Exhibit 10.1
EFFECTIVE DATE: JANUARY 31, 2007
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
(XXXXX X. XXXXXXX)
This Agreement, dated as of the 31st day of January 2007 (the "Effective
Date") by and between MACKINAC FINANCIAL CORPORATION, a Michigan corporation
(the "Company"), and XXXXX X. XXXXXXX ("Employee").
WITNESSETH:
WHEREAS, the Company currently employs Employee pursuant to an Employment
Agreement dated December 15, 2004, as amended by First Amendment to Employment
Agreement dated January 12, 2005 (the "First Agreement"); and
WHEREAS, Employee and Company have agreed to extend Employee's employment
by Company on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
undertakings set forth herein the parties hereto agree as follows:
1. Employment and Duties. As Executive Vice President and Chief Financial
Officer of the Company and the Company's wholly-owned subsidiary, mBank (the
"Bank"), Employee shall have the duties and responsibilities commensurate with
such titles and offices, including, without limitation, all such duties and
responsibilities as now are or hereafter may be set forth with respect to such
offices in the respective bylaws of the Company and the Bank or in the
directives of the Board of Directors of the Company (the "Company Board") or
Board of Directors of the Bank. As of the Effective Date, this Agreement shall
amend, supersede and replace in its entirety any other written or oral
Employment Agreements between Company and Employee, including, without
limitation, that certain agreement dated December 15, 2004, as amended, and all
such
agreements shall be of no further force and effect. During the Employment Period
(as hereinafter defined), Employee also shall serve as an officer of such other
affiliates of the Bank or the Company and in such other capacities as he may be
requested by the Company Board and shall assume such duties and responsibilities
as from time to time may be assigned to him by the Company Board, all without
additional compensation therefore. Throughout the Employment Period, Employee
shall devote his business time, attention, and energy on a full-time basis
exclusively to the affairs of the Bank and the Company and its affiliates.
2. Term of Employment. The employment of Employee hereunder shall commence
on the Effective Date and shall continue, unless earlier terminated as provided
in this Agreement, through January 31, 2010 (the "Employment Period").
3. Cash Compensation. As full cash compensation for all services to be
performed by Employee hereunder, the Company shall pay to Employee the
following:
(a) salary of not less than $165,000.00 per year (to be reviewed
annually by the Company Board), payable at the intervals at which other
executive officers of the Company and Bank are paid;
(b) an additional incentive bonus (if earned) payable during the
Employment Period prior to fiscal year-end in accordance with the Company's
or Bank's policy or plan.
4. Relocation Benefits. If Employee is directed by Bank to relocate his
principal office location by fifty (50) miles or more from Manistique, Michigan
during the Employment Period, the Company shall pay or reimburse Employee's
reasonable relocation expenses as determined and approved by the Chairman of the
Company, and if requested by Employee, within sixty (60) days of the Company's
direction to relocate his principal office, the Company shall purchase
Employee's principal residence for its appraised fair market value, which
appraisal shall
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be paid for by Company. The Company shall be responsible for all costs
associated with such purchase.
5. Employee Benefits; Disability Insurance.
(a) During the Employment Period, Employee shall be entitled to
participate in such Company employee benefit plans as from time to time are
maintained, sponsored, or made available to the executive employees of the
Company and the Bank generally, in each case on the same terms and subject
to the same conditions and limitations generally applicable to other
executive officers with respect to participation therein. Employee shall be
entitled to no less than five (5) weeks of paid vacation per calendar year
during the Employment Period. Vacation time not taken shall not be
accumulated and carried forward to a subsequent calendar year.
(b) To provide for Employee in the event of Employee's disability,
Employer will purchase, to the extent available, a supplemental disability
insurance policy for the benefit of the Employee that will provide Employee
with the difference between 80% of Employee's then current base salary and
the amount available under the Company's long term disability policy until
the earlier of Employee's (i) death and (ii) attainment of age 65.
6. Certain Expenses. With the approval of the Chairman of the Company, and
in accordance with the Company's practices and policies as then in effect during
the Employment Period as same are applied to executive officers, the Company
shall pay or reimburse Employee for reasonable travel, entertainment, and other
incidental expenses (including, the cost of business publications and
professional associations), incurred on or in furtherance of the business of the
Company or the Bank.
7. Certain Continuing Obligations of Employee. Throughout the Employment
Period and thereafter, Employee agrees to keep confidential all trade secrets,
customer lists, business
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strategies, financial and marketing information, and other data concerning the
private affairs of the Company and the Bank or any of their affiliates, made
known to or developed by Employee during the course of his employment hereunder
("Confidential Information"), not to use any Confidential Information or supply
Confidential Information to others other than in furtherance of the Company's or
Bank's business, and to return to the Company upon termination of his employment
all copies, in whatever form, of all Confidential Information and all other
documents relating to the business of the Company or any of its affiliates,
including, without limitation, the Bank, which may then be in the possession or
under the control of Employee.
At the request of the Company Board, whether or not made during the
Employment Period, Employee agrees to execute such confidentiality agreements,
assignments of intellectual property rights, and other documents as hereafter
may be reasonably determined by the Company Board to be appropriate to carry out
the purposes of this Section.
8. Termination of Employment: Effect.
(a) Employee's employment hereunder will be terminated in any of the
following ways:
(i) Immediately upon the death of the Employee;
(ii) Upon the Employee becoming disabled due to his physical or
mental condition to regularly and satisfactorily perform his duties
hereunder (as determined by the Company Board) for a period of one (1)
year;
(iii) By either the Employee or the Company, without or with
Cause (as hereinafter defined), by thirty (30) days' prior written
notice to the other, effective as of the date specified in such
notice; or
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(iv) Thirty (30) days after written notice by either the Company
or Employee after a Change of Control (as hereinafter defined) if (A)
Employee terminates his employment for Good Reason (as hereinafter
defined); or (B) the Company terminates Employee's employment
otherwise than for Cause or Employee's disability.
(b) Upon the termination of Employee's employment in any of the ways
provided in subsection (a), then this Agreement and all rights and
obligations of Employee and the Company hereunder (as opposed to rights and
obligations under any Company employee benefit plan in which Employee
participated) shall terminate and cease immediately, except for (i)
Employee's rights to the payments provided in Section 9 below; and (ii) the
rights and obligations set forth in Section 7 above and Sections 12 and 13
below.
9. Payments on Termination. Employee shall be entitled to the following
payments and benefits upon termination of his employment:
(a) If Employee's employment is terminated under Section 8(a)(i) above
(by reason of death), or if Employee's employment is terminated (either
voluntarily by Employee or for Cause by the Company) under Section
8(a)(iii) above, then Employee shall be entitled to the cash compensation
under Section 3(a) above, and the benefits and reimbursements to which
Employee is entitled under Sections 5(a) and 6 above, through the date of
termination of employment.
(b) If Employee's employment is terminated by the Company without
Cause under Section 8(a)(iii) above, Employee shall be entitled to a lump
sum cash compensation equal to his then compensation under Section 3(a)
above, plus the greater of (i) the highest
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incentive bonus received by Employee under Section 3(b) above, and (ii) the
highest incentive bonus received by Employee from the period January 1,
2005 through the Effective Date; together with the benefits and
reimbursements under Sections 5(a) and 6 above, for a period of one year
following the effective date of such termination of employment. Unless
otherwise prohibited or restricted by statute, regulation, or regulatory
agency overseeing banks or bank holding companies, the lump sum
compensation due Employee under this Section 9(b) shall be paid to Employee
within fifteen (15) days of the event giving rise to the required payment.
(c) If Employee's employment is terminated due to Employee's
disability under Section 8(a)(ii) above, Employee shall be entitled to
receive the insurance benefits described in Section 5(b)(ii) above.
(d) If Employee's employment is terminated upon a Change of Control
under Section 8(a)(iv) above (by Employee for Good Reason or by the Company
other than for Cause), Employee shall be entitled to (a) a cash payment
equal to 299% of Employee's then current base salary under Section 3(a)
above immediately, and (b) the benefits and reimbursements under Sections
5(a) and 6 above for a period of one (1) year following a Change in
Control.
(e) In the event the payments required under this Agreement, when
added together with any other amounts required to be included by Employee
under the provisions of the Internal Revenue Code of 1986, as amended,
result in an "Excess Parachute Payment," as that term is defined in Section
280G of the Code, then the amount of the payments provided for in this
Agreement shall be reduced in an amount which eliminates
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any and all excise tax to be imposed under Section 4999 (or any successor
thereto) of the Code.
10. DEFINITIONS. FOR PURPOSES OF THIS AGREEMENT:
(a) "Cause" means any of the following:
(i) Material breach of any of the terms of this Agreement or of
the Company's or Bank's policies and procedures applicable to
employees and/or directors;
(ii) Conviction of or plea of guilty or nolo contendere to a
crime involving moral turpitude or involving any violation of
securities or banking law or regulation, or the issuance of any court
or administrative order enjoining or prohibiting Employee from
violating any such law or regulation;
(iii) Repeated or habitual intoxication with alcohol or drugs
while on the premises of the Company or the Bank or any of their
affiliates, or during the performance by Employee of any of his duties
hereunder;
(iv) Embezzlement of any property belonging or entrusted to the
Company or the Bank, or any of their affiliates;
(v) Willful misconduct or gross neglect of duties, or failure to
act with respect to duties or actions previously communicated to
Employee in writing by the Company Board; or
(vi) Any act or omission of kind or nature determined in good
faith by the Company Board to be of significant seriousness, which in
the good faith judgment of the Company Board may have adversely
affected or may in the future adversely affect the Company, the Bank,
or any of their affiliates, or has irreparably
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damaged Employee's continued ability to function effectively in any of
the capacities contemplated by this Agreement.
(b) "Change in Control" shall occur if at any time:
(a) Any person or group (as such terms are used in connection
with Section 13(d) and 14(d) of the Exchange Act) becomes the
"beneficial owner" (as defined in Rule 13(d)(3) and 13(d)(5)
under the Exchange Act), directly or indirectly, of securities of
the Company or Bank representing twenty-five percent (25%) or
more of the combined voting power of the Company's or Bank's then
outstanding securities;
(b) A merger, consolidation, sale of assets, reorganization, or
proxy contest is consummated and, as a consequence of which,
members of the Company Board in office immediately prior to such
transaction or event constitute less than a majority of the Board
thereafter; or
(c) A merger, consolidation, or reorganization is consummated
with any other corporation pursuant to which the shareholders of
the Company or the Bank immediately prior to the merger,
consolidation, or reorganization do not immediately thereafter
directly or indirectly own more than fifty percent (50%) of the
combined voting power of the voting securities entitled to vote
in the election of directors of the merged, consolidated, or
reorganized entity.
Notwithstanding the foregoing, no trust department or designated fiduciary
or other trustee of such trust department of the Company or a subsidiary of
the Company, or other similar fiduciary capacity of the Company with direct
voting control of the stock shall be treated as a person or group within
the meaning of subsection (i)(a) hereof. Further, no profit-sharing,
employee stock ownership, employee stock purchase and savings, employee
pension, or other employee benefit plan of the Company or any of its
subsidiaries, and no trustee of any such plan in its capacity as such
trustee, shall be treated as a person or group within the meaning of
subsection (i)(a) hereof.
(c) "Good Reason" means any of the following occurrences without the
written consent of Employee: (a) the assignment to Employee of any duties
inconsistent with his duties described in Section 1 hereof or any removal
of Employee from or any failure to reelect Employee to his positions
described in Section 1 hereof, except in connection with promotions to
higher office; provided, that the suspension of Employee from the duties of
his employment and any positions held by him during the pendency of any
criminal
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proceedings against Employee as to which a conviction would constitute
"Cause" shall not be deemed "Good Reason" so long as during the period of
such suspension the Company continues to pay the base salary and provide
the additional benefits to which Employee is entitled; (b) the Company
requiring that the Employee relocate his principal office to a location
fifty or more miles from Manistique, Michigan; (c) the material reduction,
at any time, of the additional benefits theretofore provided to Employee;
provided, that (i) reductions in the actual economic value of additional
benefits in accordance with the objective terms of such additional benefits
(e.g., changes in the amounts of bonus payments from time to time in
accordance with the objective terms of a bonus formula) shall not be deemed
a reduction of such additional benefits for this purpose, and (ii) the
replacement of additional benefits with other new additional benefits
having substantially equivalent economic value to Employee shall not be
deemed a reduction of additional benefits for this purpose; (d) the failure
of the Company to pay Employee the base salary and provide the additional
benefits as and when required hereof; or (e) any other failure of the
Company to perform its obligations to Employee hereunder if such failure
continues uncured for ten (10) days after written notice thereof,
specifying the nature of such failure and requesting that it be cured, is
given by Employee to the Company.
11. Integration; Amendment. This Agreement contains the entire agreement of
the parties relating to the subject matter hereof and thereof, and supersedes
and replaces in their entirety any prior agreements or understandings concerning
such subject matter, including without limitation the First Agreement. This
Agreement may not be waived, changed, modified, extended, or discharged orally,
but only by agreement in writing signed in the case of the Company by the
Chairman or Vice Chairman of the Company Board.
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12. Arbitration. Any controversy, dispute, or claim arising out of or
relating to employee's employment or to this Agreement or breach thereof shall
be settled by arbitration in accordance with the commercial rules of the
American Arbitration Association at its Southfield, Michigan offices. Judgment
upon any award may be entered in any circuit court or other court having
jurisdiction thereof, without notice to the opposite party or parties. Anything
contained herein to the contrary notwithstanding, this agreement to arbitrate
shall not be deemed to be a waiver of the Company's right to secure equitable
relief including injunction (whether as part of or separate from the arbitration
proceeding) if and when otherwise appropriate.
13. Noncompetition and Nonsolicitation. Notwithstanding anything to the
contrary contained elsewhere in this Agreement:
(a) In view of Employee's importance to the success of the Company and
the Bank, Employee and the Company agree that the Company and the Bank
would likely suffer significant harm from Employee's competing with the
Company or the Bank during Employee's term of employment and for some
period of time thereafter. Accordingly, Employee agrees that Employee shall
not engage in competitive activities while employed by the Company or the
Bank and, in the event Employee's employment is terminated voluntarily by
Employee or without cause by the Company pursuant to Section 8(a)(iii)
above, during the Restricted Period. Employee shall be deemed to engage in
competitive activities if he shall, without the prior written consent of
the Company, (i) within a fifty (50) mile radius of the main office or any
branch office of the Bank, render services directly or indirectly, as an
employee, officer, director, consultant, advisor, partner, or otherwise,
for any organization or enterprise which competes directly or indirectly
with the business of Company or any of its affiliates in providing
financial products or services
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(including, without limitation, banking, insurance, or securities products
or services) to consumers and businesses, or (ii) directly or indirectly
acquires any financial or beneficial interest in (except as provided in the
next sentence) any organization which conducts or is otherwise engaged in a
business or enterprise within a fifty (50) mile radius of the main office
or any branch office of the Bank, which competes directly or indirectly
with the business of the Company or the Bank or any of their affiliates in
providing financial products or services (including, without limitation,
banking, insurance or securities products or services) to consumers and
businesses. Notwithstanding the preceding sentence, Employee shall not be
prohibited from owning less than five (5%) percent of any publicly traded
corporation whether or not such corporation is in competition with the
Company. For purposes hereof, the term "Restricted Period" shall equal the
longer of (y) twelve (12) months, or (z) the period during which Employee
receives salary and benefits under Section 8(a)(iii) above (as provided in
Section 9(b)), in each case commencing as of the date of Employee's
termination of employment.
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan applicable to contracts made
and to be performed within such State.
15. Regulatory Approval. The Company and Employee agree to use their
respective best efforts to obtain such approval of bank regulatory authorities
if required for this Agreement and the payment of any termination payments.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
MACKINAC FINANCIAL CORPORATION
/S/ XXXX X. XXXXXX
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By: Xxxx X. Xxxxxx
Its: Chairman and Chief Executive Officer
/S/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
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