Exhibit 10.3
FIRST NIAGARA FINANCIAL GROUP
AMENDED AND RESTATED
CEO EXECUTIVE SEVERANCE PLAN
Effective as of February 20, 2007
ARTICLE I.
ESTABLISHMENT OF THE PLAN
First Niagara Financial Group, Inc. (“First Niagara”) hereby establishes a
self-insured severance plan for its John Koelmel, its Chief Executive Officer
(“CEO”). 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 February 20, 2007 (the “Effective Date”). The Plan Year is the
calendar year.
ARTICLE II.
PARTICIPATION
The CEO will become a participant in the Plan as of the Effective Date. The CEO
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. The CEO will receive a Severance Payment, as determined
under Section 3.2, in the event (i) his employment is involuntarily terminated
by the Company for reasons other than Cause, as hereafter defined, (ii) he is
required to move employment to a location further than 100 miles of his current
place of employment and he does not accept such relocation and terminates
employment or (iii) his aggregate compensation is materially reduced and he
terminates employment so long as the CEO remains in employment with the Company
through his release date as established by the Company.
(a) 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 CEO’s willful and continued failure substantially to perform the CEO’s
duties (other than as a result of disability) that is not or cannot be cured
within 30 days of the Company giving the CEO 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 CEO not in good faith and without a reasonable
belief that the CEO’s action or failure to act was in or not opposed to the
Company’s best interests.

 

 

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(2) A willful act or omission by the CEO constituting dishonesty, fraud or other
malfeasance, and any act or omission by the CEO constituting immoral conduct,
which in any such case is injurious to the financial condition or business
reputation of the Company.
(3) The CEO’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 CEO 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 CEO.
The CEO will not be deemed to have been terminated for Cause until there has
been delivered to him 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 CEO and an
opportunity for the CEO, with the CEO’s counsel, to be heard before the Board),
stating that, in the good faith opinion of the Board, the CEO 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 CEO 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 CEO 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 CEO, 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 CEO 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.
Section 3.2. Benefit Amount. The CEO’s Severance Payment will be equal to the
greater of:
(i) The CEO’s base salary, determined as of the date of termination, for
twenty-four (24) months, plus the CEO’s targeted bonus amount; or
(ii) The CEO’s base salary, determined as of the date of termination, for
thirty-six (36) months.

 

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In addition, for a twelve (12)-month period following the termination of
employment, First Niagara will reimburse the CEO 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 CEO’s
remittance to First Niagara of a receipt for such services.
Section 3.3. Form of Benefit Payment. The CEO will receive his benefit in the
form of direct deposit to his 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 CEO reasonably anticipate that the level of bona fide
services the CEO 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 CEO 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 CEO 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 CEO’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 CEO on the first day of the seventh month
following the date of termination.
Section 3.4. Forfeitures of Benefits. The CEO will forfeit his right to any
unpaid Severance Payments benefits if he is reemployed by the Company.

 

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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 CEO 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 CEO 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 CEO under this Agreement constitute “parachute payments” under Code
Section 280G(b)(2) then, if the aggregate present value of such parachute
payments, singularly or together with the aggregate present value of any
consideration, compensation or benefits to be paid to the CEO under any other
plan, arrangement or agreement which constitute “parachute payments”
(collectively, the “Parachute Amount”) exceeds 2.99 times the CEO’s “base
amount,” as defined in Code Section 280G(b)(3) (the “Executive Base Amount”),
the amounts constituting “parachute payments” which would otherwise be payable
to or for the benefit of the CEO shall be reduced to the extent necessary so
that the Parachute Amount is equal to 2.99 times the CEO Base Amount (the
“Reduced Amount”); provided that such amounts shall not be so reduced if the CEO
determines, based upon the advice of an independent public accounting firm
(which may, but need not be the independent public accountants of First
Niagara), that without such reduction the CEO would be entitled to receive and
retain, on a net after tax basis (including, without limitation, any excise
taxes payable under Code Section 4999), an amount which is greater than the
amount, on a net after tax basis, that the CEO would be entitled to retain upon
Executive’s receipt of the Reduced Amount.
(b) If the determination made pursuant to subsection (a) above results in a
reduction of the payments that would otherwise be paid to the CEO except for the
application of this Section, then the CEO may then elect, in the CEO’s sole
discretion, which and how much of any particular entitlement shall be eliminated
or reduced and shall advise First Niagara in writing of the CEO’s election
within ten days of the determination of the reduction in payments; provided,
however, that if it is determined that such election by the CEO shall be in
violation of Code Section 409A, or if no such election is made by the CEO within
such ten-day period, the allocation of the required reduction shall be
pro-rata.. If no such election is made by the CEO within such ten-day period,
First Niagara may elect which and how much of any entitlement shall be
eliminated or reduced and shall notify the CEO promptly of such election. Within
ten days following such determination and the elections hereunder, First Niagara
shall pay or distribute to or for the benefit of the CEO such amounts as are
then due to the CEO under this Agreement and shall promptly pay or distribute to
or for the benefit of the CEO in the future such amounts as become due to the
CEO under this Agreement.

 

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(c) As a result of the uncertainty in the application of Section 280G of the
Code at the time of a determination hereunder, it is possible that payments will
be made by First Niagara which should not have been made under clause (a) of
this Section (an “Overpayment”) or that additional payments which are not made
by First Niagara pursuant to clause (a) of this Section should have been made
(an “Underpayment”). In the event that there is a final determination by the
Internal Revenue Service, a final determination by a court of competent
jurisdiction or a change in the provisions of the Code or regulations pursuant
to which an Overpayment arises, any such Overpayment shall be treated for all
purposes as a loan to the CEO which the CEO shall repay to First Niagara
together with interest at the applicable Federal rate provided for in Code
Section 7872(f)(2). In the event that there is a final determination by the
Internal Revenue Service, a final determination by a court of competent
jurisdiction or a change in the provisions of the Code or regulations pursuant
to which an Underpayment arises under this Agreement, any such Underpayment
shall be promptly paid by First Niagara to or for the benefit of the CEO,
together with interest at the applicable Federal rate provided for in Code
Section 7872(f)(2).
The calculations required by clause (a) of this Section will be made by First
Niagara’s independent accounting firm engaged immediately prior to the event
that triggered the payment, in consultation with First Niagara’s outside legal
counsel, and for purposes of making the calculation the accounting firm may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of
Code Sections 280G and 4999, provided that the accounting firm’s determinations
must be made with substantial authority (within the meaning of Code
Section 6662).
ARTICLE IV.
ADMINISTRATION OF PLAN
Section 4.1. Appointment of Plan Administrator and Responsibility for
Administration of Plan. First Niagara shall serve as Plan Administrator and
shall administer this Plan in accordance with its terms. The Plan Administrator
may designate other persons to carry out the responsibilities to control and
manage the operation of the Plan.
Section 4.2. Agents. The Plan Administrator may employ such agents, including
counsel, as it may deem advisable for the administration of the Plan.
Section 4.3. Compensation. The Company shall pay all the expenses of the Plan
Administrator. The Company shall indemnify any employees of the Company to whom
responsibilities have been delegated under Section 4.1 against any liability
incurred in the course of administration of the Plan, except liability arising
from their own gross negligence or willful misconduct.
Section 4.4. Records. The acts and decisions of the Plan Administrator shall be
duly recorded. The Plan Administrator shall make a copy of this Plan available
for examination by the CEO during the business hours of First Niagara.

 

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Section 4.5. Defect or Omission. The Plan Administrator shall refer any material
defect, omission or inconsistency in the Plan to the Board of Directors of First
Niagara for such action as may be necessary to correct such defect, supply such
omission or reconcile such inconsistency.
Section 4.6. Liability. Except for their own negligence, willful misconduct or
breach of fiduciary duty, neither the Plan Administrator nor any agents
appointed by the Plan Administrator shall be liable to anyone for any act or
omission in the course of the administration of the Plan.
Section 4.7. Contributions and Financing. All benefits required to be paid by
the Company under the Plan shall be paid as due directly by the Company from its
general assets.
Section 4.8. Claims Procedure. The claims procedure set forth in this paragraph
is the exclusive method of resolving disputes that arise under the Plan.
(a) Written Claim. Any person asserting any rights under this Plan must submit a
written claim to the Compensation Committee of First Niagara’s Board of
Directors (the “Committee”). The Committee shall render a decision within a
reasonable period of time from the date on which the Committee received the
written claim, not to exceed 90 days, unless an extension of time is necessary
due to reasonable cause.
(b) Denial of Claim. If a claim is denied in whole or in part, the claimant must
be provided with the following information:
(1) A statement of specific reasons for the denial of the claim;
(2) References to the specific provisions of the Plan on which the denial is
based;
(3) A description of any additional material or information necessary to perfect
the claim with an explanation of why such material information is necessary;
(4) An explanation of the claims review procedures with a statement that the
claimant must request review of the decision denying the claim within 30 days
following the date on which the claimant received such notice.
(c) Review of Denial. The claimant may request that the First Niagara Board of
Directors review the denial of a claim. A request for review must be in writing
and must be received by the Board of Directors within 30 days of the date on
which the claimant received written notification of the denial of the claim. The
Board of Directors will render a decision with respect to a written request for
review within 60 days from the date on which the Board of Directors received the
request for review. If the request for review is denied in whole or in part, the
Board of Directors must mail the claimant a written decision that includes a
statement of the reasons for the decision.

 

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ARTICLE V.
MISCELLANEOUS PROVISIONS
Section 5.1. Plan Terms are Legally Enforceable. The Company intends that the
terms of this Plan, including those relating to coverage and benefits, are
legally enforceable.
Section 5.2. Plan Exclusively Benefits CEO. The Company intends that the Plan is
maintained for the exclusive benefit of the CEO.
Section 5.3. Illegality of Particular Provision. The illegality of any
particular provision of the Plan shall not affect the other provisions, and the
Plan shall be construed in all other respects as if such invalid provision were
omitted.
Section 5.4. Applicable Laws. To the extent not pre-empted by the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), the Plan shall be
governed by the laws of the State of New York.
Section 5.5. Non-Guaranty of Employment. Nothing in this Plan shall be construed
as granting the CEO a right to continued employment with the Company.
Section 5.6. Coverage of Plan by Organization Under Common Control. The Plan is
adopted by First Niagara and covers any Organization Under Common Control with
First Niagara. The term “Organization Under Common Control” means (i) an
Affiliated Corporation, (ii) a Related Business, (iii) an Affiliated Service
Organization or (iv) any other entity required to be aggregated with First
Niagara pursuant to Section 414(o) of the Code and the regulations thereunder.
The term “Affiliated Corporation” means any corporation that is a member of a
controlled group of corporations as defined in Section 414(b) of the Code, which
includes First Niagara. The term “Related Business” means any trade or business
included in a group of trade or businesses with First Niagara which are under
common control, as defined in Section 414(c) of the Code. The term “Affiliated
Service Organization” means any service organization which is a member of an
affiliated service group, as defined in Section 414(m) of the Code, which
includes First Niagara.

 

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ARTICLE VI.
AMENDMENT AND TERMINATION
First Niagara intends to maintain this Plan indefinitely, but reserves the right
to amend, modify or terminate the Plan at any time. First Niagara may make
modifications or amendments to the Plan that are necessary or appropriate to
maintain the Plan as a plan meeting the requirements of the applicable
provisions of ERISA.
ARTICLE VII.
POST TERMINATION OBLIGATIONS
Section 7.1. The CEO hereby covenants and agrees that, for a period of one
(1) year following his termination of employment with First Niagara, he shall
not, without the written consent of First Niagara, either directly or
indirectly:
(i) solicit, offer employment to, or take any other action intended (or that a
reasonable person acting in like circumstances would expect) to have the effect
of causing any officer or employee of First Niagara, or any of its subsidiaries
or affiliates, to terminate his or her employment and accept employment or
become affiliated with, or provide services for compensation in any capacity
whatsoever to, any business whatsoever that competes with the business of First
Niagara, or any of its direct or indirect subsidiaries or affiliates or has
headquarters or offices within 100 miles of the locations in which First
Niagara, or any of its direct or indirect subsidiaries or affiliates, has
business operations or has filed an application for regulatory approval to
establish an office;
(ii) become an officer, employee, consultant, director, independent contractor,
agent, sole proprietor, joint venturer, greater than 5% equity owner or
stockholder, partner or trustee of any savings bank, savings and loan
association, savings and loan holding company, credit union, bank or bank
holding company, insurance company or agency, any mortgage or loan broker or any
other entity competing with First Niagara or its affiliates in the same
geographic locations where First Niagara or its affiliates has material business
interests; or
(iii) solicit, provide any information, advice or recommendation or take any
other action intended (or that a reasonable person acting in like circumstances
would expect) to have the effect of causing any customer of First Niagara or any
of its direct or indirect subsidiaries or affiliates to terminate an existing
business or commercial relationship with First Niagara.
Section 7.2. The CEO shall, upon reasonable notice, furnish such information and
assistance to First Niagara as may reasonably be required by First Niagara, in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become, a party; provided, however, that the CEO shall not
be required to provide information or assistance with respect to any litigation
between the CEO and First Niagara or any of its subsidiaries or affiliates.

 

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Section 7.3. All payments and benefits to the CEO under this Plan shall be
subject to the CEO’s compliance with this Article VII. The parties hereto,
recognizing that irreparable injury will result to First Niagara, its business
and property in the event of the CEO’s breach of this Article VII, agree that,
in the event of any such breach by the CEO, First Niagara will be entitled, in
addition to any other remedies and damages available, to an injunction to
restrain the violation hereof by the CEO and all persons acting for or with the
CEO. The CEO represents and admits that the CEO’s experience and capabilities
are such that the CEO can obtain employment in a business engaged in other lines
and/or of a different nature than First Niagara, and that the enforcement of a
remedy by way of injunction will not prevent the CEO from earning a livelihood.
Nothing herein will be construed as prohibiting First Niagara from pursuing any
other remedies available to them for such breach or threatened breach, including
the recovery of damages from the CEO.
IN WITNESS WHEREOF, the parties have duly executed this Plan as of the date
first above written.

            FIRST NIAGARA FINANCIAL GROUP, INC.
    December 15, 2008  By:   /s/ Sharon D. Randaccio     Date   Sharon D.
Randaccio        Chair, Compensation Committee        CHIEF EXECUTIVE OFFICER
    December 12, 2008  /s/ John R. Koelmel     Date John R. Koelmel     
President & CEO   

 

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