive may affiliate with
professional associations, business and civic
organizations in support of his role as President and Chief
Executive Officer,
provided that Executive's involvement in
such activities does not adversely
affect the performance of his duties on behalf of the Company or
the Bank or the
reputation of the Company or Bank.
2. Compensation and
Benefits.
(a) Base Salary.
The Executive shall initially be paid a base salary at
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an annualized rate of $310,000.00 (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 employees. On an
annual basis, the
Executive's Base Salary shall be reviewed by the
Employer and may be increased
in the discretion of the Board of Directors and
Compensation Committee of the
Employer. In reviewing the Executive's Base
Salary, the Board of Directors of
the Employer shall
consider the Executive's
performance, scope of
responsibility, and such other
matters as the Board of Directors or
the
Compensation Committee of the Board deems
appropriate. The Base Salary of the
Executive shall not be decreased at any time during the
current Employment Term
from the amount then in effect,
unless the Executive otherwise agrees
in
writing. The Executive shall also be entitled to
receive fees for serving as a
director of the Bank, except that
Executive shall not be paid fees
for
attendance at committee meetings.
(b) Bonuses and
Incentive Compensation. The Executive shall be eligible
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to participate in an equitable manner with all other
employees of the Employer
in any bonus or other incentive programs (including any
stock option or equity
compensation plans) as may be authorized,
declared and paid by the Boards of
Directors of the Employer. This provision shall
not preclude the grant of any
other bonus or compensation to the
Executive as determined by the Board of
Directors of the Employer.
(c) Benefit
Plans. The Executive shall be eligible to participate
in
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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, and
other fringe benefit plans or programs
maintained by the employer for the
benefit of its employees ("Benefit Plans"). The Executive's
participation in any
such benefit plans and programs (before or after termination) shall
be based on,
and subject to satisfaction of,
the eligibility requirements and
other
conditions of such plans and programs
notwithstanding any provisions of this
Agreement. The Executive shall be entitled to such
supplemental benefits as set
forth on the attached Exhibit A to this
Agreement, which may be amended from
time-to-time upon the mutual agreement of Executive and
Employer.
(d)
Expenses. The Executive is authorized to incur reasonable
expenses
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in the performance of his duties hereunder,
including the costs of business
entertainment, travel, and attendance at 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.
<PAGE>
(e) Other
Benefits. During the period of employment,
the Executive
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shall also be entitled to receive the following benefits:
(i) Paid vacation in accordance with the Employer's
Employee
Handbook;
(ii) Reasonable sick leave consistent with the Bank's
policy
in that regard for other executive officers; and
(iii) Reimbursement of fees or
dues (but not personal
expenses) for up to two club memberships of the
Executive at dining or country
clubs as may be beneficial to the Executive's role with the
Bank. The choice of
clubs shall be subject to review and disapproval by the
Board of Directors of
the Bank at any time.
(iv) Use of a Bank owned
or leased vehicle of type
commensurate with the Executive's duties and role with the
Bank as reviewed and
approved by the Board of Directors.
(f) Exclusivity of
Salary and Benefits. Executive shall not be entitled
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to any payments or benefits other than those
provided under this Agreement or
referred to in Exhibit A.
3. Termination.
Prior to
a Change of Control, the
Executive's employment by the
Employer shall be subject to termination as follows:
(a)
Voluntary Termination. The Executive may terminate this
Agreement
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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 date of termination.
Employer may appropriately adjust
Executive's duties upon notice of such
termination.
(b)
Termination Upon Death. This Agreement shall
terminate upon the
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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 and payments related to Executive's
participation in the Benefit Plans
which would have otherwise been due for a
period of 90 days following the
Executive's death to the Executive's estate or designated
beneficiaries.
(c) Termination
Upon Disability. Termination of Executive's employment
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based on "Disability" shall be construed to
comply with Section 409A of the
Internal Revenue Code and shall be deemed to have occurred
if: (i) Executive is
unable to engage in any substantial gainful activity by
reason of any medically
determinable physical or mental impairment
that can be expected to result in
death, or last for a continuous period of
not less than 12 months; (ii) by
reason of any medically determinable physical or mental
impairment that can be
expected to result in death, or last for a continuous period of not
less than 12
months, Executive is receiving income replacement
benefits for a period of not
less than three months under an accident and health plan
covering employees of
the Bank or the Company; or (iii) Executive is determined to be
totally disabled
by the Social Security Administration.
<PAGE>
The
Employer may terminate this Agreement
upon the Executive's
Disability. Once the Executive is determined to be Disabled, the
Executive shall
be entitled to 100% of the Executive's Base Salary and
continued benefits under
the Benefit Plans otherwise payable during that
period, reduced by any other
Employer-provided benefits to which the Executive may
be entitled with respect
to 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).
(d)
Termination for Cause. The Employer may terminate the
Executive's
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employment for Cause by written notice to the
Executive. For purposes of this
Agreement, "Cause" shall mean
the Executive's (1) personal
dishonesty,
incompetence, or willful misconduct; (2) breach
of fiduciary duty involving
personal profit or 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) conviction
or indictment
of Executive for a felony or any misdemeanor involving moral
turpitude, deceit,
dishonesty or fraud. 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 establish the
alleged acts and omissions and the
prevailing nature of the standards the
Employer shall have alleged are violated by such acts and/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.
(e)
Termination Without Cause. The
Employer may terminate the
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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 (i) pay to the Executive within 30 days of the
date of termination the
following 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 Employment Term, or for a period of 6
months following the date of
termination, whichever period is longer and (ii)
continue payments related to
Executive's participation in any medical, dental
and life insurance benefit
plans at the same levels that existed prior to the
termination for a period of
18 months following the termination date.
If the Executive terminates his
employment with the Employer during
the Employment Term for "Good Reason"
(defined in Section 4(d) 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.
Notwithstanding
the foregoing, if Executive's employment ends prior to
December 31, 2007 for reasons other than Cause
and under circumstances that
entitled the Executive to payments and benefits
under paragraph 4(a) of this
Agreement (regarding a "Change of
<PAGE>
Control"), then amounts that may be payable under this
paragraph 3(e) shall be
reduced by payments made to Employee under paragraph 4(a).
(f) Change of
Control. If the Executive's employment by the
Employer
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shall cease for any reason other than Cause, death or
disability of Executive,
or termination for Good Reason by Executive
within six months prior to, or 12
months following, a Change of Control that occurs
during the Employment Term,
the provisions of paragraph 4 below shall apply
even if the Employment Term
under this Agreement has expired.
(g)
Resignation. Effective upon the
Executive's termination of
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employment for any reason, the Executive hereby resigns from any
and all offices
and positions (including any director
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.
(h)
Regulatory Limits. Notwithstanding any
other provision in this
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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(d) hereof, to the extent required by applicable
Federal or state
law related to banking, deposit insurance or bank or savings
institution holding
companies or by regulations or orders issued by the
Federal Deposit Insurance
Corporation or any other state or federal
banking regulatory agency having
jurisdiction over the Company or the Bank and (ii) no payment
shall be required
to be made to or for the benefit of the Executive under
this Agreement to the
extent such payment is prohibited by applicable law,
regulation or order issued
by a banking agency
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