SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NORTH COUNTRY FINANCIAL CORPORATION
(Name of registrant as specified in its charter)
(Name of person(s) filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:_______
(2) Aggregate number of securities to which transaction applies:__________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):____________
(4) Proposed maximum aggregate value of transaction:______________________
(5) Total fee Paid:_______________________________________________________
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:_______________________________________________
(2) Form, schedule, or registration statement no.:________________________
(3) Filing party:_________________________________________________________
(4) Date filed:___________________________________________________________
<PAGE>
NORTH COUNTRY FINANCIAL CORPORATION
P.O. Box 369, 130 South Cedar Street
Manistique, Michigan 49854
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 20, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of North Country Financial Corporation (the "Corporation"), a Michigan
corporation, will be held on April 20, 1999, at 6 p.m. at the Park Place Hotel,
300 East State Street, Traverse City, Michigan 49684, for the following
purposes:
1. To elect three (3) directors, each to hold office for a three-year term.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed February 19, 1999, as the record date for
the determination of shareholders entitled to notice of and to vote at the
meeting or any adjournment thereof.
By order of the Board of Directors
/s/ Ronald G. Ford
Ronald G. Ford
President and Chief Executive Officer
Your vote is important. Even if you plan to attend the meeting, please
date and sign the enclosed proxy form, indicate your choice with
respect to the matters to be voted upon, and return it promptly in the
enclosed envelope. Note that if the stock is held in more than one
name, all parties must sign the proxy form.
Dated: March 1, 1999
<PAGE>
NORTH COUNTRY FINANCIAL CORPORATION
P.O. Box 369, 130 South Cedar Street
Manistique, Michigan 49854
PROXY STATEMENT
This Proxy Statement and the enclosed proxy are furnished in connection
with the solicitation of proxies by the Board of Directors of North Country
Financial Corporation (the "Corporation"), a Michigan bank holding company, to
be voted at the Annual Meeting of Shareholders of the Corporation to be held on
Tuesday, April 20, 1999, at 6 p.m., at the Park Place Hotel, 300 East State
Street, Traverse City, Michigan 49684, or at any adjournment or adjournments
thereof, for the purposes set forth in the accompanying Notice of Annual Meeting
of Shareholders and in this Proxy Statement.
VOTING AT THE MEETING
This Proxy Statement has been mailed on or about March 5, 1999, to all
holders of record of common stock of the Corporation as of the record date. The
Board of Directors of the Corporation has fixed the close of business on
February 19, 1999, as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting of Shareholders and any
adjournment thereof.
The Corporation has only one class of common stock and one class of
preferred stock. As of February 1, 1999, there were 7,097,837 shares of common
stock of the Corporation outstanding and no shares of preferred stock
outstanding. Each outstanding share will entitle the holder thereof to one vote
on each separate matter presented for vote at the meeting. Votes cast at the
meeting and submitted by proxy are counted by the inspectors of the meeting, who
are appointed by the Corporation.
If a Proxy in the enclosed form is properly executed and returned to the
Corporation, the shares represented by the Proxy will be voted at the Annual
Meeting and any adjournment thereof. If a shareholder specifies a choice, the
Proxy will be voted as specified. If no choice is specified, the shares
represented by the Proxy will be voted for the election of all of the nominees
named in the Proxy Statement and for the proposals set forth in this Proxy
Statement, and in accordance with the judgment of the persons named as proxies
with respect to any other matter which may come before the meeting. A proxy may
be revoked before exercise by notifying the Chairman of the Board in writing or
in open meeting, by submitting a proxy of a later date or attending the meeting
and voting in person. All shareholders are encouraged to date and sign the
enclosed proxy form, indicate your choice with respect to the matters to be
voted upon, and return it to the Corporation.
ELECTION OF DIRECTORS
The Bylaws of the Corporation provide for a Board of Directors consisting
of a minimum of five (5) and a maximum of fifteen (15) members. The Restated
Articles of Incorporation of the Corporation and the Bylaws also provide for the
division of the Board of Directors into three (3) classes of nearly equal size
with staggered three-year terms of office. Three persons have been nominated for
election to the Board, each to serve a three-year term expiring at the 2002
Annual Meeting of Shareholders. The Board has nominated Michael C. Henricksen,
John P. Miller and Ronald G. Ford, all of whom are incumbent directors
previously elected by the Corporation's shareholders.
Unless otherwise directed by a shareholder's proxy, the persons named as
proxy holders in the accompanying proxy will vote for the nominees named above.
In the event any of such nominees shall become unavailable, which is not
anticipated, the Board of Directors in its discretion may designate substitute
nominees, in which event the enclosed proxy will be voted for such substitute
nominees. Proxies cannot be voted for a greater number of persons than the
number of nominees named.
Except for those persons nominated by the Board of Directors, no other
persons may be nominated for election at the 1999 annual meeting. The
Corporation's Articles of Incorporation require at least sixty (60) days prior
written notice of any other proposed shareholder nomination, and no such notice
has been received.
<PAGE>
A plurality of the votes cast at the meeting is required to elect the
nominees as directors of the Corporation. As such, the three individuals who
receive the largest number of votes cast at the meeting will be elected as
directors. Shares not voted at the meeting, whether by abstention, broker
nonvote, or otherwise, will not be treated as votes cast at the meeting.
The Board of Directors recommends a vote FOR the election of all the
persons nominated by the Board.
INFORMATION ABOUT DIRECTORS AND DIRECTOR NOMINEES
The following information relating to the principal occupation or
employment has been furnished to the Corporation by the respective directors and
director nominees. Each of those persons has been engaged in the occupations
stated below for more than five years.
<TABLE>
Nominees for Election as Directors for Terms Expiring in 2002
Age Director of
Corporation Since
<S> <C> <C>
Michael C. Henricksen........................................................... 56 1988
Co-Owner, Satellite Services, Inc., a service company
John P. Miller.................................................................. 60 1976
Owner, Peoples Store Co., Inc. (Retail Clothing)
Ronald G. Ford.................................................................. 51 1987
Chairman, North Country Bank and Trust, North Country Financial
Corporation, First Manistique Agency, First Northern Services and
First Rural Relending Co.
Directors Whose Terms Expire in 2001
Stanley J. Gerou II............................................................. 50 1989
Owner, Gerou Excavating, Inc.
Thomas G. King.................................................................. 46 1987
President, Top of Lake Investment Company, Owner, King's Motel
John Lindroth................................................................... 43 1987
President, Superior State Agency, Inc. (Insurance Agency)
Sherry L. Littlejohn............................................................ 39 1998(1)
President and Chief Operating Officer, North Country Bank and
Trust
Directors Whose Terms Expire in 2000
Charles B. Beaulieu............................................................. 61 1984
Owner, Beaulieu Funeral Home, Inc.
Bernard A. Bouschor............................................................. 50 1996
Tribal Chairman, Sault Tribe of Chippewa Indians
C. Ronald Dufina................................................................ 54 1992
Owner, Balsam Shop, Inc., HRD, Inc., Island Leasing, Inc., and
Mackinaw Island Hospitality, Inc. (companies involved in tourism)
</TABLE>
(1) Ms. Littlejohn was appointed by the Board of Directors in 1998 to fill a
vacancy on the Board of Directors.
-2-
<PAGE>
BOARD COMMITTEES
The Board of Directors of the Corporation has an Audit Committee comprised
of John Miller, Chairman, John Lindroth and C. Ronald Dufina. Four meetings of
the Committee were held during 1998. This Committee is responsible for the
recommendation of the independent accounting firm to be engaged for the external
audit, directing and supervising investigations into matters relating to audit
functions, reviewing with independent auditors the plan and results of the
external audit, the establishment and continued supervision of internal auditing
procedures, reviewing the degree of independence of the auditors and reviewing
the adequacy of internal accounting controls.
The Compensation Committee is comprised of Chairman C. Ronald Dufina,
Charles Beaulieu, Bernard Bouschor, and John Miller. Four meetings of this
Committee were held in 1998. This Committee is responsible for recommending
annually to the Board the salary of the President, Chairman and CEO. This
Committee additionally reviews with management the annual projected salary
ranges and recommends those for Board approval. This Committee also annually
reviews the written Personnel Policy and audits the employee benefit package
annually.
The Nominating Committee of the Board, comprised of Stanley Gerou,
Chairman, Bernard Bouschor and John Lindroth, held three meetings during the
year. The Board also has an Executive Committee comprised of Michael C.
Henricksen, Chairman, Thomas G. King, Ronald G. Ford, Sherry L. Littlejohn and
John Lindroth. This Committee handles strategic planning for the Corporation and
its subsidiaries.
The Board of Directors of the Corporation held a total of six meetings
during 1998. No director attended less than 75 percent of the aggregate number
of meetings of the Board of Directors and the Committees on which he served.
There are no family relationships between or among any of the directors,
nominees, or executive officers of the Corporation.
REMUNERATION OF DIRECTORS
The directors of the Corporation each receive a fee of $500 for attendance
at meetings of the Board, except for the Chairman who receives $1,000 per
meeting. Some of the directors also serve on the Board of Directors of North
Country Bank and Trust ("Bank"), for which they are paid an annual fee of $1,200
and a fee of $1,000 per meeting (except for Mr. Ronald G. Ford, the Bank Board
Chairman, who receives $1,400 per meeting) for attendance at Bank Board meetings
and $250 per meeting for committee meetings that are held on days when the
entire Bank Board is not meeting. In November 1984, the Corporation adopted a
deferred compensation plan for certain senior management employees and directors
that provides for benefit payments to the participant and his or her family upon
retirement or death. Messrs. Charles Beaulieu, John Miller, and Ronald Ford are
participants in this plan. This plan was closed to additional participants in
1986. The plan allows the deferral of director fees and compensation in return
for the payment of certain defined monthly benefits payable upon termination of
one's service as a director or officer of the Corporation. Benefits under this
plan may be funded by life insurance policies, with the premiums paid for by the
Corporation. Any benefits payable under this plan are unsecured and payable out
of the general assets of the Corporation.
At the 1996 shareholder meeting, the Corporation's shareholders approved of
the Corporation's Deferred Compensation, Deferred Stock and Current Stock
Purchase Plan for Non-Employee Directors ("the Plan") to provide an opportunity
for directors of the Corporation and its subsidiaries to defer payment of all or
a part of their director fees ("Plan Fees") or to receive shares of the
Corporation's stock in lieu of cash payment of Plan Fees. Each director who
participates in the Plan must elect to have his or her Plan Fees credited
quarterly to either (a) a Current Stock Purchase Account, (b) a Deferred Cash
Investment Account, or (c) a Deferred Stock Account. Plan Fees credited to a
Current Stock Purchase Account are converted to shares of the Corporation's
Common Stock at market value on the credit date and distributed to the director
in lieu of cash payment of Plan Fees. Plan Fees credited to a Deferred Cash
Investment Account are deferred for tax purposes and are credited quarterly with
an appreciation factor that may not exceed the prime rate of interest charged by
the Bank. Plan Fees credited to a Deferred Stock Account are also deferred for
tax purposes. At the credit date, the Plan Fees are converted into "Corporation
stock units" determined by dividing the amount of the Plan Fees credited for the
quarter by the fair market value of a share of the Corporation's Common Stock on
the credit date. From the credit date forward, the value of the Corporation
stock units in the director's account is tied
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<PAGE>
directly to the fair market value of the Corporation's Common Stock, including
the impact of paid dividends. Upon termination of a director's service with the
Corporation, the amount credited to his or her Deferred Cash Investment Account
or Deferred Stock Account is paid out in a lump sum, or if termination occurs
because of retirement, the distribution may be spread over 5 to 10 years.
At the 1997 shareholder meeting, the Corporation's shareholders approved
the Corporation's 1997 Directors' Stock Option Plan (the "Director Option Plan")
to encourage stock ownership by non-employee directors ("Eligible Directors") of
the Corporation's bank subsidiary ("Bank") and to provide additional incentives
for them to manage the Banks effectively. The Director Option Plan provides for
the grant of options to Eligible Directors each year following each annual
meeting beginning in 1998 based on the Bank's return on equity ("ROE") for the
prior year ranging from 0 if the ROE was less than 13% to 400 shares if the
Bank's ROE was greater than 15%. The term of each option is ten (10) years,
subject to earlier termination in certain events, and the option price is 100%
of fair market value on the date of grant. Based on the earnings of the North
Country Bank and Trust for 1997, Messrs. Beaulieu, Bouschor, Dufina, Gerou,
Henricksen, King, Lindroth and Miller were on April 15, 1998, each granted an
option to purchase 400 shares of the Corporation's Common Stock at an exercise
price of $19.00 per share (adjusted for splits). Based on the earnings of the
North Country Bank and Trust for 1998, Messrs. Beaulieu, Bouschor, Dufina,
Gerou, Henricksen, King, Lindroth and Miller will, on April 15, 1999, each be
granted an option to purchase 400 shares of the Corporation's Common Stock.
COMPENSATION OF EXECUTIVE OFFICERS
Committee Report on Executive Compensation
Decisions on the compensation of the Corporation's executive officers are
made by the Board's Compensation Committee comprised of nonemployee directors
consisting of Chairman C. Ronald Dufina, Charles Beaulieu, Bernard Bouschor and
John Miller. To ensure this Committee's independence, the Board of Directors has
used outside consultants to assist the Committee in its deliberations. This
Committee report addresses the Corporation's compensation policies and programs
for the year ended December 31, 1998.
Base Salary - Excluding consideration of other relevant factors, which may
include individual performance, experience, expertise and tenure, the Board
intends to maintain the base salaries of the Corporation's executive officers
and senior managers within peer group levels.
Annually, the Committee recommends a base wage for the President and Chief
Executive Officer for consideration by the entire Board of Directors. The
Committee's recommendation is based upon compensation levels established by the
Corporation's peers and evaluations by consultants.
The base salary of the President of the Corporation's subsidiary bank is
determined in a similar manner by the Corporation's President and Chief
Executive Officer and the Bank's Board of Directors. The base salaries of all
other executive officers are established by the Corporation's President and
Chief Executive Officer.
Annual Cash Incentive - To provide performance incentives and to compensate
for the reduction in base salary, the strategy provides for annual cash awards
that are payable if the Corporation and the Bank meet or exceed annual
performance objectives established by the Board of Directors.
Long-Term Incentives - To align the interests of its executive officers and
senior managers with the Corporation's shareholders, the Board's compensation
strategy provides for a 401(k) matching contribution and equity- based
compensation under the Corporation's Stock Compensation Plan. Each of the
Corporation's compensation plans has been adopted by the Board of Directors, and
the equity-based compensation plans have been approved by the Corporation's
shareholders.
C. Donald Dufina, Charles B. Beaulieu, Bernard A. Bouschor, John P. Miller
-4-
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation received by the
Corporation's Chief Executive Officer and the Corporation's other executive
officers whose annual compensation exceeded $100,000, for any of the three years
ended December 31, 1998:
<TABLE>
Long-Term
Compensation
Name and Annual Compensation Options Granted All Other
Principal Position Year Salary(1) Bonus(1) (#) Compensation(2)
------------------ ---- ------ -------- ----- ---------------
<S> <C> <C> <C> <C> <C>
Ronald G. Ford 1998 $230,000 $69,000 60,000 $20,600
President and CEO 1997 $180,000 $45,000 72,000 $33,950
1996 $150,050 $61,520 0 $29,550
Sherry L. Littlejohn 1998 $150,000 $45,000 45,000 $ 7,538
President and Chief 1997 $116,000 $44,000 34,665 $ 6,940
Operating Officer, 1996 $ 84,000 $22,640 0 $ 4,200
North Country Bank
and Trust
</TABLE>
(1) Includes amounts deferred by employees under the Corporation's
retirement plan account pursuant to Section 401(k) of the Internal
Revenue Code.
(2) The amounts disclosed in this column include: (a) the amounts
contributed by the Corporation to the Corporation's retirement plan, in
which substantially all employees of the Corporation participate (the
Corporation made matching contributions equal to 5 percent of each
employee's salary reduction contribution for calendar 1998, (b)
director fees, and (c) the dollar value of premiums paid by the
Corporation for certain deferred compensation benefits, as follows:
<TABLE>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Mr. Ford (a) $ 8,000 $ 8,000 $ 7,500
(b) $ 12,600 $ 15,950 12,050
(c) $ -0- $ 10,000 10,000
Ms. Littlejohn (a) $ 7,538 $ 6,940 $ 4,200
</TABLE>
-5-
<PAGE>
EMPLOYMENT CONTRACT
Ronald G. Ford entered into an Employment Contract with North County Bank
and Trust, as President and CEO, effective July 1, 1994. This contract is for a
term of three years with an automatic annual one year extension unless notice of
termination is given six months before the end of the current year. This
contract provides that Mr. Ford's duties, responsibilities and administrative
authority, absent written agreement to the contrary, shall be as President and
CEO, respectively, of the Corporation and the Bank. If Mr. Ford's employment is
terminated following a change in control of the Corporation for reasons other
than his death, disability, normal retirement, for cause or by Ford without good
reason, the contract provides that he will be paid 20 quarter annual payments
each equal to 25% of the average of his aggregate annual base salary for the
three immediately preceding years. If any payment to Mr. Ford under the
Employment Contract is subject to an excise tax under Section 4999 of the
Internal Revenue Code ("IRC"), Mr. Ford will receive additional payments so that
the amount he receives equals the amount he would receive under the contract if
an excise tax was not imposed.
The Corporation has entered into an individual Management Continuity
Agreement with Ms. Littlejohn. This agreement provides severance benefits if the
executive's employment is terminated within thirty-six (36) months after a
change in control or within six (6) months before a change in control if the
Corporation terminates her or his employment in contemplation of a change in
control and to avoid the agreement. For the purposes of this agreement, a
"change in control" is any occurrence reportable as such in a proxy statement
under applicable rules of the Securities and Exchange Commission, and would
include, without limitation, the acquisition of beneficial ownership of 25% of
the Company's voting securities by any person or an extraordinary change in the
composition of the Board of Directors. Severance benefits will not be payable if
the Corporation terminates the employment for cause, if employment terminates
due to the executive's death or disability, or if the executive resigns without
good reason. An executive may resign with "good reason" after a change in
control and retain benefits if the Corporation reduces the executive's salary or
bonus, assigns duties inconsistent with the executive's prior position, or
shifts the executive's job location more than 40 miles. The agreement is for
self-renewing terms of three (3) years unless the Corporation takes action to
terminate further extensions. The agreement is automatically extended for a
three (3) year term from the date of a change in control. The agreement provides
a severance benefit of a lump-sum payment equal to three (3) years' salary and
bonus and continuation of benefits coverage for three (3) years and provides for
additional payments to make an executive whole, on an after-tax basis, for any
excise taxes imposed by Section 4999 of the IRC.
STOCK OPTION AND RESTRICTED STOCK PLAN
In 1992, the Corporation adopted a Stock Option Plan. Participants in the
Plan generally include senior officers and certain directors of the
Corporation's subsidiary bank. The Plan authorizes the issuance of 37,350 shares
of Common Stock pursuant to the exercise of options under the Plan, all of which
have been granted. Except as to then-outstanding options, this Plan was
terminated at the same time that the Board of Directors approved the Stock
Compensation Plan described below.
In 1997, the Corporation adopted a Stock Compensation Plan. Senior officers
and other key employees of the Corporation and its subsidiaries are eligible to
participate in the Plan. The Plan permits the grant of stock awards covering up
to 600,000 shares of the Corporation's common Stock, less shares covered by
options granted under the 1997 Directors' Stock Option Plan. Under the Plan, a
Committee consisting of non-employee directors may award stock options,
restricted stock, performance shares or other stock based awards.
-6-
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
Potential Realizable
Value at Assumed
% of Total Annual Rates of Stock
Options Granted Exercise Price Appreciation
Options to Employees in Price Expiration for Option Term (2)
Granted (1) Fiscal Year (Per Share) Date ----------------------------
----------- ------------- ----------- ------ 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Ronald G. Ford 60,000 40% $20.33 2008 $767,125 $1,944,046
Sherry L. Littlejohn 45,000 30% $20.33 2008 $575,343 $1,458,035
</TABLE>
(1) These options vest one year from the date of grant.
(2) Amounts reflect certain assumed rates of appreciation set forth in the
SEC's executive compensation disclosure rules. Actual gains, if any, on
stock option exercise depend on future performance of the Corporation's
Common Stock and overall stock market conditions. No assurances can be
made that the amounts reflected in these columns will be achieved.
AGGREGATE STOCK OPTION EXERCISES IN 1998 AND YEAR-END OPTION VALUES
The following table provides information on the exercise of stock options
during 1998 by the executives listed in the Summary Compensation Table and the
value of unexercised options at December 31, 1998.
<TABLE>
Number of Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
12/31/98 12/31/98(1)
Shares Acquired ------------------------- -------------------------
Name on Exercise Value Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Ronald G. Ford . . . . . . 0 $ 0 72,000 / 60,000 $576,000 / $160,200
Sherry L. Littlejohn . . . 0 $ 0 34,665 / 45,000 $277,320 / $120,150
</TABLE>
(1) Values are based on the difference between the last reported sale price
of the Corporation's Common Stock prior to December 31, 1998 ($23.00),
and the exercise prices of the options.
INDEBTEDNESS OF AND TRANSACTIONS WITH MANAGEMENT
Certain of the directors and officers of the Corporation have had and are
expected to have in the future, transactions with the subsidiary banks of the
Corporation, or have been directors or officers of corporations, or members of
partnerships, which have had and are expected to have in the future,
transactions with the subsidiary banks. In the opinion of management, all such
transactions with officers and directors and with such corporations and
partnerships are made in the ordinary course of business and substantially on
the same terms, including interest rates and collateral, as those prevailing at
the same time for comparable transactions with other customers, and these
transactions do not involve more than normal risk of collectibility or present
other unfavorable features.
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<PAGE>
VOTING SECURITIES AND BENEFICIAL OWNERSHIP OF MANAGEMENT
At February 1, 1999, the Corporation had outstanding 7,097,837 shares of
common stock, no par value per share. Shareholders are entitled to one vote for
each full share of common stock registered in their names at the close of
business on March 1, 1999, the record date fixed by the Board of Directors.
Votes cast at the meeting and submitted by proxy are counted by the inspectors
of the meeting, who are appointed by the Corporation.
As of February 1, 1999, no person was known by management to be the
beneficial owner of more than 5% of the outstanding common stock of the Company
except as follows:
<TABLE>
Name and Address of Amount and Nature of Approximate
Beneficial Owner Beneficial Ownership Percent of Class (2)
------------------- -------------------- --------------------
<S> <C> <C>
Ernest D. King 541,048 (1) 7.5%
P.O. Box 216
Naubinway, MI 49762
</TABLE>
(1) Includes 18,304 shares held jointly with Mr. King's spouse and 261,372
shares held in an Individual Retirement Account for Mr. King's spouse.
(2) Calculated on the basis of the amount of shares outstanding, plus
168,695 shares with respect to which officers and directors have the
right to acquire beneficial ownership under stock options exercisable
within 60 days.
The information in the following table sets forth the beneficial ownership
of the Corporation's common stock by each of the Company, directors, each of the
executive officers listed in the Summary Compensation Table and by all directors
and executive officers of the Company as a group.
<TABLE>
Amount and
Nature of
Beneficial Percent
Ownership (1) of Class (2)
------------- ------------
<S> <C> <C>
Charles B. Beaulieu...................... 38,601 (3) *
Bernard A. Bouschor...................... 1,970 (4) *
C. Ronald Dufina......................... 22,095 (5) *
Ronald G. Ford........................... 85,594 (6) 1.2%
Stanley Gerou............................ 114,272 (7) 1.6%
Michael Henricksen....................... 147,264 (8) 2.0%
Thomas G. King........................... 44,307 (9) *
John Lindroth............................ 62,641 (10) *
John P. Miller........................... 117,511 (11) 1.6%
Sherry L. Littlejohn..................... 39,543 (12) *
All Directors and Executive
Officers as a group (10 persons)......... 674,253 9.3%
* Less than 1.0%
</TABLE>
-8-
<PAGE>
(1) Includes shares with respect to which officers and directors have the right
to acquire beneficial ownership under stock options exercisable within 60
days. At February 1, 1999, there were a total of 168,695 such shares.
(2) Calculated on the basis of the amount of shares outstanding, plus 168,695
shares acquirable upon exercise of options described in the preceding
footnote.
(3) Includes 15,899 shares held by Mr. Beaulieu's spouse and 4,406 shares held
in an Individual Retirement Account for Mr. Beaulieu's spouse.
(4) Includes 1,665 deferred compensation shares.
(5) Includes 2,049 deferred compensation shares and 6,597 shares held in an
Individual Retirement Account for Mr. Dufina's spouse.
(6) Includes 72,000 shares for which Mr. Ford has the right to acquire
beneficial ownership under stock options exercisable in 60 days.
(7) Includes (i) 2,046 deferred compensation shares and (ii) 93,204 shares
owned jointly with Mr. Gerou's spouse.
(8) Includes (i) 2,293 deferred compensation shares, (ii) 5,400 shares for
which Mr. Henricksen has the right to acquire beneficial ownership pursuant
to stock options exercisable in 60 days, (iii) 124,835 shares held jointly
with Mr. Henricksen's spouse, and (iv) 6,954 shares held in trust for the
benefit of Mr. Henricksen's children.
(9) Includes (i) 1,554 deferred compensation shares, and (ii) 31,104 shares
held jointly with Mr. King's spouse.
(10) Includes (i) 2,046 deferred compensation shares, (ii) 12,150 shares for
which Mr. Lindroth has the right to acquire beneficial ownership pursuant
to stock options exercisable in 60 days, (iii) 36,084 shares held jointly
with Mr. Lindroth's spouse, and (iv) 9,000 shares held by Superior State
Agency of which Mr. Lindroth is a major shareholder.
(11) Includes (i) 1,501 deferred compensation shares, (ii) 1,669 shares held in
an individual retirement account for Mr. Miller's spouse, and (iii) 188
shares held jointly with Mr. Miller's children.
(12) Includes 34,665 shares for which Ms. Littlejohn has the right to acquire
beneficial ownership under stock options exercisable in 60 days.
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<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Corporation's common stock with
that of the cumulative total return on the NASDAQ Bank Stocks Index and the
NASDAQ Stock Market Index for the five year period ended December 31, 1998. The
following information is based on an investment of $100, on December 31, 1993 in
the Corporation's common stock, the NASDAQ Bank Stocks Index, and the NASDAQ
Stock Market Index, with dividends reinvested. There has been only limited
trading in the Corporation's Common Stock, there are no market makers for such
shares, and the Corporation's common stock does not trade on any stock exchange
or on the NASDAQ market. Accordingly, the returns reflected in the following
graph and table are based on sale prices of the Corporation's stock of which
management is aware. There may have been sales at higher or lower prices of
which management is not aware.
[GRAPHIC OMITTED]
<TABLE>
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
North Country Financial 100 114.08 167.20 219.45 407.05 577.68
MG Group Index 100 99.02 114.12 192.54 328.65 364.62
NASDAQ Market Index 100 104.99 136.18 169.23 207.00 291.96
</TABLE>
Source: Media General Financial Services, Richmond, Virginia.
-10-
<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The financial statements of the Corporation for the year ended December 31,
1998, have been examined by Wipfli Ullrich and Bertelson, LLP, independent
public accountants. A representative of Wipfli Ullrich and Bertelson, LLP, will
be at the Annual Meeting of Shareholders and will have an opportunity to make a
statement and will be available to answer appropriate questions. Wipfli Ullrich
and Bertelson, LLP has been appointed by the Board of Directors as the
independent public accountants of the Corporation and its subsidiaries for the
year ending December 31, 1999.
AVAILABILITY OF 10-K ANNUAL REPORT
The annual report on Form 10-K to the Securities and Exchange Commission
will be provided free to shareholders upon written request. Write Ms. Sherry
Littlejohn, North Country Financial Corporation, P.O. Box 369, 130 South Cedar
Street, Manistique, Michigan 49854.
SHAREHOLDER PROPOSALS
Any shareholder proposal to be considered by the Corporation for inclusion
in the 2000 Annual Meeting of Shareholders proxy materials must be received by
the Corporation no later than November 15, 1999.
OTHER BUSINESS
The Board of Directors is not aware of any matter to be presented for
action at the meeting, other than the matters set forth herein. If any other
business should come before the meeting, the Proxy will be voted in respect
thereof in accordance with the best judgment of the persons authorized therein,
and discretionary authority to do so is included in the proxy. The cost of
soliciting proxies will be borne by the Corporation. In addition to solicitation
by mail, officers and other employees of the Corporation and its subsidiaries
may solicit proxies by telephone or in person, without compensation other than
their regular compensation.
The Annual Report of the Corporation for 1998 is included with this Proxy
Statement. Copies of the report will also be available for all shareholders
attending the Annual Meeting.
Shareholders are urged to sign and return the enclosed proxy in the
enclosed envelope. A prompt response will be helpful and appreciated.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ronald G. Ford
Ronald G. Ford
President and Chief Executive Officer
March 1, 1999
::ODMA\PCDOCS\GRR\255738\2
-11-
<PAGE>
REVOCABLE PROXY
NORTH COUNTRY FINANCIAL CORPORATION
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
The undersigned hereby appoints Ronald G. Ford and Sherry Littlejohn, or either
of them, with power of substitution in each, proxies to vote, as designated
hereon, all of the undersigned's shares of Common Stock of NORTH COUNTRY
FINANCIAL CORPORATION, at the Annual Meeting of Shareholders to held at Park
Place Hotel, 300 East State Street, Traverse City, Michigan 49684, on April 20,
1999, at 6:00 p.m., and any and all adjournments thereof:
Please be sure to sign and date this Proxy in the box below.
Date [ ]
___________________________________________________________
Stockholder sign above Co-holder (if any) sign above
1. Election of Directors
(except as marked to the contrary below):
For Withhold For All Except
[ ] [ ] [ ]
Ronald G. Ford Michael C. Henrickson John P. Miller
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
____________________________________________
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT
THEREOF:
The Board of Directors recommends a vote "FOR" the nominees listed above.
Properly executed proxies will be voted as marked and, if not marked, will
be voted "FOR" all of the nominees.
YOUR VOTE IS IMPORTANT.
Whether or not you plan to attend, you can be sure your shares are
represented at the meeting by promptly returning your completed proxy in the
enclosed postage-paid envelope which is addressed to our tabuliation service at:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016-3572
Please date, sign exactly as your name appears hereon, and mail promptly in
the enclosed envelope which requires no postage if mailed in the United States.
When signing as attorney, executor, administrator, trustee, guardian, etc., give
full title as such. If shares are hold jointly both owners must sign.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Detach above card, sign, date and mail in postage paid envelope provided.
NORTH COUNTRY FINANCIAL CORPORATION
P.O. Box 369, 130 South Cedar Street
Manistique, Michigan 49854
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
