CONSULTING AGREEMENT
THIS AGREEMENT, made effective as of September 15,
1999 between NORTH COUNTRY FINANCIAL CORPORATION (the
"Company"), with its principal executive offices at 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, and XXXXXX X.
XXXX ("Executive").
RECITALS
Executive has over 22 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. 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, 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 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
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 Executive from
competing with them for the period provided in this
Agreement and Executive is willing to consent to such a
limitation.
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, Executive agrees to provide the
services described in Paragraph 3 hereof for the period
stated in 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, Executive shall
devote his best efforts and such of his business time,
attention, skill and efforts as he deems necessary to
consult with the executive officers 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 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. The parties
hereto acknowledge and agree that (i) Executive shall
be free to reside and work at the geographical location
of his choice, (ii) in most circumstances, Executive
may respond to the Company's requests for his services
by telephone, mail, facsimile or similar means of
communication, (iii) in requiring Executive's services
hereunder, the Company shall consider the reasonable
convenience of Executive and the demands of his other
commitments and shall require his physical attendance
at meetings and events remote from his residence only
in matters for which Executive's presence is essential;
(iv) the conduct and control of the consulting services
to be performed hereunder shall be the sole
responsibility of Executive, and (v) the Company shall
have no power to direct or dictate Executive's schedule
or the hours during which he shall be required to
perform consulting services hereunder. The Company
hereby acknowledges and agrees that 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
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,
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 Executive Seven Thousand Dollars ($7,000.00)
per month for the Term. The payments shall be
made on a monthly basis in arrears.
B. Reimbursement of Expenses. The Company
shall pay or reimburse Executive for all
reasonable travel and other expenses incurred by
Executive in the performance of his duties
hereunder. Upon the Executive's request, the
Company shall, during the Term and at its expense,
furnish 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, the Company
shall continue to provide medical and dental
benefits to the Executive and/or the Executive's
spouse and dependents at the Company's expense in
accordance with the most favorable plans,
practices, programs or policies of the Company and
its affiliated companies applicable generally to
other peer executives who are active employees and
their spouse and dependents as in effect from time
to time thereafter; provided, however, that (1) if
the Executive becomes reemployed 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. The Executive shall have
the right to purchase the car provided to him by
the Company or its affiliates during the twelve
(12) month period immediately preceding the
Retirement Date (or a comparable car acceptable to
the Executive if such car is no longer owned by
the Company or its affiliates), at the book value
thereof on the Retirement Date, exercisable within
thirty (30) days after the Retirement Date. If
the car is not purchased, Executive shall return
the car to the Company.
5. Consequences of Executive's Death or
Disability, Voluntary Termination or
Termination by the Company for Cause.
A. Death or Disability. Executive's
obligations under this Agreement shall terminate
upon the death or Disability of Executive. The
Company's obligations to pay the cash compensation
discussed in Paragraph 4A shall also terminate
upon the death or Disability of Executive. The
Company 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
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
employment 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 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. 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 Executive. Executive may
terminate this Agreement at any time by giving
ninety (90) days' prior written notice to the
Company. In such event, 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 date the Company notifies
the Executive that his duties hereunder are being
terminated for Cause; (B) the day after expiration
of the ninety (90) day 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 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 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, 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 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 Executive During and After the Term.
A. Competition. 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, business entity, or other
organization which is engaged in the business of
commercial banking within a sixty (60) mile radius
of any branch office of the Bank or any other
affiliated entity of the Company. 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
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 in which
the Executive owns, directly or indirectly, at
least a 5% equity interest or from which the
Executive receives compensation.
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.
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
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 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 Executive.
D. Independent Contractor. The parties
hereto acknowledge and agree that 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, Executive
acknowledges and agrees that, except as
specifically provided in Paragraph 4 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 Executive hereunder. In the
event the Company shall be required by law to
withhold any such taxes or payments from amounts
payable to Executive under Paragraph 4 hereof, the
amounts payable to 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 such an arbitration.
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 Company: North Country Financial Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile: 906.341.8702
If to Executive: XX 00, Xxx 0000X
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Facsimile: 906.341.5992
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.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above
written.
NORTH COUNTRY FINANCIAL CORPORATION:
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------
Title: Secretary
EXECUTIVE:
/s/ Xxxxxx X. Xxxx
---------------------------------
Xxxxxx X. Xxxx
