Document:

exv10w6

Exhibit 10.6

EMPLOYMENT AGREEMENT

     THIS AGREEMENT made and entered into effective as of the 1st day of January, 2006, by and
between JOHN CATANZARITA residing at 402 Sedgwick Drive, Syracuse, NY 13203 (the “Employee”) and
ONEIDA CONSULTING GROUP, INC., a New York Corporation with its principal office at 182 Main Street,
Oneida, New York (the “Corporation”).

RECITALS

     WHEREAS, Oneida Savings Bank (the “Bank”) has assigned all right, title and interest in, to
and under the Asset Purchase Agreement by and among BCG, LLC, Thomas J. Bader, Jerome A. Lindberg,
John F. Catanzarita, Donald J. Abernethy, James R. Mersfelder and Pamela S. Stobnicke dated June
28, 2006 and it (the “Asset Purchase Agreement”) to the Corporation by an Assignment and Assumption
Agreement effective the 28th day of June, 2006; and

     WHEREAS, the Corporation has purchased certain assets of BCG, LLC, and Employee, pursuant to
the Asset Purchase Agreement, has agreed to enter into a Covenant Not to Compete or Disclose in
connection with such sale and to be employed by Corporation; and

     WHEREAS, Corporation desires to obtain the services, skills and experience of Employee and
Employee desires to render services on behalf of Corporation under the terms and conditions set
forth herein.

     NOW, THEREFORE, in consideration of the premises contained herein, it is agreed by and between
the parties as follows:

     1. EMPLOYMENT.

          Corporation, hereby employs Employee as an officer of the Corporation, and Employee hereby
accepts such employment with Corporation and agrees to serve upon the terms and conditions
hereinafter set forth. The Employee shall render administrative, management, and

 

 

production services as are customarily performed by persons situated in similar capacities,
and shall have such other powers and duties as the Board of Directors may reasonably prescribe from
time to time, and as are set forth in Paragraph 4 hereof.

     2. TERM.

          The term of this Agreement shall be for a period of five (5) years commencing as of January 1,
2006, at 12:01 a.m. (“Commencement Date”), unless Employee’s employment terminates prior thereto,
as provided in Paragraphs 6 and 7. Thereafter, this Agreement shall be renewed automatically for
successive periods of one (1) year unless either party shall give the other at least sixty (60)
days prior written notice of its intent not to renew, whereupon it shall terminate as of the
expiration of the then existing term. Any renewal terms shall also be subject to termination as
provided in Paragraph 6 and 7.

     3. COMPENSATION.

          3.1. Compensation. As compensation for his/her services to the Corporation during the
term of this Agreement, the Corporation will pay to the Employee the base salary set forth on
Exhibit “A” annexed hereto. Such compensation shall be payable in accordance with the Corporation’s
normal payroll procedures.

          3.2. Club Memberships. Club memberships, dues and similar privileges relating to
general business relations and development will be provided in a manner consistent with other
senior executives of the Corporation and the Bank and/or as otherwise determined and approved by
the Board of Directors of the Corporation.

          3.3 Expenses. The Employee shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Employee in performing services under this Agreement in
accordance with the policies and procedures applicable to the

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Corporation, provided that the Employee accounts for such expenses as required
under such policies and procedures.

          3.4. Benefits. The Employee shall participate in such plans relating to pension,
thrift, profit-sharing, group life and disability insurance, medical and dental coverage,
education, cash bonuses, and other retirement or employee benefits or combinations thereof as shall
be determined in the discretion of the Board of Directors which benefit plans and programs may be
modified from time to time in the discretion of the Board of Directors. Employer will give Employee
credit for prior service with BCG, LLC and its predecessors for purposes of determining eligibility
to participate in Employer’s benefit plans, but not for vesting purposes under The Oneida Savings
Bank Employee Stock Ownership Plan. The benefits to which Employee shall be entitled as of the date
of this Agreement are set forth in the Oneida Financial Employee Handbook (revised 2005) (the
receipt of which is hereby acknowledged).

          3.5. Vacation. The Employee shall be entitled to annual paid vacation in accordance
with the policies established by the Corporation’s Board of Directors for similarly situated
employees, from time to time at such times and upon such conditions as the Board of Directors of
the Corporation may determine in its discretion, but in all events Employee will be entitled to a
minimum of six (6) weeks vacation.

     4. DUTIES AND RESPONSIBILITIES.

          4.1. So long as he is employed hereunder, Employee agrees to provide services relating to the
employee benefits and human resources products and services offered from time to time by the
Corporation in the manner described in Subparagraph 4.3 and to perform general management and
administrative responsibilities and any other duties reasonably assigned by Corporation, including,
but not limited to, appropriate activities to maintain and improve

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Corporation’s reputation in the community and the consulting, pension, insurance and financial
services industries. Employee shall perform all duties in accordance with Corporation standards and
guidelines.

          4.2. All funds, included but not limited to, commissions, premiums, fees and charges on all
consulting, insurance and financial services and products business transacted through the efforts
of Employee shall be invoiced to the insured or purchaser by Corporation or any provider it
represents. All checks or bank drafts received by the Employee from a purchaser shall be made
payable to Corporation or any provider company it represents; and all premiums and fees shall be
collected by Employee in name of and on behalf of Corporation.

          4.3. Except as otherwise provided herein, so long as Employee is employed hereunder, Employee
shall faithfully execute, to the best of his ability, the duties set forth in Paragraphs 1 and 4
and devote his substantially full business time and use his ability and influence to promote the
Corporation’s success. The foregoing is not intended to restrict the passive investment activities
of Employee. All consulting, insurance and financial services and products business transacted
through the efforts of Employee shall, be the sole property of Corporation and Employee shall have
no right to share in any commission or fees resulting from such business, except as may be
specifically provided hereby.

     5. DISABILITY.

          Determination of disability and payment of salary and other benefits during the period thereof
shall be pursuant to the policy of the Corporation as established from time to time by the Board of
Directors as more fully set forth in Paragraph 3.4 hereof.

     6. TERMINATION.

          This Agreement shall terminate upon the occurrence of any of the following:

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          (a) The death of the Employee;

          (b) The disability of the Employee which renders him unable to perform his duties hereunder
for a period of at least twelve (12) consecutive months or for any accumulated period of eighteen
(18) months within any three (3) year period. For purposes hereof, the Employee shall be deemed to
be disabled when any insurance carrier carrying disability income insurance for the Employee shall
determine under its policy that the Employee is totally disabled;

          (c) The written agreement of the parties hereto;

          (d) Pursuant to the provisions regarding notice and term set forth in Paragraph 2;

          (e) Termination for Cause. Corporation shall have the right to terminate this Agreement upon
five days prior written notice, in the event Corporation discharges Employee for “Cause.” For
purpose of this Agreement, “Cause” shall mean, (i) Employee’s professional license(s) (any or all)
shall have been revoked or suspended (as to the latter, unless solely caused by administrative
error) by the State of New York or any applicable federal regulator, (ii) Employee is convicted of,
pleads guilty to, any act of fraud, misappropriation or embezzlement or to any felony, (iii)
Employee has engaged in a dishonest act to the damage or detriment of Corporation or (iv) Employee
otherwise fails to comply with the terms of this Agreement and, after written notice from
Corporation of such failure, Employee at any time thereafter again falls to comply with such terms.
Upon receipt of written notice hereunder, Employee shall cease rendering services on behalf of
Corporation and shall have no authority to bind, the Corporation as a result of any subsequent
actions.

     7. EFFECT OF TERMINATION.

          (a) As of the effective date of the termination of this Agreement, the Corporation shall have
no further obligation to pay any further salary to the Employee hereunder (except the

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annual salary shall be prorated to the date of termination) or any other benefits hereunder
(except for benefits earned prior to the effective date of the termination), and the Employee shall
have no further obligation to perform his duties and responsibilities hereunder, other than the
covenant not to compete contained in Paragraph 8 hereof.

          (b) Employee acknowledges and agrees that all client accounts are owned by Corporation and all
accounts obtained by Employee during his or her employment shall be Corporation accounts and all
expiration lists, renewals, customer lists and records related thereto are and shall be the sole
property of Corporation. Upon termination of Employee’s employment, for any reason whatsoever, with
or without Cause, such customer accounts, expiration lists, renewals, customer lists and records
shall continue to remain the property of Corporation.

	 	8.	 	COVENANTS AGAINST DISCLOSURE OF SECRET AND/OR CONFIDENTIAL INFORMATION AND
COMPETITION.

          Employee represents and acknowledges that in the course of his or her employment with
Corporation he or she will become familiar with Collective Confidential Information, as defined in
the Covenant Not to Compete or Disclosure and in the Asset Purchase Agreement of Corporation and/or
its affiliates or subsidiaries (hereinafter referred to as “Affiliates”), all of which Confidential
Information is hereby acknowledged by Employee to be the exclusive property of Corporation and its
Affiliates and therefore, Employee hereby covenants and agrees as follows:

          (a) He or she shall not, during the period of his or her employment by Corporation or at any
time thereafter, disclose to any person, firm or corporation, nor shall he or she use for any
purpose whatsoever, except as directed by Corporation or disclosed in the ordinary course of
business of Corporation, any Collective Confidential Information; provided, however, that this
limitation shall not apply to any Collective Confidential Information which is required to be

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disclosed by law or by judicial process or which becomes generally available to the public
other than through a breach by Employee of his obligations hereunder.

          (b) Upon the termination, for any cause whatsoever, of his or her employment by Corporation,
Employee shall return and deliver forthwith to Corporation any and all papers, books, records,
documents, memoranda and manuals, including copies thereof, whether paper, electronic, magnetic or
other, belonging to Corporation or its Affiliates; further, he or she shall not retain or remove
any Collective Confidential Information of any type or description without the express written
consent of Corporation.

          (c) In the event of the termination of his or her employment (excepting an affirmative
termination by Employer without Cause taking effect during and thereby shortening Employee’s
currently effective term), by the Corporation, Employee covenants and agrees that he or she will
not for a period of two (2) years from the date of such termination (the “Noncompete Period”),
directly or indirectly, in any manner whatsoever, sell, provide, or assist. in the provision of
consulting, insurance, financial products and/or services located within a 75 mile radius of the
City of Syracuse or directly or indirectly solicit or accept as a customer for the purpose of
providing any type of consulting, insurance or financial products or services, any person,
corporation, limited liability company, municipality and/or any other person or entity who was a
customer of the Corporation at the time of termination during the Noncompete Period set forth in
this subsection. For purposes of this subsection, the term “consulting, insurance, financial
products or services business” is defined as any such business that Corporation and/or Affiliates
is providing, writing, procuring or negotiating at the time of Employee’s termination.

          (d) If a judicial determination is made that any of the provisions of this Paragraph 8
constitutes an unreasonable or otherwise unenforceable restriction against Employee, the

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provisions of this Paragraph 8 shall be rendered void only to the extent that such judicial
determination finds such provisions to be unreasonable or otherwise unenforceable. In this regard,
the parties hereto hereby agree that any judicial authority construing this Agreement shall be
empowered to alter the substantive and geographic scope, sever any prohibited business activities
from the coverage of this Paragraph 8, to reduce the duration of the Noncompete Period and to apply
the provisions of this Paragraph 8 to the remaining business activities not to be so altered or
severed by such judicial authority and to the duration of the Noncompete Period as reduced by
judicial determination.

          (e) Any breach or threatened breach by Employee of paragraphs (a), (b) and/or (c) of this
Paragraph 8 will irreparably injure Corporation and that any remedy at law for any breach or
threatened breach by Employee of the provisions contained in paragraphs (a), (b) and/or (c) of this
Paragraph 8 shall be inadequate, and that the Corporation shall be entitled to injunctive relief in
addition to any other remedy it might have under this Agreement or at law or in equity. Employee
further agrees that the grant of such injunctive relief and the enforcement of the terms of this
Agreement shall not deprive him or her of his or her ability to earn a living.

          (f) Nothing herein shall be construed to limit the protections afforded Corporation under the
separate Covenant Not to Compete or Disclose, and in the event of conflict of provisions, that
providing the greater protection to Corporation shall prevail.

     9. GOVERNING LAW.

          The terms of this Agreement shall be governed by the laws of the State of New York.

     10. NOTICE.

          For the purposes of this Agreement, notices and all other communications

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provided for in the Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested, postage prepaid, to
the Corporation at its home office, to the attention of the Board of Directors with a copy to the
Secretary of the Corporation, or, if to the Employee, to such home or other address as the Employee
has most recently provided in writing to the Corporation.

     11. NON-WAIVER CLAUSE.

          The waiver by either party of any breach of any provision of this Agreement by the other shall
not be construed as a waiver of any subsequent breach by the other or as a waiver of any other
clause of this Agreement.

     12. ASSIGNMENT.

          This Agreement may not be assigned by the Employee or the Corporation, but it shall inure to
the benefit of and shall be binding upon the heirs and legal representatives of the Employee and
upon the successors of the Corporation.

     13. ENTIRE AGREEMENT.

          This Agreement contains the entire understanding between the parties concerning the employment
of the Employee by the Corporation and may not be changed or terminated except by an agreement in
writing signed by both parties.

     14. SEVERABILITY.

          The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or enforceability of the other
provisions hereof.

     15. ARBITRATION.

          In case any disagreement difference or controversy shall arise between the

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Employee, his heirs or legal representatives, on the one hand, and the Corporation on the
other hand, with respect to any matter in relation to or arising out of or under this Agreement,
whether as to the construction or operation thereof, or the respective rights and liabilities of
the Employee or the Corporation, and the parties to the controversy cannot mutually agree thereon
for a period of thirty (30) days, then such disagreement, difference or controversy shall be
determined by arbitration as follows: the parties shall mutually agree upon a single arbitrator. If
they are unable to agree on a single arbitrator, each party shall select an arbitrator. Both of
such arbitrators so chosen shall select a third arbitrator. The power hereby given to the
arbitrators shall not terminate or be revoked by the death of the Employee and the arbitrators
shall proceed with the arbitration notwithstanding such death. Any award made by a majority of the
arbitrators shall be final, binding and conclusive upon the parties and those claiming under them.
The arbitrators shall have no power to make any award inconsistent with or contrary to the terms
and provisions of this Agreement. The costs and expenses of any arbitration shall be borne and paid
as the arbitrators shall, by their award, direct.

     16. SOURCE OF PAYMENTS.

          All payments provided in this Agreement shall be timely paid in cash or check from the general
funds of the Corporation. The Bank, however, guarantees payment and provision of all amounts and
benefits due hereunder to Employee and, if any such amounts and benefits are not timely paid or
provided by the Corporation, such amounts and benefits shall be paid or provided by the Bank.

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     IN WITNESS WHEREOF, the parties have set their hands effective on the date first above
written.

	 	 	 	 	 	 	 
	 	 	 	 	ONEIDA CONSULTING GROUP, INC.
	 
	 	 	 	 	 	 
	/s/ Kathleen Smith

	 	 	 	By:
	 	/s/ John Haskell
	 

	 	 	 	 	 	 
	            Witness

	 	 	 	 	 	Title: President
	 
	 	 	 	 	 	 
	/s/ Kathleen Smith

	 	 	 	 	 	/s/ John F. Catanzarita
	 

	 	 	 	 	 	 
	            Witness

	 	 	 	 	 	JOHN CATANZARITA, Employee

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	ONEIDA SAVINGS BANK

	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Kathleen Smith
	 	 	 	By:
	 	/s/ Michael R. Kallet
	 

	 	 
	 	 	 	 	 	 
	 

	 	Witness
	 	 	 	 	 	Title: President

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Exhibit A

Employment Agreement

Compensation, Paragraph 3.1

          Base salary of not less than One Hundred Twenty Two Thousand Five Hundred and 00/100 Dollars
($122,500.00) per year. Such amount may be increased by the Board of Directors in its sole
discretion.

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COVENANT NOT TO COMPETE OR DISCLOSE

     This Agreement, effective the 1st day of January, 2006, between JOHN CATANZARITA, residing at
402 Sedgwick Drive, Syracuse, NY 13203 (hereinafter referred to as “Member”) and ONEIDA CONSULTING
GROUP, INC., a New York Corporation having its principal place of business at 182 Main Street,
Oneida, New York (hereinafter referred to as “Buyer”).

     Whereas, Oneida Savings Bank has assigned all right, title and interest in, to and under the
Asset Purchase Agreement (the “Agreement”) by and among BCG, LLC, Thomas J. Bader, Jerome A.
Lindberg, John F. Catanzarita, Donald J. Abernethy, James R. Mersfelder and Pamela S. Stobnicke
dated June 28, 2006 to Buyer by an Assignment and Assumption Agreement effective the 28th day of
June, 2006; and

     Whereas, BCG, LLC owns and certain members of BCG, LLC, including Member hereunder, previously
have owned all of the stock and/or membership interests in Retirement Income Services, Inc.,
Benefit Consulting Group, LLC, Executive Advisory Group, LLC and Asset Management Strategies, Inc.
(hereinafter “Related Entities”); and

     Whereas, the Buyer has purchased certain assets of BCG, LLC (including assets owned or
formerly owned by BCG, LLC’s Related Entities) and Member, pursuant to the Agreement, has agreed to
enter into a Covenant Not to Compete or Disclose in connection with such sale and to be employed by
Buyer; and

     Whereas, Member has entered into an Employment Agreement with Buyer dated as of January 1,
2006, under the terms of which Member shall be employed by Buyer (the “Employment Agreement”).

     Now, Therefore, for good consideration, the parties agree as follows:

     1. Member represents and acknowledges that in the course of his ownership of interests in BCG,
LLC and BCG, LLC’s Related Entities, he (i) has had the opportunity to become familiar with
Confidential Information (as defined in the Agreement) of BCG, LLC and such Related Entities,
including, but not limited to the identities of clients, providers of products and services, key
contacts, costs, markets, fees and commissions, information regarding products and services
provided to or relating to clients or Active Prospective clients (as defined in the Agreement), all
of which is hereby acknowledged by Member to have been transferred to and have become the exclusive
property of Buyer as of the Effective Date (as defined in the Agreement), and together with like
information acquired subsequent to the Effective Date in the operation of the Seller Business (as
defined in the Agreement) and/or the Buyer’s business, is hereinafter collectively referred to as
“Collective Confidential Information”, and (ii) has realized a substantial benefit from the
purchase of the Acquired Assets (as defined in the Agreement) of BCG, LLC by Buyer and therefore,
Member hereby covenants and agrees as follows:

          (a) He shall not disclose to any person, firm or corporation, nor shall he use for any purpose
whatsoever, except as approved by Buyer, any of the Collective Confidential Information; provided,
however, that this limitation shall not apply to any Collective Confidential Information which is
required to be disclosed by law or by judicial process or which

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becomes available to the public other than a result of a breach by Member of his obligations
hereunder.

          (b) Member represents he has not retained any papers, books, records, documents, memoranda and
manuals, including copies thereof acquired by the Buyer.

          (c) Member covenants and agrees that he will not for a period of two (2) years from the date
of his termination of employment under the Employment Agreement (excepting an affirmative
termination by Employer without Cause taking effect during and thereby shortening Employee’s
currently effective term under the Employment Agreement) (the “Noncompete Period”).

     (i) except on behalf of Buyer pursuant to the Employment Agreement, directly or
indirectly, in any manner whatsoever, sell, provide, or assist in the provision of
consulting, insurance, financial products and/or services located within a 75 mile radius of
the City of Syracuse or directly or indirectly solicit or accept as a customer for the
purpose of providing any type of consulting, insurance or financial products or services,
any person, corporation, limited liability company, municipality and/or any other person or
entity who was a customer of BCG, LLC and Related Entities at the time of the transfer or of
Buyer during the Noncompete Period set forth in this subsection or was an Active Prospective
Client;

     (ii) additionally, Member covenants and agrees that during the Noncompete Period he
will not (A) be employed by or own a consulting, insurance agency or other business
competitive with Buyer in the consulting, insurance and/or financial services business,
individually or as a shareholder, member of a limited liability company or partner, except
as may be authorized by Buyer in advance; (B) divert business from or interfere with the
goodwill acquired by Buyer; (C) aid or assist anyone in soliciting, attempting to obtain or
accepting such business of any nature; or (D) act or serve as an advisor, consultant, or
risk manager, paid or unpaid, with respect to such business;

     (iii) hire or solicit any employee of Buyer or encourage or induce any employee to
leave employment with the Buyer; or

     (iv) solicit, induce or influence any supplier of the Buyer to discontinue or reduce
its relationship with Buyer.

          (d) If a judicial determination is made that any of the provisions of this Agreement
constitutes an unreasonable or otherwise unenforceable restriction against Member, the provisions
of this Agreement shall be rendered void only to the extent that such judicial determination finds
such provisions to be unreasonable or otherwise unenforceable. In this regard, the parties hereto
hereby agree that any judicial authority construing this Agreement shall be empowered to alter the
substantive and geographic scope, sever any prohibited business activities from the coverage of
this Agreement, to reduce the duration of the Noncompete Period and to apply the provisions of this
Agreement to the remaining business activities not to be so altered or severed by such judicial
authority and to the duration of the Noncompete Period as reduced by judicial determination.

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          (e) Any breach or threatened breach by Member of Paragraphs 1(a), (b) and/or (c) of this
Agreement will irreparably injure the Buyer and that any remedy at law for any breach or threatened
breach by Member of the provisions contained in Paragraphs 1(a), (b) and/or (c) of this Agreement
shall be inadequate, and that the Buyer shall be entitled to injunctive relief in addition to any
other remedy it might have under this Agreement or at law or in equity. Member further agrees that
the grant of such injunctive relief and the enforcement of the terms of this Agreement shall not
deprive him or her of his or her ability to earn a living.

     2. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and
their respective successors, heirs, executors, administrators and assigns.

     3. This Agreement has been entered into and shall be construed in accordance with the laws of
the State of New York.

     4. This Agreement may be amended only by written agreement signed by the parties hereto.

     5. Member acknowledges that he has completely read and fully understands each of the terms and
provisions of this Agreement and that he has executed this Agreement based on his own judgment, of
his own free will, and without reliance upon any statement or representation of others not
specifically set forth in writing or specifically referred to in this Agreement. Member further
acknowledges that he has been provided the opportunity to review this Agreement with counsel of his
own choosing at his own expense and has .reviewed the same with such counsel prior to executing the
same. Member also further acknowledges and agrees that the terms hereof (1) are no greater than are
required for the protection of the legitimate interest of the Buyer (including but not limited to
the protection of the goodwill acquired by Buyer, as well as the goodwill developed during the
period of service by Member to Buyer under the Employment Agreement), (2) do not impose undue
hardship on the Member, and (3) are not injurious to the public (including by reason of there being
adequate availability of consulting, insurance and financial service products from other providers
in competition with Buyer).

[Rest of Page Intentionally Left Blank; Signature Page Follows]

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     In Witness Whereof, the parties have executed this Agreement effective on the day and year
first above written.

	 	 	 	 	 
	 	 	 
	 	     /s/ John R. Catanzarita
 	 
	 	John Cantanzarita, Member 	 
	 	 	 
	 
	 	Oneida Consulting Group, Inc., Buyer

 	 
	 	By:  	/s/ John Haskell
 	 
	 	 	 	 
	 	 	 	 
	 

State of New York        )

County of Madison       )       ss.:

          On the 28th day of June in the year Two Thousand Six before me, the undersigned, a Notary
Public in and for said State, personally appeared John Catanzarita, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are)
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

	 	 	 	 	 
	 	 	 
	 	     /s/ Kathleen A. Smith
 	 
	 	Notary Public – State of New York 	 
	 	Appointed in Oneida County

My Commission Expires: 8/20/2006 	 
	 

State of New York        )

County of Madison       )       ss.:

          On the 28th day of June in the year Two Thousand Six before me, the undersigned, a Notary
Public in and for said State, personally appeared John Haskell personally known to me or proved to
me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the
person upon behalf of which the individual(s) acted, executed the instrument.

	 	 	 	 	 
	 	 	 
	 	     /s/ Kathleen A. Smith
 	 
	 	Notary Public – State of New York 	 
	 	Appointed in Oneida County

My Commission Expires: 8/20/2006 	 
	 

16exv10w7

Exhibit
10.7

 

 

ONEIDA FINANCIAL CORP.

PERFORMANCE BASED COMPENSATION PLAN

Purpose

     The Performance Based Compensation Plan (“Plan”) of Oneida Financial Corp. seeks to provide to
the participating officers and employees incentive and motivation to stimulate the profitability
and growth of the Company. The Plan also seeks to improve the ability of Oneida Financial Corp.
(“Company”) to attract and retain a qualified and professional workforce critical to the Company’s
continued success.

Definitions

     The following terms used in the Plan shall have the following meaning, unless specifically
otherwise provided in the context of their use in the Plan:

	 	1.	 	Actual Performance – The actual financial results of operation of the
Company during the Plan Year as measured by the Net Income Growth Rate, Return on
Average Assets and Return on Average Equity.
	 
	 	2.	 	Annual Performance Award (“Award”) – The amount due to the Participant based
upon the Company’s Actual Performance.
	 
	 	3.	 	Average Assets – The Average Assets of the Company during the Plan Year.
	 
	 	4.	 	Average Equity - The Average Equity of the Company during the Plan Year,
adjusted to eliminate any Unrealized Gain/Loss (Accumulated Other Comprehensive
Income/Loss) recorded through Equity.
	 
	 	5.	 	Bank – The Oneida Savings Bank and its successors and assigns, as reported
on an unconsolidated basis.
	 
	 	6.	 	Net Income – The Company’s net income (after deductions for Awards, state
and local franchise taxes and federal income taxes), as reported on a consolidated
basis for the Plan Year, as calculated from the Company’s financial reports for the
Plan Year.
	 
	 	7.	 	Base Compensation – The sum of the salaries and wages paid during the Plan
Year to the Participant, exclusive of Awards paid under the Plan, as reported by the
Company to the Internal Revenue Service.
	 
	 	8.	 	Board of Directors – The Board of Directors of Oneida Financial Corp.
	 
	 	9.	 	Committee – The Compensation Committee of the Board of Directors of Oneida
Financial Corp.
	 
	 	10.	 	FDIC – The Federal Deposit Insurance Corporation.
	 
	 	11.	 	Maximum Award – The highest possible amount payable to a Participant during
the Plan Year permitted under the Plan. The Maximum Award may be
measured as a specific dollar amount or as a percentage of Base Compensation.

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	 	12.	 	Participant – Executive Officers of the Company as determined by the
Committee as eligible for an Award under the Plan.
	 
	 	13.	 	Participant Category – Eligible officers shall be categorized for purposes
of this Plan into the following categories:

	 	 	 	ü Category I: President & Chief Executive Officer
	 
	 	 	 	ü Category II: All Other Executive Officers

	 	14.	 	Plan – The Performance Based Compensation Plan of Oneida Financial Corp. as
herein provided and subsequently amended by action of the Board of Directors.
	 
	 	15.	 	Plan Year – The Company’s fiscal year during which a Participant may earn
Awards.
	 
	 	16.	 	Return on Average Assets – Net Income as a percentage of Average Assets, as
computed for the Plan Year based upon the Company’s financial reports for the Plan
Year.
	 
	 	17.	 	Return on Average Tangible Equity - Net Income as a percentage of Average
Tangible Equity, as computed for the Plan Year based upon the Company’s financial
reports for the Plan Year.
	 
	 	18.	 	Net Income Growth Rate – The difference between Net Income for the current
Plan Year and Net Income for the preceding Plan Year calculated as a percentage of the
preceding Plan Year’s Net Income.
	 
	 	19.	 	Target Performance Level – Annual targets as established by the Compensation
Committee and approved by the Board of Directors based upon Net Income Growth Rate,
Return on Average Equity and Return on Average Assets as compared with the Actual
Performance of the Company for a Plan Year.
	 
	 	20.	 	Total Award - The sum of all Awards earned under the Plan by all Participants
during the Plan Year.

Administration of the Plan

	 	1.	 	Committee Responsibilities and Powers – The Committee shall report to the
Board of Directors. It shall have complete and sole responsibility for the
administration of the Plan and its construction and interpretation. It may adopt such
rules, engage outside professionals and perform such acts as in its sole discretion it
deems necessary for the effective administration and proper interpretation and
construction of the Plan.
	 
	 	2.	 	Committee Meetings – The Committee shall meet not less frequently than
annually.

2

 

	 	3.	 	Process – Management shall make annual recommendations for the review and
approval by the Committee on Participants, Participant Categories, Return
on Average Asset target levels, Return on Average Equity target levels, Net Income
Growth Rate target levels, Maximum Awards, and such other material as may be necessary
to implement, maintain and administer the Plan.
	 
	 	4.	 	Recordkeeping – The Committee shall maintain such records for each
Participant for each Plan Year as in its sole discretion it deems necessary to
implement and administer the Plan.

Participation in the Plan

	 	1.	 	Eligibility – Executive Officers of the Company who, in the sole judgement
of the Committee, may contribute to the profitability and growth of the Company shall
be eligible for participation in the Plan.
	 
	 	2.	 	Designation as Participant – The Committee shall designate from among
eligible Officers the actual Participants for each Plan Year. Participants will be
designated by name, position or employee category as updated annually by the Committee
on Schedule “A” attached. Participants in a prior Plan Year may be excluded from
participation in a subsequent Plan Year. A designation as Participant shall not
prohibit the Company from granting special performance or recognition awards to
officers and employees outside the provisions of the Plan, under such conditions and
in such form and manner as it sees fit, for meritorious service of any nature.
	 
	 	3.	 	Termination of Participation – Participants shall cease participating in the
Plan if their employment at the Company and/or the Bank is terminated during the Plan
Year for cause or due to resignation. Unless the Committee specifically determines
otherwise, such Participants shall not be eligible to receive Awards for the Plan Year
and shall be required to return to the Company any Partial Payments received.
Participants whose employment at the Company and/or the Bank is terminated for reasons
other than those aforementioned, including without limitations retirement, death,
disability or layoffs, shall cease participating in the Plan upon, and as of the date
of, termination of employment at the Company and/or the Bank. Such Participants shall
receive a pro-rata share of Awards, based upon the ratio that their length of
employment during a Plan Year bears to the entire Plan Year.

Designation of Awards

	 	1.	 	Award Levels – The Total Award payable to all Participants is based upon the
Actual Performance of the Company as compared with the Target Performance Levels
established by the Committee at the beginning of each Plan Year and appended as
Schedule “B”. The Committee reserves the right to adjust or amend the Target
Performance Levels during a Plan Year should conditions warrant such subsequent
review. Such conditions or events that may warrant review of Target Performance
Levels include, but are not limited to, mergers, acquisitions, significant economic
conditions, unusual financial situations and other events that in the sole discretion
of the Committee warrant
review. Any change in the Target Performance Levels made during a Plan Year will be
promptly communicated and explained to Participants.

3

 

	 	2.	 	Limitations on Awards – The Total Award may be reduced or eliminated in a
given Plan Year based upon the following factors:

	 	 	ü  	No Award shall be made to any Participant if the Return on Average
Tangible Equity for any Plan Year is less than 7.50%.
	 
	 	 	ü  	No Award shall be made to any Participant if the Return on Average
Assets for any Plan Year is less than 0.50%.
	 
	 	 	ü  	No Award shall be made to any Participant if the most recent
Regulatory Examination Report does not reflect a Uniform Composite
Rating of 1 or 2.
	 
	 	 	ü  	The maximum Total Award payable to all Participants is 4% of Net Income.

Award Determination

	 	1.	 	Distribution of Award – The Total Award shall be distributed between the
Participant Categories at the discretion of the Committee in accordance with
applicable Limitations on Awards and with the following maximum distribution limits by
Participant Category considered:

	 	 	ü  	Category I –  Maximum of 50% of Total Award
	 
	 	 	ü  	Category II – Maximum of 50% of Total Award

	 	2.	 	The Award for each Participant Category will be
equally divided among the Participants in each Participant Category.

Payment of Awards

	 	1.	 	Awards Due Participants – As soon as administratively feasible after the end
of the Plan Year, management shall calculate for the review and approval of the
Committee the Awards due to each Participant. Upon review by the Board of Directors
of the Actual Performance of the Company for the Plan Year, following the close of the
Company’s fiscal period, the Board of Directors shall authorize payment of Annual
Performance Awards in accordance with the provisions of the Plan for the Plan Year.
	 
	 	2.	 	Partial Payments – At the sole discretion of the Committee, Participants may
receive cash payments in advance of the close of the Plan Year in accordance with
following procedures:

	 	 	ü  	Partial cash payments may be made no earlier than six (6) months after the
beginning of the Plan Year;
	 
	 	 	ü  	Award amounts available for partial cash payments shall be determined pursuant
to the Award Determination provisions of the Plan, using
quarterly budgets, forecasts and financial results prepared by management for
review by Committee;

4

 

	 	 	 	ü Cash payments not to exceed, in aggregate, forty (40) percent of the Awards
calculated pursuant to this section may be made at the discretion of the
Committee:

Transferability

     The entitlement of a Participant to an Award under the Plan may not be sold, donated, pledged
or otherwise assigned or transferred in whole or in part. Awards under the Plan shall only accrue,
and be payable, to the Participant or the beneficiary or a deceased Participant.

Employment

     Nothing in the Plan is intended to confer upon any officer or employee the right to continue
in the employ of the Company and/or the Bank, or to interfere with or restrict in any way the right
of the Company and/or the Bank to discharge an officer or employee at any time, for any reason
whatsoever, with or without cause.

Interpretation and Construction

     The Committee shall have complete and sole responsibility for the construction and
interpretation of the Plan.

Terms of the Plan

     The Plan shall become effective when it shall have been approved by the Board of Directors and
shall remain effective thereafter unless and until terminated by the Board of Directors.

Effective Date

     The Plan as provided herein was approved by the Board of Directors on May 12, 2009 and is
effective as of January 1, 2009.

Amendment of the Plan

     The Board of Directors shall have the power at any time to amend or terminate the Plan, in
whole or in part.

Titles, Headings and Construction of Language

     The titles and headings of the sections of the Plan are for convenience of reference only and
in the event of any conflict, the text of the Plan rather than any such headings shall control.

     Whenever appropriate in the Plan, words used in the singular may be read in the plural; words
used in the plural may be read in the singular; and words importing the masculine gender shall be
deemed equally to refer to the female gender or the neuter.

Governing Law

     The Plan shall be administered in accordance with the State of New York and applicable federal
laws FDIC and State of New York banking regulations.

5

 

Witness

     In WITNESS WHEREOF, the Company, by action of its Board of Directors, has caused this Plan to
be adopted in its corporate name and its corporate seal to be hereunto affixed and attested, all as
of the date first above written.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	Oneida Financial Corp.  
	 
	 	 	 	 	 	 
	 	 	By	/s/ Richard B. Myers
	 	 	 	 	 	 
	 

	 	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 
	 	 	 	Richard B. Myers
	 

	 	 	 	 
	 

	 	 	 	(Name)	 	 
	 
	 	 	 	 	 	 
	 	 	 	Chairman of the Board of Directors
	 

	 	 	 	 
	 

	 	 	 	(Title)	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	May 12, 2009
	 

	 	 	 	 
	 

	 	 	 	(Date)	 	 
	ATTEST:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ Eric E. Stickels
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	          Secretary
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	          [Seal]
	 	 	 	 	 	 

6

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