VOLUNTARY
RETIREMENT AGREEMENT
This VOLUNTARY RETIREMENT
AGREEMENT (“Agreement”) is between FIVE STAR
BANK (“FSB”), and JAMES T. RUDGERS
(“Executive”).
WHEREAS, Executive is employed
by FSB as Chief of Community Banking;
WHEREAS, Executive has
communicated his desire to retire voluntarily from FSB effective
June 30, 2009;
WHEREAS, Executive and FSB
wish to establish and clarify their respective rights and
obligations arising from the retirement of Executive;
NOW, THEREFORE, in
consideration of the mutual promises, benefits and covenants herein
contained, Executive and FSB hereby agree as follows:
1. Executive shall resign and be
separated as an employee of FSB effective June 30, 2009.
Executive and FSB agree to announce and describe Executive’s
separation as a voluntary retirement. Executive’s
participation in all FSB fringe benefits shall cease effective
June 30, 2009, with the exception of previously vested
benefits.
2. FSB shall make one hundred
and twenty (120) equal monthly payments to Executive of
$6,250.00, less required deductions and withholding, beginning with
the first regular pay period of January 2010. In the event of
Executive’s death, any payments still due Executive under
this paragraph shall be made to Executive’s estate.
3. From the effective date of
this Agreement until expiration of the period during which
Executive is entitled to receive payments under paragraph 2,
Executive shall not engage, anywhere within New York State west of
Albany, NY, or in any geographic area served by FSB or any of its
subsidiaries, whether directly or indirectly, as principal, owner,
officer, director, agent, employee, consultant or partner, in the
management of a bank holding company, commercial bank, savings
bank, credit union or any other financial services provider that
competes with FSB, its subsidiaries or its products or programs
(“Restricted Activities”), provided that the foregoing
shall not restrict Executive from engaging in any Restricted
Activities which FSB directs Executive to undertake or which FSB
otherwise expressly authorizes. The foregoing shall not restrict
Executive from owning less than 5% of the outstanding capital stock
of any company which engages in Restricted Activities, provided
that Executive is not otherwise involved with such company as an
officer, director, agent, employee or consultant.
4. Executive shall execute the
Release of Claims attached hereto as Exhibit A within five
days following June 30, 2009. Payments under paragraph 2
shall not be made unless Executive executes the release of claims
within 5 days of June 30, 2009 and does not revoke the
Release of Claims.
5. (a) Executive has had
access to and participated in the development of or been acquainted
with confidential or proprietary information and trade secrets
related to the business of FSB, its subsidiaries, joint ventures,
and affiliates (collectively, the “Companies”),
including but not limited to (i) trade secrets, business
plans, software programs, operating plans, marketing plans,
financial reports, operating data, budgets, wage and salary rates,
pricing strategies and information, terms of agreements with
suppliers or customers and others, customer lists, reports,
correspondence, tapes, disks, tangible property and specifications
owned by or used in the Companies’ businesses;
(ii) operating strengths and weaknesses of the
Companies’ officers, directors, employees, agents, suppliers
and customers, and/or (iii) information pertaining to future
developments such as, but not limited to, research and development,
software development or enhancement, future marketing plans or
ideas, and plans or ideas for new services or products,
(iv) all information which was learned or developed by
Executive in the course and performance of his duties, including
without limitation, reports, information and data relating to the
FSB’s acquisition strategies, and (v) other tangible and
intangible property which is used in the business and operations of
the Companies but not made publicly available (i) through
(v) are, collectively, (the “Confidential
Information”).
(b) Executive shall not,
directly or indirectly, disclose, use or make known for his or
another’s benefit any Confidential Information of the
Companies or use such Confidential Information in any way except in
the best interests of the Companies in the performance of
Executive’s duties. In addition, to the extent that FSB has
entered into a confidentiality agreement with any other person or
entity Executive agrees to comply with the terms of such
confidentiality agreement and to be subject to the restrictions and
limitations imposed by such confidentiality agreements as if he was
a party thereto.
(c) The obligations of
Executive under this paragraph 5 shall survive the termination
of Executive’s employment and the expiration of this
Agreement.
6. Executive shall make himself
available at reasonable times and places to:
(a) fully cooperate and assist
with any examination of FSB conducted by regulatory authorities
having jurisdiction over FSB, including attendance at meetings and
production of notes and records that may be in Executive’s
possession; and
(b) fully cooperate and assist
FSB in any internal investigations or audits, or in any litigation
to which FSB or any of the Companies is a party.
It is understood between the parties
that paragraph 6(a) and 6(b) above will be limited to matters that
the Executive played a role in during his course of employment.
7. (a) Executive covenants,
to the maximum extent permitted by law, that he shall not at any
time hereafter provide information, support or assistance, directly
or indirectly, to any individual or organization, in connection
with any action, charge, complaint, suit or proceeding of any kind
against FSB or any of the Companies. The foregoing covenant shall
not preclude Executive from testifying in a proceeding before a
court or agency under compulsion of law, provided that Executive
complies fully with paragraph 7(b) below.
(b) Executive agrees to give
FSB notice of any and all attempts to compel disclosure of any
information he is prohibited from disclosing by this
paragraph 7(a). Executive shall provide written notice of an
attempt to compel such disclosure as promptly as possible to FSB,
and at least five (5) days before compliance with any subpoena
or order is requested or required.
(c) Executive further covenants
that he will not make to any person or entity any statement,
whether written or oral, that directly or indirectly impugns the
integrity of, or reflects negatively on any of the Companies or any
of their respective agents or employees, or that denigrates,
disparages, or results in detriment to any of the Companies or any
of their respective agents or employees. The Companies agree that
they will not make to any person or entity any statement, whether
written or oral, that directly or indirectly impugns the integrity
of, or reflects negatively on Executive, or that denigrates,
disparages, or results in detriment to Executive, except as any
Company or their agents or employees may be obligated to comply
with SEC and other regulatory requirements.
8. Any breach by Executive of
this Agreement shall be considered a material breach for which FSB
shall be entitled to cease immediately the payments described in
paragraph 2 of this Agreement, in addition to any other
remedies to which FSB may be entitled by law or under the
Agreement.
9. If any provision of this
Agreement is held to be illegal, void or unenforceable, such
provisions shall have no effect upon, and shall not impair the
legality or enforceability of, any other provision of this
Agreement.
10. This Agreement is binding
upon, and shall inure to the benefit of, the parties and their
respective heirs, executors, representatives, successors and
assigns.
11. The making of this Agreement
is not intended, and shall not be construed, as any admission that
FSB or any of the Companies has violated any federal, state, or
local law, or has committed any wrong against Executive or any
other person or entity.
12. Nothing herein is intended
to alter Executive’s status as an at-will employee.
13. The parties shall execute
the Consulting Agreement attached hereto as Exhibit B prior to
June 30, 2009. Such Consulting Agreement shall be void if
Executive revokes this Agreement or the Release of Claims.
14. Executive acknowledges and
warrants that:
(a) He has had the opportunity
to consider, for up to twenty-one days, the terms and provisions of
this Agreement;
(b) He has been advised by FSB
in this writing to consult, and has had adequate opportunity to
consult with, an attorney of his choosing prior to executing this
Agreement;
(c) He has carefully read this
Agreement in its entirety, has had an opportunity to have its
provisions explained to him by an attorney of his choosing, and
fully understands the significance of all of its terms and
provisions; and
(d) He is signing this
Agreeme
