EXHIBIT 10.5
Amendment to Employment Agreement
dated September 21, 2004,
between the Corporation
and C. Xxxxx Xxxx
AMENDMENT TO EMPLOYMENT AGREEMENT
This amendment (the "Amendment") to the Employment Agreement by and
between North Country Financial Corporation, a Michigan corporation (the
"Corporation"), and C. Xxxxx Xxxx (the "Employee"), dated August 1, 2003 and
amended by the parties on May 18, 2004 (collectively, the "Agreement"), is made
as of this 21st day of September, 2004. This Amendment replaces and supersedes
the Amendment to Employment Agreement dated as of August 10, 2004 between the
Employee and the Corporation.
WHEREAS, the Corporation and the Employee wish to amend said Agreement as
hereinafter provided;
NOW, THEREFORE, in consideration of the mutual promises of the parties and
mutual consideration, the receipt and sufficiency of which is acknowledged by
both the Corporation and the Employee, the Agreement is hereby amended as
follows:
1. Paragraph 6 of the Agreement is amended in its entirety to read:
"6. Notwithstanding any other provision of this Agreement or of any other
agreement, contract or understanding heretofore or hereafter entered into
by Employee and the Corporation, Employee shall not have any right to
receive any payment or other benefit under this Agreement if such payment
or benefit, taking into account all other payments to or benefits received
by Employee, would cause any payment to Employee under this Agreement to
be considered an "Excess Parachute Payment" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), (a
"Parachute Payment"). In the event that the receipt of any such payment or
benefit under this Agreement would cause Employee to be considered to have
received a Parachute Payment under this Agreement, then Employee shall
have the right, in his sole discretion, to designate those payments or
benefits under this Agreement which should be reduced or eliminated so as
to avoid having the payment to Employee under this Agreement be deemed to
be a Parachute Payment.
Unless the Corporation and the Employee otherwise agree in writing, any
determination of the value of the severance and other benefits provided
for Employee under the terms of this Agreement or otherwise includable in
the calculation of the Parachute Payment, shall be made in writing by the
Corporation's independent public accountants (the "Accountants"), whose
determination shall be conclusive and binding upon the Employee and the
Corporation for all purposes. For purposes of making the calculations
required by this Paragraph 6, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Corporation and the Employee shall
furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under
this Paragraph 6. The Corporation shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
Paragraph 6."
2. The Corporation and Employee hereby acknowledge and agree that the
Corporation and Employee have entered into a new employment agreement dated as
of August 10, 2004 (the "New Employment Agreement") which provides for
Employee's employment with the Corporation under that agreement to be effective
upon the closing under the Stock Purchase Agreement dated as of August 10, 2004,
as amended, between the Corporation and NCFC Recapitalization, LLC. Upon the
closing under the Stock Purchase Agreement, the Corporation and the Employee are
to have no further continuing obligations under the Agreement except for:
(a) the payment covenants of the Corporation under Paragraph 2(a)(ii) and
the first sentence of Paragraph 5 of the Agreement, as limited by Paragraph 6 of
the Agreement, to the extent not paid upon the closing under the Stock Purchase
Agreement; and
(b) the respective covenants of the Corporation and Employee under
Xxxxxxxxx 00, 00(x) and (c) and 15 of the Agreement and Paragraph 3 below of
this Amendment which shall continue notwithstanding the New Employment Agreement
and the closing under the Stock Purchase Agreement.
The payments under the first sentence of Paragraph 5 and Paragraph 2(a)(ii) of
the Agreement shall be paid by the Corporation in accordance with those
Paragraphs, as limited by Paragraph 6 of the Agreement, except that if any of
the payments then require the approval of the FDIC or any other regulatory
authority the payments shall be made as promptly as practicable after the
requisite approvals are obtained or at the time such approvals are no longer
required.
3. The Corporation hereby agrees that it shall indemnify, pay and make whole the
Employee for all taxes, reasonable legal, accounting and other professional fees
and related expenses incurred by the Employee in connection with any tax audit,
proceeding or finding of the Internal Revenue Service to the extent such is
attributable to the application of Sections 280G and 4999 of the Code to any
payment made or benefit provided in accordance with Paragraph 5 of the Agreement
as limited by Paragraph 6 of the Agreement. Such payments shall be made within
five (5) business days after delivery of the Employee's respective written
requests for payment accompanied with such evidence of taxes, fees and expenses
incurred by the Employee as the Corporation may reasonably require.
4. In the event that the Closing (as defined in the Stock Purchase Agreement) of
the transactions contemplated by the Stock Purchase Agreement shall not have
occurred on or before December 31, 2004, this Amendment shall no longer be
effective and the Agreement shall continue in full force and effect as if this
Amendment had not been made.
5. In all other respects, the Agreement is hereby reaffirmed in its entirety.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the Corporation has caused this Amendment to be
executed on its behalf by the Chairman of its Board of Directors, and the
Employee has signed this Amendment, all as of the date and year first above
written.
/s/ C. Xxxxx Xxxx
-----------------------------------
C. XXXXX XXXX, EMPLOYEE
NORTH COUNTRY FINANCIAL
CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Its: Chairman
