CONSULTING AGREEMENT
This CONSULTING AGREEMENT dated as of May 1, 1998 by and between HOME PORT
BANCORP, INC., a Delaware corporation with principal offices at 000 Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Company") and XXXX X. XXXXX an
individual having an office at 00 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000
("Consultant").
WHEREAS, Consultant has heretofore provided services to the Company as
President, Chief Executive Officer and Chairman of the Board of Directors; and
WHEREAS, commencing in the year 1992 when Consultant initiated his term as
President and Chief Executive Officer and Chairman of the Company has in each
year achieved substantial growth and a return on equity that has averaged more
than fifteen (15) percent per year, and
WHEREAS, the Company wishes to continue to retain the services of
Consultant upon the terms, conditions and provisions of this Agreement; and
WHEREAS, Consultant desires to continue to provide services to the Company
in accordance with the terms, conditions and provisions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company and Consultant hereby agree as follows:
1. Chairman, President and Chief Executive Officer. Consultant hereby
agrees to provide consulting services to the Company in the capacity of
President, Chief Executive Officer and Chairman of the Board of Directors. The
services to be performed by Consultant hereunder shall be substantially similar
in substance and manner of performance as performed by Consultant as Chairman of
the Board and President of Home Port during the three years preceding the date
of this Agreement. Nothing herein shall prohibit Consultant from engaging in
other business activities provided that such activities do not materially
interfere with the discharge of his duties hereunder.
2. Term. The initial term of employment under this Agreement shall be for
the three year period commencing May 1, 1998, and ending on April 30, 2001. The
initial term shall automatically be extended for a one-year period beyond the
then effective expiration date on May 1 of each year ("Annual Anniversary Date")
commencing on May 1, 1999 unless the Company shall give written notice to
Consultant more than ninety (90) days prior to an Annual Anniversary Date of its
intention not to continue this Agreement. Any such written notice shall not
effect any prior extensions of the term hereunder.
3. Compensation. Consultant shall receive a consulting fee of $120,000 per
annum, payable no less often than monthly, in arrears.
4. Expenses. The Company shall reimburse the Consultant for expenses
incurred in the performance of his duties hereunder, including:
(a) office expenses of $1,000 per month to be paid monthly, in advance,
on the first day of each month; and
(b) all other reasonable business expenses within twenty (20) days of
receipt by the Company from Consultant of appropriate itemization of such
expenses.
5. Termination
(a) Termination for Cause. The Company, by majority vote of the Board
of Directors (excluding Consultant), may terminate Consultant's services
hereunder at any time for Cause, upon written notice specifying the reasons.
Consultant shall not be entitled to compensation additional to that due up to
the effective date of such termination. As used herein, the term "Cause" shall
mean:
(i) the commission by Consultant of any act of embezzlement, fraud,
larceny, theft, or other willful misconduct or gross negligence
in connection with the performance of Consultant's duties, which
adversely affects the affairs of the Company; or
(ii) Consultant's conviction of a felony, or conviction of a
misdemeanor involving moral turpitude; or
(iii) a material breach of the terms of this Agreement which continues
for fifteen (15) days after the Company has given written notice
to Consultant specifying in reasonable detail the material
breach.
(b) Resignation. Consultant may at any time during the term of this
Agreement, including any automatic renewal hereof, resign, effective thirty (30)
days after providing written notice to the Company of his intention to resign.
Excepting only the resignation of Consultant following a Change of Control as
specified under Section 5 (e), Consultant shall not be entitled to any
compensation additional to that due up to the effective date of such
resignation. Consultant agrees to continue to perform his duties hereunder, and
otherwise assist the Company in an orderly transition, during such thirty (30)
day period.
(c) Death or Disability. This Agreement shall terminate upon the death
of Consultant. The Company may terminate Consultant's services hereunder at such
time during the term of this Agreement Consultant shall become disabled and is
unable to perform services hereunder, with reasonable accommodation, for a
continuous period of six (6) months. The determination of Consultant's
disability for purposes of this Section 5(c)
shall be made by a qualified physician acceptable to both parties.
(d) Additional Compensation. In the event of termination of this
Agreement due to the death or disability of Consultant, as provided in Section
5(c) above, the Company, within (60) days of such termination shall pay to
Consultant or Consultant's legal representative in a lump sum, an amount equal
to twelve (12) months compensation at the monthly rate of compensation in effect
at the time of such termination plus reimbursement for expenses incurred by
Consultant through the date of such termination.
(e) Change in Control. In the event that Consultant elects to resign
within two years of a Change in Control, the Company shall pay Consultant a lump
sum payment consisting of the aggregate amount payable to Consultant had he
continued to provide services under this Agreement for the remainder of the term
and at the rate of compensation in effect on the date of his resignation under
this Section 5(e). A "Change in Control" shall have occurred upon the occurrence
of any of the following events:
(i) failure, at any annual or special meeting of the Company's
shareholders following an "election contest" subject to Rule
14a-11 (as promulgated under the Securities Exchange Act of
1934), of any of the persons nominated by the Company to win
election to the Board; or
(ii) consummation of a "tender offer" (within the meaning of Rule
14d-2 as promulgated under the Securities Exchange Act of 1934)
for stock of the Company; or
(iii) the Company or any subsidiary thereof is merged or consolidated
or reorganized into or with another corporation or other legal
person, and as a result of such merger, consolidation or
reorganization, less than a majority of the combined voting power
of the then-outstanding securities of such surviving, resulting
or reorganized corporation or person immediately after such
transaction, is held in the aggregate by the holders of
securities entitled to vote generally in the election of
directors of the Company immediately prior to such transaction;
or
(iv) the acquisition by any "person" (as such term is used in sections
13(d) and 14(d) of the Securities Exchange Act of 1934), other
than the Company, directly or indirectly, of "beneficial
ownership" (as such term is defined in Rule 13d-3 as promulgated
under the Securities Exchange Act of 1934) or the right which,
through the passage of time, would permit the holder to acquire
"beneficial ownership" of securities representing 20% or more of
the total number of votes that may be cast for the election of
directors of the Company.
(v) the failure of the shareholders of the Company to elect Consultant
as a member of its board of directors or the failure of the Company's
board of directors to nominate and appoint Consultant as Chairman of
the Board of Directors, President, and Chief Executive Officer of the
Company excepting only if such failure is due to the refusal by
Consultant to serve as a member of the Board of Directors of the
Company or as Chairman of the Board or President.
6. Independent Contractor. Consultant acknowledges that, for all
purposes, he will be acting as an independent contractor and not as an employee.
7. Board of Directors. The Company shall use its best efforts to elect
Consultant to the Board of Directors during the term hereof. The Board of
Directors of the Company has reviewed and approved the terms of this Agreement.
8. Assignment. This Agreement and the rights and obligations of the
parties hereto shall bind and inure to the benefit of their respective heirs,
successors and representatives, and shall also bind and inure to the benefit of
any successor of the Company by reorganization, merger or consolidation, or any
assignee of a majority or more of the business of the Company.
9. Costs of Enforcement. In the event any dispute shall arise between
the Employee and the Corporation as to the terms or interpretation of this
Agreement, including this Paragraph 9, whether instituted by formal legal
proceedings or otherwise, including any action taken by Employee to enforce the
terms of this Paragraph 9 or in defending against any action taken by the
Corporation, the Corporation shall reimburse Employee for all costs and
expenses, including reasonable attorneys' fees, arising from such dispute,
proceedings or actions, notwithstanding the ultimate outcome therof, except if
it is finally adjudicated that Consultant willfully and materially breached the
terms hereof, in which case Consultant shall repay the Company any amounts so
advanced. Such reimbursement shall be paid within ten (10) days of Employee
furnishing to the Corporation written evidence, which may be in the form, among
other things, of a cancelled check or receipt, of any costs or expenses incurred
by Employee. Any such request for reimbursement by Employee shall be made no
more frequently than at thirty (30) day intervals.
10. Notices. Any notice required or permitted to be given hereunder
shall be by certified mail, return requested, and effective when received. It
shall be sufficient if said notice is personally delivered or sent by telefax to
the recipient at the address set forth in this Agreement or at such other
address as a party may be notice specify to the other.
11. Modification and Amendments. This Agreement, and any extensions
hereof may be modified or amended only by a writing signed by the parties
hereto.
12. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and incorporates all prior understandings, oral or written.
13. Waivers. No waiver of any provision or entitlement contained in
this Agreemenet shall be effective unless in writing signed by the parties
hereto. A waiver by either party of any particular provision of this Agreement
shall not constitute a waiver of any other provision.
14. Governing Law. This Agreement shall be construed under the laws of
the Commonwealth of Massachusetts.
15. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties hereteo have executed this Agreement as
a sealed instrument as of the day and year first above written.
HOME PORT BANCORP, INC.;
By: /s/ Xxxxxxx X. XxXxxxxxxx
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Name: Xxxxxxx X. XxXxxxxxxx
Title: Chairman Compensation Committee
CONSULTANT
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
