Exhibit 10.7
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into this 21st day of December, 2001
by and between NORTH COUNTRY FINANCIAL CORPORATION (the "Company"), with it's
principal executive offices located at 0000 Xxxxxxxx Xxxxx, Xxxxxxxx Xxxx,
Xxxxxxxx, and XXXXXX X. XXXX (the "Executive").
RECITALS
The Executive is employed by the Company and serves as Chief Executive
Officer, Chairman and a Director of the Company and of NORTH COUNTRY BANK &
TRUST (the "Bank"). The Company desires to continue to employ the Executive
pursuant to the terms of a formal Employment Agreement and the Executive desires
to continue to be employed by the Company in accordance with the terms and
provisions contained herein.
The Company and the Executive expressly acknowledge that, on or about July
1, 1994 and on or about July 3, 2000, the Company and the Executive entered into
binding Employment Agreements. It is further acknowledged by the Company and the
Executive that, subsequent to the date of execution of the July 3, 2000
Employment Agreement, certain circumstances changed such that the Company and
the Executive desire to restate and amend, in the form of this Amended and
Restated Employment Agreement, the terms and conditions of said July 3, 2000
Employment Agreement. The Company and the Executive intend that, subsequent to
the execution of this Amended and Restated Employment Agreement, the July 3,
2000 Employment Agreement (and the July 1, 1994 Employment Agreement) shall have
no further binding force and effect.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows.
1. Employment.
(a) The Company hereby employs the Executive, and the Executive hereby
accepts employment, on the terms and subject to the conditions contained herein.
(b) During the Employment Term as defined in Section 2, below, the
Executive shall serve as the Chairman and Chief Executive Officer (jointly the
"CEO") of the Company, faithfully and to the best of the Executive's ability,
subject to the direction of the Board of Directors and, in such capacity, shall
supervise, manage and administer the operations, business and affairs of the
Company and shall perform such duties and exercise such power and authority as
may from time to time be delegated to the Executive by the Board of Directors
consistent with the Executive's status as CEO. During the Employment Term, the
Executive shall also serve as a Director of the Company and the Chairman (for so
long as the Executive shall be nominated and elected to fill such positions).
The Executive may receive whatever additional compensation for serving in such
Director related capacity(ies) that may be established from time to time by the
Company's Board of Directors. During the Employment Term, and for no additional
consideration, the Executive shall also serve as the CEO of the Bank and as a
Director of the Bank and the Chairman (for so long as the Executive shall be
nominated and elected to fill such positions). In addition, the Executive shall
serve as an officer and/or director of such subsidiaries of the Company as may
be designated by their Boards of Directors and/or shareholders. The Executive
may
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receive whatever additional compensation for serving in such Director and
Officer related capacity(ies) that may be established from time to time by the
Company's Board of Directors.
(c) During the Employment Term, and excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive agrees to
devote substantially all of his business time, efforts and skills to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Term, it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not materially interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement.
2. Employment Term. The term of the employment of Executive under this
Agreement (the "Employment Term") shall commence as of the date hereof and shall
continue, unless sooner terminated under Section 7 hereof, until December 31,
2001.
3. Salary.
(a) During the Employment Term, Executive shall be paid a salary at the
rate of two hundred fifty thousand and 00/100 dollars ($250,000.00) per annum
(the "Annual Base Salary"), payable in equal installments in accordance with the
Company's customary payroll practices in effect from time to time.
(b) Executive's Annual Base Salary shall be reviewed periodically by
the Compensation Committee of the Company's Board of Directors (the
"Compensation Committee") and may be increased at any time and from time to time
as the Board of Directors, in its sole discretion, shall deem appropriate taking
into account the Compensation Committee's recommendation. The term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary as so
increased. Any increase in Annual Base Salary shall not serve to limit or reduce
any other obligation to Executive under this Agreement. Annual Base Salary shall
not be reduced at any time during the Employment Term. Annual Base Salary is
subject to income and employment tax withholding and all amounts in this
Agreement are stated prior to any such deductions.
4. Bonus and Long-Employment Term Incentives.
(a) In addition to Annual Base Salary, Executive shall be eligible to
receive, for each fiscal year ending during the Employment Term, any annual
bonus (the "Annual Bonus") determined in accordance with any Company bonus plan
adopted by the Board of Directors as in effect from time to time (the "Bonus
Plan").
(b) Executive shall be eligible to participate in those long-term
incentive plans available to senior executives of the Company, including any
stock incentive plan(s), in an amount and on such terms as shall be determined
by the Compensation Committee. Executive shall also be eligible to participate
in the Company's Supplemental Executive Retirement Plan in accordance with its
terms.
5. Benefits. Subject to the application of any applicable
anti-discrimination rules, the Executive shall be entitled to participate in all
employee benefit plans, programs, practices or
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arrangements of the Company in which other senior executives of the Company are
eligible to participate from time to time, including, without limitation, any
qualified or non-qualified pension, profit sharing and savings plans, any death
benefit and disability benefit plans, and any medical, dental, health and
welfare plans on terms and conditions at least as favorable as provided to other
senior executives of the Company. Notwithstanding the foregoing, (a) the Company
with provide the Executive with the use of an automobile of his choice with a
retail value up to $50,000 (the "Automobile") and (b) the Executive will be
entitled to four (4) weeks of vacation. The Automobile shall be owned by the
Company or the Bank and shall be replaced when it is approximately two years
old. While the Executive is employed by the Company, the Company shall be
responsible for all expenses associated with the automobile, including repairs,
gasoline (while the auto is being used for business purposes) and customary
insurance coverage.
6. Expenses. The Company shall pay or reimburse the Executive for all
reasonable out-of-pocket expenses incurred by him in the course of performing
his duties for the Company in accordance with the Company's reimbursement
policies as in effect from time to time. Executive shall keep accurate records
and receipts of such expenditures and shall submit such accounts and proof
thereof as may from time to time be required in accordance with such expense
account or reimbursement policies that the Company may establish for its
employees generally.
7. Termination of Employment. During the Employment Term, the Executive's
employment hereunder may be terminated under any of the following circumstances:
(a) Death or Disability. The Executive's employment hereunder shall
terminate automatically upon the Executive's death during the Employment
Term. If the Company determines in good faith that a Disability of the
Executive has occurred during the Employment Term (pursuant to the
definition of Disability set forth below), the Company may give to the
Executive written notice in accordance with Section 7(d) of this Agreement
of its intention to terminate the Executive's employment hereunder. In such
event, the Executive's employment with the Company shall terminate
effective on the thirtieth (30th) day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within thirty
(30) days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this
Agreement, "Disability" means a condition rendering the Executive unable,
by reason of a medically determinable physical or mental impairment, to
perform his duties with the Company or the Bank, which condition, in the
opinion of a physician selected by the Company's Board of Directors, is
expected to have a duration of more than 90 consecutive days.
(b) Termination by Company. The Company may terminate the Executive's
employment for Cause or without Cause. For purposes of this Agreement,
"Cause" means (i) the willful commission by the Executive of a criminal or
other act that causes or will probably cause substantial economic damage to
the Company, the Bank or an affiliate, (ii) the commission by the Executive
of an act of fraud in the performance of his duties on behalf of the
Company, the Bank or an affiliate, (iii) the continuing willful failure of
the Executive to perform his duties to the Company, the Bank or an
affiliate (other than any such failure resulting from the Executive's
incapacity due to physical or mental illness) after written notice therefor
(specifying the particulars thereof in reasonable detail) and a reasonable
opportunity to be heard and cure such failure are given to the Executive;
or (iv) the order of a federal or state bank regulatory agency or a court
of competent jurisdiction requiring the Executive's termination of
employment. For purposes of this
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paragraph, no act, or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by the Executive not
in good faith and without reasonable belief that the action or omission was
in the best interest of the Company, the Bank or an affiliate. The term
"affiliate" means a corporation or other business entity that is controlled
by, controlling or under common control with the Company.
(c) Good Reason Termination. The Executive may voluntarily terminate
his employment hereunder for Good Reason. "Good Reason" means, without the
Executive's written consent, the material breach by the Company or the Bank
of any provision of this Agreement, or, if in anticipation of or after the
occurrence of a Change in Control, the occurrence of one or more of the
following during the Employment Term:
(i) a material diminution of or interference with the Executive's
duties and responsibilities with the Company or the Bank immediately
prior to the Change in Control, including, but not limited to a
material demotion of the Executive, a material reduction in the number
or seniority of other Company personnel reporting, directly or
indirectly, to the Executive, or a material reduction in the frequency
with which, or in the nature of the matters with respect to which,
such personnel are to report to the Executive; or
(ii) the assignment to the Executive by the Company or the Bank
of duties inconsistent with the Executive's position, duties,
responsibilities and status immediately prior to the Change in
Control; or
(iii) a change in the principal workplace of the Executive to a
location outside of the direct geographical service area of the
Company and the Bank; or
(iv) any failure by the Company or the Bank to continue in effect
any qualified plan, welfare benefit or incentive plan or arrangement
in which the Executive is participating immediately prior to the
Change in Control or to reduce or eliminate the Executive's
participation in, or remuneration or benefits under, any such plans or
arrangements; or
(v) if this Agreement does not become, by operation of law, an
obligation of any successor to the Company, any failure by a successor
to the Company to expressly assume this Agreement; or
(vi) a voluntary termination by the Executive for any reason or
no reason during the ninety (90) day period commencing on the date six
(6) months after the Change in Control.
For purposes of this Agreement, Change in Control has the same meaning as
in the Company's 2000 Stock Incentive Plan, as the same may be amended from
time to time. Notwithstanding the foregoing, prior to a Change in Control,
Executive will not have "Good Reason" to terminate his employment with the
Company unless (i) the Executive complies with the requirements of
subsection (d) hereof and (ii) within the ten (10) day period after the
Board of Directors receives the Notice of Termination, as defined in
Section 7(d), below, the Company has not reasonably cured the situation
which is the basis for the Executive's claim of Good Reason to terminate.
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The Executive's continued employment or failure to give Notice of
Termination will not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder. After the
occurrence of a Change in Control, any good faith determination by the
Executive that there is Good Reason shall be conclusive and binding on the
Company and its successors.
(d) Notice of Termination. Any purported termination of employment
shall be communicated by Notice of Termination to the other party. For
purposes of this Agreement, a "Notice of Termination" shall mean a written
notice which (i) indicates the specific termination provision in this
Agreement relied upon; (ii) if applicable, sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated; and (iii)
indicates the Termination Date. "Termination Date" shall mean in the case
of the Executive's death, his date of death, or in all other cases of
termination by the Company, the date specified in the Notice of
Termination; provided, however, that the date specified in the Notice of
Termination shall be at least thirty (30) days after the date the Notice of
Termination is given to the Executive, provided, further, that in the case
of Disability, the Executive shall not have returned to the full-time
performance of his duties during such period of at least thirty (30) days.
In the case of the Executive's Good Reason Termination, the "Termination
Date" shall be no earlier than thirty (30) days after written notice by the
Executive to the Company, unless the Company agrees to an earlier
Termination Date.
8. Obligations Upon Termination.
(a) Termination by the Company for Cause. If the Executive's employment
with the Company is terminated by the Company for Cause, the Company will pay
and/or provide the Executive with the following: (i) the Executive's Annual Base
Salary through the Termination Date, and (ii) all benefits to which the
Executive is entitled under any benefit plans set forth in Section 5 hereof in
accordance with the terms of such plans through the Termination Date.
(b) Termination by Reason of Disability or Death. If the Executive's
employment with the Company is terminated during the Employment Term by reason
of the Executive's disability or death, the Company will pay and/or provide the
Executive or the Executive's legal representative, as the case may be, with the
following: (i) the Executive's Annual Base Salary as then in effect through the
Termination Date (ii) a fraction of any Annual Bonus paid to the Executive for
the fiscal year preceding the Termination Date determined by multiplying the
prior year's Annual Bonus, if any, by a fraction, the numerator of which shall
equal the number of days during such fiscal year preceding the Termination Date,
and the denominator of which shall equal three hundred sixty-five (365) and
(iii) all benefits to which the Executive is entitled under any benefit plans
set forth in Section 5 hereof in accordance with the terms of such plans through
the Termination Date. Payment of the amount set forth in this subparagraph (b)
shall be made within thirty (30) days after the Termination Date.
(c) Good Reason Termination, Termination by the Company Without Cause
or Termination after the Employment Term. If (i) the Executive terminates his
employment hereunder for Good Reason, (ii) the Company terminates the
Executive's employment without Cause, or (iii) the Executive's employment with
the Company terminates for any reason after the Employment Term ends, the
Company shall make four (4) quarterly payments to the Executive, each in an
amount equal to One Hundred Twelve Thousand Five Hundred and 00/100 Dollars
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($112,500.00) commencing on a date which is no later than ten (10) business
days after compliance with subsection (d) hereof.
(d) Release of Claims. Notwithstanding the foregoing, the Company will
not pay to the Executive, and the Executive will not have any right to
receive any payments described in Sections 8(b) and (c), above, unless and
until the Executive or his legal representative (in the case of the
Executive's death or if the Executive is disabled such that he is unable to
consent) executes, and there shall be effective following any statutory
period for revocation, a release, in a form reasonably acceptable to the
Company, that irrevocably and unconditionally releases, waives, and fully
and forever discharges the Company and its past and current shareholders,
members of the Board of Directors, officers, employees, and agents from and
against any and all claims, liabilities, obligations, covenants, rights,
demands and damages of any nature whatsoever, whether known or unknown,
anticipated or unanticipated, relating to or arising out of the Executive's
employment with the Company, including without limitation claims arising
under the Age Discrimination in Employment Act of 1977, as amended, Title
VII of the Civil Rights Act of 1974, as amended, the Civil Rights Act of
1991, as amended, the Equal Pay Act, as amended, and any other federal,
state, or local law or regulation.
(e) Withholding, Waiver of Vacation Pay and Other Issues. Payments to
be made to Executive under this Section 8 will be reduced by any applicable
income or employment taxes which are required by be withheld under
applicable law, and all amounts are stated before any such deduction.
Furthermore, none of the payments under this Section 8 shall be included as
compensation for purposes of any pension, deferred compensation or welfare
benefit plan or program of the Company. Finally, in consideration of all of
the payments to be made under this Section 8 to the Executive by the
Company pursuant to this Agreement, the Executive hereby waives any claim
he may have for accrued and unpaid vacation pay as of the Termination Date.
9. Nondisclosure.
(a) During the Employment Term and after the Executive's termination of
employment with the Company, the Executive shall not make any Unauthorized
Disclosure. For purposes of this Agreement, "Unauthorized Disclosure" shall
mean use by the Executive or disclosure by the Executive without the
consent of the Board of Directors of the Company to any person, other than
use or disclosure that is reasonably necessary or appropriate in connection
with the performance by the Executive of his duties as an executive of the
Company or as may be legally required (provided the provisions of Section
9(c) hereof are complied with), of any confidential information obtained by
the Executive while in the employ of the Company, including, but not
limited to, confidential information with respect to any of the Company's
customers, suppliers, contractors, methods of operation, services,
products, mechanisms, databases, processes, programs and access codes (the
"Confidential Information"); provided, however, that Confidential
Information 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 Section 9(a)).
(b) The Executive agrees that all memoranda, notes, records, papers,
financial models, mechanisms, programs, flow charts, work papers, source
codes, computer codes, designs, software, data and other documents and all
copies thereof relating to the operations or business of the Company, some
of which may be prepared by him, and all objects associated
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therewith (such as samples) in any way obtained by him in connection with
the performance of his duties hereunder shall be the exclusive property of
the Company. The Executive shall not, except for the Company's use, copy or
duplicate any of the aforementioned, not remove them from the Company's
facilities, nor use any information concerning them, in each case, except
for the Company's benefit, either during his employment or thereafter. The
Executive agrees that he will deliver the original and all copies of all of
the aforementioned that may be in his possession to the Company on
termination of his employment, or at any other time on the request of the
Board of Directors of the Company.
(c) If the Executive is requested or becomes legally required or
compelled (by oral questions, interrogatories, requests for information or
documents, subpoena, civil or criminal investigative demand, or similar
process) or is required by a governmental body to make any disclosure that
is prohibited or otherwise constrained by this Agreement, the Executive
will provide the Company with prompt notice of such request so that it may
seek an appropriate protective order or other appropriate remedy. Subject
to the foregoing, the Executive may furnish that portion (and only that
portion) of the Confidential Information that the Executive is legally
compelled or is otherwise required to disclose or else stand liable for
contempt or suffer other material censure or material penalty.
(d) 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 9. 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.
10. Exclusive Remedy. The payments, severance benefits and severance
protections provided to the Executive pursuant to this Agreement are to be paid
and provided in lieu of any severance payments, severance benefits and severance
protections provided in any other plan or policy of the Company.
11. Excise Tax Payments. Notwithstanding anything contained in this
Agreement to the contrary, in the event that any payment or distribution to or
for the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in connection
with, or arising out of, his employment with the Company (a "Payment" or
"Payments"), would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1996, as amended (the "Code")), or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any interest and penalties, are collectively referred
to as the "Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that after payment
by the Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax, imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments. The Company shall pay the Gross-Up Payment
to the Executive, or to the taxing authorities on behalf of the Executive, at
the time when the Excise Tax is required to be paid to the taxing authorities.
Calculation of the Gross-Up Payment shall be made by the Company's independent
certified public accounting firm engaged by the Company immediately prior to the
Change in Control
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and shall be subject to the Executive's review and consent at least ten
(10) days prior to the date on which an Excise Tax payment must be made
hereunder.
12. Trial by Jury. THE COMPANY, THE BANK AND THE EXECUTIVE ACKNOWLEDGE
THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE
WAIVED. THE COMPANY, THE BANK AND THE EXECUTIVE ACKNOWLEDGE THAT EACH HAS
HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL OF CHOICE, BEFORE SIGNING THIS
CONTRACT, AND THE COMPANY, THE BANK AND THE EXECUTIVE EACH HEREBY KNOWINGLY
AND VOLUNTARILY, WITHOUT COERCION, WAIVES ALL RIGHTS TO TRIAL BY JURY OF
ALL DISPUTES BETWEEN THEM.
13. Successors.
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors.
14. Legal Fees and Expenses. If any legal proceeding is necessary to
enforce or interpret the terms of this Agreement, or to recover damages for
breach hereof, Executive, if the prevailing party, shall be entitled to
recover from the Company reasonable attorneys' fees and necessary costs and
disbursements incurred in such litigation, in addition to any other relief
to which he may be entitled.
15. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Michigan, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by
the Company and the Executive or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party, delivered by
overnight courier, or by certified mail, return receipt requested, postage
prepaid, addressed as follows:
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If to the Executive: Xxxxxx X. Xxxx
0000 Xxxx Xxxx Xxxx
Xxxxxxx, XX 00000
If to the Company: North Country Financial Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Compensation Committee Chairperson
or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. By way of example and not by wary of
limitation, if any payments provided for hereunder are found to be beyond
limits permissible to be paid by the Company or the Bank by statute or
regulation, it is intended that the payments shall be made to the maximum
of any such lesser amount as is permissible to be paid by the Company or
the Bank.
(d) The Executive's or Company's failure to insist upon strict
compliance with any provision hereof shall not be deemed to be a waiver of
such provision or any other provision thereof.
(e) This Agreement contains the entire understanding of the Company and
the Executive with respect to the subject matter hereof except as noted
below in this Section 15(e). It is expressly agreed by and between the
Company and the Executive that this Agreement supersedes and replaces any
other agreements, understandings and arrangements, oral or written, between
the parties hereto regarding any subject matter contained in this
Agreement. Specifically included within the scope of this Section 15(e) are
those certain Employment Contracts dated July 1, 1994 and July 3, 2000, as
amended, between the Company and the Executive, which such Agreements shall
be and are hereby rendered null and void.
Notwithstanding the foregoing provisions of this Section 15(e) to the
contrary, this Agreement shall not supercede, replace or render null and/or
void that certain Restated and Amended Consulting Agreement dated December
__, 2001 between the Company and the Executive, which such Consulting
Agreement shall remain in full force and effect. However, in the event that
any provisions of this Agreement shall conflict with any provisions of such
Consulting Agreement, the provisions of this Agreement shall supercede and
control the conflicting provisions contained in such Consulting Agreement.
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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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