EXHIBIT 10
WARWICK VALLEY TELEPHONE COMPANY
47 Main Street
P.O. Box 592
Warwick, New York 10990-0592
September 2, 2005
Mr. Larry D. Drake
10 Patriot Way
Glenwood, NJ 07418

     
 
  Re: Separation Agreement

Dear Larry:
     This letter explains the separation benefits available to you and what you
need to do to receive them. When you sign this letter, it will constitute the
Agreement between you and Warwick Valley Telephone Company (hereinafter referred
to as the “Employer”) on the terms of your separation from employment with the
Employer.
Your employment terminated effective July 13, 2005.
You will be paid your earned salary and all other amounts the Employer owes to
you through the date of your termination. This payment will be made according to
the Employer’s regular payroll schedule and practices.
Except as described in paragraph 6(iv) below, all of your group insurance
benefits and all other benefits of employment will end on your last day of work.
You will receive by separate cover information regarding your rights to health
insurance continuation at your expense, and your retirement benefits. To the
extent that you have such rights, nothing in this Agreement will impair those
rights.
By signing this letter, you agree that, with the exception of the payments
and/or benefits to be made pursuant to paragraph 6(i) through and including
paragraph 6(v) of this Agreement, upon receipt of the payment described in
paragraph 2, you will have received all wages, benefits and other compensation
due to you based upon your employment with the Employer.
You have returned or will immediately return to the Employer all property of the
Employer that is in your possession, including any information you have (in
whatever form) about the Employer’s practices, procedures, trade secrets,
customer lists, or product marketing. Such materials include the company
vehicle, all credit cards, keys, passwords, documents, photographs, notebooks,
computer programs, price lists, customer lists, samples, lists of suppliers and
all other materials (as well as all copies) relating in any way to the business
of the Employer. Notwithstanding anything to the contrary contained herein, it
is specifically understood and agreed that the Employer is providing you with a
laptop computer and NexTel cellular telephone (both of which are currently in
your possession) without charge, and that ownership of said laptop computer and
cellular telephone is hereby transferred to you.

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Although you are not otherwise entitled to it, in consideration of your
acceptance of this Separation Agreement, the Employer will provide you with the
following:
A separation benefit of $98,863.97, less customary payroll deductions. This
separation payment is equivalent to 7 months (or equivalent to 30 1/3 weeks) of
your current base rate of pay.
A supplemental separation benefit in the gross amount of $153,962.29 less
withholdings. This will be payable in a lump sum as soon as practicable after
the effective date of this Agreement as defined in paragraph 20 below and in no
event later than December 31, 2005.
The separation benefit described in paragraph 6(i) will be paid weekly, in
accordance with the Employer’s regular payroll schedule and practices. These
payments will commence with the first regular pay period after the “effective
date” of this Agreement as defined in paragraph 20, below. All payments under
said paragraph 6(i) will be completed on or about March 7, 2006, but no later
than March 15, 2006.
Your Group Life and AD&D insurance, long term disability insurance, telephone
and toll services, DSL/Dial Up Internet Service and Digital TV service will
continue through February 28, 2006. (Note: Since you were not enrolled in the
Employer’s group health or dental plan, you are not eligible for COBRA
coverage.) In the event that, on or prior to February 28, 2006, you re-locate
your residence outside of the coverage area for DSL/Dial Up Internet Service and
Digital TV service currently provided by the Employer, then the Employer shall
be under no further obligation to make payment for such services.
Eligibility to receive all other retirement benefits under the Employer’s
policies and plans, in accordance with the terms of such policies and plans,
including your calculated retirement benefit under the Warwick Valley Telephone
Company Retirement Plan for Management Employees (the “Plan”). Your calculated
retirement benefit under the Plan is $13,607 per year. This benefit is subject
to adjustment as provided in the Plan.
In the event that the Employer receives an inquiry from any person or entity
with respect to your former employment with the Employer, the Employer shall
provide a “Letter of Reference” (as set forth in Attachment “A” annexed hereto)
to any such person or entity. Such letter shall be provided to you also upon
execution of this Agreement and no other statement shall be made to any such
person or entity making inquiry of the Employer or to any person or entity
employed by or representing the Employer.
Except as otherwise set forth in this paragraph 8, you agree that by signing
this Agreement you will give up your right to bring any legal claim against the
Employer of any nature. The claims that you are giving up include, but are not
limited to, claims related in any way, directly or indirectly, to your
employment relationship with the Employer, including your separation from
employment. This Separation Agreement is intended to be interpreted in the
broadest possible manner to include all actual or potential legal claims that
you may have against the Employer, except as specifically provided otherwise in
this Agreement.
     Specifically, you agree to fully and forever release all of your legal
rights and claims against the Employer, whether or not presently known to you
and including future legal rights and claims if based in whole or in part on
acts or omissions occurring before you deliver this signed Agreement to the
Employer. You agree that the legal rights and claims that you are giving up
include, but are not limited to, your rights, if any, under all State and
federal statutes that protect you from discrimination in employment, such as the
Age Discrimination in Employment Act (the “ADEA”), Title VII of the Civil Rights
Act of 1964, as amended, the Rehabilitation Act of 1973, the Americans With
Disabilities Act, the Equal Pay Act, the New York Human Rights Law and any
similar State or local statute, regulation or order. You also agree that the
legal rights and claims that you are giving up include your rights, if any, for
unpaid wages or benefits under all State and federal statutes such as the Fair
Labor Standards Act, the Family and Medical Leave Act, the Employee Retirement
and Income Security Act (ERISA), the New York Labor Law and any similar State or
local statute, regulation or order. You agree that the legal rights and claims
that you are giving up include all common law rights and claims, such as a
breach of express or implied contract, tort (whether negligent or intentional),
wrongful discharge, constructive discharge, infliction of emotional distress,
defamation, promissory estoppel, and any claim for fraud, omission or
misrepresentation. You also agree that you are giving up and forever releasing
any right that you may have to attorneys’ fees for any of the foregoing rights
and claims.

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     You agree that the release described in this paragraph 8 applies not only
to the Employer, but also to the Employer’s predecessors, and past, current and
future subsidiaries, related entities, officers, directors, shareholders,
agents, attorneys, employees, successors, or assigns. You also agree that this
Agreement may be used as a complete defense in the future if you bring any claim
that you have released in this paragraph 8.
     The claims that you are giving up and releasing do not include your vested
rights, if any, under any qualified retirement plan in which you participate,
and your COBRA, unemployment compensation and worker’s compensation rights, if
any. Nothing in this release shall be construed to constitute a waiver of
(a) any claims you may have against the Employer that arise from acts or
omissions that occur after the date you sign this Agreement, (b) your right to
file an administrative charge with any governmental agency where the waiver of
that right is prohibited by law, (c) your right to participate in any
administrative or court investigation, hearing or proceeding, or (d) your right
to enforce the terms and conditions of this Agreement in a court of competent
jurisdiction as set forth in paragraph 16 hereof. You agree, however, to waive
and release any right to receive any individual remedy or to recover any
individual monetary or non-monetary damages or attorneys fees as a result of any
such administrative charge or proceeding. In addition, this release does not
affect your rights as expressly created by this Agreement, and does not limit
your ability to enforce this Agreement.

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You will not, unless required or otherwise permitted by law, disclose to others
any information regarding the Employer’s proprietary practices, procedures,
sales, marketing, and trade secrets. You agree to keep and treat all such
information as proprietary and confidential.
You also agree that for a period of one year following the effective termination
date, you will not, directly or indirectly, on behalf of yourself or any other
person or entity, solicit or recruit any employees of the Employer to leave the
Employer and/or perform work or services for another employer.
The terms of this Separation Agreement, the benefit being paid under it or the
fact of its payment, are confidential and may not be disclosed by you except
that you may disclose this information to your spouse, attorney, accountant or
other professional advisor to whom you must make the disclosure in order for
them to render professional services to you. You will instruct them, however, to
maintain the confidentiality of this information just as you must. In addition
and notwithstanding anything to the contrary contained herein, you may also
disclose the terms of this Separation Agreement, the benefit being paid under it
or the act of its payment where you are required or compelled to do so by
subpoena, an order of any judicial, quasi-judicial or administrative body,
and/or where you are otherwise required to do so by law.
You agree that neither payment by the Employer of the amounts set forth in
paragraph 6, nor any other term or condition of this Agreement, shall be
construed by either you or the Employer, at any time, as an admission of
liability or wrongdoing by the Employer.
You agree that you will not directly or indirectly make, or cause to be made,
written or oral statements or other form of communication that is derogatory or
disparaging to the Employer or its officers, directors, shareholders or
employees.
The rights and benefits of the Employer under this Agreement shall be
transferable to or enforceable by the Employer’s successors and assigns. You
agree that this Agreement also binds all persons who might assert a legal right
or claim on your behalf, such as your heirs, personal representatives and
assigns, now and in the future. In addition, your rights and benefits under this
Agreement shall be enforceable by your heirs, executors, representatives,
administrators, successors and assigns, and same shall inure to their benefit.
You agree that the invalidity or unenforceability of any particular provision of
this Agreement shall not affect the other provisions hereof, and this Agreement
shall be construed in all respects as if such invalid or unenforceable provision
were omitted.
You agree that no promise, inducement or other agreement not expressly contained
in this Separation Agreement or referred to in this Agreement, has been made
conferring any benefit upon you. You also agree that this Agreement contains the
entire agreement between you and the Employer with respect to any benefit
conferred upon you. All prior agreements, understandings, representations, oral
agreements and writings are expressly superseded hereby and are of no further
force and effect, and you expressly agree that you are not relying on any
representations that are not contained in this Agreement. This Agreement is
entered into, governed by and construed in accordance with the laws of the State
of New York. The Supreme Court of the State of New York, County of Orange and/or
the United States District Court for the Southern District of New York are
hereby designated as the two forums in which any action or proceeding arising
from or in any way connected to this Agreement may be commenced, and the parties
hereto hereby expressly consent to the personal jurisdiction of said courts.
You agree that you are voluntarily signing this Agreement, that you have not
been pressured into agreeing to its terms and that you have enough information
to decide whether to sign this Agreement. If, for any reason, you believe that
this Agreement is not entirely voluntary, or if you believe that you do not have
enough information, then you should not sign this Agreement.
You have up to 21 calendar days from the date of this letter to accept the terms
of this Separation Agreement and return it to me. You may accept and return the
Agreement at any time within those 21 days, but you are not required to do so
and you may take the entire 21-day period.
You are advised to consult an attorney about this Agreement.
After you have accepted this Agreement, you will still have an additional 7
calendar days in which to

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revoke your acceptance. To revoke, you must send me a written statement of
revocation by registered mail, return receipt requested. If you do not revoke,
the 8th day after the date of your acceptance will be the “effective date” of
the Agreement, and you may not thereafter revoke it.
     To accept this Agreement, please date and sign this letter and return it to
me. (An extra copy for your files is enclosed.)

     
 
  Sincerely,
 
   
 
  Zig Nowicki, CCP
 
  Director of Information Technology
 
  and Human Resources

By signing this letter, I acknowledge that I have had the opportunity to review
this Separation Agreement carefully with an attorney of my choice. I have read
this Agreement, I understand its terms and I voluntarily agree to them.
Dated: July 13, 2005
 
  /s/ Larry D. Drake    
 
 
 
Larry D. Drake    

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