Exhibit 10.1
WEBSTER FINANCIAL CORPORATION
Webster Plaza
Waterbury, Connecticut
January 10, 2000
Brian Orenstein
MECH Financial, Inc.
100 Peal Street
Hartford, Connecticut 06103
Dear Mr. Orenstein:
1. In consideration for the payments set forth in paragraph 2
hereof, you hereby agree that for a period of nine months commencing upon the
day following the consummation (the "Effective Time") of the transactions
contemplated by the Agreement and Plan of Merger by and between Webster
Financial Corporation (the "Company") and MECH Financial, Inc. ("MECH"), dated
as of December 1, 1999 (the "Merger Agreement"), you will adhere to the
restrictions and limitations set forth herein.
(a) Confidential Information. You will hold in a fiduciary
capacity for the benefit of the Company and its affiliated companies all secret
or confidential information, knowledge or data relating to MECH or the Company
or any of its affiliated companies and their respective businesses (including,
without limitation, any proprietary and not publicly available information
concerning any processes, methods, trade secrets, research, secret data, costs
or names of users or purchasers of their respective products or services,
business methods, operating procedures or programs or methods of promotion and
sale) that you obtain or obtained during your employment by MECH or the Company
or any of the affiliated companies and that is not public knowledge (other than
as a result of your violation of this paragraph 1(a)) ("Confidential
Information"). For the purposes of this paragraph 1(a), information shall not be
deemed to be publicly available merely because it is embraced by general
disclosures or because individual features or combinations thereof are publicly
available. You will not communicate, divulge or disseminate Confidential
Information at any time during or after your employment with the Company or any
of the affiliated companies, except with the prior written consent of the
Company, or as otherwise required by law or legal process. All records, files,
memoranda, reports, customer lists, drawings, plans, documents and the like that
you use, prepare or come into contact with during the course of your employment
shall remain the sole property of the Company or one or more of the affiliated
companies, as applicable, and shall be turned over to the Company or such
affiliated company, as applicable, upon termination of your employment.
(b) Nonsolicitation. You agree that you will not, at any time
during the Restricted Period (as defined in paragraph 1(c) below), without the
prior written consent of the Company, directly or indirectly employ, or solicit
the employment of (whether as an employee, officer, director, agent, consultant
or independent contractor), any person who was or is at any time during the
previous 12 months an employee, representative, officer or director of the
Company or any of its affiliated companies (except for such employment by the
Company or any of its affiliated companies). You agree that you will not, at any
time during the Restricted Period, directly or indirectly, attempt in any manner
to persuade any client or customer of the Company or its affiliated companies to
cease to do business or to reduce the amount of business which any such client
or customer has customarily done or contemplates doing with the Company or its
affiliated companies, whether or not the relationship between the Company or
such affiliated company and such client or customer was originally established,
in whole or in part, through your efforts, or to solicit business of
Brian Orenstein
January 10, 2000
Page 2
any such client or customer of the Company or its affiliated companies, unless
such solicitation is rendered on the behalf of, and in furtherance of the
business of, the Company.
(c) Noncompetition. During the Restricted Period (as defined
below), you shall not, without the prior written consent of the Chief Executive
Officer of the Company, engage in or become associated with a Competitive
Activity. For purposes of this paragraph 1: (i) the "Restricted Period" means
the period commencing on the Effective Time and ending on the nine-month
anniversary of the Effective Time; (ii) a "Competitive Activity" means any
business or other endeavor, in any county in Connecticut, that is engaged in the
banking business, whether as a bank, a savings and loan, a savings bank, a
credit union, mortgage company, bank holding company, savings and loan holding
company or other depositary institution holding company in such jurisdiction as
of the Effective Time or any time thereafter; and (iii) you will be considered
to have become "associated with a Competitive Activity" if you become directly
or indirectly involved as an owner, principal, employee, officer, director,
independent contractor, representative, stockholder, financial backer, agent,
partner, advisor, lender, or in any other individual or representative capacity
with any individual, partnership, corporation or other organization that is
engaged in a Competitive Activity. Notwithstanding the foregoing, you may make
and retain investments during the Restricted Period in less than one percent of
the equity of any entity engaged in a Competitive Activity, if such equity is
listed on a national securities exchange or regularly traded in an
over-the-counter market.
2. In consideration for your agreement not to engage in the
activities set forth in paragraph 1, the Company hereby agrees to pay you an
amount (the "Non-Compete Amount"), currently valued by the parties at $102,916,
to be paid in equal monthly installments over the duration of the Restricted
Period, provided that such payments shall not commence until such time as you
are no longer providing services to the Company or its affiliated companies. The
parties hereby agree to reconfirm and, to the extent necessary or permissible,
modify in writing the Non-Compete Amount and the duration of the Restricted
Period on or before the date on which the Effective Time is expected to occur.
3. In the event payments to you under this Agreement and with
or pertaining to any other plan, agreement or arrangement of the Company or MECH
(the "Total Payments"), are determined by a final and nonappealable order of a
court of competent jurisdiction or a final settlement approved by the Company to
be subject to the excise tax (the "Excise Tax") under Section 4999 of the
Internal Revenue Code (the "Code"), the Company shall pay to you within 30 days
of such determination an additional amount such that the net amount retained by
you, after deduction of the Excise Tax on Total Payments and any federal and
state income tax and Excise Tax upon the payment provided for by this paragraph
3, shall be equal to the Total Payments. The parties agree that any calculations
required pursuant to this paragraph 3 shall be made by the Company; provided,
however, that if you object in writing to the Company's determination within 60
days, the determination shall be made by a "Big Five" accounting firm selected
by the Company and subject to your reasonable consent. The determination made by
such accounting firm shall be binding on you and the Company. The parties
further agree that they shall reasonably cooperate with each other in connection
with any administrative or judicial proceedings concerning the existence or
liability for Excise Tax with respect to the amounts payable hereunder. The
Company agrees to indemnify you and hold you harmless for any penalties,
interest or expenses you reasonably incur in the event it is determined that
Excise Tax is owed. You hereby agree that you will not take any position on your
income tax return or otherwise that is inconsistent with the positions of the
Company with respect to the treatment of any payment, including the Non-Compete
Amount, which may be contended is a "parachute payment" under Section 280G of
the Code.
Brian Orenstein
January 10, 2000
Page 3
4. In accordance with Section 1(a) of the Change in Control
Agreement between MECH and you dated as of June 28, 1996, as amended as of
January 1, 1998 (the "Prior Agreement"), as soon as reasonably practicable
following the Effective Time and within 30 days of the Effective Time, the
Company shall make a lump sum payment to you equal to $381,833, subject to
reduction as provided for in Sections 1(e) and 1(f) of the Prior Agreement. Upon
the Company's request given in writing not less than 45 days prior to the
Effective Time, you hereby agree that you will provide services to the Company
on the same basis as you provided services to MECH immediately prior to the
Effective Time, for a period of up to six months following the Effective Time,
at your current base pay; provided, however, that in the event you receive and
accept a bona fide employment opportunity that is not in violation of the
covenants set forth in paragraph 1 hereof, you may terminate your employment
before the end of the period requested by the Company, but in no event earlier
than the 90th day following the Effective Time.
5. In the event of a breach or threatened breach of paragraph
1, you agree that the Company shall be entitled to injunctive relief in a court
of appropriate jurisdiction to remedy any such breach or threatened breach, and
you acknowledge that damages would be inadequate and insufficient. With respect
to any provision of paragraph 1 finally determined by a court of competent
jurisdiction to be unenforceable, you and the Company hereby agree that such
court shall have jurisdiction to reform this Agreement or any provision hereof
so that it is enforceable to the maximum extent permitted by law, and the
parties agree to abide by such court's determination. If any of the covenants of
paragraph 1 are determined to be wholly or partially unenforceable in any
jurisdiction, such determination shall not be a bar to or in any way diminish
the rights of the Company to enforce any such covenant in any other
jurisdiction.
6. The existence of Excise Tax shall not affect the
obligations of the parties to perform their respective covenants under
paragraphs 1 and 2.
7. This Agreement shall be governed by and subject to the
jurisdiction of the laws of the State of Connecticut applicable to contracts
made and to be performed within such State.
8. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. This
Agreement may not be amended or terminated without the prior written consent of
the parties hereto, provided that the parties agree to the modifications or
amendments as are contemplated by paragraph 2. In the event of your death after
the Effective Time, the Non-Compete Amount shall be payable to your
beneficiaries or your estate. In the event of non-payment hereof by the Company,
you shall be entitled to payment of counsel fees and expenses to enforce the
Company's obligations as provided in Section 1(d) of the Prior Agreement.
9. This Agreement shall terminate and have no further force
and effect without liability of any kind to any of the parties hereto, upon
termination of the Merger Agreement without consummation of the merger
contemplated thereby. Immediately following the Effective Time, this Agreement
shall supersede any other employment, severance or change of control agreement
between you and MECH, including, without limitation, the Prior Agreement. As
used in this Agreement, the term "affiliated companies" shall include any
company controlled by, controlling or under common control with the Company.
Brian Orenstein
January 10, 2000
Page 4
10. The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
Very truly yours,
WEBSTER FINANCIAL CORPORATION
By: /s/ James C. Smith
-----------------------------
James C. Smith
Accepted and Agreed to:
/s/ Brian A. Orenstein
- -----------------------------
Brian Orenstein
Accepted and Agreed to:
MECH FINANCIAL, INC.
By: /s/ Edgar C. Gerwig
-----------------------------
President
WEBSTER FINANCIAL CORPORATION
Webster Plaza
Waterbury, Connecticut
January 10, 2000
Richard Stout
MECH Financial, Inc.
100 Peal Street
Hartford, Connecticut 06103
Dear Mr. Stout:
1. In consideration for the payments set forth in paragraph 2
hereof, you hereby agree that for a period of nine months commencing upon the
day following the consummation (the "Effective Time") of the transactions
contemplated by the Agreement and Plan of Merger by and between Webster
Financial Corporation (the "Company") and MECH Financial, Inc. ("MECH"), dated
as of December 1, 1999 (the "Merger Agreement"), you will adhere to the
restrictions and limitations set forth herein.
(a) Confidential Information. You will hold in a fiduciary
capacity for the benefit of the Company and its affiliated companies all secret
or confidential information, knowledge or data relating to MECH or the Company
or any of its affiliated companies and their respective businesses (including,
without limitation, any proprietary and not publicly available information
concerning any processes, methods, trade secrets, research, secret data, costs
or names of users or purchasers of their respective products or services,
business methods, operating procedures or programs or methods of promotion and
sale) that you obtain or obtained during your employment by MECH or the Company
or any of the affiliated companies and that is not public knowledge (other than
as a result of your violation of this paragraph 1(a)) ("Confidential
Information"). For the purposes of this paragraph 1(a), information shall not be
deemed to be publicly available merely because it is embraced by general
disclosures or because individual features or combinations thereof are publicly
available. You will not communicate, divulge or disseminate Confidential
Information at any time during or after your employment with the Company or any
of the affiliated companies, except with the prior written consent of the
Company, or as otherwise required by law or legal process. All records, files,
memoranda, reports, customer lists, drawings, plans, documents and the like that
you use, prepare or come into contact with during the course of your employment
shall remain the sole property of the Company or one or more of the affiliated
companies, as applicable, and shall be turned over to the Company or such
affiliated company, as applicable, upon termination of your employment.
(b) Nonsolicitation. You agree that you will not, at any time
during the Restricted Period (as defined in paragraph 1(c) below), without the
prior written consent of the Company, directly or indirectly employ, or solicit
the employment of (whether as an employee, officer, director, agent, consultant
or independent contractor), any person who was or is at any time during the
previous 12 months an employee, representative, officer or director of the
Company or any of its affiliated companies (except for such employment by the
Company or any of its affiliated companies). You agree that you will not, at any
time during the Restricted Period, directly or indirectly, attempt in any manner
to persuade any client or customer of the Company or its affiliated companies to
cease to do business or to reduce the amount of business which any such client
or customer has customarily done or contemplates doing with the Company or its
affiliated companies, whether or not the relationship between the Company or
such affiliated company and such client or customer was originally established,
in whole or in part, through your efforts, or to solicit business of any such
client or customer of the Company or its affiliated
Richard Stout
January 10, 2000
Page 2
companies, unless such solicitation is rendered on the behalf of, and in
furtherance of the business of, the Company.
(c) Noncompetition. During the Restricted Period (as defined
below), you shall not, without the prior written consent of the Chief Executive
Officer of the Company, engage in or become associated with a Competitive
Activity. For purposes of this paragraph 1: (i) the "Restricted Period" means
the period commencing on the Effective Time and ending on the nine-month
anniversary of the Effective Time; (ii) a "Competitive Activity" means any
business or other endeavor, in any county in Connecticut (other than outside the
Town of Old Lyme in Windham or New London County), that is engaged in the
banking business, whether as a bank, a savings and loan, a savings bank, a
credit union, mortgage company, bank holding company, savings and loan holding
company or other depositary institution holding company in such jurisdiction as
of the Effective Time or any time thereafter; and (iii) you will be considered
to have become "associated with a Competitive Activity" if you become directly
or indirectly involved as an owner, principal, employee, officer, director,
independent contractor, representative, stockholder, financial backer, agent,
partner, advisor, lender, or in any other individual or representative capacity
with any individual, partnership, corporation or other organization that is
engaged in a Competitive Activity. Notwithstanding the foregoing, you may make
and retain investments during the Restricted Period in less than one percent of
the equity of any entity engaged in a Competitive Activity, if such equity is
listed on a national securities exchange or regularly traded in an
over-the-counter market.
2. In consideration for your agreement not to engage in the
activities set forth in paragraph 1, the Company hereby agrees to pay you an
amount (the "Non-Compete Amount"), currently valued by the parties at $146,979,
to be paid in equal monthly installments over the duration of the Restricted
Period, provided that such payments shall not commence until such time as you
are no longer providing services to the Company or its affiliated companies. The
parties hereby agree to reconfirm and, to the extent necessary or permissible,
modify in writing the Non-Compete Amount and the duration of the Restricted
Period on or before the date on which the Effective Time is expected to occur.
3. In the event payments to you under this Agreement and with
or pertaining to any other plan, agreement or arrangement of the Company or MECH
(the "Total Payments"), are determined by a final and nonappealable order of a
court of competent jurisdiction or a final settlement approved by the Company to
be subject to the excise tax (the "Excise Tax") under Section 4999 of the
Internal Revenue Code (the "Code"), the Company shall pay to you within 30 days
of such determination an additional amount such that the net amount retained by
you, after deduction of the Excise Tax on Total Payments and any federal and
state income tax and Excise Tax upon the payment provided for by this paragraph
3, shall be equal to the Total Payments. The parties agree that any calculations
required pursuant to this paragraph 3 shall be made by the Company; provided,
however, that if you object in writing to the Company's determination within 60
days, the determination shall be made by a "Big Five" accounting firm selected
by the Company and subject to your reasonable consent. The determination made by
such accounting firm shall be binding on you and the Company. The parties
further agree that they shall reasonably cooperate with each other in connection
with any administrative or judicial proceedings concerning the existence or
liability for Excise Tax with respect to the amounts payable hereunder. The
Company agrees to indemnify you and hold you harmless for any penalties,
interest or expenses you reasonably incur in the event it is determined that
Excise Tax is owed. You hereby agree that you will not take any position on your
income tax return or otherwise that is inconsistent with the positions of the
Company with respect to the treatment of any payment, including the Non-Compete
Amount, which may be contended is a "parachute payment" under Section 280G of
the Code.
Richard Stout
January 10, 2000
Page 3
4. In accordance with Section 1(a) of the Change in Control
Agreement between MECH and you dated as of June 28, 1996, as amended as of
January 1, 1998 (the "Prior Agreement"), as soon as reasonably practicable
following the Effective Time and within 30 days of the Effective Time, the
Company shall make a lump sum payment to you equal to $ 570,875, subject to
reduction as provided for in Sections 1(e) and 1(f) of the Prior Agreement. Upon
the Company's request given in writing not less than 45 days prior to the
Effective Time, you hereby agree that you will provide services to the Company
on the same basis as you provided services to MECH immediately prior to the
Effective Time, for a period of up to six months following the Effective Time,
at your current base pay; provided, however, that in the event you receive and
accept a bona fide employment opportunity that is not in violation of the
covenants set forth in paragraph 1 hereof, you may terminate your employment
before the end of the period requested by the Company, but in no event earlier
than the 90th day following the Effective Time.
5. In the event of a breach or threatened breach of paragraph
1, you agree that the Company shall be entitled to injunctive relief in a court
of appropriate jurisdiction to remedy any such breach or threatened breach, and
you acknowledge that damages would be inadequate and insufficient. With respect
to any provision of paragraph 1 finally determined by a court of competent
jurisdiction to be unenforceable, you and the Company hereby agree that such
court shall have jurisdiction to reform this Agreement or any provision hereof
so that it is enforceable to the maximum extent permitted by law, and the
parties agree to abide by such court's determination. If any of the covenants of
paragraph 1 are determined to be wholly or partially unenforceable in any
jurisdiction, such determination shall not be a bar to or in any way diminish
the rights of the Company to enforce any such covenant in any other
jurisdiction.
6. The existence of Excise Tax shall not affect the
obligations of the parties to perform their respective covenants under
paragraphs 1 and 2.
7. This Agreement shall be governed by and subject to the
jurisdiction of the laws of the State of Connecticut applicable to contracts
made and to be performed within such State.
8. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. This
Agreement may not be amended or terminated without the prior written consent of
the parties hereto, provided that the parties agree to the modifications or
amendments as are contemplated by paragraph 2. In the event of your death after
the Effective Time, the Non-Compete Amount shall be payable to your
beneficiaries or your estate. In the event of non-payment hereof by the Company,
you shall be entitled to payment of counsel fees and expenses to enforce the
Company's obligations as provided in Section 1(d) of the Prior Agreement.
9. This Agreement shall terminate and have no further force
and effect without liability of any kind to any of the parties hereto, upon
termination of the Merger Agreement without consummation of the merger
contemplated thereby. Immediately following the Effective Time, this Agreement
shall supersede any other employment, severance or change of control agreement
between you and MECH, including, without limitation, the Prior Agreement. As
used in this Agreement, the term "affiliated companies" shall include any
company controlled by, controlling or under common control with the Company.
Richard Stout
January 10, 2000
Page 4
10. The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
Very truly yours,
WEBSTER FINANCIAL CORPORATION
By: /s/ James C. Smith
-----------------------------
James C. Smith
Accepted and Agreed to:
/s/ Richard. W. Stout, Jr.
- --------------------------
Richard W. Stout, Jr.
Accepted and Agreed to:
MECH FINANCIAL, INC.
By: /s/ Edgar C. Gerwig
--------------------------
President
WEBSTER FINANCIAL CORPORATION
Webster Plaza
Waterbury, Connecticut
January 10, 2000
Thomas Wood
MECH Financial, Inc.
100 Peal Street
Hartford, Connecticut 06103
Dear Mr. Wood:
1. In consideration for the payments set forth in paragraph 2
hereof, you hereby agree that for a period of nine months commencing upon the
day following the consummation (the "Effective Time") of the transactions
contemplated by the Agreement and Plan of Merger by and between Webster
Financial Corporation (the "Company") and MECH Financial, Inc. ("MECH"), dated
as of December 1, 1999 (the "Merger Agreement"), you will adhere to the
restrictions and limitations set forth herein.
(a) Confidential Information. You will hold in a fiduciary
capacity for the benefit of the Company and its affiliated companies all secret
or confidential information, knowledge or data relating to MECH or the Company
or any of its affiliated companies and their respective businesses (including,
without limitation, any proprietary and not publicly available information
concerning any processes, methods, trade secrets, research, secret data, costs
or names of users or purchasers of their respective products or services,
business methods, operating procedures or programs or methods of promotion and
sale) that you obtain or obtained during your employment by MECH or the Company
or any of the affiliated companies and that is not public knowledge (other than
as a result of your violation of this paragraph 1(a)) ("Confidential
Information"). For the purposes of this paragraph 1(a), information shall not be
deemed to be publicly available merely because it is embraced by general
disclosures or because individual features or combinations thereof are publicly
available. You will not communicate, divulge or disseminate Confidential
Information at any time during or after your employment with the Company or any
of the affiliated companies, except with the prior written consent of the
Company, or as otherwise required by law or legal process. All records, files,
memoranda, reports, customer lists, drawings, plans, documents and the like that
you use, prepare or come into contact with during the course of your employment
shall remain the sole property of the Company or one or more of the affiliated
companies, as applicable, and shall be turned over to the Company or such
affiliated company, as applicable, upon termination of your employment.
(b) Nonsolicitation. You agree that you will not, at any time
during the Restricted Period (as defined in paragraph 1(c) below), without the
prior written consent of the Company, directly or indirectly employ, or solicit
the employment of (whether as an employee, officer, director, agent, consultant
or independent contractor), any person who was or is at any time during the
previous 12 months an employee, representative, officer or director of the
Company or any of its affiliated companies (except for such employment by the
Company or any of its affiliated companies). You agree that you will not, at any
time during the Restricted Period, directly or indirectly, attempt in any manner
to persuade any client or customer of the Company or its affiliated companies to
cease to do business or to reduce the amount of business which any such client
or customer has customarily done or contemplates doing with the Company or its
affiliated companies, whether or not the relationship between the Company or
such affiliated company and such client or customer was originally established,
in whole or in part, through your efforts, or to solicit business of any such
client or customer of the Company or its affiliated companies, unless such
solicitation is rendered on the behalf of, and in furtherance of the business
of, the Company.
Thomas Wood
January 10, 2000
Page 2
(c) Noncompetition. During the Restricted Period (as defined
below), you shall not, without the prior written consent of the Chief Executive
Officer of the Company, engage in or become associated with a Competitive
Activity. For purposes of this paragraph 1: (i) the "Restricted Period" means
the period commencing on the Effective Time and ending on the nine-month
anniversary of the Effective Time; (ii) a "Competitive Activity" means any
business or other endeavor, in any county in Connecticut, that is engaged in the
banking business, whether as a bank, a savings and loan, a savings bank, a
credit union, mortgage company, bank holding company, savings and loan holding
company or other depositary institution holding company in such jurisdiction as
of the Effective Time or any time thereafter; and (iii) you will be considered
to have become "associated with a Competitive Activity" if you become directly
or indirectly involved as an owner, principal, employee, officer, director,
independent contractor, representative, stockholder, financial backer, agent,
partner, advisor, lender, or in any other individual or representative capacity
with any individual, partnership, corporation or other organization that is
engaged in a Competitive Activity. Notwithstanding the foregoing, you may make
and retain investments during the Restricted Period in less than one percent of
the equity of any entity engaged in a Competitive Activity, if such equity is
listed on a national securities exchange or regularly traded in an
over-the-counter market.
2. In consideration for your agreement not to engage in the
activities set forth in paragraph 1, the Company hereby agrees to pay you an
amount (the "Non-Compete Amount"), currently valued by the parties at $211,746,
to be paid in equal monthly installments over the duration of the Restricted
Period, provided that such payments shall not commence until such time as you
are no longer providing services to the Company or its affiliated companies. The
parties hereby agree to reconfirm and, to the extent necessary or permissible,
modify in writing the Non-Compete Amount and the duration of the Restricted
Period on or before the date on which the Effective Time is expected to occur.
3. In the event payments to you under this Agreement and with
or pertaining to any other plan, agreement or arrangement of the Company or MECH
(the "Total Payments"), are determined by a final and nonappealable order of a
court of competent jurisdiction or a final settlement approved by the Company to
be subject to the excise tax (the "Excise Tax") under Section 4999 of the
Internal Revenue Code (the "Code"), the Company shall pay to you within 30 days
of such determination an additional amount such that the net amount retained by
you, after deduction of the Excise Tax on Total Payments and any federal and
state income tax and Excise Tax upon the payment provided for by this paragraph
3, shall be equal to the Total Payments. The parties agree that any calculations
required pursuant to this paragraph 3 shall be made by the Company; provided,
however, that if you object in writing to the Company's determination within 60
days, the determination shall be made by a "Big Five" accounting firm selected
by the Company and subject to your reasonable consent. The determination made by
such accounting firm shall be binding on you and the Company. The parties
further agree that they shall reasonably cooperate with each other in connection
with any administrative or judicial proceedings concerning the existence or
liability for Excise Tax with respect to the amounts payable hereunder. The
Company agrees to indemnify you and hold you harmless for any penalties,
interest or expenses you reasonably incur in the event it is determined that
Excise Tax is owed. You hereby agree that you will not take any position on your
income tax return or otherwise that is inconsistent with the positions of the
Company with respect to the treatment of any payment, including the Non-Compete
Amount, which may be contended is a "parachute payment" under Section 280G of
the Code.
4. In accordance with Section 1(a) of the Change in Control
Agreement between MECH and you dated as of June 28, 1996, as amended as of
January 1, 1998 (the "Prior Agreement"), as soon as reasonably practicable
following the Effective Time and within 30 days of the Effective Time, the
Company shall make a lump sum payment to you equal to $599,122, subject to
reduction as provided for in Sections 1(e) and 1(f) of the Prior Agreement. Upon
the
Thomas Wood
January 10, 2000
Page 3
Company's request given in writing not less than 45 days prior to the Effective
Time, you hereby agree that you will provide services to the Company on the same
basis as you provided services to MECH immediately prior to the Effective Time,
for a period of up to six months following the Effective Time, at your current
base pay; provided, however, that in the event you receive and accept a bona
fide employment opportunity that is not in violation of the covenants set forth
in paragraph 1 hereof, you may terminate your employment before the end of the
period requested by the Company, but in no event earlier than the 90th day
following the Effective Time.
5. In the event of a breach or threatened breach of paragraph
1, you agree that the Company shall be entitled to injunctive relief in a court
of appropriate jurisdiction to remedy any such breach or threatened breach, and
you acknowledge that damages would be inadequate and insufficient. With respect
to any provision of paragraph 1 finally determined by a court of competent
jurisdiction to be unenforceable, you and the Company hereby agree that such
court shall have jurisdiction to reform this Agreement or any provision hereof
so that it is enforceable to the maximum extent permitted by law, and the
parties agree to abide by such court's determination. If any of the covenants of
paragraph 1 are determined to be wholly or partially unenforceable in any
jurisdiction, such determination shall not be a bar to or in any way diminish
the rights of the Company to enforce any such covenant in any other
jurisdiction.
6. The existence of Excise Tax shall not affect the
obligations of the parties to perform their respective covenants under
paragraphs 1 and 2.
7. This Agreement shall be governed by and subject to the
jurisdiction of the laws of the State of Connecticut applicable to contracts
made and to be performed within such State.
8. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. This
Agreement may not be amended or terminated without the prior written consent of
the parties hereto, provided that the parties agree to the modifications or
amendments as are contemplated by paragraph 2. In the event of your death after
the Effective Time, the Non-Compete Amount shall be payable to your
beneficiaries or your estate. In the event of non-payment hereof by the Company,
you shall be entitled to payment of counsel fees and expenses to enforce the
Company's obligations as provided in Section 1(d) of the Prior Agreement.
9. This Agreement shall terminate and have no further force
and effect without liability of any kind to any of the parties hereto, upon
termination of the Merger Agreement without consummation of the merger
contemplated thereby. Immediately following the Effective Time, this Agreement
shall supersede any other employment, severance or change of control agreement
between you and MECH, including, without limitation, the Prior Agreement. As
used in this Agreement, the term "affiliated companies" shall include any
company controlled by, controlling or under common control with the Company.
Thomas Wood
January 10, 2000
Page 4
10. The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
Very truly yours,
WEBSTER FINANCIAL CORPORATION
By: /s/ James C. Smith
-----------------------------
James C. Smith
Accepted and Agreed to:
/s/ Thomas M. Wood
- -----------------------------
Thomas Wood
Accepted and Agreed to:
MECH FINANCIAL, INC.
By: /s/ Edgar C. Gerwig
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President