CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT is made as of August 4, 1997 by and
between NEWMIL BANCORP, INC. (the "Company"), a Delaware corporation
headquartered in New Milford, Connecticut, and its subsidiary, NEW MILFORD
SAVINGS BANK (the "Bank"), (sometimes collectively referred to as the
"Client"), and XXXXXXX X. XXXXX, an individual residing in Canaan,
Connecticut ("Consultant").
WHEREAS, Consultant has served as Chairman of the Board of Directors
and President of Company, and in similar capacities at the Bank, since 1991.
WHEREAS, the Consultant has voluntarily resigned from all positions at
the Company and the Bank so as to have the opportunity to pursue other
interests.
WHEREAS, the Company and Bank desire to have continued access to the
services of Consultant from time to time.
WHEREAS, Consultant has considerable background with Company and
Bank matters so as to both be a valuable resource for and potential competitive
threat to them.
WHEREAS, Company and Bank are desirous of using the continued
services of Consultant as a consultant to perform services on an occasional
basis as described herein and to obtain Consultant's agreement not to engage
in certain competitive activities as described herein, and Consultant is
desirous of offering its services to and so agreeing with Client:
NOW, THEREFORE, Client and Company hereby agree as follows:
1. SERVICES OF CONSULTANT
Commencing as of September 1, 1997, Consultant will provide consulting
services to Company and Bank as an independent contractor. Consultant will
provide the Client with such services on an as needed, as-called basis, provided
that Consultant shall not be required to provide more than 10 hours of such
services in any calendar month, shall be subject to reasonable vacation periods,
sick days, personal days, holidays and other business commitments. Consultant
agrees to use his best efforts to perform consulting services for Client in
connection with (i) customer relations; (ii) governmental and regulatory
relations; (iii) legal issues; and (iv) other senior management and/or Board
of Director issues as Client may from time to time require. Consultant
shall receive his assignments from, and shall report only to (unless
otherwise directed) the Client's President and/or Board of Directors.
Consultant shall not purport to speak or act on behalf of Company or Bank
unless specifically instructed to do so in writing. Consultant shall
promptly report to Client any unsolicited communications relating to Company
or Bank received from Company or Bank employees, agents, or advisors, or any
other persons. Client and Consultant shall cooperate to coordinate the
extent and timing of these services.
2. COMPENSATION
Commencing as of September 1, 1997, Consultant will perform services as
an independent consultant to Client and be compensated at a rate of (through
August 31, 1998) SEVENTY-FIVE THOUSAND DOLLARS ($75,000) per year,
and, commencing as of September 1, 1998 (through August 31, 1999) SEVENTY-
FIVE THOUSAND DOLLARS ($75,000) per year, in each case such amounts
shall be payable in twelve (12) equal monthly installments in advance on the
first day of each calendar month. In the event Consultant is to be compensated
for a portion of a year or month remaining under the term of this Agreement,
Consultant's compensation shall be calculated on a pro-rata basis based upon the
actual number of months or weeks of service. Consultant shall not be
required to maintain records to reflect the time spent and services rendered
in providing consulting services under this Agreement. For purposes of
determining compensation payable under this Section, one calendar week
equals one-fourth of a calendar month and where necessary compensation
calculations shall be rounded to the nearest week.
3. STATUS
The status of Consultant in relation to Client under this Agreement
will be that of an independent contractor. Consultant is expressly not an
employee of Client and is not eligible to participate in any benefits or
privileges provided or offered to Client's employees.
4. TERM
(a) The term of this Consulting Agreement shall commence as of
September 1, 1997 and will expire two (2) years from that date, or
August 31, 1999, unless earlier terminated as provided in this
Section. This Agreement shall terminate automatically upon (i) the
death of Consultant, or (ii) the election to terminate this Agreement
by either Client or Consultant in accordance with Section 4(b)
hereof due to the total and permanent disability of Consultant, or
(iii) the Date of Termination of this Agreement as defined in
Section 9(b) hereof. Any termination of this Agreement because of
the death or total and permanent disability of Consultant shall not
be considered a breach of this Agreement and the parties'
obligations under this Agreement, other than those intended to
survive the termination of this Agreement, shall cease upon the
effective date of the termination of this Agreement.
(b) In the event that Consultant becomes "totally and
permanently disabled" as defined in this subsection 4(b), Client
shall continue to pay Consultant compensation in accordance with
the terms of this Agreement unless either Client or Company elects
to terminate as described below. "Totally and permanently
disabled" shall mean any physical or mental disability which
prevents Consultant from substantially performing the consulting
services contemplated by this Agreement. Client shall be furnished
with acceptable medical evidence of Consultant's disability.
Acceptable medical evidence shall be a written certification
furnished by a physician satisfactory to both Client and Consultant
certifying that Consultant is then incapable of substantially
performing his duties under this Agreement. If the parties cannot
agree upon a physician to make the necessary examination and
certification, the parties shall submit the matter to the President of
the local medical society nearest the place where Consultant is then
physically located to have a physician designated to make such
examination and certification. In the event Consultant is totally and
permanently disabled for a continuous period of more than three (3)
months from the commencement of such disability, either Client or
Consultant may elect to terminate this Agreement upon the delivery
of ten (10) days notice to the other party and such termination shall
take effect upon the tenth day following delivery of such notice.
Client's obligation to pay compensation to Consultant shall cease as
of the effective date of such termination of this Agreement, except
as provided in this sub-paragraph. Unless this Agreement is
terminated, Client shall continue to pay Consultant's compensation
in accordance with the terms of this Agreement notwithstanding
Consultant's total and permanent disability.
5. NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION
Consultant agrees that he will not, at any time, disclose to others,
use for his own benefit or otherwise appropriate or copy for the benefit of
anyone other than Company or Bank, any Confidential Information, whether or
not developed by Consultant, except as required in Consultant's duties
hereunder; provided, however, that this Section shall apply only so long
as the information in question is secret and confidential.
The term "Confidential Information" shall refer to any information not
publicly known which was obtained from Client or which was discovered,
developed or prepared during or as a result of the performance of any consulting
services on behalf of Client.
6. PROCEDURE FOR PRESERVING CONFIDENTIALITY OF CONFIDENTIAL INFORMATION
Consultant agrees to comply with any and all reasonable procedures which
Client may adopt from time to time to preserve the confidentiality of any
Confidential Information.
7. NONCOMPETITION AGREEMENT
(a) Employment with Competitors. During the term of this Agreement,
Consultant agrees that he will not render, directly or indirectly,
any services of an advisory or consulting nature or as an employee
or otherwise to any bank, bank holding company, savings bank, savings
and loan holding company or similar financial services business
operating in the Bank's principal or secondary market area (a
"Competing Bank"). Without otherwise limiting the foregoing,
Consultant may continue his service as a director of the Connecticut
Development Authority.
(b) Ownership or Management of Competitors. During the term of this
Agreement, Consultant agrees that he will not, either alone or as a
member of a partnership or joint venture, as a beneficiary of a trust,
or as an officer, director, stockholder or investor of or in any other
corporation or enterprise, or otherwise (except as an investor in or
stock holder of not more than five percent (5%) of publicly-traded
securities (including options) of such entity or enterprise), be
engaged in the ownership or management of any Competing Bank.
(c) Extension of Noncompetition Agreement. If the Consulting
Agreement is terminated for any reason by either party prior to the
expiration of the two (2) year period commencing on September 1,
1997 (the "Agreement Expiration Date"), Client will have the
option to extend the period of effectiveness of the covenant not to
compete contained in this Section 7 until the Agreement Expiration
Date upon making continued consulting payments as otherwise
provided herein. If Client decides not to continue the covenant not
to compete, Client will not have a continuing obligation to make
payments to Consultant for the covenant not to compete and the
Consultant will be released from the restrictions of the covenant not
to compete as of the termination of this Consulting Agreement.
8. DUTY UPON TERMINATION OF ASSOCIATION
Upon termination of its association with Client for any reason,
Consultant agrees to deliver to Client all writings, documents, records,
data, memoranda, notes and other material of any nature which are in its
possession or control and which are or contain Confidential Information
relating to his consulting services to the Client under this Agreement.
9. DEFAULT AND TERMINATION
(a) It shall be a default and an event of default hereunder if
Client or Consultant (or such parties permitted as assignees of the
interests of Client or Consultant) violates a term, covenant or condition
of this Agreement, unless the defaulting party cures such default within
thirty (30) days following the receipt of written notice of such
default from the other party, or, if the nature of the default is such
that it cannot be cured within said thirty (30) day period, unless the
defaulting party, upon receipt of such notice of default, immediately
commences appropriate steps to cure the default and thereafter
diligently and continuously pursues such curative steps and, in fact,
cures the default within a reasonable time, but in any event within
ninety (90) days after the receipt of the notice of default.
(b) In addition to the remedies otherwise available at law or in
equity to a party to this Agreement upon a breach of this Agreement, if
Client or Consultant (the "Non-Defaulting Party") has given written
notice to the other party to this Agreement (the "Defaulting Party")
of a default by the Defaulting Party and the Defaulting Party has
not cured such default in the time period permitted by Section 9(a)
hereof, then the Non-Defaulting Party may elect, upon written
notice to the Defaulting Party, to terminate this Agreement effective
as of the Date of Termination. For purposes of this Agreement, the
"Date of Termination") shall be the date notice is given by the
Non-Defaulting Party under this Section 9(b). Termination of this
Agreement for any reason shall not, unless otherwise provided,
affect (a) obligations accruing prior to the effective date of
termination; or (b) any obligations which, from the context hereof,
are intended to survive termination of this Agreement. If
Consultant elects to terminate this Agreement under this Section for
the non-payment of amounts owed by Client to Consultant under
this Agreement, Consultant shall receive immediate payment from
Client of the compensation payable to Consultant under this
Agreement through the Agreement Expiration Date, provided that,
in such case, the non-compete provisions of Section 7 shall apply
through the Agreement Expiration Date.
(c) Any right of termination of this Agreement or suit for specific
performance under this Agreement shall not abrogate any other
legal or equitable remedies the parties may otherwise have under
this Agreement.
10. ASSIGNMENT
This Agreement and the rights and obligations of Consultant hereunder
may not be assigned or transferred in whole or in part by Consultant without the
prior written consent of Client, and no such assignment or transfer or attempted
assignment or transfer shall be effective for any purpose whatsoever without
Client's prior written consent. Client shall have no obligation to recognize any
purported assignee or transferee of this Agreement. The rights of Client,
however, may be assigned or transferred to any corporate affiliate of Client,
with Client to remain liable for the performance of this Agreement. A
"corporate affiliate" of Client shall mean any corporation that controls,
is controlled by or is under common control with, the Client. "Control"
means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a person, whether through
the ownership of voting securities, by contract or otherwise.
11. TAXES
Client shall, in addition to the payments required hereunder, pay all
sales, use, transfer or other taxes, whether federal, state or local,
however designated, which are levied or imposed by reason of the provision
of consulting services contemplated hereby; excluding, however, income taxes
payable by Consultant.
12. SEVERABILITY
If any provision of this Agreement is declared invalid by any
tribunal, then the parties shall negotiate in good faith a replacement
provision therefor. The remaining provisions of this Agreement shall remain
in effect.
13. NOTICES
All notices or other communications required or permitted to be given
hereunder shall be (as elected by the person giving such notice) (a) personally
delivered, or (b) transmitted by telex, telefax or telegram (with postage
prepaid mail confirmation), or (c) by overnight courier service, or (d) by
registered or certified mail to the parties at the following addresses unless
otherwise notified in writing:
NewMil Bancorp, Inc.
New Milford Savings Bank
00 Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Chairman of the Board
Xxxxxxx X. Xxxxx
X.X. Xxx 000
Xxxxxx, Xxxxxxxxxxx 00000
Except as otherwise specified herein, all notices and other
communications shall be deemed to have been duly given on the date of
receipt if delivered personally, one (1) day after delivery to an overnight
courier service, five (5) days after posting if transmitting by registered
or certified mail, or the date of transmission if transmitted by telex,
telefax or telegram, whichever shall first occur.
14. GOVERNING LAW
This Agreement is subject to and will be construed in accordance with the
laws of the State of Connecticut, without regard to the State's internal
conflict of law, for the resolution of all claims and controversies arising
between the parties under and relating to this Agreement. In the event of a
dispute relating to the enforcement or interpretation of this Agreement, the
prevailing party shall be entitled to recover, in addition to all other
remedies available at law and equity, all costs, including, but not limited
to, attorneys' fees incurred in such dispute and in the collection of costs,
including attorneys' fees, provided in this Section.
15. HEADINGS
The headings used in this Agreement are for the convenience of reference
only.
16. WAIVER
The failure of any party to require the performance of any obligation of
the other party or to enforce any right or remedy hereunder shall not prevent
enforcement of that same right or remedy or any other right or remedy on any
other occasion.
17. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement of the parties as to the
subject matter hereof and supersedes any and all prior oral or written
understandings or agreements as to such subject matter. This Agreement may be
amended only by written amendment duly signed by authorized representatives of
both parties.
18. SURVIVABILITY
This Agreement shall be binding upon, and shall inure to the benefit
of Client's successors and assigns, whether by way of consolidation, merger,
acquisition, purchase of substantially all Client's assets, or the like.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands as of the date first above written.
CLIENT: CONSULTANT:
NEWMIL BANCORP, INC.
By:________________________________ _____________________________
Its President Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
NEW MILFORD SAVINGS BANK
By________________________________
Its President
Xxxxxxx X. Xxxxx
