CONSULTING AGREEMENT
EXHIBIT
10.7
This
Agreement (this “Agreement”) is entered into by and between Grand River
Commerce, Inc. (the “Company”) having its principal place of business in Grand
Rapids, Michigan, and Xxxxx X. Xxxxxxx, an adult individual residing in the
State of Michigan (the “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 Company’s organization of a
proposed bank (the “Bank”) upon the terms and conditions hereinafter set forth.
2. Term.
The
term
of this Agreement shall begin as of the date of this Agreement and shall
terminate on the earlier of (i) September 30, 2008; (ii) the date on which
the
Bank receives (and satisfies all conditions to opening for business under)
its
authorization to commence its banking business (the “Certificate of Authority”)
from the Michigan Office of Financial & Insurance Services and approval of
Insurance of Accounts from the Federal Deposit Insurance Corporation; (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 she has been unable to perform his or her 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: (i) 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 five (5) days
following written notice to the Consultant); (ii) the Consultant’s willful
misconduct or gross negligence in the performance of his or her services
hereunder; (iii) 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; (iv) receipt by the Company of any notification from
the Michigan Office of Financial & Insurance Services or the Federal Deposit
Insurance Corporation indicating that the Consultant would not be an acceptable
candidate to be the Chief Executive 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 fourteen thousand five hundred
eighty-three dollars ($14,583) per month (prorated for any partial month),
which
shall be paid in arrears in two installments of seven thousand two hundred
ninety-one dollars and fifty cents ($7,291.50) 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 Executive to
continue, without interruption, family medical benefits coverages under
COBRA.
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(c) Deductions.
All such
compensation shall be payable without deduction for federal income, social
security, or state income taxes or any other amounts.
(d) Relocation.
The
Company shall pay the realtor’s commission on the sale of Consultant’s house.
The Company shall reimburse Consultant for moving expenses (based on competitive
bids with Consultant’s packing) for moving to Grand Rapids, Michigan, and then
to permanent housing within Grand Rapids, Michigan. Lastly, the Company shall
provide Consultant with the cost of temporary housing in Grand Rapids, Michigan
at a cost of no more than $1,000 per month.
In
the
event Consultant shall terminate his services for the Company prior to the
establishment of the Bank, Consultant shall immediately reimburse the Company
for the realtor’s fee and moving allowance.
(e) Termination
Payments.
If, for
any reason, other than a termination by the Company “for cause,” the Company
terminates this Agreement during its term, Consultant will be entitled to
receive a lump sum payment, payable on the date of termination, equal to six
months of consulting fees. The Termination Payment due pursuant to this Section
3(d) shall be the Consultant’s exclusive remedy upon termination by the Company
for any reason other than “for cause.”
4. Duties.
The
Consultant shall render services conscientiously and shall devote his or her
full time, attention, efforts and abilities to the establishment of the Bank,
including without limitation promptly preparing the Bank’s business plan,
recruiting individuals to fill the staff positions identified in the business
plan, obtaining regulatory approvals, site development activities, 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.
5. Expenses.
The
Consultant shall be reimbursed by the Company for all reasonable business
expenses which were incurred by the Consultant during the performance of his
or
her services hereunder; provided, any such reimbursement in excess of $1,000
in
any month shall require the prior written approval of the Company’s Board of
Directors or a committee thereof; provided, however, that any expenses set
forth
in the organizational budget shall be deemed to be approved unless the Company’s
Board of Directors makes an express determination to the contrary prior to
the
time at which the expense is incurred. 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 carry no worker’s compensation
insurance or any health or accident insurance to cover Consultant. The Company
shall not pay any contributions to Social Security, unemployment insurance,
federal or state withholding taxes, nor provide any other contributions or
benefits which might be expected in an employer-employee
relationship.
7. Covenant
Not to Compete.
The
Consultant hereby acknowledges and recognizes the highly competitive nature
of
the Company’s business and accordingly agrees that, during the term 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 of the Company to engage in any activities hereby prohibited to the
Consultant or to terminate their employment.
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 of the Company,
access to and knowledge of which 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 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 or her 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: (a) as required
by
subpoena or court order, in which case Consultant shall give Company at least
10
days’ notice; or (b) 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. Consultant shall not 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.
Consultant acknowledges that all such confidential information is property
of
the Company and/or the Bank and agrees that upon Consultant’s termination all
such confidential information shall be returned to the Company within
twenty-four (24) hours of such termination.
9. Remedies.
The
Consultant acknowledges and agrees that the Company’s remedy at law for a breach
or threatened breach of any of the provisions of Paragraphs 7 and 8 of this
Agreement would be inadequate. In recognition thereof, if the Consultant
breaches or threatens to breach any provision of Paragraphs 7 and 8 of this
Agreement, the Company shall be entitled to equitable relief in the form of
specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available in addition
to any of its remedies at law. Nothing herein shall prohibit the Company from
pursuing any other right or remedy available to it for such breach or threatened
breach.
10. Assignment.
This
Agreement is a personal one, being entered into in reliance upon and in
consideration of the personal skill and qualifications of Consultant. Consultant
shall therefore not voluntarily or by operation of law assign or otherwise
transfer the obligations incurred on its part pursuant to the terms of this
Agreement without the prior written consent of Company. Any attempted assignment
or transfer by Consultant of its obligations without such consent shall be
wholly void.
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11. Modification
of Agreement.
This
Agreement may be modified by the parties hereto only by a written supplemental
agreement executed by both parties.
12. Notice.
Any
notice required or permitted to be given hereunder shall be sufficient if in
writing, and if sent by any nationally recognized courier service providing
for
receipt of delivery, registered or certified mail, postage prepaid, or by fax
followed by such mail, addressed as follows:
If
to
Company:
Grand
River Commerce, Inc.
00
Xxxxxxx Xxxxx
Xxxxxxxx,
XX 00000
Attention:
Xxxxxx Xxxxxxx, Chairman of the Board
If
to
Consultant:
Xxxxx
X.
Xxxxxxx
_____________________
_____________________
or
to
such other address as the parties hereto may specify, in writing, from time
to
time.
13. 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.
14. Entire
Agreement.
This
Agreement contains the entire agreement of the parties relating to the subject
matter of this Agreement and supersedes any prior written or oral arrangements
with respect to the Consultant’s engagement by the Company.
15. Successors,
Binding Agreement.
Subject
to the restrictions on assignment contained herein, this Agreement shall inure
to the benefit of and be enforceable by the Consultant’s personal or legal
representatives, executors, administrators, heirs, distributees, devisees,
and
legatees.
16. Validity.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
17. Applicable
Law.
This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of Michigan.
18. Headings.
The
headings of the paragraphs of this Agreement are for convenience only and shall
not control or affect the meaning or construction or limit the scope or intent
of any of the provisions of this Agreement.
19. Voluntary
Agreement.
The
parties hereto acknowledge that each has had an opportunity to consult with
an
attorney or other counselor concerning the meaning, import, and legal
significance of this Agreement, and each has read this Agreement, as signified
by their respective signature hereto, and each is voluntarily executing the
same
after, if sought, advice of counsel for the purposes and consideration herein
expressed.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first set forth above.
| /s/ Xxxxx X. Xxxxxxx | |||
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|||
|
Xxxxx
X. Xxxxxxx, individually
“Consultant”
|
| GRAND RIVER COMMERCE, INC. | |||
| /s/ Xxxxxx Xxxxxxx | |||
|
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|||
|
Xxxxxx
Xxxxxxx, Chairman of the Board
“Company”
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