Exhibit 10.1
EMPLOYMENT AGREEMENT
This sets forth the terms of
the Employment Agreement made as of January 1, 2022 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
located in Dewitt, New York (collectively, the “Employer”), and (ii) JOSEPH F. SERBUN, an individual currently residing at
Syracuse, New York (“Employee”). This Agreement is effective as of January 1, 2022 and supersedes the Employment Agreement
between the parties dated January 1, 2019.
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, Retail Banking, for CBSI and CBNA, for
a term commencing on January 1, 2022 and ending on December 31, 2024, subject to termination as provided in paragraph 3 hereof. The combined
period that begins on January 1, 2022 and ends on December 31, 2024 is referred to in this Agreement as the “Period of Employment.”
(b) Salary.
During the Period of Employment, Employer shall pay Employee a base salary at an annual rate of not less than $420,240 (“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 as a Tier 2 Executive of
the Employer pursuant to the terms of the Management Incentive Plan, which has been approved by the Board of Directors of Employer (“Board”)
to cover Employee and other key personnel of Employer, as well as other incentive plans that may be established by Employer and that are
applicable to Employer’s executives of similar salary tier to Employee. Upon termination of Employee’s employment pursuant
to paragraph 3(a), 3(b), 3(c) or 6, Employee shall be entitled to a pro rata portion (based on Employee’s complete 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. Any such pro rata portion of an annual incentive award that becomes payable pursuant
to the preceding sentence shall be paid at the time and in the form determined in accordance with the applicable incentive award.
2. Duties
During the Period of Employment. Employee shall have full responsibility, subject to the control of the Board and Employer’s
President and Chief Executive Officer or authorized designee, for the supervision of all aspects of Employer’s retail banking business
and operations, including all activities related to branch banking, mortgage lending and credit operations, and installment lending, as
well as the discharge of such other duties and responsibilities to Employer as may from time to time be reasonably assigned to Employee
by the Employer’s President and Chief Executive Officer, or the authorized designee of the Board. Employee shall report to the President
and Chief Executive Officer of Employer or to such other officer as designated by Employer’s President and Chief Executive Officer.
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, civic and charitable organizations, provided that such services
and affiliations are not inconsistent with and do not unreasonably interfere with the performance of Employee’s duties under this
Agreement. 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. Employee shall receive only the compensation and other benefits described in this Agreement for Employee’s
duties on behalf 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 Employee’s 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.
(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, or the Employer’s Chief Executive Officer or authorized designee,
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.
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
12 months following 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) 175 percent of the sum of the annual Base Salary in effect at the time
of termination and the most recent payment to Employee under the Management Incentive Plan, or (ii) amounts of Base Salary and expected
Management Incentive 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 waive all restrictions on all CBSI stock previously granted to Employee
and permit Employee to dispose of any such restricted stock, as well as 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.
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 paragraph 6(a)(i)
of this Agreement. Payments under this paragraph 3(e) and payments under paragraph 6(a)(i) shall not be duplicated.
(f) Termination
by Employee Without Good Reason. Except in the case of Employee’s termination for good reason in accordance with paragraphs
3(e) and 6(d), Employee may elect to terminate this Agreement and Employee’s employment with Employer upon not less than 60 days
prior written notice delivered to Employer, in which event Employee shall be entitled only to the compensation and benefits Employee earned
or accrued through the date of termination. Employer may appropriately adjust Employee’s authority, duties and/or responsibilities
upon notice of such termination, which notice shall constitute Employee’s consent to a change in authority, duties and responsibilities.
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 (including, but not limited to, expenses incurred while performing duties outside the general geographic area of Employee’s
principle residence). Reimbursable expenses must be submitted to the President and Chief Executive Officer of Employer, or his designee,
for review on no less than a quarterly 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 during 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 Employer’s President and Chief Executive Officer, 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 mobile telephone and the payment or reimbursement of all Employer-related business charges incurred in connection
with the use of such telephone; and
(v) The
use of an Employer-owned or Employer-leased automobile, the selection and replacement of which shall be subject to the approval of Employer’s
President and Chief Executive Officer (or the President and Chief Executive Officer’s designee), or at Employer’s option an
automobile allowance to provide for a reasonably similar benefit consistent with similarly situated executive employees.
5. Equity-Based
Compensation. Employer shall cause the Compensation Committee of the Board to review whether Employee should be granted equity-based
compensation, including restricted stock, restricted stock units and 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 Plan, 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 (as an employee) 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” (as defined in paragraph 6(c)) 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 bi-weekly 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) Employer
shall provide Employee with the cash equivalents of the benefits described in paragraph 4(a) for a period of 30 months following Employee’s
termination. Unless Employee is a “specified employee” (as determined in accordance with Internal Revenue Code Section 409A),
the cash equivalents payable pursuant to this subparagraph (ii) shall be payable in equal monthly installments over the 30-month period
that begins on the first day of the month following Employee’s separation from service. 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 30-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 24 months shall be paid as scheduled.
(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.
(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, 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 in 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 or the board of directors
of 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.
(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 and material relocation of the office from which Employee is expected to perform his duties; or
(iii) A
material breach of this Agreement or any other agreement between the parties under which Employee provides services.
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 (the “remedy period”) in which to remedy the condition (and
not be required to pay or provide the severance benefit described in this paragraph 6). If the “good reason” condition is
not remedied within the 30-day remedy period, Employee shall receive the severance benefit described in this paragraph 6 only if Employee
terminates employment within ten business days following the expiration of the 30-day remedy period.
7. Withholding.
Employer shall deduct and withhold from compensation and benefits provided under this Agreement all necessary 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.
In accordance with the Defend
Trade Secrets Act of 2016, Employer hereby advices Employee that Employee shall not be held criminally or civilly liable under any Federal
or State trade secret law for the disclosure of a trade secret that is made in confidence to a Federal, State, or local government official
or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. Employee shall not be held criminally
or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in a complaint or other
document filed in a lawsuit or other proceeding, if such filing is made under seal. If Employee files a lawsuit for retaliation by Employer
for reporting a suspected violation of law, the trade secret may be disclosed to Employee’s attorney and trade secret information
may be used in the court proceeding, if Employee files any document containing the trade secret under seal, and does not disclose the
trade secret, except pursuant to court order.
(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.
(c) Non-Competition
Period. The “non-competition period” shall begin on January 1, 2022 and shall end 12 months after the 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.
(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.
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) to the extent applicable, Employer’s Executive Equity Ownership Guidelines
and claw-back policy.
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 or at the end of the term hereof, whichever first
occurs, 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.
14. Internal
Revenue Code Section 409A. 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);
(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;
(c) the
right to receive installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct
payments; and
(d) to
the extent that any reimbursement or in-kind benefits are subject to the requirements of Internal Revenue Code Section 409A, (x) the amount
eligible for reimbursement or in-kind benefit in one calendar year will not affect the amount eligible for reimbursement or in-kind benefit
in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount
that may be reimbursed or paid), (y) the right to reimbursement or an in-kind benefit is not subject to liquidation or exchange for another
benefit, and (z) subject to any shorter time periods provided in this Agreement, any such reimbursement of an expense or in-kind benefit
must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred.
15. 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.
16. 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.
17. Miscellaneous.
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 Employment Agreement between the parties that is scheduled to expire
effective December 31, 2021. This Agreement cannot be amended, modified, or supplemented in any respect, except by a subsequent written
agreement entered into by the parties hereto. 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. The provisions of paragraphs 3(e), 6 and 8 hereof
shall survive the termination of this Agreement.
18. 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.
19. 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 of reimbursement shall expire on the fifth anniversary of Employee’s separation of employment
with Employer.
Signature page follows.
The foregoing is established
by the following signatures of the parties.
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COMMUNITY BANK SYSTEM, INC. |
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By: |
/s/ Mark E. Tryniski |
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Its: |
President & Chief Executive
Officer |
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COMMUNITY BANK, N.A. |
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By: |
/s/ Maureen Gillan-Myer |
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Its: |
Chief Human Resources Officer |
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/s/ Joseph F. Serbun |
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JOSEPH F. SERBUN |
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