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MUNICIPAL ORDER NO. 2043
A MUNICIPAL ORDER OF THE CITY OF PADUCAH, KENTUCKY,
APPROVING A SEVERANCE AND RELEASE AGREEMENT WITH CITY
MANAGER AND AUTHORIZING THE EXECUTION OF THE AGREEMENT
WHEREAS, on December 7, 2010, the City and Jeffery A. Pederson, City
Manager, entered into an agreement for the employment which subsequently amended on
December 21, 2011, April 14, 2014 and August 30, 2016; and
WHEREAS, said agreement and amendments included terms authorizing
severance pay to City Manager under certain terms and conditions which are applicable to the
direction by this Municipal Order.
NOW THEREFORE, THE BOARD OF COMMISSIONERS OF THE CITY OF
PADUCAH, KENTUCKY, HEREBY ORDER THE FOLLOWING:
SECTION 1. Recitals and Authorization. The City hereby approves the
Severance Agreement and Release ( "Agreement") among the City and Jeffery Pederson in the
form attached hereto as Exhibit A and made part hereof. It is further determined that it is
necessary and desirable and in the best interest of the City to enter into the Agreement for the
purposes therein specified, and the execution and delivery of the Agreement is hereby authorized
and approved. The Mayor of the City is hereby authorized to execute the Agreement. It is
further ordered that the City Finance Officer and Human Resources Officer shall take such
administrative steps deemed necessary to implement Exhibit A.
SECTION 2. Effective Date. This Order shall be in full force and effect on and
after the date as approved by the Board of Commissioners of the City of Paducah, Kentucky.
MAYOR
ATTEST:
Tammara S. Sanderson, City Clerk
Adopted by the Board of Commissioners, November 14, 2017
Recorded by Tammara S. Sanderson, City Clerk, November 14, 2017
\mo\agree-severance & release — city mgr Nov 2017
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EXHIBIT A
208638 SEVERANCE AND RELEASE AGREEMENT
THIS AGREEMENT is entered into by and between the CITY OF PADUCAH, state of
Kentucky, a municipal corporation (hereinafter referred to as "Employer"), and JEFFERY A.
PEDERSON of Paducah, Kentucky (hereinafter referred to as "Employee").
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WHEREAS, upon the request of Employer, Employee has tendered his resignation as City
Manager of the City of Paducah pursuant to Section 10, Termination By the Employee, Paragraph C of
the Employment Agreement dated December 7, 2010, as subsequently amended (hereinafter
"Employment Agreement") ; and
NOW, THEREFORE, in consideration of the foregoing premises, the promises contained herein,
and in the existing written employment agreement and other valuable consideration, the legal adequacy
and sufficiency of which is hereby acknowledged by Employee and Employer, the parties do hereby agree
as follows:
1. SEPARATION FROM EMPLOYMENT. Notwithstanding the provisions of Section 10,
Termination by Employee, Paragraph C of the Employment Agreement, which provide that the
termination date is the date Employer offers to accept Employee's resignation, which the parties
acknowledge occurred on November 8, 2017, the parties agree that Employee's employment with
Employer as City Manager shall end at midnight on January 12, 2018, or at any time prior to January 12,
2018, at the voluntary request of Employee or if discharged for "cause" by Employer, as that term is
defined in Section 10 of the Employment Agreement (hereinafter referred to collectively as the
"Separation Date"). On the Separation Date, Employee will no longer be in the employment of the
Employer and the terms of the severance provisions set forth herein shall immediately take effect.
2. SEVERANCE PAY. Upon consideration of the terms of the Agreement to employ the
Employee, dated December 7, 2010, as subsequently amended, the parties agree that on the Separation
Date the Employee is entitled to certain monetary benefits by reason of Section 11: SEVERANCE of the
Employment Agreement.
The parties mutually agree that AS OF NOVEMBER 7, 2017 (a base line date) the monetary
benefits were calculated to be as follows (subject to adjustment as provided):
A. A sum equal to one (1) year salary at his current rate of pay. The amount is
calculated to be $169,228.80 (base salary) plus longevity pay $503.88 for a total of $169,732.68. Said
payments are to commence following the Separation Date and shall be paid over a 12 -month period
(hereinafter "Severance Period") in 26 bi-weekly payments in accordance with the City's normal payroll
policies and procedures and shall be subject to all standard withholdings, including but not limited to,
Federal, State, FICA and Medicare.
B. The total sums calculated in paragraph 2.A. above shall, by mutual agreement of
the parties, be paid to Employee in bi-weekly installments (on the city's normal payroll dates) until such
time as the amount has been totally paid. Notwithstanding the foregoing, the Employee may demand
payment in full at anytime upon 10 days written notice to Employer. All payments due shall bear no
interest.
C. A sum equal to all accrued sick leave and vacation pay. The amount is
calculated to be $13,084.32 (vacation pay) plus $42,256.76 (sick pay) for a total of $55,341.08. The sums
calculated in 2.C. shall be adjusted upward or downward to reflect those dates of actual employment or
days used between November 7, 2017 and Separation Date. The aforesaid sums will be paid to Employee
in a lump sum on or within one week following the Separation Date.
D. An amount equal to 12 months of Employer provided life insurance premiums.
The amount is calculated to be $522.00. The aforesaid sum will be paid to Employee in a lump sum on
or within one week following the Separation Date.
E. A payment is to be made by Employer to the Employee's deferred compensation
plan with ICMA. The exact sum, using the same formula and rates as has been the past practice will be
verified by the City's Finance Officer with ICMA and the Employer will promptly pay a sum to the plan a
sum not to exceed $24,000.00 and will include those dates of actual employment up to and including the
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Separation Date. As set forth in the December 21, 2011 Addendum to the Employee's Agreement of
Employment, any excess of deferred compensation permitted by (Kentucky) CERS but, above the IRS
$24,000.00 maximum allowable, shall be paid to Employee in cash or his H.S.A. account, at Employee's
direction. The calculation of excess deferred compensation shall include wages, longevity, and buy-outs
of vacation and sick days as contemplated in 2.C. above. The aforesaid sum will be paid to the
Employee's Deferred Compensation Plan in a lump sum on or within one week following the Separation
Date.
F. The following is mutually agreed to by the parties with respect to Employee's
City Health Allocation Benefits:
i. Pursuant to the verifying message (dated November 7, 2017) sent to
Greg Carlton (Peel & Holland) by Sandy Oskins (Anthem) the Employee shall continue to be covered, at
the Employer's expense, under the health portion (life insurance excluded) of the existing city plan
(Employee & Family, Investor Option with Health Savings Option (family)) during the Severance Period.
In the event the Employee becomes covered under another employer's group health plan then the
Employer is to be immediately notified. Should Employee become covered under another employer's
group health plan, then Employer shall pay Employee a pro -rata amount equaling the total health
insurance premiums for those months remaining in the Severance Period. The payment shall be in a lump
sum.
ii. The parties have been informed and understand that any form of health
insurance premium payments by the Employer on behalf of the Employee during the Severance Period is
likely to be taxable to the Employee and must be reported by the Employer. Should the Employee wish
to investigate this issue further then he may seek his own tax/accounting advice, as Employer does not
warrant any tax treatment matters in this Agreement.
iii. Upon conclusion of the Severance Period, the Employee shall be entitled
to COBRA (subject to the terms and conditions and qualifying events at the time of termination of
coverage) and, if eligible, receive the COBRA benefit option at rates which are effective at that time.
Should the Employee elect COBRA he shall be responsible for all premium payments and administrative
fee(s).
G. Employee understands that any sums paid to Employee under the terms of this
Severance Agreement may be subject to all standard withholdings. Employer does not warrant any tax
treatment matters in this Agreement and Employee is advised to seek his own tax/accounting advice.
3. CONSIDERATION. Employer and Employee acknowledge and agree that the
Severance Pay described in Paragraphs 2.A. -G. herein are in addition to, and wholly distinct from, any
compensation earned by Employee during the course of his employment with Employer. Further,
Employee acknowledges and agrees that the Employment Agreement does not entitle him to an extension
of his employment beyond the date he was requested to resign and further does not entitle him to remain
on the Employer's health care plan for 12 months following his Separation Date. Employee further
acknowledges and agrees that these additional provisions are provided to him in exchange for entering
into this Agreement, including, but not limited to, Employee's release of Employer from any and all
claims, more particularly described in Paragraphs 5 and 6 herein.
4. RETURN OF PROPERTY. Employee agrees that all keys, credit cards, supplies,
materials, documents, computers, and other employer -owned property (hereinafter referred to as
"Employer Property") shall be returned to Employer on or before the Separation Date. Employee further
represents that no Employer Property has been copied in any manner and/or retained by Employee or
anyone else at his discretion.
WAIVER AND RELEASE OF ALL CLAIMS.
a. As a material inducement to Employer to enter into this Agreement, Employee
does hereby irrevocably and unconditionally forever waive, release, and discharge Employer, its agents,
servants employees commissioners officers board members directors insurers attorneys members
/ Y successors and assigns and any and all persons associations affiliates whether herein named or not
collectively referred to herein as "Releasees," who together with the above named may be jointly or
severally liable to Employee of and from any and all actions causes of action claims suits covenants
agreements demands and damages includingattorneys' fees and costs actually incurred whether
founded upon tortemployment law, civil rights employment retirement contract state or federal statute
or otherwise, resently existing whether known or unknown which have arisen or may hereafter arise
from or on account of or be in any manner related to Employee's employment with Employer, and the
termination thereof.
b. Without limiting the generality of the foregoing, Employee acknowledges and
agrees that in consideration of the above, Employee does hereby irrevocably and unconditionally waive
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any right to file, assert, or initiate any civil action, administrative action, and/or workers' compensation or
employment claim against Releasees arising from or relating to his employment with Employer, and the
termination of same, including, but not limited to, actions based on the Age Discrimination in
Employment Act, 29 U.S.C. 621, et seq; Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000(e) et
seq, the Civil Rights Act of 1991, the National Labor Relations Act, E.R.I.S.A., the Americans with
Disabilities Act, the Family and Medical Leave Act and the Kentucky Human Rights Act, KRS 344.010,
et seq. Employee acknowledges and understands that a breach of this Agreement will result in
Employee's liability to Employer for any and all damages that result therefrom, including, but not limited
to, attorneys' fees and costs incurred by Employer as a result of defending any civil and/or administrative
action.
C. Nothing in this agreement including, but not limited to the release of claims,
proprietary information, confidentiality, and cooperation provisions, prevents Employee from interacting
or working with a federal, state or local agency charged with the enforcement of any laws. By signing
this agreement and release, Employee is waiving rights to individual relief based on claims asserted in
such a charge or complaint, except where such a waiver of individual relief is prohibited by law.
6. ADEA WAIVER. Employee/"You" acknowledge that you are knowingly and
voluntarily waiving and releasing any rights you may have under the ADEA ("ADEA Waiver"). You
also acknowledge that the consideration given for the ADEA Waiver is in addition to anything of value to
which you were already entitled. You further acknowledge that you have been advised by this writing, as
required by the ADEA, that: (a) your ADEA Waiver does not apply to any rights or claims that arise after
the date you sign this Agreement; (b) you should consult with any attorney prior to signing this
Agreement; (c) you have twenty-one (2 1) days to consider this Agreement (although you may choose to
voluntarily sign it sooner); (d) you have seven (7) days following the date you sign this Agreement to
revoke the ADEA Waiver, with such revocation to be effective only if you deliver written notice of
revocation to the Employer within the seven (7) day prior; and the ADEA Waiver will not be effective
until the date upon which the revocation period has expired unexercised, which will be the eighth day
after you sign this Agreement. Nevertheless, your general release of claims, except for the ADEA
Waiver, is effective immediately, and not revocable.
7. RIGHT TO COUNSEL. Employee is hereby advised to seek independent counsel prior to
signing this Agreement. Employee acknowledges that he understands his right to discuss all aspects of
this Agreement with his private attorney or advisors.
8. MERGER. Employee represents and agrees that in executing this Agreement, he does
not rely and has not relied upon any representation or statement made by Employer which is not expressly
set forth in this Agreement, that this Agreement represents the entire Agreement by and between the
parties, and that all prior statements, representations, warranties, covenants, and agreements are merged
herein by reference.
9. SEVERABILITY. The provisions of this Agreement are severable and if any of it is
found to be invalid, illegal, or unenforceable, the remaining part shall remain fully valid, legal and
enforceable. This Agreement shall survive the termination of any arrangement contained herein.
10. DISCLAIMER OF LIABILITY. Employee agrees and understands that Employer does
not admit to the violation of any law or contract and that Employer has entered into this Agreement solely
in the interest of providing Employee severance pay and forever resolving any and all claims Employee
may have against Employer arising from or relating to Employee's employment, if any.
11. CONFIDENTIALITY. Employee agrees that confidential and proprietary information,
as that information is more particularly described in the list of exceptions to the Open Records Act in
KRS 61.878 and the list of exceptions in the Open Meetings Act in KRS 61.810, related to Employer's
business which he became aware of or was made privy to as a result of his employment with Employer
shall be considered confidential, and he shall not disclose same to any third person or entity in the
absence of a court order or subpoena. Violation of this provision compelling confidentiality shall be
considered a material breach of this Agreement and subject to legal remedies, including, but not limited
to, Employer's attorney's fees and costs incurred in enforcing this provision of this Agreement.
Notwithstanding the foregoing, Employee acknowledges that this Employment Agreement would be
subject to an open records request such that Employer will be required by law to release a copy of this
Agreement if a lawful request is received.
12. MISCELLANEOUS. This Agreement shall be fully binding upon the parties hereto,
their heirs, successors and assigns, and shall be construed and interpreted under the laws of the
Commonwealth of Kentucky as it is made and entered into in the Commonwealth of Kentucky. Venue
shall exclusively be in McCracken County, Kentucky, in either state or federal courts.
13. AGREEMENT TO COOPERATE. Employee acknowledges that, as the former City
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Manager for Employer, he may be called upon to assist and/or cooperate with Employer following the
Separation Date relating to matters which occurred during his employment, including but not limited to,
litigation matters, etc. Employee agrees to cooperate and/or assist Employer in those matters, at which
point Employer will reimburse Employee for his reasonable costs and expenses related thereto.
14. EFFECTIVE DATE. This Agreement shall become effective seven (7) days following
the date of Employee's signature below.
PLEASE READ CAREFULLY: BY EXECUTING THIS AGREEMENT, EMPLOYEE
ACKNOWLEDGES THAT HE HAS CAREFULLY READ AND UNDERSTANDS THE
PROVISIONS SET FORTH HEREIN AND IS KNOWINGLY AND VOLUNTARILY ENTERING
INTO SAME.
WITNESS the signatures of the undersigned.
EMPLOYER:
By:
Title:
Date:
STATE OF KENTUCKY )
COUNTY OF MCCRACKEN )
EMPLOYEE:
By:
JEFFERY A. PEDERSON
Date:
The foregoing instrument was acknowledged before me this day of November, 2017, by
Jeffery A. Pederson, Employee.
My commission expires
Notary Public, State at Large
STATE OF KENTUCKY
COUNTY OF MCCRACKEN )
The foregoing instrument was acknowledged before me this day of November, 2017, by
(title) of the City of Paducah, Employer.
My commission expires
Notary Public, State at Large
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