Document:

Exhibit 10.7

 

THIS EMPLOYMENT AGREEMENT this "Agreement") is made
and effective as of Monday December 1st, 2014, between HDIMAX, Inc. a Delaware corporation having just completed a Merger with
Indigo-Energy, Inc. (together with its successors and assigns, the "Company"), and Stanley L. Teeple, Chief Compliance
Officer, (“CCO”) and Corporate Secretary.

 

Recitals

 

The Company and CCO desire to enter into an agreement pursuant
to which the Company will employ CCO as its Chief Compliance Officer and Corporate Secretary subject to the terms and conditions
of this Agreement.

 

Agreement

 

NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and promises contained herein, the parties agree as follows:

 

1. Employment.

 

The Company hereby engages CCO to serve as the Chief Compliance
Officer and Corporate Secretary of the Company, and CCO agrees to serve the Company, during the Service Term (as defined in Section
4 below) in the capacities, and subject to the terms and conditions, set forth in this

 

2. Duties.

 

During the Service Term, CCO, as Chief Compliance Officer of
the Company, shall have all the duties and responsibilities of this office and such other duties and responsibilities as may be
delegated from time to time by the Board or the Chief Executive Officer (CEO) of the Company in their sole discretion. CCO will
report to the CEO. CCO will devote his best efforts and whatever time and resources are required to fulfill his responsibilities
to the business of the Company and its Subsidiaries.

 

3. Salary, Bonus and Benefits.

 

The CEO shall make all decisions related to CCO’s base
salary and the payment of bonuses, if any. CCO’s Annual Base Salary and other compensation will be reviewed by the CEO or
Compensation Committee of the Board of Directors at least annually.

 

		A.	Base Salary. During the term of this Agreement, the Company will pay CCO a base salary (the "Annual Base
Salary") of $250,000 per annum in accordance with the Company's customary payroll practices.

 

		B.	Bonus Plan- Equity Awards. CCO shall receive a one-time grant of shares of common stock in the corporation on
or about 1 January 2015 to be issued not later than June 30, 2015 in an amount to be determined by the CEO and Compensation Committee.

 

		C.	Bonus Plan- Completion Bonus and Annual Bonus. CCO shall be eligible to receive an annual bonus in accordance
with Company bonus policy to be established by the Board of Directors. For 2014, CCO shall receive a one-time bonus for successful
completion of the closing of the merger with Indigo-Energy, Inc. in the amount of one-hundred thousand dollars ($100,000). For
2015 and all subsequent years, an annual bonus of not less than five (5%) and not more than thirty-five percent (35%) of his prior
year annual base salary shall be awarded at the sole discretion of the CEO and Compensation Committee of the Board of Directors.

 

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		D.	Benefits.

 

		(i)	CCO shall either be enrolled in the Company health and welfare insurance program or receive reimbursement for health, dental,
medical, disability, and life insurance premiums for himself and his spouse.

		(ii)	CCO shall participate in any pension benefit program of the Company at a level equal to senior management.

		(iii)	CCO shall be reimbursed for all reasonable business related expenses incurred in the performance of his duties in accordance
with the Company’s policies.

		(iv)	CCO shall be reimbursed for the cost of maintaining a corporate office in Henderson, NV including rent, utilities, phones,
internet and related office expenses at a cost not to exceed $4,000 per month for a period of nine months, at time such expense
shall be reviewed by the CEO and all expenses will be supported by invoices in accordance with the Company policies.

		(v)	CCO shall receive three weeks of paid vacation annually commencing January 1, 2015.

 

4. Employment Term.

 

Unless CCO’s employment under this Agreement is sooner
terminated as a result of CCO’s resignation or termination in accordance with the provisions of Section 5 below, CCO’s
term of employment ("Service Term") under this Agreement shall commence on the date hereof and shall continue for a period
of twenty-five months through December 31, 2016. On that date the agreement shall automatically renew for an additional 12 month
period unless terminated by either party.

 

5. Termination.

 

CCO’s employment with the Company shall cease upon the
first of the following events to occur:

 

	 	A.	CCO’s death.
	 	 	 
	 	B.	CCO’s voluntary retirement.
	 	 	 
		C.	CCO’s disability, which means his incapacity due to physical or mental illness such that he is unable to perform the
essential functions of his previously assigned duties.

 

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		D.	Termination by the Company by the delivery to CCO of a written notice from the Chief Executive Officer that the CCO has been
terminated ("Notice of Termination") with or without Cause. "With Cause" shall mean termination for any of
the following:
	 	 	CCO’s (A) commission of a felony or a crime
involving moral turpitude or the commission of any other act or omission involving dishonesty in the performance of his duties
to the Company or fraud; (B) substantial and repeated failure to perform duties of the office held by CCO as reasonably directed
by the Board or the Chief Executive Officer; (C) gross negligence or willful misconduct with respect to the Company or any of its
Subsidiaries; (D) material breach of this Agreement not cured within ten (10) days after receipt of written notice thereof from
the Company; (E) failure, within ten (10) days after receipt by CCO of written notice thereof from the Company, to correct, cease
or otherwise alter any failure to comply with instructions or other action or omission which the Chief Executive Officer reasonably
believes does or may materially or adversely affect its business or operations; (F) misconduct which is of such a serious or substantial
nature that a reasonable likelihood exists that such misconduct will materially injure the reputation of the Company or its Subsidiaries
if CCO were to remain employed by the Company; (G) harassing or discriminating against the Company's employees, customers or vendors
in violation of the Company's policies with respect to such matters; (H) and/or misappropriation of funds or assets of the Company
for personal use or willful violation of Company policies or standards of business conduct as determined in good faith by the Chief
Executive Officer.

 

		E.	CCO’s voluntary resignation by the delivery to the Chief Executive Officer of a written notice from CCO that CCO has
resigned.

 

6. Rights on Termination. 

 

		A.	If during the term of employment the CCO’s employment is terminated under Section 5 above by the Company without Cause
or Section 5. A. or C. (death or disability), then the Company shall pay a severance pay of four months base compensation and continue
all other benefits as defined in 3. D. above for a period of four months including any pro-rata portion of any bonus or compensation
plan in force at the time.

 

		B.	If the CCO is terminated for Cause per Section 5.D. above, then all future rights and benefits will immediately cease but all
rights, compensation and benefits will be brought current and considered earned.

 

 

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7. Representations of CCO.

		A.	CCO hereby represents and warrants to the
Company that the statements contained in this Section 7 are true and accurate as of the date of this Agreement.

 

		i)	Legal Proceedings. CCO is not the subject of any criminal proceeding.

		ii)	Securities Law. CCO has not been found in a civil action by the Securities and Exchange Commission, Commodity Futures Trading
Commission, a state securities authority or any other regulatory agency to have violated any federal, state or other securities
or commodities law.

		iii)	Employment Restrictions. CCO is not currently a party to any non-competition, non-solicitation, confidentiality or other work-related
agreement that limits or restricts CCO’s ability to work in any particular field or in any particular geographic region,
whether or not such agreement would be violated by this Agreement.

 

8. Confidential Information; Proprietary Information, etc.

 

	 	A.	Obligation to Maintain Confidentiality.
CCO agrees that, other than in the course of performance of his duties as an employee of the Company, he will not at any time (whether
during or after CCO’s term of employment) disclose or permit to be disclosed to any Person or, directly or indirectly, utilize
for his own account or permit to be utilized by any Person any Proprietary Information or records pertaining to the Company, its
Subsidiaries and their respective business for any reason whatsoever without the Chief Executive Officer's consent.
	 	 	 
	 	B.	Third Party Information. CCO understands
that the Company and its Subsidiaries will receive from third parties confidential or proprietary information ("Third Party
Information") subject to a duty on the Company's and its Subsidiaries' part to maintain the confidentiality of such information
and to use it only for certain limited purposes.
	 	 	 
	 	C.	Compelled Disclosure. If CCO is
required by law or governmental regulation or by subpoena or other valid legal process to disclose any Proprietary Information
or Third Party Information to any Person, CCO will immediately provide the Company with written notice of the applicable law, regulation
or process so that the Company may seek a protective order or other appropriate remedy.

 

9. Noncompetition and Non-solicitation.

 

	 	A.	Noncompetition. As long as CCO
is an employee of the Company or any Subsidiary thereof, and for a period ending twelve (12) months following the Termination Date
of CCO’s employment (the "Restrictive Covenant Period"), CCO shall not, directly or indirectly own, manage, control,
participate in, consult with, render services for, or in any manner engage in any business competing with the Company.

 

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	 	B.	Non-solicitation. As long as CCO
is an employee of the Company or any Subsidiary thereof, and during the Restrictive Covenant Period thereafter, CCO shall not directly
or indirectly through another entity: (i) induce or attempt to induce any employee of the Company or any Subsidiary to leave the
employ of the Company or such Subsidiary, or in any way interfere with the relationship between the Company or any Subsidiary and
any employee thereof.
	 	 	 
	 	C.	Submission to Jurisdiction. The
parties hereby submit to the jurisdiction of any state or federal court sitting in the State of Nevada in any action or proceeding
arising out of or relating to Section 8 and/or 9 of this Agreement.

 

GENERAL PROVISIONS

10. Notices.

 

Any notice provided for in this Agreement must be in writing
and must be mailed, personally delivered or sent by reputable overnight courier service (charges prepaid) to the recipient at the
address below indicated:

 

If to the Company:

HDIMAX. Inc.

9225 Jane Street

Vaughan, ON L6A 0J7

Attention: Chief Executive Officer

 

If to CCO

Stanley L. Teeple

2857 Sumter Valley Cir

Henderson, NV 89052

 

11. Miscellaneous.

 

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

 

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B.Complete Agreement. This Agreement,
those documents expressly referred to herein and other documents of even date herewith embody the complete agreement and understanding
among the parties and supersede and preempt any prior understandings, agreements or representations by or among the parties.

 

C.Counterparts; Facsimile Transmission.
This Agreement may be executed in separate counterparts, each of which is deemed to be an original.

 

D.Successors and Assigns. Except
as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be enforceable by CCO, the Company and
their respective successors and assigns; provided that the rights and obligations of the parties under this Agreement shall not
be assignable without the prior written consent of the other party, except for assignments by operation of law and assignments
by the Company to any successor of the Company by merger, consolidation, combination or sale of assets. Any purported assignment
in violation of these provisions shall be void ab initio.

 

E.Choice of Law; Jurisdiction. All
questions or disputes concerning this Agreement and the exhibits hereto will be governed by and construed in accordance with the
internal laws of the State of Nevada.

 

F.Remedies. Each of the parties
to this Agreement will be entitled to enforce its rights under this Agreement specifically, to recover damages and costs (including
attorney's fees) caused by any breach of any provision of this Agreement and to exercise all other rights existing in its favor.
The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without
posting any bond or deposit) for specific performance and/or other injunctive relief in order to enforce or prevent any violations
of the provisions of this Agreement.

 

G.Amendment and Waiver. The provisions
of this Agreement may be amended or waived only with the prior written consent of the Company and Executive.

 

H.No Waiver. A waiver by any party
hereto of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that such party
would otherwise have on any future occasion. Neither failure to exercise nor any delay in exercising on the part of any party hereto,
any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies herein provided are cumulative and may be exercised singly or concurrently, and are
not exclusive of any rights or remedies provided by law.

 

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I.Waiver of Jury Trial. BOTH PARTIES
TO THIS AGREEMENT AGREE THAT ANY ACTION, DEMAND, CLAIM OR COUNTERCLAIM RELATING TO THE TERMS AND PROVISIONS OF THIS AGREEMENT,
OR TO ITS BREACH, MAY BE COMMENCED IN THE STATE OF NEVADA IN A COURT OF COMPETENT JURISDICTION. BOTH PARTIES TO THIS AGREEMENT
FURTHER AGREE THAT ANY ACTION, DEMAND, CLAIM OR COUNTERCLAIM SHALL BE RESOLVED BY A JUDGE ALONE, AND BOTH PARTIES HEREBY WAIVE
AND FOREVER RENOUNCE THAT RIGHT TO A TRIAL BEFORE A CIVIL JURY.

 

 

12. Indemnification.

 

During and following the employment period, the Company shall
indemnify CCO and hold him harmless from and against any claim, loss or cause of action arising from or out of his performance
as an officer, director or employee of the Company or any of its Subsidiaries or in any other capacity, including any fiduciary
capacity, in which CCO serves at the request of Company to the maximum extent permitted by applicable law and the Company's By-Laws.
Expenses incurred in defending or investigating a threatened or pending action, suit or proceeding shall be paid by the Company
in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of CCO to
repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Company. To the extent
that the Company reduces the indemnity rights provided for under its By-Laws after execution of this Agreement, the Company's indemnity
obligations hereunder shall be unaffected (to the extent permitted by applicable law).

 

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.

 

HDIMAX, Inc. and Indigo-Energy, Inc.

 

By: /s/ Raaj Brar                                                       

Raaj Brar, Chief Executive Officer

 

 

Chief Compliance Officer

 

/s/ Stanley L. Teeple                                               

Stanley L. Teeple

 

 

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Exhibit 10.1

EMPLOYMENT AGREEMENT

This sets forth the terms of the Employment Agreement made as of January 1, 2015 between (i) COMMUNITY BANK SYSTEM, INC., a Delaware corporation and registered bank holding company (“CBSI”), and COMMUNITY BANK, N.A., a national banking association (“CBNA”), both having offices in DeWitt, New York (collectively, the “Employer”), and (ii) MARK E. TRYNISKI, an individual currently residing at 1964 Penfold Way, Baldwinsville, New York (“Employee”).  This Agreement is effective as of January 1, 2015 and supersedes the Employment Agreement between the parties dated as of January 1, 2012.

W I T N E S S E T H

IN CONSIDERATION of the promises and mutual agreements and covenants contained herein, and other good and valuable consideration, the parties agree as follows:

 

                                1.           Employment.

 

(a)           Term.  Employer shall continue to employ Employee, and Employee shall continue to serve, as President and Chief Executive Officer of Employer for a term commencing on January 1, 2015 and ending on December 31, 2017 (“Period of Employment”), subject to termination as provided in paragraph 3 hereof.

(b)           Salary.  During the Period of Employment, Employer shall pay Employee a base salary at an annual rate of not less than $725,000 (“Base Salary”).  Employee’s Base Salary shall be reviewed and adjusted in accordance with Employer’s regular payroll practices for executive employees.  Employee’s Base Salary is payable in accordance with Employer’s regular payroll practices for executive employees.

(c)           Incentive Compensation.  During the Period of Employment, Employee shall be entitled to annual incentive compensation opportunities pursuant to the terms of the Management Incentive Plan, which has been approved by the Board of Directors of Employer to cover Employee and other key personnel of Employer, as well as other incentive plans that may be established by Employer.  Upon termination of Employee’s employment pursuant to subparagraph 3(a), 3(b), 3(c) or 6, Employee shall be entitled to a pro rata portion (based on Employee’s completed months of active employment in the applicable year) of the annual incentive awards that are payable with respect to the year during which the termination occurs or, if the annual awards for such year are not determinable at the time of termination, then the immediately prior year’s awards shall be used to determine such pro rata portion.

 

 

  

  

  

 

2.           Duties during the Period of Employment.  Employee shall have responsibility, subject to the control of Employer’s Board of Directors for the supervision of all aspects of Employer’s business and operations, and the discharge of such other duties and responsibilities to Employer as may from time to time be reasonably assigned to Employee by Employer’s Board of Directors.  Employee shall report to Employer’s Board of Directors.  Employee shall devote Employee’s best efforts to the affairs of Employer, serve faithfully and to the best of Employee’s ability and devote all of Employee’s working time and attention, knowledge, experience, energy and skill to the business of Employer, except that Employee may affiliate with professional associations, business and civic organizations; provided that such affiliations are not inconsistent with and do not interfere with the performance of Employee’s duties under this Agreement.  Consistent with CBSI’s Corporate Governance Guidelines, Employee shall advise, and obtain the consent of, the Chair of the Board and Chair of the Nominating and Corporate Governance Committee prior to accepting a position on another public company board of directors.  Employee shall be appointed to serve as a Director of Community Bank System, Inc. and Community Bank, N.A., provided that such appointment and subsequent re-nomination to serve as a Director shall be subject to (i) Employee being qualified to serve under applicable law, regulations, and the Employer’s bylaws, and (ii) the exercise of the fiduciary duties of the Employer’s Board of Directors and nominating committee of the Board of Directors.  Employee shall serve on the Board of Directors of, or as an officer of Employer’s affiliates, without additional compensation if requested to do so by the Board of Directors of Employer.  Employee shall receive only the compensation and other benefits described in this Agreement for Employee’s duties as a Director of Employer or any of its affiliates.

3.           Termination.  Employee’s employment by Employer shall be subject to termination as follows:

(a)           Expiration of the Term.  This Agreement shall terminate automatically at the expiration of the Period of Employment unless the parties enter into a written agreement extending Employee’s employment, except for the continuing obligations of the parties as specified hereunder.

(b)           Termination Upon Death.  This Agreement shall terminate upon Employee’s death.  In the event this Agreement is terminated as a result of Employee’s death, Employer shall continue payments of Employee’s Base Salary for a period of 90 days following Employee’s death to the beneficiary designated by Employee on the “Beneficiary Designation Form” attached to this Agreement as Appendix A.  Any restrictions on shares of CBSI stock previously granted to Employee shall be waived as of the date of death, and Employee’s beneficiary shall be free to dispose of any restricted stock previously granted to Employee by Employer.  Additionally, Employer shall treat as immediately exercisable all unexpired stock options issued by Employer and held by Employee that are not exercisable or that have not been exercised, so as to permit the Beneficiary to purchase the balance of CBSI stock not yet purchased pursuant to said options until the end of the full exercise period provided in the original grant of the option right, determined without regard to Employee’s death or termination of employment.

 

 

  

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(c)           Termination Upon Disability.  Employer may terminate this Agreement upon Employee’s disability.  For the purpose of this Agreement, Employee’s inability to perform substantially all of Employee’s duties under this Agreement by reason of physical or mental illness or injury for a period of 26 successive weeks (the “Disability Period”) shall constitute disability.  The determination of disability shall be made by a physician selected by Employer and a physician selected by Employee; provided, however, that if the two physicians so selected shall disagree, the determination of disability shall be submitted to arbitration in accordance with the rules of the American Arbitration Association and the decision of the arbitrator shall be binding and conclusive on Employee and Employer.  During the Disability Period, Employee shall be entitled to 100% of Employee’s Base Salary otherwise payable during that period, reduced by all other Employer-provided income replacement benefits to which Employee may be entitled for the Disability Period on account of such disability (including, but not limited to, benefits provided under any disability insurance policy or program, workers’ compensation law, or any other benefit program or arrangement).  Upon termination pursuant to this disability provision, any restrictions on shares of CBSI stock previously granted to Employee shall be waived and Employee shall be free to dispose of any restricted stock granted to Employee.  Additionally, Employer shall treat as immediately exercisable all unexpired stock options issued by Employer and held by Employee that are not exercisable or that have not been exercised, so as to permit the Employee to purchase the balance of CBSI stock not yet purchased pursuant to said options until the end of the full exercise period provided in the original grant of the option right, determined without regard to Employee’s disability or termination of employment.

(d)           Termination for Cause.  Employer may terminate Employee’s employment immediately for “cause” by written notice to Employee.  For purposes of this Agreement, a termination shall be for “cause” if the termination results from any of the following events:

 

(i)           Employee’s willful breach of any material provision of this Agreement, which breach Employee shall have failed to cure within thirty (30) days following Employer’s written notice to Employee specifying the nature of the breach;

(ii)         Any documented misconduct by Employee as an executive or director of Employer, or any subsidiary or affiliate of Employer for which Employee is performing services hereunder, which is material and adverse to the interests, monetary or otherwise, of Employer or any subsidiary or affiliate of Employer;

(iii)       Unreasonable neglect or refusal to perform the duties assigned to Employee under or pursuant to this Agreement, unless cured within thirty (30) days following Employer’s written notice to Employee specifying the nature of the neglect or refusal;

(iv)        Conviction of a crime involving any act of dishonesty or moral turpitude, or the commission of a felony;

(v)         Adjudication as a bankrupt, which adjudication has not been contested in good faith, unless bankruptcy is caused directly by Employer’s unexcused failure to perform its obligations under this Agreement;

(vi)        Documented failure to follow the reasonable written instructions of the Board of Directors of Employer, provided that the instructions do not require Employee to engage in unlawful conduct; or

(vii)       A willful violation of a material rule or regulation of the Office of the Comptroller of the Currency or of any other regulatory agency governing Employer or any subsidiary or affiliate of Employer.

 

 

  

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Notwithstanding any other term or provision of this Agreement to the contrary, if Employee’s employment is terminated for cause, Employee shall forfeit all rights to payments and benefits otherwise provided pursuant to this Agreement; provided, however, that Base Salary shall be paid through the date of termination.

 

(e)           Termination For Reasons Other Than Cause.  In the event Employer terminates Employee’s employment during the Period of Employment or within 24 months following the expiration of the Period of Employment for reasons other than “cause” (as defined in paragraph 3(d)), or in the event that Employee terminates his employment with Employer during the Period of Employment for “good reason” (as defined in paragraphs 6(d)(i) or 6(d)(iii) and subject to the notice and right to cure provisions of paragraph 6(d)), then Employee shall be entitled to a severance benefit equal to the greater of (i) 200 percent of the sum of Employee’s annual Base Salary in effect at the time of termination and the aggregate sum of all payments made to Employee during the 12 months preceding Employee’s termination pursuant to the Management Incentive Plan (or equivalent successor plan), or (ii) amounts of Base Salary and expected Management Incentive Plan (or equivalent successor plan) payments that otherwise would have been payable through the balance of the unexpired term of this Agreement.  Unless Employee is a “specified employee” (as determined in accordance with Internal Revenue Code Section 409A), the benefit payable pursuant to this paragraph 3(e) shall be payable in equal biweekly installments over the 12-month period that begins on the first day of the month following Employee’s termination.  If Employee is a “specified employee” (as determined in accordance with Internal Revenue Code Section 409A), then installment payments during the first six months of the 12-month installment period shall be limited to the extent required by Internal Revenue Code Section 409A, any unpaid installment amounts shall be paid immediately after such six-month period and installment payments due during the remaining six months shall be paid as scheduled.

 

In addition to the cash benefits described in the foregoing of this paragraph 3(e), Employer shall: (iii) waive all restrictions on all CBSI stock previously granted to Employee and permit Employee to dispose of any such restricted stock; (iv) treat as immediately exercisable all unexpired stock options held by Employee that are not exercisable or that have not been exercised, so as to permit Employee to purchase the balance of CBSI stock not yet purchased pursuant to said options until the end of the full exercise period provided in the original grant of the option right determined without regard to Employee’s termination of employment; (v) to the extent permitted by Internal Revenue Code Section 409A, fully fund the grantor trust created pursuant to the separate “Supplemental Retirement Plan Agreement” between Employee and Employer, as amended, for benefits payable pursuant to that separate agreement; and (vi) cover Employee and his eligible dependents under all Employer benefit plans and programs available to Employer’s retired employees.

 

Notwithstanding the foregoing, amounts payable under clauses (i) or (ii) of this paragraph 3(e) shall be reduced by any payments made to Employee under paragraphs 6(a)(i) and (ii) of this Agreement and by any payments made to Employee under any severance or similar plan, policy or program maintained by Employer.

 

 

  

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4.           Fringe Benefits.

(a)           Benefit Plans.  During the Period of Employment, Employee shall be eligible to participate in any employee pension benefit plans (as that term is defined under Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended), Employer-paid group life insurance plans, medical plans, dental plans, long-term disability plans, business travel insurance programs and other fringe benefit programs maintained by Employer for the benefit of (or which are applicable to) its executive employees.  Participation in any of Employer’s benefit plans and programs shall be based on, and subject to satisfaction of, the eligibility requirements and other conditions of such plans and programs.  Employer may require Employee to submit to an annual physical, to be performed by a physician of his own choosing.  Employee shall be reimbursed for related expenses not covered by Employer’s health insurance plan, or any other plan in which Employee is enrolled.  Employee shall not be eligible to participate in Employer’s Severance Pay Plan maintained for other employees not covered by employment agreements.

(b)           Expenses.  Upon submission to Employer of vouchers or other required documentation, Employee shall be reimbursed for (or Employer shall pay directly) Employee’s actual out-of-pocket travel and other expenses reasonably incurred and paid by Employee in connection with Employee’s duties hereunder.  Reimbursable expenses must be submitted to the Compensation Committee of the Board of Directors of Employer for review on no less than an annual basis.

(c)           Other Benefits.  During the Period of Employment, Employee also shall be entitled to receive the following benefits:

 

(i)           Paid time-off of twenty-one (21) days each calendar year (with no carry-over of unused time to a subsequent year) and any holidays that may be provided to all employees of Employer in accordance with Employer’s holiday policy;

(ii)         Reasonable sick leave;

(iii)       Reimbursement of membership fees and dues (but not personal expenses) for up to two club memberships and other appropriate professional associations, subject to the approval of the Compensation Committee of the Board of Directors of Employer, the primary purpose of which memberships shall be the promotion of Employer’s business interests.  Reimbursements shall be made on or before the last day of Employee’s taxable year following the taxable year in which the expense was incurred;

(iv)        The use of an Employer-owned automobile, the purchase and replacement of which shall be subject to the approval of the Compensation Committee of the Board of Directors of Employer; and

(v)         The use of an Employer-owned mobile telephone, the payment or reimbursement of all Employer-related business charges incurred in connection with the use of such telephone.

 

 

  

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(d)           Supplemental Retirement Benefits.  The terms and conditions for the payment of supplemental retirement benefits are set forth in a separate written agreement between the parties.

5.           Restricted Stock and Stock Options.  Employer shall cause the Compensation Committee of the Board of Directors of Employer to review whether Employee should be granted shares of restricted stock and/or options to purchase shares of common stock of CBSI.  Such review may be conducted pursuant to the terms of the Community Bank System, Inc. 2014 Long-Term Incentive Compensation Program, a successor plan, or independently, as the Compensation Committee shall determine.  Reviews shall be conducted no less frequently than annually.

6.           Change of Control.

(a)           If Employee’s employment with Employer shall cease for any reason, including Employee’s voluntary termination for “good reason” (as defined in paragraph 6(d) below), but not including Employee’s termination for “cause” (as described in paragraph 3(d)) or Employee’s voluntary termination without “good reason”, within two years following a “Change of Control” that occurs during the Period of Employment, then:

 

(i)           Employer shall pay to the Employee the greater of (A) 300 percent of the sum of the annual Base Salary in effect at the time of Employee’s termination and the aggregate sum of all payments made to Employee during the 12 months preceding Employee’s termination pursuant to the Management Incentive Plan (or equivalent successor plan), or (B) amounts of Base Salary and expected payments under the Management Incentive Plan (or equivalent successor plan) that otherwise would have been payable through the balance of the unexpired term of this Agreement.  Unless Employee is a “specified employee” (as determined in accordance with Internal Revenue Code Section 409A), the amount determined pursuant to this paragraph 6(a)(i) shall be payable in equal biweekly installments over the 12-month period that begins on the first day of the month following Employee’s termination.  If Employee is a “specified employee” (as determined in accordance with Internal Revenue Code Section 409A), then installment payments during the first six months of the 12-month installment period shall be limited to the extent required by Internal Revenue Code Section 409A, any unpaid installment amounts shall be paid immediately after such six-month period and installment payments due during the remaining six months shall be paid as scheduled.

(ii)          Subject to the applicable limitations of Internal Revenue Code Section 409A that apply if Employee is a “specified employee” (as determined in accordance with Internal Revenue Code Section 409A), Employer shall provide Employee with fringe benefits, or the cash equivalents of such benefits, identical to those described in paragraph 4(a) for a period of 36 months following Employee’s termination.

(iii)         Employer shall treat as immediately exercisable all unexpired stock options issued by Employer and held by Employee that are not otherwise exercisable or that have not been exercised so as to permit Employee to purchase the balance of CBSI stock not yet purchased pursuant to said options until the end of the full exercise period provided in the original grant of the option right, determined without regard to Employee’s termination of employment.

 

 

  

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(iv)         Employer shall waive all restrictions on any shares of CBSI stock granted to Employee and permit Employee to dispose of such stock.

(b)           Notwithstanding any provision of this Agreement to the contrary, and except as provided in the last sentence of this paragraph 6(b), in the event that any payment or benefit received or to be received by the Employee in connection with a Change of Control (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits being hereinafter called “Total Benefits”) would be subject (in whole or part) to the excise tax imposed pursuant to Internal Revenue Code Section 4999, then the cash severance payments provided in this Agreement shall first be reduced, and the other payments and benefits hereunder shall thereafter be reduced, to the extent necessary so that no portion of the Total Benefits will be subject to such excise tax, but only if (i) is greater than or equal to (ii), where (i) equals the reduced amount of such Total Benefits minus the aggregate amount of federal, state and local income taxes on such reduced Total Benefits, and (ii) equals the unreduced amount of such Total Benefits minus the sum of (A) the aggregate amount of federal, state and local income taxes on such Total Benefits, and (B) the amount of excise tax to which the Employee would be subject in respect of such unreduced Total Benefits.

(c)           For purposes of this paragraph 6, a “Change of Control” shall be deemed to have occurred if:

 

(i)           any “person,” including a “group” as determined in accordance with the Section 13(d)(3) of the Securities Exchange Act of 1934 (“Exchange Act”), is or becomes the beneficial owner, directly or indirectly, of securities of Employer representing 30% or more of the combined voting power of Employer’s then outstanding securities;

(ii)         as a result of, or in connection with, any tender offer or exchange offer, merger or other business combination (a “Transaction”), the persons who were directors of Employer before the Transaction shall cease to constitute a majority of the Board of Directors of Employer or any successor to Employer;

(iii)       Employer is merged or consolidated with another corporation and as a result of the merger or consolidation less than 70% of the outstanding voting securities of the surviving or resulting corporation shall then be owned in the aggregate by the former stockholders of Employer, other than (A) affiliates within the meaning of the Exchange Act, or (B) any party to the merger or consolidation;

(iv)        a tender offer or exchange offer is made and consummated for the ownership of securities of Employer representing 30% or more of the combined voting power of Employer’s then outstanding voting securities; or

(v)         Employer transfers substantially all of its assets to another corporation, which is not controlled by Employer.

 

  

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(d)           For purposes of this paragraph 6, “good reason” shall mean action taken by Employer that results in:

 

(i)           An involuntary and material adverse change in Employee’s authority, duties, responsibilities, or base compensation;

(ii)          An involuntary relocation of the office from which Employee is expected to perform his duties; or

(iii)         A material breach of this Agreement.

 

In all cases, Employee must provide notice to Employer of the existence of a condition described in (i), (ii) or (iii) above within 30 days of the initial existence of the condition, upon the notice of which Employer shall have 30 days thereafter in which to remedy the condition.

7.           Withholding.  Employer shall deduct and withhold from compensation and benefits provided under this Agreement all required income and employment taxes and any other similar sums required by law to be withheld.

8.           Covenants.

(a)           Confidentiality.  Employee shall not, without the prior written consent of Employer, disclose or use in any way, either during his employment by Employer or thereafter, except as required in the course of his employment by Employer, any confidential business or technical information or trade secret acquired in the course of Employee’s employment by Employer.  Employee acknowledges and agrees that it would be difficult to fully compensate Employer for damages resulting from the breach or threatened breach of the foregoing provision and, accordingly, that Employer shall be entitled to temporary preliminary injunctions and permanent injunctions to enforce such provision.  This provision with respect to injunctive relief shall not, however, diminish Employer’s right to claim and recover damages.  Employee covenants to use his best efforts to prevent the publication or disclosure of any trade secret or any confidential information that is not in the public domain concerning the business or finances of Employer or Employer’s affiliates, or any of its or their dealings, transactions or affairs which may come to Employee’s knowledge in the pursuance of his duties or employment.

(b)           No Competition.  Employee’s employment is subject to the condition that during the term of his employment hereunder and for the period specified in paragraph 8(c) below, Employee shall not, directly or indirectly, own, manage, operate, control or participate in the ownership, management, operation or control of, or be connected as an officer, employee, partner, director, individual proprietor, lender, consultant or otherwise with, or have any financial interest in, or aid or assist anyone else in the conduct of, any entity or business (a “Competitive Operation”) which competes in the banking industry or with any other business conducted by Employer or by any group, affiliate, division or subsidiary of Employer, in the same counties of New York, Pennsylvania or any other state in which the Employer or any such group, affiliate, division or subsidiary conducts business.  Employee shall keep Employer fully advised as to any activity, interest, or investment Employee may have in any way related to the banking industry.  It is understood and agreed that, for the purposes of the foregoing provisions of this paragraph, (i) no business shall be deemed to be a business conducted by Employer or any group, division, affiliate or subsidiary of Employer unless 5% or more of Employer’s consolidated gross sales or operating revenues is derived from, or 5% or more of Employer’s consolidated assets are devoted to, such business; (ii) no business conducted by any entity by which Employee is employed or in which he is interested or with which he is connected or associated shall be deemed competitive with any business conducted by Employer or any group, division, affiliate or subsidiary of Employer unless it is one from which 2% or more of its consolidated gross sales or operating revenues is derived, or to which 2% or more of its consolidated assets are devoted; and (iii) no business which is conducted by Employer on the date of Employee’s termination and which subsequently is sold by Employer shall, after such sale, be deemed to be a Competitive Operation within the meaning of this paragraph.  Ownership of not more than 5% of the voting stock of any publicly held corporation shall not constitute a violation of this paragraph.

 

 

  

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(c)           Non-Competition Period.  The “non-competition period” shall begin on January 1, 2015 and shall end twelve (12) months after Employee’s termination of employment; provided, however, that the “non-competition period” shall end on the date Employee’s employment ends in the event of Employee’s termination for “good reason” (as defined in paragraph 6(d)), or Employee’s termination without “cause” (as defined in paragraph 3(d)).

(d)           Non-Solicitation.  While Employee is employed by Employer, and for a period of two years after Employee’s employment with Employer ends for any reason, Employee shall not directly or indirectly solicit (other than on behalf of Employer) business or contracts for any products or services of the type provided, developed or under development by Employer during Employee’s employment by Employer, from or with (x) any person or entity which was a customer of Employer for such products or services as of, or within 12 months prior to, the date of Employee’s termination of employment with Employer, or (y) any prospective customer which Employer was soliciting as of, or within 12 months prior to, Employee’s termination.  Additionally, while Employee is employed by Employer, and for two years after Employee’s employment with the Employer ends for any reason, Employee will not directly or indirectly contract with any such customer or prospective customer for any product or service of the type provided, developed or which was under development by Employer during Employee’s employment with Employer.  Employee will not at any time knowingly interfere or attempt to interfere with any transaction, agreement or business relationship in which Employer was involved or was contemplating during Employee’s employment with Employer, including but not limited to relationships with customers, prospective customers, agents, contractors, vendors, service providers, and suppliers.

(e)           Non-Recruitment.  While Employee is employed by Employer, and for a period of two years after Employee’s employment with Employer ends for any reason, Employee shall not, directly or indirectly, solicit, recruit, or hire, or in any manner assist in the hiring, solicitation or recruitment of any of individual who is or was an employee of Employer, or who otherwise provided services to Employer, within 12 months prior to the termination of Employee’s employment with Employer.

 

 

  

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(f)           Termination of Payments.  Upon the breach by Employee of any covenant under this paragraph 8, Employer shall cease all payments to Employee and may offset and/or recover from Employee immediately any and all amounts payable to Employee under this Agreement against any damages to which Employer is legally entitled in addition to any and all other remedies available to Employer under the law or in equity.

(g)           Resignation as Director.  In the event that Employee’s employment terminates for any reason, he shall be deemed to have immediately tendered his resignation as a director on Employer’s (and any of Employer’s affiliates) Board of Directors, and such Boards may accept such resignation in their discretion effective upon the termination date without further action by the Employee.

9.             Notices.  Any notice which may be given hereunder shall be sufficient if in writing and mailed by overnight mail, or by certified mail, return receipt requested, to Employee at his residence and to Employer at 5790 Widewaters Parkway, Dewitt, New York 13214, or at such other addresses as either Employee or Employer may, by similar notice, designate.

10.           Rules, Regulations and Policies.  Employee shall abide by and comply in all material respects with all of the rules, regulations, and policies of Employer that may be in effect and amended from time to time, including without limitation (i) Employer’s policy of strict adherence to, and compliance with, any and all requirements of the banking, securities, and antitrust laws and regulations, (ii) Employer’s human resources, personnel and benefits policies, and (iii) Employer’s Executive Equity Ownership Guidelines.

11.           No Prior Restrictions.  Employee affirms and represents that Employee is under no obligations to any former employer or other third party which is in any way inconsistent with, or which imposes any restriction upon, the employment of Employee by Employer, or Employee’s undertakings under this Agreement.

12.           Return of Employer’s Property.  After Employee has received notice of termination, Employee shall promptly return to Employer all documents and other property in his possession belonging to Employer.

13.           Construction and Severability.  The invalidity of any one or more provisions of this Agreement or any part thereof, all of which are inserted conditionally upon their being valid in law, shall not affect the validity of any other provisions to this Agreement; and in the event that one or more provisions contained herein shall be invalid, as determined by a court of competent jurisdiction, the court shall have authority to modify such provision in a manner that most closely reflects the intent of the parties and is valid.  This Agreement shall be interpreted and applied in all circumstances in a manner that is consistent with the intent of the parties that amounts earned and payable pursuant to this Agreement shall not be subject to the premature income recognition or adverse tax provisions of Internal Revenue Code Section 409A.  Accordingly, by way of example and not limitation, (a) distributions of benefits payable following Employee’s termination of employment shall commence as of the date required by this Agreement or, if later, the earliest date permitted by Internal Revenue Code Section 409A (generally six months after termination, if Employee is a “specified employee” within the meaning of Internal Revenue Code Section 409A), and (b) the phrase “termination of employment” (and similar terms and phrases) shall be construed to mean “separation from service” within the meaning of Internal Revenue Code Section 409A.

 

  

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14.           Governing Law.  This Agreement was executed and delivered in New York and shall be construed and governed in accordance with the laws of the State of New York.

15.           Assignability and Successors.  This Agreement may not be assigned by Employee or Employer, except that this Agreement shall be binding upon and shall inure to the benefit of the successor of Employer through merger or corporate reorganization.  Any attempted assignment in violation of this paragraph 15 shall be null and void and of no effect.

16.           Miscellaneous.

(a)           This Agreement constitutes the entire understanding and agreement between the parties with respect to the subject matter hereof and shall supersede all prior understandings and agreements, including the January 1, 2012 Employment Agreement between the parties (which agreement expired on December 31, 2014).

(b)           This Agreement cannot be amended, modified, or supplemented in any respect, except by a subsequent written agreement entered into by the parties hereto.

(c)           The services to be performed by Employee are special and unique; it is agreed that any breach of this Agreement by Employee shall entitle Employer (or any successor or assigns of Employer), in addition to any other legal remedies available to it, to apply to any court of competent jurisdiction to enjoin such breach.

(d)           The provisions of paragraphs 3(e), 6 and 8 hereof shall survive the termination of this Agreement.

17.           Counterparts.  This Agreement may be executed in counterparts (each of which need not be executed by each of the parties), which together shall constitute one and the same instrument.

18.           Jurisdiction, Venue and Fees.  The jurisdiction of any proceeding between the parties arising out of, or with respect to, this Agreement 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.  If Employee is the prevailing party in a proceeding to collect payments due pursuant to this Agreement, Employer shall reimburse Employee for reasonable attorneys’ fees incurred by Employee in connection with such proceeding.  Reimbursement shall be made on or before the last day of Employee’s taxable year following the taxable year in which the expense was incurred.  The foregoing right to reimbursement shall expire on the fifth anniversary of Employee’s separation from employment with Employer.

 

  

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The foregoing is established by the following signatures of the parties.

 

	 	COMMUNITY BANK SYSTEM, INC.
	 	 
	 	 
	 	By:  /s/ George J. Getman   
	 	 
	 	Its: Executive Vice President and General Counsel
	 	 
	 	 
	 	COMMUNITY BANK, N.A.
	 	 
	 	 
	 	By:  /s/ Bernadette R. Barber
	 	 
	 	Its: Senior Vice President, Chief Human Resources Officer
	 	 
	 	 
	 	/s/  Mark E. Tryniski   
	 	 
	 	MARK E. TRYNISKI

 

  

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