THIS CONSULTING AGREEMENT (this “ Agreement ”), dated as of May 4, 2004, is entered into by and between Citizens Financial Group, Inc. (“ Buyer ”) and Charles D. Koch (the “ Consultant ”) to be effective upon the Effective Time of the Merger contemplated by the Agreement and Plan of Merger (the “ Merger Agreement ”) dated as of May 4, 2004 among Charter One Financial, Inc., a Delaware corporation (the “ Company ”), Buyer, and Cardinal Acquisition Corp., a Delaware corporation and a wholly owned Subsidiary of Buyer (“ Merger Subsidiary ”). If the Effective Time does not occur, this Agreement shall be void ab initio and of no further force and effect. Capitalized terms used but not defined herein shall have the meaning set forth in the Merger Agreement.
WHEREAS, the Consultant has invaluable knowledge and expertise regarding the operations of the Company;
WHEREAS, due to the Consultant’s knowledge and expertise, Buyer wishes to have the cooperation of, and access to, the Consultant following the Effective Time; and
WHEREAS, Buyer and the Consultant have mutually agreed that the Consultant shall serve as an advisor to the Surviving Corporation (together with the Company as hereinbefore defined, the “ Company ”) on the terms and subject to the conditions hereinafter specified.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and the Consultant hereby agree as follows:
1. Consulting Period . The Consultant shall render consulting services, on the terms and conditions set forth in this Agreement, for the period beginning at the Effective Time and ending upon the third anniversary of the date (the “ Effective Date ”) on which the Effective Time occurs (the “ Consulting Period ”). Notwithstanding the foregoing, subject to Section 3, nothing in this Agreement or otherwise constitutes an express or implied promise of continued engagement as a consultant, as a director or as any other service provider for any period or at all and will not interfere in any way with the rights of the Consultant, Buyer or any relevant Affiliated Entity to terminate the Consultant’s services, with or without Cause (as defined in Section 3).
2. Consulting Services . During the Consulting Period, the Consultant shall (a) provide general consulting services to the Company with respect to the business of the Company and (b) make himself reasonably available to the Company to consult on specific projects for the Company with respect to such business, in each case, as may be reasonably requested from time to time by the Chairman and Chief Executive Officer of Buyer or his designee (the “ Consulting Services ”). The Consulting Services shall be performed at such place or places as shall be mutually agreed upon by the Consultant and Buyer. In addition, during the Consulting Period, the Consultant shall serve as a member of the Board of Directors of The Royal Bank of Scotland
Group plc, Chairman of the Company’s affiliated bank for the midwestern region of the United States (to the extent it remains in existence) and Vice Chairman of Buyer (the “ Board Services ”).
3. Consideration . In consideration for agreeing to provide the Consulting Services, during the Consulting Period, the Consultant shall be paid an annual amount of $500,000.00 (the “ Consulting Fees ”), payable in equal monthly installments commencing on the Effective Date and on the first day of each month thereafter. In the event of the Consultant’s death, permanent and total disability (as determined by a physician selected by Buyer and reasonably acceptable to the Consultant or his representative), voluntary termination or termination by Buyer for Cause (as defined below), the obligation to pay the Consulting Fees in respect of the months remaining in the Consulting Period as of the date of any such event shall cease. In the event Buyer terminates the Consultant’s services as a consultant other than for Cause, the Consultant shall be paid the Consulting Fees for the remainder of the Consulting Period in a lump sum within ten business days of the date of termination in full satisfaction of Buyer’s obligations under this Agreement (except for Buyer’s obligations contained in the last sentence of Section 4). For purposes of this Agreement, “Cause” shall mean the willful engaging by the Consultant in illegal conduct or gross misconduct which is materially and demonstrably injurious to Buyer. For the avoidance of doubt, the Consultant shall not be entitled to any fees or retainers in respect of his Board Services.