CONSULTING AGREEMENT
CONSULTING
AGREEMENT
This
Agreement (“Agreement”) is entered into as of the 20th day of December, 2004 by
and between Birmingham Bloomfield Bancorp, Inc. (“Company”), a corporation
organized under the laws of the State of Michigan, and Xxxxxxx Xxxxxx, an
adult
individual residing in the State of Michigan (“Consultant”).
The
parties hereto agree as follows:
1. Engagement.
The
Company hereby engages the Consultant, and the Consultant hereby agrees to
render, at the request of the Company, independent advisory and consulting
services for the Company in connection with the formation or acquisition
of a
proposed new bank charter (“Bank”), upon the terms and conditions hereinafter
set forth.
2. Term.
The
term
of this Agreement shall become effective as of January 1, 2005 and shall
terminate on the earlier of (i) December 31, 2005; (ii) the date on which
the
Bank opens for business following the receipt of (and satisfaction of all
conditions to opening for business under) its authorization to commence its
banking business (“Certificate of Authority”) from the Michigan Office
of
Financial and Insurance Services
(“State”) and approval of its application for deposit insurance from the Federal
Deposit Insurance Corporation (“FDIC”); (iii) the date on which the Company
advises the Consultant that it has abandoned its effort to obtain the
Certificate of Authority; (iv) the date on which the Consultant receives
written
notice from the Company that it is terminating this Agreement “for cause” as
hereafter defined; or (v) the death or disability of the Consultant (as used
herein, the disability of the Consultant shall be deemed to have occurred
when
he has been unable to perform his services under this Agreement for a period
of
forty-five (45) consecutive days or the Consultant has made any claim under
any
disability insurance policy). As used herein, “for cause” shall be defined as
follows: (a) the Consultant’s failure to use diligent and good faith efforts to
perform the services requested by the Company under this Agreement (which
failure is not cured within ten (10) days following written notice to the
Consultant); (b) the Consultant’s willful misconduct or gross negligence in the
performance of his services hereunder; (c) the Consultant’s conviction of a
crime or involvement in any conduct which could, in the judgment of the Company,
adversely impact on the reputation of the Company or the Bank or the prospects
of the Bank receiving its Certificate of Authority; or (d) receipt by the
Company of any notification from the FDIC or the State indicating that the
Consultant would not be an acceptable candidate to be Chief Financial Officer
of
the Bank.
3. Compensation.
During
the term of this Agreement, as compensation for all services rendered by
the
Consultant under this Agreement, the Company shall pay the Consultant the
following amounts:
(a) Consulting
Fee.
The
Company shall pay the consultant the sum of eight thousand three hundred
thirty-three 33/100 Dollars ($8,333.33) per month (prorated for any partial
month), which shall be paid in arrears in two installments of four thousand
one
hundred and sixty-six 66/100 Dollars ($4,166.66) each on the 15th
and
30th
day of
each calendar month.
(b) Medical
Benefits.
The
Company shall reimburse the Consultant, not less frequently than monthly,
upon
presentment of appropriate documentation the amount paid by the Consultant
to
continue, without interruption, family medical benefits coverages under COBRA.
(c) Deductions.
All such
compensation shall be payable without deduction for federal income, social
security, or state income taxes or any other amounts.
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(d) Deferred
Compensation.
Unless
this Agreement has been terminated or the term has ended pursuant to Paragraph
2
hereof,
the Company shall cause the Bank, subject to and upon approval of the Bank’s
charter application and Articles of Incorporation by the State, to pay, in
one
lump sum, not later than thirty (30) days following such approval, an amount
equal to $729.29 times the number of months of the term of this Agreement;
and
subject to and upon the Bank’s opening for business to the public, to pay, in
one lump sum, not later than thirty (30) days following its opening for
business, an amount equal to $1,354.39 times the number of months of the
term of
this Agreement, with such deferred payments representing the accumulated
difference of fees paid under this Agreement and the approximate annualized
amount of compensation, prorated for the term of this Agreement, as agreed
upon
in the successor Employment Agreement to be entered into pursuant to Paragraph
11
of this
Agreement.
(e) Severance. If
this
Agreement shall be terminated by the Company for any reason other than “for
cause” and without the employment agreement referenced in Paragraph 11
hereof
becoming effective, Consultant will be entitled to receive a lump sum payment,
payable on the date of termination, of not less than the greater of (i) one-half
of the fees which would have been payable for the remaining term of this
Agreement from the date of termination or (ii) $16,666.66.
4. Duties.
The
Consultant shall render services conscientiously and shall devote his full
time,
attention, efforts and abilities to the organizational activities of the
Company
and the Bank, including without limitation obtaining regulatory approvals,
site
development activities, personnel matters and capital raising activities,
at
such times during the term hereof and in such manner as reasonably requested
by
the Company, and performed at such places and at such times as are reasonably
convenient to the Company and the Consultant. The Consultant shall observe
all
policies and directives promulgated from time to time by the Company’s board of
directors.
It is
understood that Consultant may complete
any obligations which are outstanding as of the date of this Agreement to
any of
his existing consulting clients, and that his performance of such obligations
will not result in a violation of the provisions of this Paragraph 4
or any
of the noncompete provisions of Paragraph 7,
below.
5. Expenses.
The
Consultant shall be reimbursed by the Company for all reasonable business
expenses paid by the Consultant during the performance of his services
hereunder; provided however, that any such reimbursement in excess of $250
in
any month shall require the prior written approval of the Company’s board of
directors or a committee thereof. The Company’s obligation to reimburse the
Consultant pursuant to this paragraph shall be subject to the presentation
to
the Company’s board of directors or a committee thereof by the Consultant of an
itemized account of such expenditures, together with supporting vouchers,
in
accordance with any policies of the Company in effect from time to
time.
6. Independent
Contractor.
It is
expressly agreed that Consultant is acting as an independent contractor in
performing services hereunder. The Company shall have no obligation to carry
worker’s compensation insurance or any health or accident insurance to cover
Consultant. The Company shall have no obligation to pay any contributions
to
social security, unemployment insurance, federal or state withholding taxes,
nor
to provide any other contributions or benefits which might be expected in
an
employer-employer relationship.
7. Covenant
Not to Compete.
The
Consultant hereby acknowledges and recognizes the highly competitive nature
of
the Bank’s business and accordingly agrees that, during and for the period
commencing with the date hereof and ending on the later of (i) December 31,
2005
or (ii) the termination, whether by the Company or the Consultant, of this
Agreement, the Consultant will not, except as provided in Paragraph 4
hereof,
directly or indirectly:
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(a) engage
in
any business activity related to the business of banking or financial services,
or the formation of any entity for the purpose of engaging in such a business
(other than on behalf of the Company to the extent that the Consultant is
then
in the employ of or consulting for the Company), whether such engagement
is as
an officer, director, proprietor, employee, partner, member, investor (other
than as a passive investor in less than one percent (1%) of the outstanding
capital stock of a publicly traded corporation), consultant, advisor, agent
or
other participant in another business,
(b) assist
others in engaging in any of the business activities prohibited to the
Consultant under clause (a) above, or
(c) induce
employees or consultants of the Company or any proposed employees of the
Bank to
engage in any activities hereby prohibited to the Consultant or to terminate
their employment (prospective or otherwise).
The
term
of this restriction shall be extended for a period of time equal to any period
of time during which the Consultant violates or fails to observe the provisions
of this paragraph.
8. No
Disclosure of Confidential Information.
The
Consultant acknowledges that the Company’s trade secrets and private processes,
as they may exist from time to time, and confidential information concerning
the
formation and development of the Bank, the Bank’s planned products, technical
information regarding the Bank, and data concerning potential customers of
and
investors in the Bank are valuable, special, and unique assets to which the
Company and the Bank have an interest, access to and knowledge of which assets
are essential to the performance of the Consultant’s duties under this
Agreement. In light of the highly competitive nature of the industry in which
the business of the Company and Bank is conducted, the Consultant further
agrees
that all knowledge and information described in the preceding sentence not
in
the public domain and heretofore or in the future obtained by the Consultant
as
a result of his engagement by the Company shall be considered confidential
information. In recognition of this fact, the Consultant agrees that the
Consultant will not, during or after the term of this Agreement, disclose
any of
such secrets, processes, or information to any person or other entity for
any
reason or purpose whatsoever, except as necessary in the performance of the
Consultant’s duties as a consultant to the Company and then only upon a written
confidentiality agreement in such form and content as requested by the Company
from time to time, nor shall Consultant make use of any of such secrets,
processes or information for Consultant’s own purposes or for the benefit of any
person or other entity (except the Company and its subsidiaries, if any)
under
any circumstances during or after the term of this Agreement.
9. Return
of Property.
Consultant acknowledges that all memoranda, notes, records, reports, manuals,
books, papers, letters, client and customer lists, contracts, software programs,
information and records, drafts of instructions, guides and manuals, and
other
documentation (whether in draft or final form), and other sales or financial
information and aids relating to the Company’s or Bank’s business, and any and
all other documents containing confidential information furnished to Consultant
by any representative of the Company or otherwise acquired or developed by
Consultant in connection with his duties under this Agreement (collectively,
“Recipient Materials”) shall at all times be the property of the Company or the
Bank, as applicable. Within three calendar days of the termination of this
Agreement, Consultant shall return to the Company or Bank, as applicable,
any
Recipient Materials which are in his possession, custody or
control.
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10. Remedies.
In the
event that Consultant violates any of the provisions set forth in Paragraphs
7,
8,
or
9
of this
Agreement, Consultant acknowledges that the Company and Bank would suffer
immediate and irreparable harm and would not have an adequate remedy at law
for
money damages in the event that any of the covenants were not performed in
accordance with their terms or otherwise were materially breached. Accordingly,
Consultant agrees that, without the necessity of proving actual damages or
posting bond or other security, the Company or Bank shall be entitled to
temporary or permanent injunction or injunctions to prevent breaches of such
performance and to specific enforcement of such covenants in addition to
any
other remedy to which the Company or Bank may be entitled, at law or in equity.
In such a situation, the parties agree that the Company or Bank may pursue
any
remedy available, including declaratory relief, concurrently or consecutively
in
any order as to any breach, violation, or threatened breach or violation
of
Paragraphs 7,
8,
or
9
of this
Agreement, and the pursuit of any particular remedy or remedies shall not
be
deemed an election of remedies or waiver of the right to pursue any other
remedy.
11. Employment
Agreement.
The
Consultant agrees to enter into an employment agreement with the Bank in
form
satisfactory to the Consultant and the Bank in their reasonable discretion,
subject to the review, modification and approval of the Bank’s primary
regulators, which employment agreement shall be effective as of the date
on
which the Bank opens for business, subject to and following the receipt of
(and
satisfaction of all conditions to opening for business under) its Certificate
of
Authority from the State and approval of its application for deposit insurance
from the FDIC.
12. Assignment.
Consultant’s
obligations under this Agreement are personal in nature and may not be assigned
by Consultant, this Agreement being entered into in reliance upon and in
consideration of the personal skill and qualifications of Consultant. Any
attempted assignment or transfer by Consultant of his obligations hereunder
shall be void.
13. Modification.
This
Agreement may be modified by the parties hereto only by a written supplemental
agreement executed by both parties.
14. Notice.
All
notices and other communications required or permitted to be given or delivered
hereunder or by reason of the provisions of this Agreement shall be in writing
and shall be deemed to have been properly given if (a) delivered personally,
(b)
delivered by a recognized overnight courier service, (c) sent by United States
mail, or (d) sent by facsimile transmission followed by a confirmation copy
delivered by recognized overnight courier service the next day. Such notices,
requests, consents and other communications shall be sent to the respective
parties as follows (or at such other address for a party as shall be specified
by like notice to the other party):
If
to
Company:
Birmingham
Bloomfield Bancorp, Inc.
00000
Xxxxxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000
Attention:
Chairman of the Board
If
to
Consultant:
Xxxxxxx
Xxxxxx
______________
_________,
Michigan _____
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Any
notice or other communication given pursuant to this Agreement shall be
effective (i) in the case of personal delivery, telex or facsimile transmission,
when received; (ii) in the case of mail, upon the earlier of actual receipt
or
five (5) business days after deposit with the United States Postal Service,
first class certified or registered mail, postage prepaid, return receipt
requested; and (iii) in the case of a recognized overnight courier service,
one
(1) business day after delivery to the courier service together with all
appropriate fees or charges and instructions for overnight
delivery.
15. Waiver
of Breach.
The
waiver by either party of any breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach.
16. Entire
Agreement.
The
parties acknowledge and agree that this Agreement constitutes the complete
and
entire agreement between the parties; that each executed this Agreement based
upon the express terms and provisions set forth herein; that, in accepting
this
consulting arrangement, Consultant has not relied on any representations,
oral
or written, which are not set forth in this Agreement; that no previous
agreement, either oral or written, shall have any effect on the terms or
provisions of this Agreement; and that all previous agreements, either oral
or
written, are expressly superseded and revoked by this Agreement.
17. Successors,
Binding Agreement.
Subject
to the restrictions on assignment contained herein, this Agreement shall
inure
to the benefit, and be enforceable by, the parties and their respective
successors and assigns.
18. Validity.
If any
term or other provision of this Agreement is held to be illegal, invalid
or
unenforceable by any rule of law or public policy, (A) such term or provision
shall be fully severable and this Agreement shall be construed and enforced
as
if such illegal, invalid or unenforceable provision were not a part hereof;
(B)
the remaining provisions of this Agreement shall remain in full force and
effect
and shall not be affected by such illegal, invalid or unenforceable provision
or
by its severance from this Agreement; and (C) there shall be added automatically
as a part of this Agreement a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and still be legal,
valid
and enforceable.
If any
provision of this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only as broad as is enforceable.
19. Applicable
Law.
This
Agreement shall be governed by and construed in accordance with the laws
of the
State of Michigan, without regard to the laws that might otherwise govern
under
applicable principles of conflicts of laws.
20. Headings.
The
headings contained in this Agreement are for convenience of reference only
and
shall not affect in any way the meaning or interpretation of this
Agreement.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first set forth above.
| CONSULTANT | ||
| /s/ Xxxxxxx Xxxxxx | ||
| Xxxxxxx Xxxxxx | ||
| BIRMINGHAM BLOOMFIELD BANCORP, INC. | ||
| By: /s/ Xxxxxxx Xxxxx | ||
|
Compensation Committee
Member
|
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