EXECUTIVE SEVERANCE AGREEMENT


     AGREEMENT, dated as of August 19, 1996, by and between Pawling Savings
Bank, a New York stock bank corporation (the "Company"), Progressive Bank, Inc.
("Progressive") both having offices at 1301 Route 52, Fishkill, New York
12524-7000, and John A. Eickman, whose residence is 710 Meadow Road,
Bridgewater, New Jersey 08807 ("Eickman").

     The Company's Board of Directors considers the continued services of key
executives of the Company to be in the best interest of the Company and its
stockholder.

     The Company's Board of Directors desires to assure and has determined that
it is appropriate and in the best interests of the Company and its stockholder
to reinforce and encourage, the continued attention and dedication of key
executives of the Company to their duties without personal distraction in
circumstances arising from the possibility or occurrence of a change in control
of the Company.

     The Company is a wholly owned subsidiary of Progressive, the stock of which
is traded on the NASDAQ market.

     In consideration of the premises and the covenants and agreements contained
herein, and other good and valuable consideration, the Company, Progressive and
Eickman agree as follows:

     1. Services During Certain Events. In the event a proposal is made to
effect a Change in Control (as defined in Section 3 hereof), Eickman agrees that
he will not voluntarily leave the employ of the Company and will render the
services contemplated in the recitals of this Agreement until such proposal for
a Change in Control is terminated or abandoned or until six (6) months after a
Change in Control has occurred. If a proposal is made, Eickman shall be notified
of same within a reasonable period of time.

     2. Termination. For purposes of this Agreement, a "Termination" shall be
deemed to have occurred in the event that Eickman's employment by the Company is
terminated at any time from the date of the proposal to two years following a
Change in Control:

        (a) by the Company for reasons other than "cause" (as defined in Section
5 hereof), "disability" (as defined in Section 5 hereof), death or attainment of
age 65;

        (b) by Eickman following the occurrence of any of the following events
without Eickman's consent:

            (i) the assignment to Eickman of any duties or responsibilities that
are inconsistent with his position, duties, responsibilities or status
immediately preceding such Change in Control, or a change in his reporting
responsibilities or titles within


                                        -1-

<PAGE>

the Company in effect at such time resulting in a reduction of his duties,
responsibilities or position at the Company;

            (ii) a reduction of the Eickman's annual salary unless it is part of
a general salary reduction plan affecting other Executives;

            (iii) a material reduction in any year of the ratio of bonus,
incentive compensation or fringe benefits received by Eickman pursuant to any
bonus, incentive or fringe benefit plan (the "Benefit Plans") to his annual
salary in such year, which reduction is greater than the average reduction in
the ratio of such incentive compensation or fringe benefits to annual salary
received by all participants under the Benefit Plans; as used here, adjustments
to incentive compensation based upon personal or general business performance
will not be considered material;

            (iv) a material increase in the amount of travel required of Eickman
(i.e., 40 miles or more from his residence) in connection with his employment by
the Company, or the transfer of Eickman to a location requiring a change in his
residence; or

            (v) any failure by the Company or Progressive to comply with and
satisfy Section 7 of this Agreement; or

        (c) by Eickman, if he shall determine in his absolute discretion (and
give notice to the Company's Board of Directors specifying what it is that
prevents him from performing his duties) that due to the Change in Control
(including any changes in circumstances at the Company that directly or
indirectly affect Eickman's position, duties, responsibilities or status
immediately preceding the change in Control) he is no longer able effectively to
discharge his duties and responsibilities and the situation is not remedied to
the reasonable satisfaction of Eickman within 30 days of receipt by the Company
of written notice from Eickman of such determination.

     3. Change in Control. For purposes of this Agreement, a "Change in Control"
of the Company shall be deemed to have occurred if:

        (a) Progressive shall approve (i) any consolidation or merger of the
Company or any subsidiary of the Company where (A) the stockholder of the
Company, (Progressive), immediately prior to such consolidation or merger, would
not, immediately after such consolidation or merger, beneficially own, directly
or indirectly, Voting Securities (as defined below) representing in the
aggregate more than 50% of the combined voting power of the Voting Securities of
the surviving entity (or of its ultimate parent corporation, if any) or (B) the
members of the Board of Directors of the Company, immediately prior to the
consolidation or merger, would not, immediately after the consolidation or
merger, constitute a majority of the Board of Directors of the corporation
issuing cash or securities in the consolidation or merger (or of its ultimate
parent corporation, if any) or (ii) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of the
Company; or


                                       -2-

<PAGE>

        (b) the stockholders of Progressive shall approve any consolidation or
merger of Progressive where (A) the stockholders of Progressive, immediately
prior to such consolidation or merger, would not, immediately after such
consolidation or merger, beneficially own, directly of indirectly, Voting
Securities (as defined below) representing in the aggregate more than 50% of the
combined voting power of the Voting Securities of the surviving entity (or of
its ultimate parent corporation, if any) or (B) the members of the Board of
Directors of Progressive, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger, constitute a majority
of the Board of Directors of the Corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any) or (C)
any sale, lease or exchange or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single plan) of all or
substantially all the assets of Progressive; or

        (c) individuals who, as of the date hereof, constitute the entire Board
of Directors of the Company or Progressive (the "Incumbent Directors") cease for
any reason to constitute a majority of the Board, provided that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company's or Progressive's stockholders, was approved by a
vote of at least a majority of the then Incumbent Directors (other than an
election or nomination of an individual whose assumption of office is the result
of an actual or threatened election contest relating to the election of
directors of the Company or Progressive, as such terms are used in Rule 14a-11
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
shall be, for purposes of this Agreement, considered as though such individual
were an Incumbent Director;

Notwithstanding the foregoing, a "Change in Control" of the Company or
Progressive shall not be deemed to have occurred for purposes of the foregoing
clause (c) solely as the result of an acquisition of securities by the Company
or Progressive which, by reducing the number of Common Shares of the Voting
Securities outstanding increases (i) the proportionate number of Common Shares
beneficially owned by any person to more than 50% of the Common Shares then
outstanding or (ii) the proportionate voting power represented by more than 50%
of the combined voting power of all then outstanding Voting Securities
beneficially owned by any person to more than 50% of the combined voting power
of all then outstanding Voting Securities;

As used herein, the term "Voting Securities" when used with respect to a
corporation shall mean all the then outstanding securities of such corporation
entitled under ordinary circumstances to vote in the election of the directors
of such corporation.

     4. Rights and Benefits upon Termination or Change in Control.

        (a) Severance Payment. Subject to Sections 5 and 10(a) hereof, in the
event of Termination, the Company shall pay Eickman, in a lump-sum payment an
amount equal to 2.99 times Eickman's average annual compensation for his years
of service prior to the date of Change of Control (not to exceed five years).


                                       -3-

<PAGE>

        (b) Stock Options. Immediately prior to a change in Control, all
outstanding options to buy Progressive stock held by Eickman shall be deemed to
be and shall become fully vested and immediately exercisable.

     5. Conditions to the Obligations of the Company. The rights and benefits
provided in Section 4 hereof shall not accrue to Eickman if any of the following
events shall occur:

        (a) The Company shall terminate Eickman's employment or consultancy for
"cause". For purposes of this Agreement, termination of employment or
consultancy for "cause" shall mean (i) Eickman's conviction for, or pleas of
nolo contendere to, a crime involving a felony, (ii) Eickman's commission of an
act of personal dishonesty or breach of fiduciary duty resulting in each case in
substantial personal profit in connection with Eickman's employment by the
Company, (iii) willful and gross misconduct by Eickman in the course of his
duties, (iv) deliberate and intentional continuing refusal by Eickman to perform
duties or responsibilities that are properly assigned to Eickman (except for
non-performance because of incapacity due to illness or accident) which refusal
is not cured by Eickman within 30 days after receipt by him of written notice
with respect thereto; or termination directed by the Superintendent of Banks,
the Federal Deposit Insurance Corporation, or similar regulatory authority.

        (b) Following a Termination, Eickman shall not within ten days after
receiving a written request to do so, resign as a director and/or officer of the
Company and of each subsidiary and affiliate of the Company of which he is then
serving as a director and/or officer.

        (c) The Company shall terminate Eickman's employment or consultancy for
"disability". For purposes of this Agreement, "disability" shall mean a physical
or psychological condition of Eickman which renders him unable to perform his
duties for the Company for a period for six months or longer, as confirmed in
writing by Eickman's independent physician.

     6. Arbitration and Expenses.

        (a) 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 White Plains, New York in accordance with the rules of the
American Arbitration Association then in effect. The arbitrators shall be
approved by both the Company and Eickman and their decision shall be binding on
the parties and conclusive for all purposes. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. The expense of such
arbitration shall be borne by the Company.

        (b) The Company shall pay or reimburse Eickman on a current basis within
ten days after submission of bills by Eickman for all reasonable costs and
expenses (including, without limitation, attorney's fees) incurred by Eickman as
a result of any claim, action or proceeding (including a claim, action or
proceeding in which Eickman prevails against the Company) arising out of, or
challenging the validity, advisability or enforceability 


                                       -4-

<PAGE>

of, this Agreement or any provision hereof.

     7. Successors. The Company and Progressive shall cause any successor
(whether direct of indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Company, to assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place. Upon transfer of the business the new entity will be responsible for
performance of this Agreement. As used herein, ("the Company") shall include any
successor to all or substantially all of the Company's business or assets which
executes and delivers an agreement provided for in this Section 7 or which
otherwise becomes bound by all the term and provisions or this Agreement by
operation of law.

     8. Notice of Termination. Any termination of Eickman's employment by the
Company shall be communicated to Eickman at the address set forth above (or such
other address as Eickman shall have notified the Company in writing for purposes
of this Agreement) in a written notice and, except for termination of "cause",
shall specify a termination date no sooner than 31 days after the giving of such
notice.

     9. Term of Agreement. This Agreement shall terminate on December 31, 1998;
provided, however, that this Agreement shall automatically renew upon the
anniversary date for successive two-year terms unless the Company's Board of
Directors notifies Eickman in writing at least 30 days prior to a December 31st
expiration date that it does not wish to renew the Agreement for an additional
term; and provided further that if a Change in Control occurs during the term of
an additional term of this Agreement, the Agreement shall continue in effect for
two years following such Change in Control.

     10. Miscellaneous.

        (a) Other Severance Payments. The severance payment provided under
Section 4(a) hereof shall be offset by any other severance payment which Eickman
receives under any Severance Plan of the Company or Progressive or under any
other agreement between the undersigned and Progressive or the Company,
including damages for breach of any such agreement.

        (b) Assignment. No right, benefit or interest hereunder shall be subject
to assignment, anticipation, alienation, sale, encumbrance, charge, pledge,
hypothecation or set-off in respect of any claim, debt or litigation, or to
execution, attachment, levy or similar process.

        (c) Construction of Agreement. Nothing in this Agreement shall be
construed to amend any provision of any plan or policy of the Company. This
Agreement is not, and nothing herein shall be deemed to create, a commitment of
continued employment of Eickman by the Company.

        (d) Amendment. This agreement may not be amended, modified or canceled
except by written agreement of the parties.


                                       -5-

<PAGE>

        (e) Waiver. No provision of this Agreement may be waived except by a
writing signed by the party to be bound thereby.

        (f) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall remain in full force and effect to
the fullest extent permitted by law.

        (g) Taxes. Any payment or delivery required under this Agreement shall
be subject to all requirements of the law with regard to withholding of taxes,
filing, making of reports and the like, and the Company shall use its best
efforts to satisfy promptly all such requirements.

        (h) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York.

        (i) Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the matters covered hereby.

                                   PAWLING SAVINGS BANK


                                   By: /s/ Elizabeth P. Allen
                                       ---------------------------
                                       Elizabeth P. Allen
                                       Chairman of the Board


                                   PROGRESSIVE BANK, INC.


                                   By: /s/ Thomas C. Aposporos
                                       ----------------------------
                                       Thomas C. Aposporos
                                       Chairman of the Board


                                       /s/ John A. Eickman
                                       ----------------------------
                                       John A. Eickman
                                       Individually


                                      -6-


<PAGE>

                          EXECUTIVE SEVERANCE AGREEMENT

      AGREEMENT, dated as of March 31, 1993, by and between Pawling Savings
Bank, a New York stock bank corporation (the "Company"), Progressive Bank, Inc.
("Progressive") both having offices at Akindale Road, Pawling, New York 12564,
and Robert A. Gabrielsen, whose residence address is Harden Drive,
LaGrangeville, New York 12540 ("Gabrielsen").

      The Company's Board of Directors considers the continued services of key
executives of the Company to be in the best interest of the Company and its
stockholder.

      The Company's Board of Directors desires to assure and has determined that
it is appropriate and in the best interests of the Company and its stockholder
to reinforce and encourage, the continued attention and dedication of key
executives of the Company to their duties without personal distraction in
circumstances arising from the possibility or occurrence of a change in control
of the Company.

      The Company is a wholly owned subsidiary of Progressive the stock of which
is traded on the NASDAQ market.

      In consideration of the premises and the covenants and agreements
contained herein, and other good and valuable consideration, the Company,
Progressive and Gabrielsen agree as follows:

      1. Services During Certain Events. In the event a proposal is made to
effect a Change in Control (as defined in Section 3 hereof), Gabrielsen agrees
that he will not voluntarily leave the employ of the Company and will render the
services contemplated in the recitals of this Agreement until such proposal for
a Change in Control is terminated or abandoned or until six (6) months after a
Change in Control has occurred. If a proposal is made, Gabrielsen shall be
notified of same within a reasonable period of time.

      2. Termination. For purposes of this Agreement, a "Termination" shall be
deemed to have occurred in the event that Gabrielsen's employment by the Company
is terminated at any time from the date of the proposal to two years following a
Change in Control:

            (a) by the Company for reasons other than "cause" (as defined in
Section 5 hereof), "disability" (as defined in Section 5 hereof), death or
attainment of age 65;

            (b) by Gabrielsen following the occurrence of any of the following
events without Gabrielsen's consent:

                  (i) the assignment to Gabrielsen to any duties or
responsibilities that are inconsistent with his position, duties,
responsibilities or status immediately preceding such Change in Control, or a
change in his reporting responsibilities or titles


                                       -1-
<PAGE>

within the Company in effect at such time resulting in a reduction of his
responsibilities or position at the Company;

                  (ii) a reduction of the Gabrielsen's annual salary unless it
is part of a general salary reduction plan affecting other Executives;

                  (iii) a material reduction in any year of the ratio of bonus,
incentive compensation or fringe benefits received by Gabrielsen pursuant to any
bonus, incentive or fringe benefit plan (the "Benefit Plans") to his annual
salary in such year, which reduction is greater than the average reduction in
the ratio of such incentive compensation or fringe benefits to annual salary
received by all participants under the Benefit Plans; as used here, adjustments
to incentive compensation based upon personal or general business performance
will not be considered material;

                  (iv) a material increase in the amount of travel required of
Gabrielsen (i.e., 40 miles or more from his residence) in connection with his
employment by the Company, or the transfer of Gabrielsen to a location requiring
a change in his residence; or

                  (v) any failure by the Company to comply with and satisfy 
Section 7 of this Agreement; or

            (c) by Gabrielsen, if he shall determine in his absolute discretion
(and give notice to the Company's Board of Directors specifying what it is that
prevents him from performing his duties) that due to the Change in Control
(including any changes in circumstances at the Company that directly or
indirectly affect Gabrielsen's position, duties, responsibilities or status
immediately preceding the change in Control) he is no longer able effectively to
discharge his duties and responsibilities and the situation is not remedied to
the reasonable satisfaction of Gabrielsen within 30 days of receipt by the
Company of written notice from Gabrielsen of such determination.

      3. Change in Control. For purposes of this Agreement, a "Change in
Control" of the Company shall be deemed to have occurred if:

            (a) Progressive shall approve (i) any consolidation or merger of the
Company or any subsidiary of the Company where (A) the stockholder of the
Company, (Progressive), immediately prior to such consolidation or merger, would
not, immediately after such consolidation or merger, beneficially own, directly
or indirectly, Voting Securities (as defined below) representing in the
aggregate more than 50% of the combined voting power of the Voting Securities of
the surviving entity (or of its ultimate parent corporation, if any) or (B) the
members of the Board of Directors of the Company, immediately prior to the
consolidation or merger, would not, immediately after the consolidation or
merger, constitute a majority of the Board of Directors of the corporation
issuing cash or securities in the consolidation or merger (or of its ultimate
parent corporation, if any) or (ii) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of the
Company;


                                       -2-
<PAGE>

      (b) the stockholders of Progressive shall approve any consolidation or
merger of Progressive where (A) the stockholders of Progressive, immediately
prior to such consolidation or merger, would not, immediately after such
consolidation or merger, beneficially own, directly or indirectly, Voting
Securities (as defined below) representing in the aggregate more than 50% of the
combined voting power of the Voting Securities of the surviving entity (or of
its ultimate parent corporation, if any) or (B) the members of the Board of
Directors of Progressive, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger, constitute a majority
of the Board of Directors of the Corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any) or (C)
any sale, lease or exchange or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single plan) of all or
substantially all the assets of Progressive;

      (c) individuals who, as of the date hereof, constitute the entire Board of
Directors of the Company or Progressive (the "Incumbent Directors") cease for
any reason to constitute a majority of the Board, provided that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company's or Progressive's stockholders, was approved by a
vote of at least a majority of the then Incumbent Directors (other than an
election or nomination of an individual whose assumption of office is the result
of an actual or threatened election contest relating to the election of
directors of the Company or Progressive, as such terms are used in Rule 14a-11
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
shall be, for purposes of this Agreement, considered as though such individual
were an Incumbent Director; or

Notwithstanding the foregoing, a "Change in Control" of the Company or
Progressive shall not be deemed to have occurred for purposes of the foregoing
clause (c) solely as the result of an acquisition of securities by the Company
or Progressive which, by reducing the number of Common Shares of the Voting
Securities outstanding increases (i) the proportionate number of Common Shares
beneficially owned by any person to more than 50% of the Common Shares then
outstanding or (ii) the proportionate voting power represented by more than 50%
of the combined voting power of all then outstanding Voting Securities;

As used herein, the term "Voting Securities" when used with respect to a
corporation shall mean all the then outstanding securities of such corporation
entitled under ordinary circumstances to vote in the election of the directors
of such corporation.

      4. Rights and Benefits upon Termination or Change in Control.

            (a) Severance Payment. Subject to Sections 5 and 10(a) hereof, in
the event of Termination, the Company shall pay Gabrielsen, in a lump-sum
payment an amount equal to 2.99 times Gabrielsen's average annual compensation
for his years of service prior to the date of Change of Control (not to exceed
five years).


                                       -3-
<PAGE>

            (b) Stock Options. Immediately prior to a change in Control, all
outstanding options to buy Progressive stock held by Gabrielsen shall be deemed
to be and shall become fully vested and immediately exercisable.

      5. Conditions to the Obligations of the Company. The rights and benefits
provided in Section 4 hereof shall not accrue to Gabrielsen if any of the
following events shall occur:

            (a) The Company shall terminate Gabrielsen's employment or
consultancy for "cause". For purposes of this Agreement, termination of
employment or consultancy for "cause" shall mean (i) Gabrielsen's conviction
for, or pleas of nolo contendere to, a crime involving a felony, (ii)
Gabrielsen's commission of an act of personal dishonesty or breach of fiduciary
duty resulting in each case in substantial personal profit in connection with
Gabrielsen's employment by the Company, (iii) willful and gross misconduct by
Gabrielsen in the course of his duties, (iv) deliberate and intentional
continuing refusal by Gabrielsen to perform duties or responsibilities that are
properly assigned to Gabrielsen (except for non-performance because of
incapacity due to illness or accident) which refusal is not cured by Gabrielsen
within 30 days after receipt by him of written notice with respect thereto; or
termination directed by the Superintendent of Banks, the Federal Deposit
Insurance Corporation, or similar regulatory authority.

            (b) Following a Termination, Gabrielsen shall not within ten days
after receiving a written request to do so, resign as a director and/or officer
of the Company and of each subsidiary and affiliate of the Company of which he
is then serving as a director and/or officer.

            (c) The Company shall terminate Gabrielsen's employment or
consultancy for "disability". For purposes of this Agreement, "disability" shall
mean a physical or psychological condition of Gabrielsen which renders him
unable to perform his duties for the Company for a period for six months or
longer, as confirmed in writing by Gabrielsen's independent physician.

      6. Arbitration and Expenses.

            (a) 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 White Plains, New York in accordance with the rules of the
American Arbitration Association then in effect. The arbitrators shall be
approved by both the Company and Gabrielsen and their decision shall be binding
on the parties and conclusive for all purposes. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. The expense of such
arbitration shall be borne by the Company.

            (b) The Company shall pay or reimburse Gabrielsen on a current basis
within ten days after submission of bills by Gabrielsen for all reasonable costs
and expenses (including, without limitation, attorney's fees) incurred by
Gabrielsen as a result of any claim, action or proceeding (including a claim,
action or proceeding in which Gabrielsen prevails against the Company) arising
out of, or challenging the validity,


                                       -4-
<PAGE>

advisability or enforceability of, this Agreement or any provision hereof.

      7. Successors. The Company and Progressive shall cause any successor
(whether direct of indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Company, to assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place. Upon transfer of the business the new entity will be responsible for
execution of this contract. As used herein, ("the Company") shall include any
successor to all or substantially all of the Company's business or assets which
executes and delivers an agreement provided for in this Section 7 or which
otherwise becomes bound by all the terms and provisions or this Agreement by
operation of law.

      8. Notice of Termination. Any termination of Gabrielsen's employment by
the Company shall be communicated to Gabrielsen at the address set forth above
(or such other address as Gabrielsen shall have notified the Company in writing
for purposes of this Agreement) in a written notice and, except for termination
of "cause", shall specify a termination date no sooner than 31 days after the
giving of such notice.

      9. Term of Agreement. This Agreement shall terminate on December 31,1995;
provided, however, that this Agreement shall automatically renew upon the
anniversary date for successive two-year terms unless the Company's Board of
Directors notifies Gabrielsen in writing at least 30 days prior to a December
31st expiration date that it does not wish to renew the Agreement for an
additional term; and provided further that if a Change in Control occurs during
the term of an additional term of this Agreement, the Agreement shall continue
in effect for two years following such Change in Control.

      10. Miscellaneous.

            (a) Other Severance Payments. The severance payment provided under
Section 4(a) hereof shall be offset by any other severance payment which
Gabrielsen receives under any Severance Plan of the Company or Progressive or
under any other agreement between the undersigned and Progressive or the
Company, including damages for breach of any such agreement.

            (b) Assignment. No right, benefit or interest hereunder shall be
subject to assignment, anticipation, alienation, sale, encumbrance, charge,
pledge, hypothecation or set-off in respect of any claim, debt or litigation, or
to execution, attachment, levy or similar process.

            (c) Construction of Agreement. Nothing in this Agreement shall be
construed to amend any provision of any plan or policy of the Company. This
Agreement is not, and nothing herein shall be deemed to create, a commitment of
continued employment of Gabrielsen by the Company.

            (d) Amendment. This agreement may not be amended, modified or
canceled except by written agreement of the parties.


                                       -5-
<PAGE>

            (e) Waiver. No provision of this Agreement may be waived except by a
writing signed by the party to be bound thereby.


            (f) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall remain in full force and effect to
the fullest extent permitted by law.

            (g) Taxes. Any payment or delivery required under this Agreement
shall be subject to all requirements of the law with regard to withholding of
taxes, filing, making of reports and the like, and the Company shall use its
best efforts to satisfy promptly all such requirements.

            (h) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York.

            (i) Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the matters covered
hereby.

                                             PAWLING SAVINGS BANK


                                             By: /s/ Donald B. Dedrick
                                                 -------------------------------
                                                 Donald B. Dedrick
                                                 Chairman of the Board


                                             PROGRESSIVE BANK, INC.


                                             By: /s/ Thomas C. Aposporos
                                                 -------------------------------
                                                 Thomas C. Aposporos
                                                 Chairman of the Board


                                                 /s/ Robert A. Gabrielsen
                                                 -------------------------------
                                                 Robert A. Gabrielsen
                                                 Individually


                                       -6-