www.sec.gov/Archives/edgar/data/36506/0000950124-04-004 -
[Cached Version]
Published on: 10/18/2004
Last Visited: 2/1/2005
(3) The amounts shown include the taxable amount of group life insurance cost paid by North Country for Mr. Bess ($4,713) and Ms. Littlejohn ($452).
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(5) Ms. Littlejohn resigned from North Country and the Bank on May 21, 2003.
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SHERRY L. LITTLEJOHN.We have an employment agreement, dated September 30, 2000, with Sherry L. Littlejohn, our former president and chief executive officer.The agreement was for a term of three years, with an automatic daily extension of its term unless thirty days' notice was given by either party to the other to discontinue the daily extensions.Ms. Littlejohn resigned as president and chief executive officer of North Country and the Bank, and as a director of North Country and the Bank, effective May 21, 2003, which ended any further extension of the agreement's term.
Ms. Littlejohn's minimum annual salary under the employment agreement was $250,000, subject to at least annual review by our compensation committees.Ms. Littlejohn was entitled to participate in various bonus, long-term incentive, retirement, employee benefit and welfare plans available to our senior executives, received the use of a car with a retail value of up to $50,000 and four weeks of paid vacation.
If Ms. Littlejohn terminated her employment for good reason (defined as the material breach by us of the employment agreement or the occurrence of certain events in anticipation, or upon the occurrence, of a change in control of us) or we terminated her employment without cause (as defined in the agreement), upon Ms. Littlejohn's execution and delivery of a release of all claims against us, the Bank, and their respective current and former shareholders, directors, officers, employees, and agents relating to or arising from her employment with us, she would receive 12 quarterly payments, each in an amount equal to 25% of her then annual base salary (or if the termination occurred after a change in control, the greater of her annual base salary before or after the change in control), and for three years following the termination date, she and her spouse and dependents would receive medical and dental benefits under our plans for active employees at our expense.If, after a change in control (as defined in our 2000 Stock Incentive Plan), Ms. Littlejohn terminated her employment for good reason or we terminated her employment without cause, she would receive the following benefits in addition to those noted above: outplacement services up to a maximum amount of 15% of her annual base salary (or if the termination occurred after a change in control, the greater of her annual base salary before or after the change in control), plus travel expense reimbursement for job search travel of up to $5,000; the same counseling services that may be available to our employees pursuant to the "Employee Assistance Program;" and a cash payment within 90 days of the end of each of the three (3) calendar years during which Ms. Littlejohn receives payments from us under the agreement in an amount equal to the amounts that we would have contributed to its qualified retirement plan and Supplemental Executive Retirement Plan on her behalf during each such calendar year if she had continued her employment for the three-year period commencing on the date of her termination of employment and had earned the annual base salary (or if the termination occurs after a change in control, the greater of her annual base salary before or after the change in control) and a bonus equal to the bonus earned by her for the fiscal year ending immediately prior to the year in which the change in control occurred.
If Ms. Littlejohn's employment were terminated by us for cause, or by voluntary termination by her other than for good reason, she would receive her annual base salary and related benefits through the date of termination of her employment.If any payment to Ms. Littlejohn were subject to the golden parachute excise tax under Section 4999 of the Internal Revenue Code, we would pay additional amounts, to Ms. Littlejohn or to tax authorities such that the amount she received equaled the amount she would have received under the agreement if an excise tax were not imposed.The employment agreement also contained various non-competition, non-solicitation, and confidentiality provisions restricting Ms. Littlejohn's activities during her employment and for three years thereafter.
On December 9, 2003, Ms. Littlejohn submitted a claim for additional compensation under her employment agreement.In January, 2004, the FDIC advised us that any payments under Ms. Littlejohn's employment agreement would require prior approval of the FDIC under the "golden parachute" provisions of the FDIC Regulations.We subsequently advised Ms. Littlejohn's counsel we will not make further payments under her employment agreement.
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(1) These same options had a scheduled expiration date of March 19, 2013, however they expired in 2003 as a result of Ms. Littlejohn's resignation.
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In an action styled Lanctot v. Littlejohn, et al., filed in the U.S. District Court for the Western District of Michigan on June 13, 2003, a shareholder of the Corporation brought a class action against the Corporation, its former chairman and chief executive officer and current director, Ronald G. Ford, and its former chief executive officer and director, Sherry L. Littlejohn, for alleged violations of Federal securities laws.
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In another action styled Rosen v. North Country Financial Corporation, et al., filed in the U.S. District Court for the Western District of Michigan on June 23, 2003, a former shareholder of the Corporation has brought a class action against the Corporation, its former chairman and chief executive officer and current director, Ronald G. Ford, and its former chief executive officer and director, Sherry L. Littlejohn, for alleged violations of Federal securities laws.
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In an action styled Virginia M. Damon Trust v. North Country Financial Corporation, Nominal Defendant, and Dennis Bittner, Bernard A. Bouschor, Ronald G. Ford, Sherry L. Littlejohn, Stanley J. Gerou II, John D. Lindroth, Stephen Madigan, Spencer Shunk, Michael Henrickson, Glen Tolksdorf, and Wesley Hoffman, filed in the U.S. District Court for the Western District of Michigan on July 1, 2003, a shareholder of the Corporation has brought a shareholder's derivative action under Section 27 of the Exchange Act against the Corporation and certain of its current and former directors and senior executive officers.
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The Complaint also alleges that Mr. Ford and Ms. Littlejohn, through a series of compensation arrangements, stock options, and employment agreements obtained by them through improper means resulting from the offices they held with the Corporation, received excessive compensation, to the injury of the Corporation.
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