Exhibit 10.12
SEPARATION AND CONSULTING AGREEMENT
PREMIER NATIONAL BANK (the "Bank"), and XXXXXX XXXXXXXXXX ("Xxxxxxxxxx") agree
to enter into this SEPARATION AND CONSULTING AGREEMENT dated as of March 1, 1999
as follows:
1. TERMINATION OF EXECUTIVE SEVERANCE AGREEMENT.
Xxxxxxxxxx agrees that as of the effective date of this Separation and
Consulting Agreement, his Executive Severance Agreement dated March 31, 1993
among Pawling Savings Bank, Progressive Bank, Inc. and Xxxxxxxxxx (the
"Executive Severance Agreement") is hereby terminated, and shall be null and
void and of no further force and effect. Xxxxxxxxxx relinquishes and forever
waives any and all rights in, or claims that he now has or may have under, the
Executive Severance Agreement. Executive represents that with the termination of
the Executive Severance Agreement he has no other present or future contract or
agreement of employment with Pawling Savings Bank, Progressive Bank, Inc., or
the Bank, whether written or oral, express or implied.
2. NOTICE OF RESIGNATION; LAST DAY OF EMPLOYMENT.
(a) Xxxxxxxxxx has notified the Bank as of March 1, 1999 that his last day
of employment with the Bank will be July 23, 1999 (the "Resignation
Date").
(b) The Bank hereby agrees to continue to employ Xxxxxxxxxx, and Xxxxxxxxxx
hereby agrees to continue to be employed by the Bank, until the
Resignation Date, unless earlier terminated pursuant to Section 7 below
(the "Employment Period"), upon the terms and subject to the conditions
set forth in this Agreement.
3. DUTIES AND RESPONSIBILITIES DURING EMPLOYMENT PERIOD.
(a) During the Employment Period, Xxxxxxxxxx will serve as the Bank=s
Director of Retail Banking. In such capacity, Xxxxxxxxxx shall perform
the customary duties and have the customary responsibilities of such
position, including the integration of the Bank=s retail banking
operations in connection with the merger of First Xxxxxx Valley and
Pawling Savings Bank; PROVIDED that the Bank=s President and Chief
Executive Officer shall have the right at any time to reassign
Xxxxxxxxxx to such other duties as are consistent with Xxxxxxxxxx=s
skills and experience. Any such reassignment shall not constitute a
termination by the Bank without Cause pursuant to Section 7(c) of this
Agreement.
(b) During the Employment Period, Xxxxxxxxxx agrees to faithfully serve the
Bank, devote full working time, attention and energies to the business
of the Bank, its subsidiaries and affiliated entities, and perform the
duties under this Agreement to the best of his abilities. The Bank
acknowledges and agrees that Xxxxxxxxxx may devote time and attention
to the establishment of his own consulting company or post-Resignation
Date employment PROVIDED that Xxxxxxxxxx fulfills his duties under this
Agreement. Xxxxxxxxxx may perform services without compensation
therefor in connection with the management of his personal investments
or in connection with charitable or civic organizations
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(c) Xxxxxxxxxx agrees (i) to comply with all applicable laws, rules and
regulations, and all requirements of all applicable regulatory,
self-regulatory, and administrative bodies; (ii) to comply with the
Bank=s rules, procedures, policies, requirements, and directions; and
(iii) not to engage in any other business or employment without the
written consent of the Bank except as otherwise specifically provided
herein.
4. COMPENSATION DURING EMPLOYMENT PERIOD.
During the Employment Period, the Bank shall continue to provide Xxxxxxxxxx with
compensation and employee benefits at the same level as was in effect
immediately prior to the date of this Agreement.
5. ADDITIONAL COMPENSATION PAYABLE AT END OF EMPLOYMENT PERIOD.
(a) In consideration for Xxxxxxxxxx=s execution of this Agreement and
compliance with the terms and conditions contained herein, the Bank
will provide Xxxxxxxxxx with the additional compensation described in
this section UNLESS Xxxxxxxxxx=s employment is terminated (i) by reason
of his death or Total Disability pursuant to Section 7(a) below or (ii)
by the Bank for Cause pursuant to Section 7(b) below.
(b) The following additional benefits are payable to Xxxxxxxxxx under this
Section 5:
(i) The Bank will pay Xxxxxxxxxx $421,211.00, reduced by
applicable withholding taxes, in a single lump sum within 10
business days after Xxxxxxxxxx=s last day of employment.
(ii) If Xxxxxxxxxx elects to continue group health benefits
coverage in accordance with the COBRA coverage continuation
requirements, the Bank will pay a portion of the COBRA
coverage premiums during the period beginning on the
Resignation Date and ending on the earlier of January 31, 2000
or the date such COBRA coverage terminates. The amount
premiums to be paid by the Bank will be equal to the employer
contribution for the medical benefits coverage in effect for
Xxxxxxxxxx immediately prior to the Resignation Date.
6. APPOINTMENT AS CONSULTANT.
(a) In consideration for Xxxxxxxxxx=s execution of this Agreement and
compliance with the terms and conditions contained herein, the Bank
hereby agrees that if Xxxxxxxxxx=s employment continues until the
Resignation Date, or if Xxxxxxxxxx=s employment is terminated by the
Bank without Cause pursuant to Section 7(c) below prior to the
Resignation Date, the Bank will appoint Xxxxxxxxxx as a Consultant, and
Xxxxxxxxxx hereby agrees to accept such appointment, upon the terms and
conditions set forth in this Agreement. Such appointment shall commence
as of August 1, 1999 and shall continue through July 31, 2000 (the
"Consulting Period"), unless earlier terminated pursuant to Section 7
below, or unless renewed or extended by written agreement of the
parties.
(b) During the Consulting Period, Xxxxxxxxxx shall make himself reasonably
available to assist the Bank in effecting a smooth transition and
integration of the Bank=s retail banking operations.
(c) Xxxxxxxxxx, in conjunction with his consulting company, agrees to
develop industry best practices information to be presented to the
Bank=s management during the Consulting Period as appropriate.
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(d) During the Consulting Period, Xxxxxxxxxx shall report to Xxxx Xxx
Xxxxxx, Vice Chairman.
(e) While it is the intent of this Agreement that the mutual convenience of
the parties be served, it is understood between the parties that during
the Consulting Period Xxxxxxxxxx shall act in the capacity of an
independent contractor and shall not be subject to the direction,
control or supervision of the Bank with respect to the time spent, or
procedures followed in the performance of his consulting services
hereunder. Xxxxxxxxxx agrees to devote sufficient working time,
attention and energies to complete the tasks described in this Section
6.
(f) The Bank agrees to compensate Xxxxxxxxxx for all services rendered
during the Consulting Period the total amount of $66,494. Such
compensation shall be payable in equal monthly installments following
the close of each month in which services are performed. Xxxxxxxxxx
hereby agrees that he shall not be eligible either to participate in
any employee benefit plans maintained by the Bank (or any of its
affiliates) or to receive any fringe benefits during the Consulting
Period.
7. TERMINATION OF SERVICES.
Xxxxxxxxxx=s services under this Agreement may be terminated prior to the end of
the Employment Period or Consulting Period under any of the circumstances set
forth in this Section 7. Upon termination, Xxxxxxxxxx (or his beneficiary or
estate, as the case may be) shall be entitled to receive the compensation
described in Section 8 below.
(a) DEATH OR TOTAL DISABILITY. Xxxxxxxxxx=s services shall terminate upon
his death or his becoming "Totally Disabled." For purposes of this
Agreement, Xxxxxxxxxx shall be "Totally Disabled" if Xxxxxxxxxx is
physically or mentally incapacitated so as to render Xxxxxxxxxx
incapable of performing his usual and customary duties under this
Agreement for a period of 6 months or longer, as confirmed in writing
by an independent physician mutually agreed upon by Xxxxxxxxxx and the
Bank.
(b) TERMINATION BY THE BANK FOR CAUSE. The Bank may terminate Xxxxxxxxxx=s
services under this Agreement if it determines that Xxxxxxxxxx has
engaged in an act constituting "Cause". For purposes of this Agreement,
the term "Cause" shall mean any of the following: (A) conviction of a
crime (including conviction on a NOLO CONTENDERE plea) involving a
felony; (B) commission of an act of personal dishonesty or breach of
fiduciary duty resulting in each in case in substantial personal profit
in connection with Xxxxxxxxxx=s employment by the Bank, (C) willful and
gross misconduct by Xxxxxxxxxx in the course of his duties, (D)
deliberate and intentional continuing refusal to perform duties or
responsibilities that are properly assigned to Xxxxxxxxxx (except for
nonperformance because of incapacity due to illness or accident) which
refusal is not cured by Xxxxxxxxxx within 30 days after receipt by him
of written notice with respect thereto; or (E) termination directed by
the Superintendent of Banks, the Federal Deposit Insurance Corporation,
or similar regulatory authority.
(c) TERMINATION BY THE BANK WITHOUT CAUSE. The Bank may terminate
Xxxxxxxxxx=s services at any time without Cause after providing 30
days= prior written notice to Xxxxxxxxxx.
(d) TERMINATION BY XXXXXXXXXX. Xxxxxxxxxx may voluntarily terminate his
services at any time after providing 30 days= prior written notice to
the Bank.
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8. COMPENSATION FOLLOWING TERMINATION OF SERVICES.
(a) TERMINATION PRIOR TO RESIGNATION DATE. In the event that Xxxxxxxxxx=s
services are terminated prior to the Resignation Date, he (or his
estate or beneficiaries as the case may be) shall receive the following
compensation:
(i) In the event that Xxxxxxxxxx=s services are terminated by the
Bank without Cause pursuant to Section 7(c) above, the Bank
shall continue to provide Xxxxxxxxxx with the compensation and
benefits described in Section 4 until the Resignation Date.
(ii) In the event that Xxxxxxxxxx'x services are terminated (A) by
reason of Xxxxxxxxxx'x death or Total Disability pursuant to
Section 7(a), (B) by the Bank for Cause pursuant to Section
7(b), or (C) by Xxxxxxxxxx pursuant to Section 7(d), the Bank
shall pay Xxxxxxxxxx any accrued but unpaid salary for
services rendered to the termination date, any accrued but
unpaid expenses required to be reimbursed in accordance with
the Bank=s policy, and any vacation accrued to Xxxxxxxxxx=s
termination date.
(iii) Any employee benefits to which Xxxxxxxxxx may be entitled
pursuant to the Bank=s employee benefit plans in which he was
participating immediately prior to his termination date shall
be determined and paid in accordance with the terms of such
plans. Except as may be provided under this Agreement,
Xxxxxxxxxx shall have no right to receive any other
compensation, or to participate in any other plan, arrangement
or benefit, with respect to future periods after such
termination or resignation.
(b) TERMINATION PRIOR TO THE END OF THE CONSULTING PERIOD. In the event
that Xxxxxxxxxx=s services are terminated after the end of the
Employment Period but prior to the conclusion of the Consulting Period,
he (or his estate or beneficiaries as the case may be) shall receive
the following compensation:
(i) In the event that Xxxxxxxxxx=s services are terminated by the
Bank without Cause pursuant to Section 7(c) above, the Bank
shall pay Xxxxxxxxxx a lump sum amount equal to the remaining
unpaid balance of the compensation payable for the Consulting
Period.
(ii) In the event that Xxxxxxxxxx'x services are terminated (A) by
reason of Xxxxxxxxxx'x death or Total Disability pursuant to
Section 7(a), (B) by the Bank for Cause pursuant to Section
7(b), or (C) by Xxxxxxxxxx pursuant to Section 7(d), the Bank
shall pay Xxxxxxxxxx any accrued but unpaid compensation for
services rendered to the termination date.
(iii) Except as may be provided under this Agreement, Xxxxxxxxxx
shall have no right to receive any other compensation with
respect to future periods after such termination or
resignation.
(c) OTHER COMPENSATION. Notwithstanding anything in this Section 8,
Xxxxxxxxxx=s right to receive the additional compensation described in
Section 5 above shall be determined in accordance with the provisions
set forth in Section 5(a).
9. GENERAL RELEASE.
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In consideration for the Bank's payment of the benefits under Section 5 of this
Agreement, the Bank=s agreement to appoint Xxxxxxxxxx as a consultant pursuant
to Section 6 of this Agreement, and compliance with the terms and conditions of
this Agreement, Xxxxxxxxxx hereby agrees to release the Bank and any and all of
the Bank=s subsidiaries, parents, branches, divisions, affiliates, related
entities, predecessor entities, including Pawling Savings Bank and Progressive
Bank, Inc. and present and former officers, directors, employees and agents
(collectively the "Released Parties"), individually and in their official
capacities, of and from all causes of action, claims, damages, judgments or
agreements of any kind including, but not limited to, all matters arising out of
Xxxxxxxxxx=s employment with any of the Released Parties and the cessation
thereof, with the exception of any claims or actions by Xxxxxxxxxx to enforce
this Resignation Agreement. This release includes, but is not limited to, any
alleged violation of:
- The National Labor Relations Act;
- Title VII of the Civil Rights Act of 1964;
- Sections 1981 through 1988 of Title 42 of the United States
Code;
- The Employee Retirement Income Security Act of 1974 ("ERISA");
- THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967;
- The Immigration Reform Control Act;
- The Americans with Disabilities Act of 1990;
- The Fair Labor Standards Act:
- The Occupational Safety and Health Act;
- The Family and Medical Leave Act of 1993;
- The New York Human Rights Law;
- The New York Labor Law;
- The New York Equal Rights Law ' 40-c ET SEQ.;
- The New York Minimum Wage Law;
- The New York Equal Pay Law;
- any other federal, state or local civil or human rights law or
any other local, state or federal law, regulation or
ordinance;
- any public policy, contract, tort, or common law; or
- any allegation for costs, fees, or other expenses including
attorneys' fees incurred in these matters.
10. WAIVER OF RELIEF OR RECOVERY.
Xxxxxxxxxx hereby waives his right to accept any monetary relief or recovery in
connection with any charge or complaint before any federal, state, or local
court or administrative agency against the Released Parties, except as such
waiver is prohibited by law. Nothing in this Section 10 is intended to limit or
alter Xxxxxxxxxx=s coverage under any indemnification policies, practices, or
arrangements maintained by the Released Parties with respect to current and
former directors and officers.
11. WITHHOLDING OF TAXES.
The Bank shall withhold from any compensation and benefits payable under this
Agreement all applicable federal, state, local, or other taxes.
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12. NON-DISCLOSURE OF AGREEMENT TERMS.
Xxxxxxxxxx agrees that he will not disclose the terms of this Agreement to any
third party other than his immediate family, attorney, accountants, or other
consultants or advisors or except as may be required by any governmental
authority.
13. SOURCE OF PAYMENTS.
All payments provided under this Agreement, other than payments made pursuant to
a plan which provides otherwise, shall be paid from the general assets of the
Bank, and no special or separate account shall be established, and no other
segregation of assets made, to assure payment. Xxxxxxxxxx shall have no right,
title or interest whatever in or to any investments which the Bank may make to
aid the Bank in meeting its obligations under this Agreement. To the extent that
any person acquires a right to receive payments from the Bank under this
Agreement, such right shall be no greater than the right of an unsecured
creditor of the Bank and its affiliates.
14. ARBITRATION.
Any dispute or controversy arising under or in connection with this Agreement
shall be settled by arbitration, conducted before a panel of three arbitrators
in accordance with the rules of the American Arbitration Association under its
National Rules for the Resolution of Employment Disputes. The arbitrators shall
be approved by both the Bank and Xxxxxxxxxx and their decision shall be binding
and conclusive for all purposes. Judgment upon the award rendered by the
arbitrator(s) may be entered by any court having jurisdiction thereof. Any such
arbitration shall take place in White Plains, New York or such other place as
may be agreed upon at the time by the parties to the arbitration. The cost of
such arbitration (including reasonable legal fees and expenses) shall be borne
by the party against whom judgment is rendered.
15. SUCCESSORS AND ASSIGNMENT.
Except as otherwise provided in this Agreement, this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, representatives, successors and assigns. This Agreement shall not be
assignable by Xxxxxxxxxx, and shall be assignable by the Company only to any
financially solvent corporation or other entity resulting from the
reorganization, merger or consolidation of the Company with any other
corporation or entity or any corporation or entity to or with which the
Company's business or substantially all of its business or assets may be sold,
exchanged or transferred, and it must be so assigned by the Company to, and
accepted as binding upon it by, such other corporation or entity in connection
with any such reorganization, merger, consolidation, sale, exchange or transfer
(the provisions of this sentence also being applicable to any successive such
transaction).
16. ENTIRE AGREEMENT; AMENDMENT.
This Agreement shall supersede any and all existing oral or written agreements,
representations, or warranties between Xxxxxxxxxx and the Bank or any of its
subsidiaries or affiliated entities relating to the terms of Xxxxxxxxxx'x
employment. It may not be amended except by a written agreement signed by both
parties.
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17. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and to be performed in that
State, without regard to its conflict of laws provisions.
18. NOTICES.
Any notice, consent, request or other communication made or given in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by registered or certified mail, return receipt
requested, or by facsimile or by hand delivery, to those listed below at their
following respective addresses or at such other address as each may specify by
notice to the others:
To the Bank:
Premier National Bank
0000 Xxxxx 00
X.X. Xxx 0000
Xxxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxx Xxxxxx, President and
Chief Executive Officer
To Xxxxxxxxxx:
Xxxxxx Xxxxxxxxxx
00 Xxxxxx Xxxxx
XxXxxxxxxxxxx, Xxx Xxxx 00000
19. MISCELLANEOUS.
(a) WAIVER. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
(b) SEPARABILITY. If any term or provision of this Agreement is declared
illegal or unenforceable by any court of competent jurisdiction and
cannot be modified to be enforceable, such term or provision shall
immediately become null and void, leaving the remainder of this
Agreement in full force and effect.
(c) HEADINGS. Section headings are used herein for convenience of reference
only and shall not affect the meaning of any provision of this
Agreement.
(d) RULES OF CONSTRUCTION. Whenever the context so requires, the use of the
singular shall be deemed to include the plural and vice versa.
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(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, and such counterparts will together constitute but one
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year set forth below.
PREMIER NATIONAL BANK
By:/s/ Xxxxx Xxx Xxxxxx
President and Chief Executive Officer
/s/ Xxxxxx Xxxxxxxxxx
Executive Vice President
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