Exhibit 10.1
July 3, 2002
PERSONAL AND CONFIDENTIAL
Xx. Xxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Dear Xxxx:
Re: Confidential Separation Agreement and General Release
This letter (the "Letter Agreement") will confirm your resignation
from Financial Institutions, Inc. ("FII") as Chief Administrative Officer and
from each and every officer, director or trustee position that you hold at FII,
its subsidiaries and joint ventures. This Letter Agreement will explain the
effect of your resignation on various FII plans and benefits. It also provides
for certain payments tailored especially for you in consideration of your
release of any potential claims as set forth below. Accordingly, you and FII
agree as follows:
1. You will resign as an employee, officer, director or trustee of
FII, its subsidiaries and joint ventures, as of 5:00 p.m. on July 24, 2002 (the
"Resignation Date").
2. Despite your resignation, you will be entitled to receive equal
monthly payments in an amount that equals the sum of (a) the Base Salary Amount
paid to you in 2002, and (b) the annual incentive compensation earned by you for
the year 2001, for a period of one year ("Severance Period"), commencing on the
Resignation Date. The gross monthly payments will be Twenty-Five Thousand One
Hundred Fifty-Eight Dollars and Seventeen Cents ($25,158.17) or a total gross
amount of Three Hundred One Thousand Eight Hundred Ninety-Eight Dollars and No
Cents ($301,898.00). FII reserves the right to deduct from these payments to you
any federal, state or local taxes or other amounts required by law to be
deducted. Your obligations under Paragraphs 5-7 and each of their numbered
subparagraphs of the Employment Agreement executed by and between you and FII as
of April 15, 2001, which is hereby incorporated by reference and attached as
Exhibit A, will run for one year from the Resignation Date. The monthly payments
will continue during the Severance Period even if you obtain employment
provided, however that you do not violate Paragraphs 5-7 and each of their
numbered subparagraphs of your Employment Agreement (Exhibit A).
3. Your family coverage under the FII health and dental insurance
plans, will be continued as if you remained an employee to and including April
15, 2004, or until you obtain
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a position offering comparable benefits, whichever occurs first. Your portion of
the premium, as it may be adjusted on an annual basis, will be deducted from the
monthly payments during the Severance Period. Following the Severance Period,
you will be billed directly for your share of the premiums by the insurance
carrier. If you fail to pay your share of the premiums, the insurance will be
canceled after thirty (30) days, at which time you will be eligible for COBRA
benefits. Information concerning COBRA will be sent to you under separate cover.
In the event you obtain a position offering comparable benefits, you must
immediately notify Xxxxxx X. Xxxxxxxxx, Vice President of Human Resources,
Financial Institutions, Inc., 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000.
4. You will receive payment for two (2) weeks unused vacation in a
gross amount of Seven Thousand Seven Hundred Sixty-Nine Dollars and Twenty-Three
Cents ($7,769.23), less standard payroll deductions, following the Resignation
Date.
5. You acknowledge that, under law, you will not be able to make any
more contributions or have any made on your behalf in FII's 401(k) Plan ("Plan")
following the Resignation Date. You retain the right to apply for a distribution
from the Plan, including, among other things, a rollover, according to the terms
and conditions of the Plan.
6. You acknowledge that your group life insurance and long-term
disability insurance will cease on the Resignation Date. Information regarding
conversion rights, if any, will be sent to you under separate cover.
7. You will be reimbursed for any reasonable and necessary
out-of-pocket business expenses incurred by you up to the Resignation Date, in
the course of performing your duties, upon timely submission of expense reports
and substantiation of the expenses, in accordance with FII policies.
8. Your 28,777 vested stock options will be treated in accordance
with the terms and conditions of the FII 1999 Management Stock Incentive Plan
("Stock Option Plan"). Pursuant to the Stock Option Plan, you must exercise your
stock options which have vested within ninety (90) days of the Resignation Date.
9. You will return all of FII's property on the Resignation Date, as
set out in detail in Paragraph 6 of your Employment Agreement (Exhibit A).
10. In consideration of the promises made by you in Paragraph 12,
below, and the general release and waiver contained in Paragraph 14 of this
Letter Agreement, FII will provide additional consideration, to which you are
not otherwise entitled, as follows:
(a) an amount, pro rated for the months you were employed in
2002 to and including the Resignation Date, equal to the additional 401(k)
match, based on 2002 year end financial results. This amount will be paid in a
lump sum payment promptly after FII's audited financial results are publicly
disclosed,
(b) an amount, pro rated for the months you were employed in
2002, to and including the Resignation Date, equal to your share of the Senior
Management Incentive Compensation Plan benefit based on 2002 year end financial
results as determined by the
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Compensation Committee (Personnel Committee) of the Board of Directors. This
amount will be paid in a lump sum promptly after FII's audited financial results
are publicly disclosed.
11. You agree to cooperate with FII in ongoing business matters and
in the defense or prosecution of any civil, criminal or administrative actions,
whether or not they are currently pending, in which you had involvement during
your employment with FII at dates and times reasonably convenient to you. Such
cooperation may include, but is not limited to, consulting with FII and its
attorneys and testifying by affidavit, deposition, or otherwise at dates and
times reasonably convenient to you. You will be reimbursed for your reasonable
out of pocket expenses upon presentation of appropriate documentation.
12. You agree to comply with Paragraphs 5 through 7 and each of
their numbered subparagraphs of your Employment Agreement (Exhibit A).
13. You represent and agree that you understand that you have
twenty-one (21) days to discuss all aspects of this Letter Agreement with your
private attorney whom you have retained at your own expense; that to the extent
you desire you have availed yourself of this right; that you have carefully read
and fully understand all of the provisions of this Letter Agreement, and that
you are voluntarily entering into this Letter Agreement. You further understand
and agree that you have seven (7) days from the date of the execution of this
Letter Agreement to revoke it and that the waiver contained in Paragraph 14 of
this Letter Agreement is not effective until the seven (7) day period has
expired.
14. You, for and in consideration of the promises set forth in this
Letter Agreement, including, but not limited to, the additional consideration
set forth in Paragraph 10 and its lettered subparagraphs, to which you are not
otherwise entitled, hereby agree and covenant for yourself, your heirs,
executors, administrators and assigns, to release and discharge and not to
institute any suit or action, at law or in equity, against Financial
Institutions, Inc., defined to include its subsidiaries, joint ventures and all
other related and affiliated entities, their predecessors, successors and
assigns, and their respective officers, directors, shareholders, employees,
agents, attorneys and all persons acting by, through or with them (in the
aggregate "Affiliates"), for or on account of any claim or causes of action
based upon and or arising out of any or all facts, circumstances and or events
relating to your employment with Financial Institutions, Inc. or any of their
Affiliates and your separation from that employment. You release and forever
discharge, and by this document, do release and forever discharge, Financial
Institutions, Inc. and their Affiliates, of and from all and any manner of
action or actions, cause or causes of action, suits, debts, liabilities,
obligations, dues, sums of money, claims for wages, bonuses, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, plans, programs,
controversies, agreements, promises, variances, trespasses, damages, judgments,
extents, executions, claims and demands whatsoever, in law or in equity, which
against them, you ever had, now have, or which your heirs, executors or
administrators, hereafter can, shall or may have, upon or by reason of any
matter, cause or thing whatsoever arising out of your employment with Financial
Institutions, Inc. or any of their Affiliates and your separation from that
employment and specifically including, but not in any way limited to claims
arising under New York's Executive Law (Human Rights Law), ss.290 et seq., Title
VII of the Civil Rights Act of 1964, as amended in 1972 and 1991, the Americans
With Disabilities Act, and the Family and Medical Leave Act and you specifically
waive any and all claims under the Age Discrimination
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in Employment Act, as amended, and any other federal, state or local statute,
ordinance, rule or regulation relating to discrimination from the beginning of
your employment to the date you execute this Letter Agreement.
15. You agree that you will not disclose the contents of this Letter
Agreement nor the terms of this settlement to any third party, with the
exception of your spouse, your attorney or your accountant, each of whom are
likewise informed of and bound by this confidentiality provision, unless
compelled to do so by legal process. You understand and agree that FII may be
required to disclose this Agreement to its Board of Directors or pursuant to SEC
regulations.
16. You agree that you will not disparage FII or its Affiliates,
their products or services or their officers, directors or employees in any way
either orally or in writing. Similarly, FII will not disparage you and if FII
receives an inquiry from a prospective employer concerning you, FII will respond
with your job title, dates of employment, and, if asked, will state that you
resigned to pursue other professional opportunities. If either you or FII
receives an inquiry from the news media or an other third party, including
inside staff, both you and FII will respond by stating that you resigned to
pursue other professional opportunities. FII, through its President and Chief
Executive Officer, agrees to inform its senior management team of your
resignation by using the following text:
For the last several months, the FII Personnel Committee has been
working with Xxxx Xxxxxxx and me to develop an organizational plan
in support of the Company's long-term strategic objectives. Those
efforts included an evaluation of the prospective roles and
responsibilities for each member of our Executive Management Team.
After considering his future role with FII, Xxxx has offered to
resign from the Company to pursue other opportunities. Regretfully,
the Personnel Committee and I have agreed to accept his resignation,
which will be effective later this month.
17. You acknowledge and agree that: (a) any breach or attempted or
threatened breach of the Letter Agreement or any provision thereof, including
specifically, without limitation, Paragraphs 5 through 7 and each of their
numbered subparagraphs of your Employment Agreement (Exhibit A), would result in
irreparable injury to FII for which there would be no adequate remedy at law,
and (b) if you should breach or attempt or threaten to breach this Letter
Agreement or any provision thereof, including specifically, without limitation,
Paragraphs 5 through 7 and each of and their numbered subparagraphs of your
Employment Agreement (Exhibit A), FII shall have the right to seek an injunction
and/or temporary restraining order to enjoin you from any further breaches or
attempted or threatened breaches of this Letter Agreement or any provision
thereof, including, specifically, without limitation, Paragraphs 5 through 7 and
each of their numbered subparagraphs of the Employment Agreement (Exhibit A), or
to compel compliance with this Letter Agreement or any provision thereof,
including specifically, without limitation, Paragraphs 5 through 7 and each of
their numbered subparagraphs of the Employment Agreement (Exhibit A), by
specific performance in addition to any other remedy available to FII in equity
or at law, and (c) if a court of competent
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jurisdiction determines that you have breached or attempted or threatened to
breach this Letter Agreement or any provision thereof, including specifically,
without limitation, Paragraphs 5 through 7 and each of their numbered
subparagraphs of the Employment Agreement (Exhibit A), you shall consent to the
granting in such proceeding of an injunction restraining you from further
breaches or attempted or threatened breaches or compelling compliance, by
specific performance, with this Letter Agreement.
18. This Letter Agreement and the attached Exhibit A constitutes the
terms of our agreement in its entirety and the terms and provisions shall be
binding on an to the benefit of you, your beneficiaries, heirs at law, legatees
and other legal representatives and shall be binding on and to the benefit of
FII and its Affiliates. Without limitation, this Letter Agreement supersedes and
is in complete satisfaction of all rights and obligations in your Employment
Agreement.
19. You agree that the terms of this Letter Agreement supersede any
and all prior agreements whether written or oral and are made pursuant to the
laws of New York State and may be modified or terminated only by written
agreement between you and FII. Any dispute as to the terms of this Letter
Agreement or the compliance of the parties with its term shall be resolved under
the laws of New York State.
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Please indicate your acceptance of the foregoing by executing it in
the space set forth below and returning it along with a signed and notarized
acknowledgement to the undersigned.
FINANCIAL INSTITUTIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
President & CEO
Attachment: Employment Agreement dated as of April 15, 2001 (Exhibit A).
I HAVE READ, UNDERSTAND AND AM VOLUNTARILY ENTERING INTO THIS LETTER AGREEMENT.
Dated: July 16th, 2002 /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Sworn to before me this 16th day
of July, 2002.
/s/ Xxxxxx X. Xxxxxxxx
----------------------
Notary Public
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