FIRST NIAGARA FINANCIAL GROUP
EXECUTIVE SEVERANCE PLAN
Effective as of October 23, 2006
ARTICLE I.
ESTABLISHMENT OF THE PLAN
First Niagara Financial Group, Inc.
(“First Niagara”) hereby establishes a self-insured
severance plan for certain of its key executive management
personnel. The term “Company” means First Niagara and
any Organization Under Common Control that is covered under the
Plan in accordance with Section 5.6. Both the original
effective date and the amended and restated effective date of the
Plan is October 23, 2006 (the “Effective
Date”). The Plan Year is the calendar year.
ARTICLE II.
PARTICIPATION
Section 2.1. Eligible
Executives . Each
Eligible Executive, as hereafter defined, will become a Participant
in the Plan on the later of : (i) the first day on
which the individual becomes an Eligible Executive; or
(ii) the Effective Date . The term “Eligible
Executive” means any employee of the Company who has been
designated by the Chief Executive Officer of First Niagara as a
member of First Niagara’s Strategic Performance Committee
excluding any employee covered under an employment agreement that
provides for severance or other similar post-employment
compensation. If any employee becomes a Participant and thereafter
is no longer designated as a member of the Strategic Performance
Committee or subsequently becomes covered under an employment
agreement that provides for severance or other similar
post-employment compensation, the employee will cease to be a
Participant as of that date.
Section 2.2. Exclusive
Benefit. A
Participant in this Plan will not be eligible to receive any
benefit under the terms of the First Niagara Financial Group
Separation Pay Plan.
ARTICLE III.
BENEFITS AND PAYMENT OF BENEFITS
Section 3.1. In General
. Each Participant (i) whose
employment is involuntarily terminated by the Company for reasons
other than Cause, as hereafter defined, (ii) who is required
to move employment to a location further than 100 miles of the
Participant’s current place of employment and who does not
accept such relocation and terminates employment or
(iii) whose aggregate compensation is materially reduced and
who terminates employment will receive a Severance Payment, as
determined under Section 3.2, if the Participant remains in
employment with the Company through his or her release date as
established by the Company.
For purposes of this Plan, “Cause”
means a finding by the Board of Directors of the Company that any
of the following conditions exist:
(1) The Participant’s willful and
continued failure substantially to perform the Participant’s
duties (other than as a result of disability) that is not or cannot
be cured within 30 days of the Company giving the Participant
notice of the failure to so perform. For purposes of this Plan, no
act or failure to act will be deemed “willful” unless
effected by the Participant not in good faith and without a
reasonable belief that the Participant’s action or failure to
act was in or not opposed to the Company’s best interests
.
(2) A willful act or omission by the
Participant constituting dishonesty, fraud or other malfeasance,
and any act or omission by the Participant constituting immoral
conduct, which in any such case is injurious to the financial
condition or business reputation of the Company.
(3) The Participant’s indictment for
a felony offense under the laws of the United States or any state
other than for actions related to operation of motor vehicles which
does not involve operation of a motor vehicle while intoxicated or
impaired.
(4) Breach by the Participant of First
Niagara’s Code of Ethics for Senior Financial Officers, any
restrictive covenant, non-competition, confidentiality or
non-solicitation, or other similar agreement which is applicable to
the Participant.
The Participant will not be deemed to have been
terminated for Cause until there has been delivered to the
Participant a copy of a resolution, duly adopted by the affirmative
vote of not less than a majority of the Board of First Niagara at a
meeting called and held for that purpose (after reasonable notice
to the Participant and an opportunity for the Participant, with the
Participant’s counsel, to be heard before the Board), stating
that, in the good faith opinion of the Board, the Participant has
engaged in conduct described above and specifying the particulars
in detail.
(b) Upon the occurrence of any event
described in Section 3.1(ii) or (iii) above, the
Participant shall have the right to elect to terminate his
employment under this Agreement by resignation upon not less than
thirty (30) days prior written notice to First Niagara, which
notice must be given by the Participant within ninety
(90) days after the initial event giving rise to said right to
elect to terminate his employment. Notwithstanding the preceding
sentence, in the event of a continuing breach of this Agreement by
First Niagara, the Participant, after giving due notice within the
prescribed time frame of an initial event specified above, shall
not waive any of his rights solely under this Agreement by virtue
of the fact that Participant has submitted his resignation but has
remained in the employment of First Niagara and is engaged in good
faith discussions to resolve any occurrence of an event described
above. First Niagara shall have at least thirty (30) days to
remedy any condition set forth above, provided, however, that First
Niagara shall be entitled to waive such period and make an
immediate payment hereunder.
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Section 3.2. Benefit
Amount . A
Participant’s Severance Payment will be equal to the greater
of:
(i) The Participant’s base salary,
determined as of the date of termination, for twelve (12) months,
plus the Participant’s targeted bonus amount; or
(ii) The Participant’s base salary,
determined as of the date of termination, for eighteen
(18) months.
In addition, for a twelve (12)-month period
following the termination of employment, First Niagara will
reimburse the Participant for outplacement services in an amount
not to exceed $10,000; provided however, that reimbursements for
such outplacement services shall be made in a cash lump sum within
30 days of Participant’s remittance to First Niagara of
a receipt for such services.
Section 3.3. Form of Benefit
Payment . A
Participant will receive his or her benefit in the form of direct
deposit to his or her bank account in accordance with the normal
payroll process over the period of the Severance Payment. All
applicable payroll taxes and withholding will be applied. Severance
Payments and benefits payable under this Plan will not be treated
as compensation for purposes of calculating benefits under any
other employee benefit plan maintained by the Company.
Notwithstanding any other provision in this
Agreement, for purposes of this Agreement, “termination of
employment” shall mean “Separation from Service”
as defined in Code Section 409A and the Treasury Regulations
thereunder, such that First Niagara and the Participant reasonably
anticipate that the level of bona fide services the Participant
would perform after termination would permanently decrease to a
level that is less than 50% of the average level of bona fide
services performed (whether as an employee or an independent
contractor) over the immediately preceding 36-month
period.
Notwithstanding anything in this Agreement to
the contrary, if the Participant is a Specified Employee (within
the meaning of Treasury Regulations §1.409A-1(i)), then, to
the extent necessary to avoid penalties under Code
Section 409A, no payment shall be made to the Participant
prior to the first day of the seventh month following the date of
termination in excess of the “permitted amount” under
Code Section 409A. For these purposes, the “permitted
amount” shall be an amount that does not exceed two times the
lesser of: (i) the sum of Participant’s annualized
compensation based upon the annual rate of pay for services
provided to First Niagara for the calendar year preceding the year
in which occurs the date of termination or (ii) the maximum
amount that may be taken into account under a tax-qualified plan
pursuant to Code Section 401(a)(17) for the calendar year in
which occurs the date of termination. Payment of the
“permitted amount” shall be made in accordance with
regular payroll practices. Any payment in excess of the permitted
amount shall be made to the Participant on the first day of the
seventh month following the date of termination.
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Section 3.4. Forfeitures of
Benefits . A
Participant will forfeit his or her right to any unpaid Severance
Payments benefits if he or she is reemployed by the Company in any
position that meets the criteria in Section 3.1(c)
above.
Section 3.5. Effect of Regulatory
Actions . Any actions
by First Niagara under this Agreement must comply with the law,
including regulations and other interpretive action, of the Federal
Deposit Insurance Act, Federal Deposit Insurance Corporation, or
other entities that supervise any of the activities of First
Niagara. Specifically, any payments to the Participant by First
Niagara, whether pursuant to this Agreement or otherwise, are
subject to and conditioned upon their compliance with Section 18(k)
of the Federal Deposit Insurance Act, 12 U.S.C. Section
1828(k), and the regulations promulgated thereunder in 12 C.F.R.
Part 359.
Section 3.6. Golden Parachute
Adjustments . Notwithstanding anything in this Agreement or
any other agreement to the contrary:
(a) In the event First Niagara (or its
successor) and the Participant both determine, based upon the
advice of the independent public accountants for First Niagara,
that part or all of the consideration, compensation or benefits to
be paid to the Participant under this Agreement constitute
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