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CANANDAIGUA NATIONAL BANK

AND TRUST COMPANY

72 South Main Street

Canandaigua, New York 14424







Robert G. Sheridan

Phone: (716) 394-4260

Executive Vice President and Cashier

Facsimile: (716) 396-1355

Retail Services

                      CNBanker Voice (716) 394-5520

e-mail: rsheridan@cnbank.com







November 20, 2000










Mr. Joseph L. Dugan

235 Parker Drive

Pittsburgh, PA 15216




Re:

Employment and Compensation Agreement




Dear Joe:




Pursuant to our recent conversations this letter shall attempt to confirm our understandings regarding your anticipated employment with Canandaigua National Bank and Trust Co.  Our offer includes the following:




1)

Your base pay shall be $110,000 per annum.




2)

We agree to pay you $13,000, net of taxes upon your execution and return of a copy of this agreement and the processing of your employment application, which is enclosed.




3)

We shall provide you with 25 shares of the common stock of The Canandaigua National Corporation upon your execution of this agreement and the processing of your employment application.




4)

You shall be eligible for a Performance Bonus upon your attainment of certain goals according to the matrix attached hereto and labeled Exhibit A.




5)

Your title shall be Senior Vice President.  You shall be a member of our Management Group and shall be entitled to normal bank benefits but also certain benefits associated with your senior position to include membership in a health club and annual physical to an extent not to exceed $1,500.  In addition you shall be eligible for stock options, as a 






Mr. Joseph L. Dugan

November 20, 2000

Page 2










Senior Vice President, in connection with the Canandaigua National Corporation Stock Option Plan based upon performance of the bank.  A copy of the plan is enclosed for your review.




6)

You shall be eligible for tuition reimbursement for accredited undergraduate or graduate level courses provided they are approved by the CEO.




7)

You shall be eligible for certain relocation expense reimbursements as outlined in Exhibit B attached hereto.




8)

The sign-on bonus and relocation expenses outlined above shall be subject to 100% refund should you voluntarily leave the employ of the Canandaigua National Bank and Trust Company within 24 months of the commencement of your employment here; and 50% refund should you voluntarily leave within 24 –36 months.




9)

During your tenure your guaranteed severance shall be 6 months of base pay in the event that you leave the bank involuntarily.




10)

Your employment shall commence on December 29, 2000. Your are employeed at will, and your employment is subject to the policies and procedures set forth in our employee handbood that is enclosed with this letter.







I trust that the above terms and conditions of employment meet with your 

approval.  If they do, kindly indicate your acknowledgement and acceptance of them by executing the enclosed copy of this letter and returning it to me.  If you have any questions or concerns please call me at 716-393-6097 or write to me at:




72 S. Main St.

Canandaigua, New York 14424




We look forward to you joining the bank and playing an important role toward our future growth and profitability.







Sincerely yours,







Robert G. Sheridan

Senior Vice President









Mr. Joseph L. Dugan

November 20, 2000

Page 3













I hereby acknowledge and agree to the terms and conditions of employment as outlined above.  










11/22/2000

/s/ Joseph L. Dugan

Dated

Joseph L. Dugan






Mr. Joseph L. Dugan

November 20, 2000

Page 4










Exhibit A – Sales Manager Bonus Program




								
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 

	 

	Relationship Ratio


	 
	 

	 

	< 1:1.5

	1:1.5 - 1:1.99

	1:2 - 1:3.99

	1:4-1:4.99

	1:5+


	 
	Number of Qualifying DDA's

	 <400 

	0.0%

	2.5%

	5%

	10%

	15%


	 
	 401-799 

	2.5%

	5%

	10%

	15%

	20%


	 
	 800-1,199 

	5.0%

	10%

	15%

	20%

	25%


	 
	 1,200-1,599 

	7.5%

	15%

	20%

	25%

	30%


	 
	 1,600-1,999 

	10.0%

	20%

	25%

	30%

	40%


	 
	 2,000+ 

	12.5%

	25%

	30%

	40%

	65%












Mr. Joseph L. Dugan

November 20, 2000

Page 5







Exhibit A – Sales Manager Bonus Program (continued)




				
	 
	Qualifying DDA

	 

	 
	Checking Account

	 

	 
	and Direct Deposit of Payroll


	 
	and Debit Card

	 

	 
	Must also offer

	 

	 
	Chexmate Line of Credit


	 
	Credit Card

	 

	 
	 
	 
	 

	 
	Relationship Ratio

	 

	 
	Calculated as the ratio of # of cross sold products to the checking account


	 
	E.g. Customer has checking account and opens 1 savings account, 1 time deposit


	 
	  and a consumer loan.  Total products are 4 (includes checking).  Therefore ratio is 


	 
	  1:4.  Direct Debit and CNBill Pay are 1/2 point each


	 
	 
	 
	 

	 
	Ratio is calculated using the period 180 days following the opening date of the checking account.


	 
	 
	 
	 

	 
	Qualifying accounts:

	 

	 
	Value

	Type

	 

	 
	            0.5 

	At least one direct debit to non-CNB vendor 


	 
	            0.5 

	CNBill pay enabled account


	 
	            1.0 

	Any savings product, including money market


	 
	            1.0 

	Any time account


	 
	            1.0 

	Any direct consumer loan, except chexmate


	 
	            1.0 

	Any mortgage loan, including home equity


	 
	 
	Any insurance policy:


	 
	            1.0 

	Property and casualty


	 
	            1.0 

	Life

	 

	 
	            1.0 

	Long-tem Care


	 
	            1.0 

	Any Trust account, including retirement account


	 
	            1.0 

	Any Investment account, including mutual fund












Mr. Joseph L. Dugan

November 20, 2000

Page 6







Exhibit B – Benefits

									
	 
	 
	Joe Dugan

	 
	 
	 
	 
	 
	 

	 
	 
	Salary and Benefits Summary Proposal

	 
	 
	 
	 
	 
	 

	 
	 
	The Canandaigua National Bank and Trust Company

	 
	 
	 
	 
	 
	 






							
	Position Title 

	Vice President - Sales 

	 
	 
	 
	 
	 






				
	 
	Amount

	Estimated Value 

	 

	Salary and related compensation 

	 
	 
	 

	Salary (Review 12/01)  Annual Base Rate for 2001 

	$100,000.00 

	$100,000.00 

	 

	Bonus  - variable up to 35% of base 

	 
	 
	 

	     payable February 28 following year 

	0%-35%

	$ 35,000.00 

	 

	CNB Profit Sharing Plan - Contractual - Est 12% Base 

	12%

	$12,000.00 

	 

	CNB E.S.O.P. - Contractual - Est 1% Base 

	1%

	$1,000.00 

	 

	 
	 
	 
	 

	Signing Bonus (Net after taxes) * 

	 
	 
	 

	     Net after taxes (check enclosed)

	$5,000.00 

	$ 6,250.00 

	assume 25% tax rate 


	 
	 
	 
	 

	Vacation

	 
	 
	 

	Year 2001 

	4 weeks 

	$ 7,692.31 

	 

	 
	 
	 
	 

	Holidays 

	 
	 
	 

	     Follow federal banking holidays 

	9-10 per year 

	$          3,846.15 

	 

	 
	 
	 
	 

	Group Benefit Plans 

	 
	 
	 

	     Health insurance 

	50% subsidy 

	$          3,105.60 

	Family Group Plan


	     Pre-tax spending accounts 

	 
	 
	 

	     -Unreimbursed Medical Care Expenses 

	up to $3,500

	$             875.00 

	est tax save at 25% rate


	     -Unreimbursed Medical and Child Care Expenses 

	up to $5,000 

	$          1,250.00 

	est tax save at 25% rate


	     Pre-tax dental plan 

	family plan 

	$             164.34 

	est tax save at 25% rate


	     Life Insurance 

	3x Base Salary 

	$             276.00 

	Est annual premium


	     Short Term Disability 

	50%-100% salary 

	$             250.00 

	Est annual premium


	     Long Term Disability 

	60% salary 

	$             250.00 

	Est annual premium


	 
	 
	 
	 

	Preferred Lending Rate - 7.25%

	 
	 
	 

	     Short term lending - Up to $15,000 

	 
	$             300.00 

	Current rate 9.25%


	     Mortgage Loans - Up to $30,000 

	 
	$             114.00 

	Current rate 8.01%


	 
	 
	 
	 

	Relocation Expenses * 

	 
	 
	 

	    Reimbursement for up to $7,500 of associated expenses 

	 $           7,500.00 

	$          9,375.00 

	Non-taxable reimbursement


	 
	 
	 
	 

	 
	 
	 
	 

	 
	Total Estimated Value 

	$181,748.40

	 






The Signing Bonus and Relocation Expense Reimbursement  are 100% refundable to the Bank if you leave employment, without cause within 36 months of your start date