AMENDED AND RESTATED CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT is entered into and made effective this 21st day
of December, 2001 between NORTH COUNTRY FINANCIAL CORPORATION (the "Company"),
with its principal executive offices at 0000 Xxxxxxxx Xxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx, and XXXXXX X. XXXX (the "Executive").
RECITALS
The Executive has over 24 years of experience with the Company, NORTH
COUNTRY BANK & TRUST (the "Bank"), and/or their affiliates and is currently
employed as Chairman of the Board and Chief Executive Officer of the Company and
the Bank. The Executive possesses intimate knowledge of the business and affairs
of the Company, the Bank, and their affiliates and their respective policies,
markets and financial and human resources. By virtue of his employment, the
Executive has acquired certain confidential information and data (as described
further herein) with respect to the Company, the Bank, and their affiliates.
The Company and the Bank desire to assure the continued services of the
Executive on their own behalf and/or on behalf of their affiliates following
termination of his employment by the Company and the Bank for the period
provided in this Agreement, and the Executive is willing to continue to provide
certain services to the Company, the Bank, and/or their affiliates for such
period, upon the terms and conditions hereinafter set forth. In addition, the
Company and the Bank wish to prevent the Executive from competing with them for
the period provided in this Agreement and the Executive is willing to consent to
such a limitation.
The Company and the Executive expressly acknowledge that, on or about
September 15, 1999 and on or about July 3, 2000, the Company and the Executive
entered into binding Consulting Agreements. It is further acknowledged by the
Company and the Executive that, subsequent to the date of execution of the July
3, 2000 Consulting Agreement, certain circumstances changed such that the
Company and the Executive desire to restate and amend, in the form of this
Amended and Restated Consulting Agreement, the terms and conditions of said July
3, 2000 Consulting Agreement. The Company and the Executive intend that,
subsequent to the execution of this Amended and Restated Consulting Agreement,
the July 3, 2000 Consulting Agreement (and the September 15, 1999 Consulting
Agreement) shall have no further binding force and effect.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties agree as follows:
1. Consulting. As of the Retirement Date, as defined herein, the
Executive agrees to provide the services described in Paragraph 3 hereof for the
period stated in
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Paragraph 2 hereof, subject to the other terms and conditions herein provided.
For the purposes of this Agreement, "Retirement Date" means the day after the
date the Executive leaves the full-time employ of the Company other than because
of death or Disability (as defined in Paragraph 5A hereof).
2. Term. The term shall commence as of the Retirement Date and shall
continue until the tenth anniversary of such date, unless this Agreement is
sooner terminated as hereinafter set forth (the "Term").
3. Duties. During the Term, the Executive shall devote his best efforts
and such of his business time, attention, skill and efforts as are necessary to
consult with the executive officers and Board of Directors of the Company and
the Bank with respect to such matters as may be reasonably requested by the
Company and the Bank; provided, however, that nothing in this Agreement shall
preclude the Executive from devoting reasonable periods required for serving as
a director or consultant to any business organization which does not involve a
material conflict of interest with the Company's business, from engaging in
charitable and community activities, and from managing his personal investments,
so long as such activities do not negatively impact on the Executive's
availability and ability to provide services to the Company hereunder. The
parties hereto acknowledge and agree that (i) the Executive shall be free to
reside and work at any location of his choice within the direct geographical
service area of the Company and the Bank, (ii) in certain circumstances, the
Executive may respond to the Company's requests for his services by telephone,
mail, facsimile or similar means of communication, (iii) in requiring the
Executive's services hereunder, the Company shall consider the reasonable
convenience of the Executive and the demands of his other commitments; (iv) the
conduct and control of the consulting services to be performed hereunder shall
be the sole responsibility of the Executive; (v) the Company and the Executive
shall reasonably agree upon the Executive's schedule and the hours during which
he shall be required to perform consulting services hereunder, and (vi) nothing
in this Agreement requires the Executive to devote his full time efforts to or
on behalf of the Company. The Company hereby acknowledges and agrees that the
Executive shall continue to receive compensation and benefits pursuant to this
Agreement as set forth in Paragraph 4 hereof notwithstanding the failure or
refusal of the Company to request the performance of consulting services by the
Executive hereunder. The Company may terminate this Agreement only for Cause as
set out in Paragraph 5B hereof.
4. Compensation. As compensation for the services to be provided pursuant
to this Agreement, the Executive shall receive from the Company or its
affiliates the compensation, expense reimbursement and other benefits set forth
below:
A. Cash Compensation. The Company will pay to the Executive Seven
Thousand Dollars ($7,000.00) per month for the Term. The payments shall be
made on a monthly basis in arrears.
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B. Reimbursement of Expenses. The Company shall pay or reimburse the
Executive for all reasonable travel and other expenses incurred by the
Executive in the performance of his duties hereunder. Upon the Executive's
request, the Company shall, during the Term and at its expense, furnish the
Executive with secretarial services and office space sufficient for the
Executive to perform his duties hereunder at a location mutually convenient
for the Company and the Executive.
C. Benefits. For the Term and the Company's sole cost and expense
(i.e., without any co-pay or cost sharing from the Executive), the Company
shall provide comprehensive medical and dental insurance benefits to the
Executive and/or the Executive's spouse and dependents; provided, however,
that (1) if the Executive becomes re-employed with another employer and is
eligible to receive medical or other benefits under another employer
provided plan, the medical and other benefits described herein shall be
secondary to those provided under such other plan during such applicable
period of eligibility, provided that the aggregate coverage of the combined
benefit plans is no less favorable to the Executive, in terms of amounts,
deductibles and costs to him, than the coverage required hereunder, and (2)
that if the Executive and/or the Executive's spouse qualifies for coverage
by Medicare or any successor program, the Company may require that the
Executive and/or the Executive's spouse fully participate in Medicare and
pay the premiums therefor personally.
D. Company Car. For the Term and the Company's expense, the Company
shall provide the Executive with a vehicle that is similar in quality to
those provided by the Company to the Executive while the Executive was
employed as Chairman of the Board and Chief Executive Officer of the
Company and the Bank. In addition, at the Company's choice, the Company
shall either reimburse the Executive for the Executive's consulting service
related out-of-pocket vehicle expenses, or shall pay the Executive the
Company's then current mileage reimbursement allowance for all miles
traveled by the Executive while performing consulting services pursuant to
this Agreement. The Executive agrees to provide the Company with whatever
reasonable information and documentation that the Company may require
regarding consulting related vehicle usage. At such times as the Company
and the Executive shall agree, but not less frequent than every forty-eight
(48) month period during the Term, the Company shall replace and update the
Executive's vehicle.
5. Consequences of the Executive's Death or Disability, Voluntary
Termination or Termination by the Company for Cause.
A. Death or Disability. The Executive's obligations under this
Agreement shall terminate upon the death or Disability of the Executive.
The Company's obligations to pay the cash compensation discussed in
Paragraph 4A shall also terminate upon the death or Disability of the
Executive. The Company
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will have the obligation to reimburse the Executive for expenses allowed
under Paragraph 4B hereof which were incurred prior to the date of death or
Disability. Thereafter, the Company's obligations under Paragraph 4B will
cease. The health benefits discussed in Paragraph 4C will continue for ten
years from the Retirement Date, notwithstanding the death or Disability of
the Executive or, if shorter, until the death of the last to die of the
Executive or his spouse. For purposes of this Agreement, the Executive
shall have suffered a "Disability" if he is disabled within the meaning of
the Company's long-term disability plan. If the Company does not have such
a plan, the Executive shall have suffered a "Disability" if he is unable to
perform his duties with or without reasonable accommodation for ninety (90)
consecutive business days or one hundred twenty (120) business days in the
aggregate during a 365-day period as a result of incapacity due to mental
or physical illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Executive or the Executive's legal representative, provided if the parties
are unable to agree, the parties shall request that the President of the
Xxxxxxxxxxx County Medical Society choose such physician.
B. Termination by the Company for Cause. The Company may terminate the
Executive's services hereunder for Cause. There will be Cause for
termination under any of the following circumstances: (i) any act of
Personal Dishonesty (as hereinafter defined) by the Executive; (ii) any act
of Willful Misconduct (as hereinafter defined) by the Executive; (iii) any
act by the Executive constituting a breach of his fiduciary duty to the
Company which results or is intended to result in gain to, or personal
enrichment of, the Executive at the Company's expense; or (iv) any breach
by the Executive of Paragraph 6A through 6D of this Agreement
(noncompetition, confidential information, and nonsolicitation). For
purposes of this Agreement: "Personal Dishonesty" means conduct on the part
of the Executive which evinces a want of integrity or an intentional breach
of trust and which directly causes (or the Board of Directors determines is
reasonably likely to cause) material injury to the Company; and "Willful
Misconduct" means conduct on the part of the Executive which evinces a
deliberate disregard of the interest of the Company and which causes (or
the Board of Directors determines is reasonably likely to cause) material
injury to the Company. The Executive acknowledges and agrees that after the
Termination Date, he shall no longer be entitled to receive any of the
compensation provided under Paragraph 4 hereof but that Paragraphs 6A
through 6D hereof shall continue to apply to the extent provided therein.
C. Termination by the Executive. The Executive may terminate this
Agreement at any time by giving eighteen (18) months prior written notice
to the Company. In such event, the Executive shall receive no further
compensation hereunder after the Termination Date as defined herein. After
the Termination Date, the provisions of Paragraphs 6A through 6D hereof
shall continue to apply to the extent provided therein. The term
"Termination Date" shall mean (A) the
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date the Company notifies the Executive that his duties hereunder are being
terminated for Cause; (B) the day after expiration of the eighteen (18)
month period specified in Xxxxxxxxx 0X if this Agreement is terminated by
the Executive pursuant to Paragraph 5C unless the Executive and the Company
agree on an earlier date; provided, however, that (1) any such Notice of
Termination shall be given in accordance with Paragraph 5D hereof, and (2)
if a dispute exists concerning the termination, the Termination Date shall
be the date on which the dispute is finally settled, either by mutual
written agreement of the parties, or by arbitration as provided in
Paragraph 7F hereof.
D. Termination Notice and Procedure. Any termination by the Company
for Cause as provided under Paragraph 5B hereof or by the Executive as
provided under Xxxxxxxxx 0X hereof, shall be made by written Notice of
Termination to the other party delivered by hand or certified mail (postage
prepaid), return receipt requested, addressed, if to the Company, at its
main office at 0000 Xxxxxxxx Xxxxx, Xxxxxxxx Xxxx, XX 00000, or if to the
Executive, at the address set forth on the signature page of this Agreement
(or such other address as shall be specified in writing by either party to
the other). Any such Notice of Termination shall be made in accordance with
the following procedures:
(i) Any Notice of Termination for Cause under Paragraph 5B shall
indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and
circumstances alleged to provide a basis for termination. Any
termination of employment by the Executive under Xxxxxxxxx 0X xxxxx
xxxxx such fact therein.
(ii) Any Notice of Termination by the Company for Cause under
Paragraph 5B hereof shall be approved by a resolution duly adopted by
a majority of the Directors of the Company (or any successor
corporation) then in office, specifying in detail the basis for such
termination.
(iii) In the event of a purported termination by the Company for
Cause, if within thirty (30) days following the date of receipt of the
Notice of Termination, one party notifies the other that a dispute
exists concerning the basis for termination, this Agreement shall not
be terminated until the dispute is finally resolved either by mutual
written agreement of the parties, or by arbitration as provided in
Paragraph 7F hereof.
6. Obligations of the Executive During and After the Term.
A. Competition. The Executive agrees that during the Term, and for the
two-year period following the Term, he shall not, either directly or
indirectly, as an agent, stockholder, employee, officer, director, trustee,
partner, member, proprietor or otherwise, render advice or assistance to
(other than on behalf of the Company) or be employed by or render services
to any person, company,
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business entity, or other organization which is engaged in the business of
providing banking or financial services within a sixty (60) mile radius of
any branch office of the Bank or any other affiliated entity of the
Company. The terms "banking" and "financial services" shall be defined as
only those services that are being offered by the Bank at the time that
this Agreement is signed by the parties. The Company, Bank and any other
affiliated entity of the Company are hereafter referred to as the "Company
Affiliated Group."
B. Confidential Information. The Executive shall not make any
Unauthorized Disclosure. For purposes of this Agreement, "Unauthorized
Disclosure" shall mean disclosure by the Executive without the consent of
the Board of Directors to any person, other than an employee of the Company
Affiliated Group or a person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by the Executive of his
duties hereunder or as may be legally required, of any confidential
information obtained by the Executive while rendering services to the
Company Affiliated Group (including, but not limited to, any confidential
information with respect to any of the Company Affiliated Group's customers
or methods of operation) the disclosure of which he knows or has reason to
believe will be materially injurious to the Company Affiliated Group;
provided, however, that such term shall not include the use or disclosure
by the Executive, without consent, of any information known generally to
the public (other than as a result of disclosure by him in violation of
this Paragraph 6B) or any information not otherwise considered confidential
by a reasonable person engaged in the same business as that conducted by
the Company Affiliated Group.
C. Solicitation of Employees. The Executive will not, during the Term
and for the two-year period following the Term, directly or indirectly,
induce, solicit, entice or procure any person who is an employee of the
Company Affiliated Group, or has been such an employee within the three
months preceding such contact by the Executive, to terminate his or her
employment with the Company Affiliated Group so as to accept employment
with any person, company, business entity, or other organization
whatsoever.
D. Solicitation of Customers. During the Term and for the two-year
period following the Term, the Executive will not, directly or indirectly,
contact any customer or prospective customer of the Company Affiliated
Group with whom the Executive has had contact on behalf of the Company
Affiliated Group during the two-year period preceding the date of
termination of the Term or any customer or prospective customer about whom
the Executive has obtained confidential information in connection with the
Executive's services to the Company Affiliated Group during such two-year
period so as to cause or attempt to cause such customer or prospective
customer of the Company Affiliated Group not to do business or to reduce
such customer's business with the Company Affiliated Group or divert any
business from the Company Affiliated Group.
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E. Enforcement of Covenants. The Executive recognizes that irreparable
and incalculable injury will result to the Company Affiliated Group, its
businesses or properties in the event of his breach of any of the
restrictions imposed by this Section 6. The Executive therefore agrees
that, in the event of any such actual, impending or threatened breach, the
Company or any affiliate thereof will be entitled, in addition to any other
remedies and damages, to temporary and permanent injunctive relief (without
the necessity of posting a bond or other security) restraining the
violation, or further violation, of such restrictions by the Executive and
by any other person or entity for whom the Executive may be acting or who
is acting for the Executive or in concert with the Executive.
7. General Provisions.
A. Successors and Assigns. (i) This Agreement shall be binding upon
and shall inure to the benefit of the Company, its successors and assigns,
and the Company shall require any successor or assign (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform if no such
succession or assignment had taken place. The term "Company" as used herein
shall include such successors and assigns. The term "successors and
assigns" as used herein shall mean a corporation or other entity acquiring
all or substantially all the assets and business of the Company (including
this Agreement) whether by operation of law or otherwise.
(ii) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the Executive, nor shall
the Executive's rights hereunder be subject to encumbrance or to the claims
of the Executive's creditors. This Agreement and all rights of the
Executive hereunder shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, Estate, executors,
administrators, heirs and beneficiaries.
B. Enforcement. The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part hereof are declared
invalid or unenforceable by a court of competent jurisdiction, the validity
and enforceability of the remainder of such provisions or parts hereof and
the applicability thereof shall not be affected thereby.
C. Amendment. This Agreement may not be amended or modified except by
written instrument executed by the Company and the Executive.
D. Independent Contractor. The parties hereto acknowledge and agree
that the Executive shall be an independent contractor during the Term and
that he shall not be deemed an employee of the Company. In acknowledging
that he is providing services as an independent contractor, the Executive
acknowledges and agrees that, except as specifically provided in
Paragraph 4
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hereof, he shall not be entitled to participate in any insurance, qualified
or nonqualified benefit plans or other fringe benefits provided by the
Company to its employees and that, except as required by federal, state or
local law, the Company shall not be required to withhold nor shall the
Company withhold any income, social security, unemployment or other taxes
or similar payments from the amounts payable to the Executive hereunder. In
the event the Company shall be required by law to withhold any such taxes
or payments from amounts payable to the Executive under Paragraph 4 hereof,
the amounts payable to the Executive thereunder shall be reduced
accordingly.
E. Governing Law. This Agreement and the rights and obligations
hereunder shall be governed by and construed in accordance with the
internal laws of the State of Michigan without giving effect to its
principles of conflicts of laws.
F. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, other than a controversy or claim
arising in connection with Section 6 hereof (the noncompetition,
confidentiality and nonsolicitation provisions) where the Company is
seeking injunctive relief, shall be settled exclusively by arbitration by a
single arbitrator mutually agreed to by the disputing parties in accordance
with the Commercial Arbitration Rules of the American Arbitration
Association as then in effect. Such arbitration will be held in Manistique,
Michigan or such other place as is mutually agreed to by the disputing
parties. Judgment on the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. The arbitrator may award costs and
reasonable attorneys' fees to the prevailing party in any arbitration
conducted pursuant to this Agreement.
G. Notice. Notices given pursuant to this Agreement shall be in
writing and shall be considered to be given and received in all respects
when personally delivered, when transmitted by facsimile or on the second
business day following the date deposited in the United States mail,
certified mail, postage pre-paid, return receipt requested, addressed to
the parties as set forth below or at such other address as each party may
specify by notice to the other party, or in the case of a facsimile, to the
facsimile number indicated:
If to the Company: North Country Financial Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Compensation Committee Chairperson
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If to the Executive:
Attention: Xxxxxx X. Xxxx
0000 Xxxx Xxxx Xxxx
Xxxxxxx, XX 00000
H. No Waiver. No waiver by either party at any time of any breach of
the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or any
prior or subsequent time.
I. Headings. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
J. Effect on Previous Agreements. It is expressly agreed by and
between the Company and the Executive that the execution hereof by the
parties renders null and void all terms, conditions and the continuing
effectiveness of the September 15, 1999 and the July 3, 2000 Consulting
Agreements between the parties. The Company and the Executive declare and
acknowledge that it was their express intention to replace the September
15, 1999 Consulting Agreement with the July 3,2000 Consulting Agreement and
it is their express intention to replace the July 3, 2000 Agreement with
this Amended and Restated Consulting Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY: NORTH COUNTRY BANK AND TRUST:
By: /s/ Xxxxxx Xxxxxxxxxx
--------------------------------------
Xxxxxx Xxxxxxxxxx, its President &
Authorized Signatory
EXECUTIVE: XXXXXX X XXXX:
/s/ Xxxxxx X. Xxxx
------------------------------------------
Xxxxxx X. Xxxx
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