8-K

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): March 19, 2018

(Exact name of registrant as specified in its charter)

Delaware	001-13695	16-1213679
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5790 Widewaters Parkway, DeWitt, New York	13214
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (315) 445-2282

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 5.02           Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b)           On March 19, 2018, Community Bank System, Inc. (the “Company”) and its wholly-owned subsidiary, Community Bank, N.A. (the “Bank”), announced that Brian D. Donahue, Executive Vice President and Chief Banking Officer has decided to retire after more than 25 years of service with the Company. Mr. Donahue will resign from his position as Executive Vice President and Chief Banking Officer of the Bank effective June 2, 2018, but will remain employed through December 31, 2018 to ensure the orderly transition of his duties to other Bank personnel.

Mr. Donahue joined the Bank in 1992 as a Senior Regional Loan Officer, and was named to the executive management committee of the Bank in 2003. In 2005, he was appointed Executive Vice President and Chief Banking Officer playing an instrumental role in the Bank’s growth and success.

Joseph F. Serbun, Senior Vice President and Chief Credit Officer and a member of the executive management committee, will be assuming the majority of Mr. Donahue’s duties and will be responsible for overseeing the entirety of the Bank’s credit business. Mr. Serbun has more than 34 years of experience in the banking industry, having served in various roles with larger money center banks and regional community banks. He joined the Bank in 2008 as Credit Officer Team Leader and has served as Senior Vice President and Chief Credit Officer since 2010. Consistent with the Bank’s established succession planning, other responsibilities under Mr. Donahue’s oversight have or will be transitioned to other members of the Bank’s management team.

(e)            In connection with the announcement of Mr. Donahue’s retirement on March 19, 2018, the Company and Bank entered into an amendment to Mr. Donahue’s Employment Agreement which expires on December 31, 2018. Under the revised terms, Mr. Donahue will be available following his resignation as an executive officer of the Bank to consult with senior management until December 31, 2018, to ensure the orderly transition of his duties to other members of the Bank’s management team. Mr. Donahue will also be available to perform such transition, succession and other duties as may from time to time be reasonably assigned to him by the Bank’s President and CEO or his authorized designee.

In accordance with the terms of his Employment Agreement, as amended, Mr. Donahue will continue to be paid his current salary and be eligible for his continued benefits (or substantially equivalent benefits) and incentive compensation through December 31, 2018, except that his cash incentive compensation shall be prorated based on his June 2, 2018 resignation date.

The foregoing description of the amendment to Mr. Donahue’s Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the copy of the Amendment to the Employment Agreement, attached hereto as Exhibit 10.1, and incorporated by reference.

Item 9.01           Financial Statements and Exhibits

(d) Exhibits

10.1 Amendment to Employment Agreement, dated March 19, 2018, by and among Community Bank System, Inc., Community Bank, N.A. and Brian D. Donahue.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Community Bank System, Inc.
	By:	/s/ George J. Getman
	Name:  George J. Getman
	Title:  EVP and General Counsel
Dated: March 20, 2018

EXHIBIT INDEX

Exhibit No.	Description
10.1	Amendment to Employment Agreement, dated March 19, 2018, by and among Community Bank System, Inc., Community Bank, N.A. and Brian D. Donahue

EX-10.1

Exhibit 10.1

AMENDMENT TO EMPLOYMENT AGREEMENT

This sets forth the terms of an Amendment to the Employment Agreement made as of January 1, 2016 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) BRIAN D. DONAHUE, an individual currently residing at Orchard Park, New York (“Employee”). This Amendment is effective as of March 19, 2018.

RECITALS

A. Pursuant to the terms of the January 1, 2016 Employment Agreement between Employee and Employer (“Employment Agreement”), Employee is currently employed as Chief Banking Officer and Executive Vice President of Employer.

B. Employee has indicated to Employer that Employee would like to retire on December 31, 2018, which is the date on which the term of the Employment Agreement is scheduled to expire.

C. Employee and Employer, desirous of ensuring an orderly transition of Employee’s employment duties and responsibilities prior to Employee’s retirement, hereby mutually agree as follows:

TERMS

1.       Voluntary Resignation. Employee’s voluntary resignation from his position as Chief Banking Officer and Executive Vice President of Employer will be effective as of June 2, 2018.

2.       Transition Duties. During the period June 2, 2018 through December 31, 2018, and in lieu of the duties and responsibilities described in Paragraph 2 of the Employment Agreement, Employee shall be assigned and perform such transition, succession and other duties as may from time to time be reasonably assigned to Employee by Employer’s President and Chief Executive Officer, or the authorized designee of Employer’s Board of Directors. By way of example and not limitation, Employee agrees to provide reasonably requested guidance and direction to appropriate Employer personnel to ensure an orderly transition of Employee’s employment duties and responsibilities. Employee shall continue to report to the President and Chief Executive Officer of Employer or the President and Chief Executive Officer’s designee. Employer and Employee anticipate that the level of bona fide services that Employee will perform after June 2, 2018 will permanently decrease to no more than 20 percent of the average level of bona fide services performed by Employee over the immediately preceding 36-month period.

3.       Voluntary Retirement. Employee’s voluntary retirement will be effective as of December 31, 2018.

4.       Management Incentive Plan. Although Employee will be employed through December 31, 2018, Employee’s incentive compensation, if any, for calendar year 2018 pursuant to the terms of Employer’s Management Incentive Plan shall be prorated, based on Employee’s (Tier 2) position and service through June 2, 2018, plus any imputed service attributable to Employee’s accrued but unused vacation time calculated as of June 2, 2018. Payment (if any) shall be made at the time and in the form determined pursuant to Employer’s Management Incentive Plan.

5.       Long-Term Equity Incentive Grant. For purposes of any rights Employee may have pursuant to the three-year long-term equity incentive grant issued to Employee by Employer with a grant effective date of January 1, 2016, Employee shall be given credit for his employment through December 31, 2018. To the extent earned in accordance with the terms of such long-term equity incentive grant, benefits will be paid or provided at the time and in the form described in such grant.

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6.       Retirement Benefit. For purposes of calculating Employee’s benefit under the October 18, 2013 Supplemental Retirement Plan Agreement between Employee and Employer, Employee’s final average compensation shall be calculated by averaging Employee’s annual base salary and cash incentive payments awarded during calendar years 2014 through 2018.

7.       Entire Agreement. Except as otherwise provided in this Amendment, all of the terms and conditions of the Employment Agreement shall remain the same. Accordingly, this Amendment, read in conjunction with the Employment Agreement, constitutes the entire agreement between the parties with respect to the subject matter of the Employment Agreement.

8.       Employee’s Affirmation and Acknowledgement. Employee hereby affirms that his decisions to enter into this Amendment, to resign his position, and to retire in accordance with the terms of this Amendment are entirely voluntary. For the avoidance of doubt, Employee acknowledges that his decisions to enter into this Amendment, to resign his position, and to retire in accordance with the terms of this Amendment shall not form the basis for a claim that his employment has been involuntarily terminated by Employer or that he has “Good Reason” (as defined in the Employment Agreement) to elect to terminate his employment. Employee specifically acknowledges and agrees that, if his employment with Employer changes and ends in the manner contemplated by this Amendment, he will not be entitled to the benefits described in Paragraph 3(e) of the Employment Agreement.

[Signature page follows.]

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

COMMUNITY BANK SYSTEM, INC.
By:	/s/ Mark E. Tryniski
Its President and CEO
Date:  March 19, 2018
COMMUNITY BANK, N.A.
By:	/s/ Mark E. Tryniski
Its President and CEO
Date:  March 19, 2018
/s/ Brian D. Donahue
BRIAN D. DONAHUE
Date:  March 19, 2018

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