Exhibit 10.2
CONSULTING AGREEMENT
CONSULTING AGREEMENT (this "Agreement"), dated as of January
20, 2000 by and between Xxxxxxx Financial Corporation, a Delaware corporation
(the "Company"), and Xxxxx X. Xxxxxx (the "Consultant").
WHEREAS, the Company and MECH Financial Inc., a Delaware
corporation ("MECH"), have entered into an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of December 1, 1999, pursuant to which, among
other things, MECH shall be merged with and into the Company as of the Effective
Time (as defined in the Merger Agreement);
WHEREAS, in connection with the transactions contemplated by
the Merger Agreement and in recognition of the Consultant's experience and
abilities, the Company desires to assure itself of the services of the
Consultant in accordance with and subject to the terms and conditions provided
herein; and
WHEREAS, the Consultant wishes to perform services for the
Company in accordance with and subject to the terms and conditions provided
herein.
NOW, THEREFORE, in consideration of the mutual premises and
the respective covenants and agreements of the parties herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
1. Prior Agreements. The Company acknowledges that, effective
as of immediately following the Effective Time, the Consultant's employment with
the Company shall terminate in accordance with Section 11 of the Employment
Agreement between Mechanics Savings Bank, ("MECH Bank") and the Consultant dated
as of June 28, 1996 and that Consultant should be entitled to the payment set
forth in Section 1 of the Change in Control Agreement between MECH Bank and the
Consultant dated as of June 28, 1996 (relating to a Change in Control, as
defined therein).
2. Engagement as Consultant. The Company hereby agrees to
engage the Consultant, and the Consultant hereby agrees to perform services for
the Company, on the terms and conditions set forth herein.
3. Term. The Term of this Agreement (the "Term") shall
commence on the Effective Time and shall terminate six months thereafter. This
Agreement shall be of no force or effect unless and until the Effective Time
occurs.
4. Duties. During the Term, the Consultant shall perform such
services relating to the business of the Company and its subsidiaries as the
Consultant and the Chief Executive Officer or Board of Directors of the Company
shall mutually agree. Subject to the preceding sentence, (i) Consultant shall
provide advisory and consulting services during the term of this Agreement, and
will give the Company and its affiliates the benefit of his special knowledge,
skill, contacts and business experience in the financial institutions industry
and (ii) Consultant shall provide consultant services to the Company and its
affiliates in any capacity that is responsive to the reasonable requests of the
Company. Due to Consultant's long relationship with MECH and his recognition in
the community, his participation as a consultant in the Company's business will
add to the stature of the Company and its affiliates. The Consultant shall in no
event be required to provide consulting services to the Company for more than 20
hours during any week. The scheduling of such time shall be mutually agreeable
to the Consultant and the Company. The Consultant shall perform his duties and
responsibilities
under this Agreement to the best of his ability and using his best efforts, in a
diligent, timely, professional and workmanlike manner, in accordance with
performance standards generally prevailing in the savings institutions industry.
The Company acknowledges that the Consultant is permitted to pursue other
activities, whether of a personal or business nature (subject to the limitations
set out in Sections 8 and 10 hereof), and, accordingly, may not always be
immediately available to the Company.
5. Place of Performance. The Consultant shall perform his
duties and conduct his business from his primary residence and/or at such other
locations as are reasonably acceptable to him and the Company.
6. Independent Contractor. During the term of this Agreement,
the Consultant shall be an independent contractor and not an employee of the
Company and shall not be entitled to the benefits provided by the Company and
its affiliates to employees, including but not limited to group insurance
coverage and eligibility to participate in any retirement plans and other
employee benefit plans. Accordingly, Consultant shall be responsible for payment
of all taxes, including Federal and State income tax, Social Security tax,
Unemployment Insurance tax, and any other taxes or business license fees as
required. During the Term, the Consultant shall deliver to the Company, within
10 days following the end of each month, a brief description of the services and
activities performed by the Consultant during the month in connection with this
Agreement, including the approximate amount of time spent by the Consultant in
the performance of such services or activities.
7. Compensation and Related Matters.
(a) Monthly Consulting Fee. During the Term, the
Company shall pay to the Consultant, in equal monthly installments, a consulting
fee equal to $19,350 per month.
(b) Business Expenses. The Consultant shall be
reimbursed by the Company for all reasonable business expenses incurred by him
at the request of the Company in connection with his performance of consulting
services hereunder upon submission by the Consultant of receipts and other
documentation in accordance with the Company's normal reimbursement procedures.
8. Termination. The Consultant's engagement as a consultant
hereunder shall terminate without further action by any party hereto upon the
expiration of the Term or upon the Consultant's death or disability (as defined
in the Company's long term disability plan). This Agreement may also be
terminated by the Consultant upon 30 days' written notice to the Company (such
notice may be waived by mutual consent of the parties) or by the Company upon
the Consultant's commencement of, or involvement in, a "Competitive Activity."
Upon termination of the Consultant's engagement as a consultant hereunder in
accordance with the immediately preceding sentence or as a result of death of
disability, the parties hereto shall have no further obligation or liability
under this Agreement, except that the Company shall pay the Consultant all fees
and reimburse the Consultant for all reasonable expenses earned or incurred
hereunder prior to the date of termination.
For the purposes of this Agreement, a "Competitive
Activity" shall include the Consultant's direct or indirect participation in the
ownership, management, operation or control of, or employment or other
association, as an officer, employee, partner or otherwise, with any business
that is in competition with the business conducted by the Company and its
affiliates in any geographic area where such business is being conducted.
9. Option to Purchase Car. At the Effective Time, the
Consultant shall have the right and option to purchase at "book value" the
automobile that was provided to him by MECH immediately prior to the Effective
Time.
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10. Compliance with Law and Company Policy. In the performance
of the services herein contemplated, the Consultant is an independent contractor
with the authority to control the details of his work. However, the services of
the Consultant are subject to the approval of the Company and shall be subject
to the Company's general right of supervision to secure the satisfactory
performance thereof. The Consultant agrees to comply with all federal, state and
municipal laws, rules and regulations, as well as all policies and procedures of
the Company, that are now or may in the future become applicable to the
Consultant in connection with his services to the Company. At all times during
or after the Term, the Consultant shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or data
relating to the Company or any of its affiliates, and shall not in any manner,
directly or indirectly, use for his own benefit or the benefit of any other
person, firm, entity or corporation, nor disclose, divulge, render or offer, any
information, except on behalf of the Company in the course of the proper
performance of the Consultant's duties or except as may otherwise be required by
law or legal process (provided the Company has been given notice and opportunity
to challenge or limit the scope of disclosure purportedly so required).
Confidential information shall not include, for purposes of this Section 10, any
information that is generally available to the public other than as result of a
prohibited disclosure by the Consultant. At all times during and after the Term,
the Consultant shall refrain from making disparaging remarks about the Company
and its officers, directors and employees.
11. Indemnification. The Company shall indemnify and hold
harmless the Consultant to the full extent permitted by law and the by-laws of
the Company for reasonable expenses, costs, liabilities and legal fees that the
Consultant may incur in the discharge of his duties hereunder, solely to that
extent such duties are performed at the direction of a senior officer of the
Company.
12. Successors: Binding Agreement.
(a) The Company shall require any successor to all or
substantially all of the business or assets of the Company to expressly 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.
(b) This Agreement and all rights of the Consultant
hereunder shall inure to the benefit of and be enforceable by the Consultant's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devices and legates. This Agreement is personal to and may not be
assigned by the Consultant.
(c) On and after the Effective Time, this Agreement
shall supercede any other agreement between the parties hereto or between MECH
and the Consultant with respect to the subject matter hereof; provided nothing
herein shall impair Consultant's rights under the prior agreements described in
Paragraph 1 above.
13. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service to the
parties at the following addresses (or at such other address for a party as
shall be specified by the notice):
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If to the Company: Xxxxxxx Financial Corporation
Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Corporate Secretary
If to the Consultant: Xxxxx X. Xxxxxx
00 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxxxxx 00000
14. Disputes. Any dispute, controversy or claim arising out of
or relating to this Agreement, or the breach, termination or validity hereof,
shall be finally settled by arbitration by one arbitrator in Connecticut
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court of competent jurisdiction.
15. Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the parties hereto. No waiver by a party hereto
at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by the parties which are not set forth expressly in this
Agreement. This Agreement shall be governed and construed in accordance with the
laws of Connecticut, without giving effect to the principles of conflicts of law
thereunder.
16. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original but both of which
together shall constitute one and the same instrument.
17. Enforcement. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
18. Survival. The obligations of the parties set forth in
Sections 6, 8, 10, 11, 12, 13, 14, 15, 17 and 18 shall survive any termination
or expiration of the Consultant's engagement as a consultant hereunder or of
this Agreement
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
XXXXXXX FINANCIAL CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Chairman and CEO
/s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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