EX-10.1 2 tm2013170d1_ex10-1.htm EXHIBIT 10.1

Exhibit 10.1

 

EXECUTION VERSION

 

RETIREMENT AND RELEASE AGREEMENT

 

 

THIS RETIREMENT AND RELEASE AGREEMENT (this “Release”) is made by and among
SCOTT A. KINGSLEY (“Employee”), COMMUNITY BANK SYSTEM, INC., a Delaware
corporation and registered bank holding company (“CBSI”), and COMMUNITY BANK,
N.A., a national banking association (“CBNA,” and together with CBSI, the
“Company”), dated as of March 13, 2020 (the “Signing Date”).

 

WHEREAS, the Company and Employee have mutually agreed that Employee’s
employment with the Company will end effective as of the close of business on
June 30, 2020 (the “Effective Time”);

 

WHEREAS, in connection with the termination of Employee’s employment, the
Company, in exchange for Employee’s promises and covenants in this Release and
subject to Employee’s execution, delivery, and non-revocation of this Release
and the Confirmation (as defined below), desires to provide Employee with
certain rights and benefits as set forth in this Release; and

 

WHEREAS, capitalized terms used but not defined herein shall have the meanings
given to them in the Employment Agreement, by and between the Company and
Employee, dated December 31, 2019 (as amended or supplemented from time to time,
the “Agreement”).

 

NOW THEREFORE, in consideration of these premises and the mutual promises
contained herein, and intending to be legally bound hereby, the parties agree as
follows:

 

1.Termination of Employment; Consideration.

 

1.1.            Employee’s employment with the Company and its affiliates shall
terminate as of the Effective Time. Employee hereby resigns as an officer of the
Company and an officer and director of each of its subsidiaries and affiliates,
and from any other positions he holds with the Company and its subsidiaries and
affiliates (including, without limitation, as a trustee and committee member
with respect to the Company’s 401(k) plan or other employee benefit plans),
effective as of the Effective Time. From the Signing Date through the Effective
Time, Employee will continue to be eligible to receive the Base Salary and to
participate in the benefit plans described in Section 4 of the Agreement.
However, except as otherwise expressly provided in Section 1.2 of this Release,
Employee shall not be eligible to receive any incentive compensation under the
Company’s Management Incentive Plan or any other applicable annual bonus or
short-term incentive plan, or to receive any further equity or equity-based
awards (whether under the Company’s 2014 Long-Term Incentive Plan or otherwise).

 

1.2.            Notwithstanding anything to the contrary in the Agreement, and
subject to (x) Employee’s timely execution and delivery (that is, within
twenty-one (21) days following the Signing Date) and non-revocation of this
Release, (y) Employee’s timely execution and delivery of the Confirmation and
Release (“Confirmation”) attached hereto as Exhibit A, as described in
Section 1.5 of this Release, and (z) continued compliance with his promises and
covenants hereunder, the Company shall provide Employee with the following
payments and benefits (collectively, the “Separation Benefits”):

 

 

 

(i)Severance in an aggregate amount of $1,662,938 (the “Severance Amount”),
payable in two equal installments. The first installment shall be paid on the
Company’s first regular payroll date in January 2021, and the second installment
shall be paid on the Company’s first regular payroll date in January 2022.

 

(ii)Employee’s outstanding shares of CBSI restricted stock and unvested stock
options (calculated as of the Effective Time) are listed on Appendix 1 hereto.
The number of shares of CBSI restricted stock and unvested stock options set
forth under the column “To Vest” on such Appendix 1 shall vest and remain
outstanding and be eligible to be exercised for the remaining period of their
10-year term. The number of shares of CBSI restricted stock and unvested stock
options set forth under the column “To Be Forfeited” shall be immediately
forfeited for no consideration.

 

(iii)The Company shall transfer to Employee all rights, title, and ownership in
the Company-owned automobile that is currently assigned to Employee for his use.

 

(iv)Solely for purposes of that certain Supplemental Retirement Plan Agreement,
by and between Employee and the Company, dated as of September 29, 2009 (as
amended or supplemented from time to time, the “SERP”), Employee shall be deemed
to have completed sixteen (16) “years of service with Employer,” as defined in
the SERP. For the avoidance of doubt, no portion of the Severance Amount (or any
other payment or benefit described in this Section 1.2) shall be taken into
account for purposes of calculating any payments or benefits under the SERP
(whether by being included as part of the calculation of “final average
compensation” thereunder or otherwise).

 

1.3.            Regardless of whether Employee executes or revokes this Release
or the Confirmation, the Company will pay Employee all accrued and unpaid
(i) Base Salary, and (ii) reimbursable business expenses, subject to and in
accordance with the Company’s applicable policies and procedures (including,
without limitation, submission of receipts), in each case of (i) and
(ii) through the date of his cessation of employment with the Company as soon as
administratively feasible following the Effective Time. In addition, regardless
of whether Employee executes or revokes this Release or the Confirmation,
nothing in this Release or the Confirmation shall be deemed to waive Employee’s
right to continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985 or similar state law (collectively, “COBRA”), and the
Company shall provide Employee with all applicable COBRA notices in accordance
with its typical procedures for departing employees.

 

1.4.            Employee acknowledges that: (i) the payments, rights, and
benefits set forth in Sections 1.2 and 1.3 constitute full settlement of all his
rights under the Agreement upon his termination of employment, (ii) he has no
entitlement under any other severance or similar arrangement maintained by the
Company, and (iii) except as otherwise provided specifically in this Release,
the Company does not and will not have any other liability or obligation to
Employee. Employee further acknowledges that, in the absence of his execution
(and non-revocation) of this Release and the Confirmation, the benefits and
payments specified in Section 1.2 above would not be provided to him.

 

 2 

 

 

1.5.            As an express condition to the receipt of the Separation
Benefits, Employee must execute and deliver to the Company, either on or within
twenty-one (21) days following the Effective Time, the Confirmation, and must
not revoke the Confirmation within the time period specified therein. Employee
expressly acknowledges and agrees that, if Employee fails to so timely execute
and deliver the Confirmation, or timely revokes the Confirmation in accordance
with its terms, Employee shall forfeit all rights to the Separation Benefits.

 

2.Employee’s Release.

 

2.1.            Employee hereby fully and forever releases and discharges the
Company, its parents and subsidiaries and each of their respective predecessors,
successors, assigns, stockholders, affiliates, officers, directors, trustees,
employee benefit plans and their administrators and fiduciaries, employees,
agents and attorneys, past and present (the Company and each such person or
entity is referred to as a “Released Person”) from any and all claims, causes of
action, damages, and liabilities, of whatever kind or nature, direct or
indirect, in law, equity, or otherwise (collectively, “Claims”), whether known
or unknown, arising through the date of this Release out of, or in any way
related to, Employee’s employment by the Company or the termination thereof,
including, but not limited to, any claims for relief or causes of action under
the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., or any other
federal, state, or local statute, ordinance, or regulation regarding
discrimination in employment, and any claims, demands, or actions based upon
alleged wrongful or retaliatory discharge or breach of contract under any state
or federal law.

 

2.2.            Employee expressly represents that he has not filed a lawsuit or
initiated any other administrative proceeding against a Released Person and that
he has not assigned any Claim against a Released Person. Employee further
promises not to initiate a lawsuit or to bring any other Claim against any
Released Person arising out of or in any way related to Employee’s employment by
the Company or the termination of that employment. This Release will not prevent
Employee from filing a charge with the Equal Employment Opportunity Commission
(or similar state agency) or participating in any investigation conducted by the
Equal Employment Opportunity Commission (or similar state agency); provided,
however, that any Claims by Employee for personal relief in connection with such
a charge or investigation (such as reinstatement or monetary damages) would be
barred.

 

2.3.            The foregoing will not be deemed to release the Company from
(a) claims solely to enforce the terms of this Release (including claims under
Section 1.2), (b) claims for benefits (not including severance benefits) under
the Company’s employee welfare benefit plans and employee pension benefit plans,
subject to the terms and conditions of those plans, or (c) claims for defense
and indemnification under the Company’s By-Laws or policies of insurance.

 

 3 

 

 

3.    Restrictive Covenants. Employee acknowledges that his covenants contained
in Section 8 of the Agreement will survive the termination of his employment in
accordance with their terms, and for this purpose, such termination of
employment will be treated as a resignation without “good reason” (as defined in
the Agreement). Employee affirms that those covenants are reasonable and
necessary to protect the legitimate interests of the Company, that he received
adequate consideration in exchange for agreeing to those restrictions, and that
he will abide by those restrictions. Employee expressly and specifically
acknowledges that he will fully comply with Section 12 of the Agreement, which
requires Employee to promptly return to the Company as of the Effective Time all
documents and other property in his possession belonging to the Company.

 

4.    Non-Disparagement. Employee will not disparage any Released Person or
otherwise take any action which could reasonably be expected to adversely affect
the personal or professional reputation of any Released Person. The Company
shall instruct the members of the CBSI Board of Directors and the Company’s
executive officers to not disparage Employee or otherwise take any action which
could reasonably be expected to adversely affect the personal or professional
reputation of Employee. Notwithstanding the foregoing, in no event will any
truthful, legally required disclosure or action be deemed to violate this
Section, regardless of the content of such disclosure or the nature of such
action.

 

5.    Disclosures. Employee and the Company agree that nothing in this Release,
the Confirmation or the Agreement prevents or prohibits Employee from (i) making
any truthful disclosure of relevant and necessary information or documents in
connection with any charge, action, investigation, or proceeding relating to
this Release, the Confirmation or the Agreement, or as required by law or legal
process; (ii) participating, cooperating, or testifying in any charge, action,
investigation, or proceeding with, or providing information to, any
self-regulatory organization, governmental agency, or legislative body, and/or
pursuant to the Sarbanes-Oxley Act, or (iii) filing, testifying, participating
in or otherwise assisting in a proceeding relating to an alleged violation of
any federal, state, or municipal law relating to fraud, or any rule or
regulation of the Securities and Exchange Commission or any self-regulatory
organization. To the extent permitted by law, upon receipt of any subpoena,
court order, or other legal process compelling the disclosure of any such
information or documents, Employee agrees to give prompt written notice to the
Company so as to permit the Company to protect its interests in confidentiality
to the fullest extent possible.

 

6.    Cooperation. Employee further agrees that he will cooperate fully with the
Company and its counsel with respect to any litigation, investigations, or
governmental proceedings in which Employee was in any way involved during his
employment with the Company and any transition matters in which the Company
believes that Employee’s cooperation would be helpful. Employee will render such
cooperation in a timely manner on reasonable notice from the Company. Employee
and the Company acknowledge and agree that any services to be provided under
this Agreement, including during Employee’s continued employment through
June 30, 2020, may be provided outside of the physical premises of the Company
(i.e., on a remote basis) at the request of either Employee or the Company.

 

7.    Notice. Any notice or communication required or permitted under this
Release or the Confirmation shall be made in writing and sent by certified or
registered mail, return receipt requested, addressed as follows:

 

 4 

 

 

  If to Employee: to the address in the Company’s personnel files.     If to
Company: Community Bank System, Inc.   5790 Widewaters Parkway   Dewitt, New
York 13214   Attn: General Counsel

 

or to such other address as either party may from time to time duly specify by
notice given to the other party in the manner specified above.

 

8.    Rescission Right. Employee expressly acknowledges and recites that (a) he
has read and understands the terms of this Release in their entirety, (b) he has
entered into this Release knowingly and voluntarily, without any duress or
coercion; (c) he has been advised orally and is hereby advised in writing to
consult with an attorney with respect to this Release (and the Confirmation)
before signing it; (d) he was provided twenty-one (21) calendar days after
receipt of the Release to consider its terms before signing it; and (e) he is
provided seven (7) calendar days from the date of signing to terminate and
revoke this Release, in which case this Release shall be unenforceable, null,
and void. Employee may revoke this Release during those seven (7) days by
providing written notice of revocation to the Company at the address specified
in Section 7 herein. For the avoidance of doubt, if Employee fails to execute
and deliver this Release to the Company within twenty-one (21) days following
the Signing Date, or timely revokes it in accordance with this Section 8, the
Company’s obligation to provide the Separation Benefits shall immediately
terminate.

 

9.    Challenge. If Employee violates or challenges the enforceability of this
Release or the Confirmation (other than for purposes of bringing a claim not
released as provided in Section 2.3), no further Separation Benefits will be due
to Employee.

 

10.Miscellaneous.

 

10.1.            No Admission of Liability. This Release is not to be construed
as an admission of any violation of any federal, state, or local statute,
ordinance, or regulation or of any duty owed by the Company to Employee. There
have been no such violations, and the Company specifically denies any such
violations.

 

10.2.            Severability. Whenever possible, each provision of this Release
will be interpreted in such manner as to be effective and valid under applicable
law. However, if any provision of this Release is held to be invalid, illegal,
or unenforceable in any respect, such invalidity, illegality, or
unenforceability will not affect any other provision, and this Release will be
reformed, construed, and enforced as though the invalid, illegal, or
unenforceable provision had never been herein contained.

 

10.3.            Entire Agreement; Amendments. Except as otherwise provided
herein, this Release contains the entire agreement and understanding of the
parties hereto relating to the subject matter hereof, and merges and supersedes
all prior and contemporaneous discussions, agreements, and understandings of
every nature relating to the subject matter hereof. This Release may not be
changed or modified, except by an agreement in writing signed by each of the
parties hereto.

 

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10.4.            Withholding. The Company shall be entitled to deduct and
withhold from all payments and benefits under this Release (including, without
limitation, the Separation Benefits) all applicable federal, state, local, and
non-U.S. taxes, and all other appropriate or required deductions.

 

10.5.            Section 409A. Section 14 of the Agreement is incorporated by
reference, mutatis mutandis, as though fully set forth herein.

 

10.6.            Employee’s Estate. In the event of Employee’s death, all
payments hereunder shall be paid in accordance with this Release to Employee’s
estate.

 

10.7.            Governing Law; Jurisdiction and Venue. This Release was
executed and delivered in New York an shall be construed and governed in
accordance with the laws of the State of New York (without giving effect to any
choice or conflict of law provisions or rules thereof). The jurisdiction of any
proceeding between the parties arising out of, or with respect to, this Release
shall be in a court of competent jurisdiction in New York State, and venue shall
be in Onondaga County. Each party shall be subject to the personal jurisdiction
of the courts of New York State.

 

10.8.            Counterparts and Facsimiles. This Release may be executed,
including execution by facsimile, portable document format (.pdf), or other
electronic signature, in multiple counterparts, each of which shall be deemed an
original, and all of which together shall be deemed to be one and the same
instrument.

 

[Signature page follows.]

 

 6 

 

 

 

IN WITNESS WHEREOF, each of CBNA and CBSI have caused this Release to be
executed by its duly authorized officer, and Employee has executed this Release,
in each case as of March 13, 2020, respectively.

 

  COMMUNITY BANK SYSTEM, INC.       By: /s/ Mark E. Tryniski   Name: Mark E.
Tryniski   Title: President and Chief Executive Officer       COMMUNITY BANK,
N.A.       By: George J. Getman   Name: George J. Getman   Title: EVP & General
Counsel       SCOTT A. KINGSLEY       /s/ Scott Kingsley

 

[Signature Page to CBU Retirement and Release Agreement]

 

 

 

EXHIBIT A

 

CONFIRMATION AND RELEASE

 

Reference is made to that certain Retirement and Release Agreement (the
“Release”), by and among Community Bank System, Inc., a Delaware corporation and
registered bank holding company (“CBSI”), Community Bank, N.A., a national
banking association (“CBNA,” and together with CBSI, the “Company”), and Scott
A. Kingsley, dated as of March 13, 2020. Capitalized terms used but not defined
in this Confirmation and Release (the “Confirmation”) shall have the meanings
given to them in the Release.

 

By my signature below, I, Scott A. Kingsley, hereby acknowledge, agree to, and
confirm each of the following:

 

1.My employment with the Company and its affiliates ended on June 30, 2020 (the
“Effective Time”).

 

2.As an express condition to my receipt of the Separation Benefits set forth in
the Release, I must timely execute and deliver to the Company, and not revoke, a
copy of this Confirmation.

 

3.By executing this Confirmation, I hereby fully and forever release and
discharge each Released Person from any and all Claims, whether known or
unknown, arising through the date of this Confirmation out of, or in any way
related to, my employment by the Company or the termination thereof, including,
but not limited to, any claims for relief or causes of action under the Age
Discrimination in Employment Act, 29 U.S.C. § 621 et seq., or any other federal,
state, or local statute, ordinance, or regulation regarding discrimination in
employment, and any claims, demands, or actions based upon alleged wrongful or
retaliatory discharge or breach of contract under any state or federal law.

 

4.I expressly represent that I have not filed a lawsuit or initiated any other
administrative proceeding against a Released Person and that I have not assigned
any Claim against a Released Person. I further promise not to initiate a lawsuit
or to bring any other Claim against any Released Person arising out of or in any
way related to my employment by the Company or the termination of that
employment. This Confirmation will not prevent me from filing a charge with the
Equal Employment Opportunity Commission (or similar state agency) or
participating in any investigation conducted by the Equal Employment Opportunity
Commission (or similar state agency); provided, however, that any Claims by me
for personal relief in connection with such a charge or investigation (such as
reinstatement or monetary damages) would be barred.

 

5.My release of Claims in this Confirmation will not be deemed to release the
Company from (a) claims solely to enforce the terms of the Release (including
claims under Section 1.2 thereof), (b) claims for benefits (not including
severance benefits) under the Company’s employee welfare benefit plans and
employee pension benefit plans, subject to the terms and conditions of those
plans, or (c) claims for defense and indemnification under the Company’s By-Laws
or policies of insurance.

 

 A-1 

 

 

6.I further acknowledge and confirm that, from the Signing Date set forth in the
Release until the date I execute this Confirmation, I have continued to be in
compliance with my covenants under Sections 4, and 6 of the Release, and that my
continued compliance with all terms of the Release is an express condition to my
receipt of the Separation Benefits. I expressly and specifically acknowledge
that I have fully complied with Section 12 of the Agreement, which requires me
to promptly return to the Company as of the Effective Time all documents and
other property in my possession belonging to the Company.

 

7.Rescission Right. I expressly acknowledge and recite that (a) I have read and
understand the terms of this Confirmation in their entirety, (b) I have entered
into this Confirmation knowingly and voluntarily, without any duress or
coercion; (c) I have been advised orally and was advised in writing by the
Company in the Release to consult with an attorney with respect to this
Confirmation before signing it; (d) I was provided twenty-one (21) calendar days
after receipt of this Confirmation to consider its terms before signing it; and
(e) I have seven (7) calendar days from the date of signing to terminate and
revoke this Confirmation, in which case this Confirmation shall be
unenforceable, null, and void. I may revoke this Confirmation during those seven
(7) days by providing written notice of revocation to the Company at the address
specified in Section 7 of the Release. For the avoidance of doubt, if I fail to
execute and deliver this Confirmation to the Company within twenty-one (21) days
following the Effective Time, or timely revoke it in accordance with this
Section 7, the Company’s obligation to provide the Separation Benefits shall
immediately terminate.

 

8.Sections 9 and 10 of the Release are incorporated by reference, mutatis
mutandis, as though fully set forth in this Confirmation.

 

*     *     *     *     *

 

This Confirmation and Release has been executed by the undersigned on the date
set forth below.

 

SCOTT A. KINGSLEY   DATE (to be on or within 21 days following June 30, 2020)

 

 A-2 

 

 

APPENDIX 1

 

OUTSTANDING EQUITY AWARDS AND TREATMENT UPON TERMINATION1

 

Grant Date  Type  Exercise
Price (if
applicable)   Total
Number
Unvested
as of
Effective
Time   To Vest   To Be
Forfeited  March 16, 2016  Option  $38.02    2,692    2,692    —  March 15,
2017  Option  $57.12    3,142    2,717    425  March 20, 2018  Option  $55.92  
 5,559    5,559    —  March 20, 2019  Option  $59.41    10,542    —    10,542 
March 16, 2016  Restricted Stock   —    556    556    —  March 15, 2017 
Restricted Stock   —    701    680    21  March 20, 2018  Restricted Stock   —  
 1,329    1,329    —  March 20, 2019  Restricted Stock   —    2,544    —  
 2,544  March 20, 2019  Performance Stock   —    12,7202   3,180    9,540 

 

 

1 For the avoidance of doubt, no options, restricted stock, performance stock,
or other equity awards shall vest except as expressly set forth in this Appendix
1 (subject to the terms of the Release), notwithstanding the fact that
additional vesting may have otherwise been provided under the terms of the
Company’s equity plan or an applicable award agreement (whether pursuant to a
retirement in “good standing” provision or otherwise).

2 Performance stock is shown at the “maximum” level of achievement.

 

Appendix 1