lsb-8k_0201.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________________________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
______________________________
Date of
report (Date of earliest event reported): January 27,
2010
LAKE
SHORE BANCORP, INC.
(Exact
name of registrant as specified in its charter)
|
United
States
(State
or other jurisdiction of incorporation)
|
|
000-51821
(Commission
File Number)
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20-4729288
(IRS
Employer Identification No.)
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125 East
Fourth Street, Dunkirk, NY 14048
(Address
of principal executive offices) (Zip Code)
Registrant's
telephone number, including area code: (716) 366-4070
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[
] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[
] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to Rule 13e-4
(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Additional
Details Regarding Compensation Arrangements of Chief Operating Officer; Change
of Control Agreement
As
reported on the Current Report on Form 8-K filed by Lake Shore Bancorp, Inc.
(the “Company”) on October 21, 2009, Daniel P. Reininga was appointed the
Executive Vice President and Chief Operating Officer, effective January 1,
2010. On January 27, 2010, the Board of Directors and the
Compensation Committee finalized certain additional terms of Mr. Reininga’s
compensation arrangements which are described below.
Award
of Stock Options and Restricted Stock
On
January 27, 2009, the Compensation Committee of Lake Shore Bancorp, Inc.
approved the following grants of restricted stock and stock options to purchase
shares of the Company’s common stock to Mr. Reininga in accordance with the
Company’s 2006 Recognition and Retention Plan and 2006 Stock Option Plan,
respectively:
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Restricted Stock
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Stock Options
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Daniel
P. Reininga
Executive
Vice President and Chief Operating Officer
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11,900
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17,773
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These
awards will vest in five equal annual installments with the first installment
vesting on January 4, 2011 and subsequent installments vesting each January 4th
thereafter. The stock options have an exercise price of $7.88, the closing
market price of the Company’s common stock on the grant date, and expire on
January 26, 2020, subject to earlier termination as provided in the 2006 Stock
Option Plan and the applicable stock option agreement.
Supplemental
Benefit Plan for Executive Officers
Effective
as of January 27, 2010, Mr. Reininga became a participant in the Bank’s existing
supplemental benefit plan for executives (the “Executive SERP”) following the
termination of his participation in the Bank’s supplemental benefit plan for
directors (the “Director SERP”) on December 31, 2009. Under the
Executive SERP, Mr. Reininga is fully vested in an annual benefit of $18,165
payable in monthly installments over a period of fifteen years commencing at age
65, subject to reduction for termination of service prior to age
65. The calculation of Mr. Reininga’s annual benefit was based on the
annual benefit to which Mr. Reininga was entitled pursuant to the Director
SERP. In addition, in the event of a change of control (as defined in
the Executive SERP), Mr. Reininga will be treated as having attained age 65 for
purposes of benefit payments. The foregoing description of the Executive SERP is
qualified in its entirety by reference to the text of the Executive SERP, which
was filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on
January 31, 2007, and is incorporated herein by reference.
One-Year
Change of Control Agreement
On
January 27, 2010, Mr. Reininga entered into a One-Year Change of Control
Agreement with the Company and Lake Shore Savings Bank (the
“Bank”). In addition, on January
27, 2010, Rachel A. Foley, Chief Financial Officer, entered into an Amended and
Restated One-Year Change of Control Agreement, which conformed her existing
One-Year Change of Control Agreement to certain minor changes made to the form
of agreement, including without limitation to ensure compliance with Section
409A of the Internal Revenue Code.
Generally,
the One-Year Change of Control Agreement provides that the Bank may terminate
the employment of the officer covered by the agreement, with or without cause,
at any time prior to a “change of control” or “pending change of control” (as
each such term is defined in the agreement) without obligation for severance
benefits. However, upon the occurrence of a “change of control” or “pending
change of control,” the officer will receive severance benefits if his or her
employment is terminated without cause or the officer resigns with good reason.
The severance benefits would generally be equal to the value of the cash
compensation and fringe benefits that the officer would have received if he or
she had continued working for one additional year. The Bank would pay the same
severance benefits if the officer resigns after a change of control following a
loss of title or office, material reduction in duties, functions, compensation
or responsibilities, involuntary relocation of his or her principal place of
employment to a location over 35 miles from the Bank’s principal office on the
day before the change of control and over 35 miles from the officer’s principal
residence or other material breach of contract which is not cured within 30
days. The One-Year Change of Control Agreement also provides certain uninsured
death and disability benefits. The term of the One-Year Change of
Control Agreement is perpetual until one year after the date on which the Bank
notifies the employee of its intention to terminate the agreement (the “Initial
Expiration Date”) or, if later, the first anniversary of the latest “change of
control” or “pending change of control” that occurs before the Initial
Expiration Date.
If Lake
Shore Bancorp and Lake Shore Savings experiences a change in ownership, a change
in effective ownership or control or a change in the ownership of a substantial
portion of their assets as contemplated by section 280G of the Internal Revenue
Code, a portion of any severance payments under the change of control agreements
might constitute an “excess parachute payment” under current federal tax laws.
Pursuant to the change of control agreements, any severance payments made which
are subject to section 280G of the Internal Revenue Code would be reduced to the
extent necessary to avoid the imposition of an excise tax and related
non-deductibility under section 280G of the Internal Revenue Code.
The foregoing description of the
One-Year Change of Control Agreements is qualified in its entirety by reference
to the text of the form of change of control agreement, which is filed herewith
as Exhibit 10.1 and incorporated herein by reference.
Changes
to Base Salaries
On
January 27, 2010, the Board of Directors of the Company approved salary levels
for certain executive officers to become effective retroactively (as applicable)
to January 1, 2010, as set forth below:
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David
C. Mancuso, President and CEO
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$275,000
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Daniel
P. Reininga, Executive Vice President and COO
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$160,000
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Rachel
A. Foley, CFO
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$136,000
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Item
8.01 Other
Events
The
Company issued a press release on February 2, 2010 announcing the declaration of
a quarterly cash dividend of $0.05 per share on its outstanding common
stock. The dividend is payable on February 23, 2010 to shareholders
of record as of February 8, 2010. A copy of the press release is attached as
Exhibit 99.1 hereto.
Item
9.01 Financial
Statements and Exhibits.
(d) Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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LAKE
SHORE BANCORP, INC.
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By:
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Name:
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Rachel
A. Foley
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Title:
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Chief
Financial Officer
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Date:
February 2, 2010