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                                                                    EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT

         This Agreement is made this third day of September, 2003, by and
between North Country Financial Corporation, a Michigan corporation, (the
"Corporation") and, Kelly W. George (the "Employee").

         WHEREAS, the Board of Directors of the Corporation believes that the
future services of the Employee in the capacity of Senior Vice President and
Chief Lending Officer will be of great value to the Corporation;

         WHEREAS, the Corporation operates a wholly owned commercial banking
subsidiary known as North Country Bank & Trust Company which is engaged in the
general business of banking, hereinafter the "Bank"; and

         WHEREAS, the Bank is presently the subject of a Cease and Desist Order
issued by the Federal Deposit Insurance Corporation and the Michigan Office of
Financial and Insurance Services; and

         WHEREAS, the Employee is willing to serve in the employ of the
Corporation and the Bank on a full-time basis for the term of this Agreement.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties hereto have agreed and do hereby
mutually agree as follows:

1.       Term -- Agreement to Serve

         The Corporation hereby employs for itself, the Bank and or any
         additional subsidiaries (hereinafter sometimes collectively referred to
         as the "Corporation"), the services of Employee for a period commencing
         as of the date first written above and terminating August 31, 2005 (the
         "Termination Date"), subject to the rights of earlier termination
         hereinafter set forth, to perform the duties of Senior Vice President
         and Chief Lending Officer for the Corporation and the Bank. The
         Employee hereby accepts such employment in consideration of the
         compensation and the other terms and conditions herein provided, and
         agrees to serve the Corporation well and faithfully and to devote his
         best efforts to such employment as long as it shall continue hereunder.
         During the period of such employment, the Employee will devote his
         substantial full-time attention -- reasonable vacations, periods of
         illness and the like excepted -- to the affairs of the Corporation.

2.       Base Salary and Fringe Benefits

         Except as otherwise provided herein, as compensation for these services
         hereunder, the Corporation will pay to Employee, in installments and on
         dates in accordance with its normal payroll, during the period of his
         employment hereunder, a base salary at the aggregate rate of one
         hundred seventy-five thousand ($175,000) per annum, subject to the

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         right of the parties, by mutual agreement, to adjust such rate upward
         in respect of any future period after the date hereof, (hereinafter
         referred to as "Base Pay").

         In addition the Corporation shall:

         (a)      Pay (i) a cash retention bonus in the amount of seven thousand
                  five hundred dollars ($7,500) to Employee upon his
                  commencement of employment with the Corporation, and (ii) a
                  cash bonus equal to one year of Employee's Base Pay if, during
                  the term of this Agreement, the Bank is no longer subject
                  (whether or not the Bank has received formal notice of such)
                  to any formal or informal enforcement action including cease
                  and desist orders, written agreements or memorandum of
                  understanding by any federal or state banking regulatory
                  agency.

         (b)      Provide four (4) weeks paid vacation annually beginning
                  January 1, 2004, with one (1) week paid vacation during the
                  period of initial employment through December 31, 2003.

         (c)      Reimburse fees and expenses incurred in connection with
                  business of the Corporation or the Bank, including fees for
                  attendance at banking related conventions and similar items
                  approved by the President & CEO.

         (d)      Provide an automobile allowance in the amount of $450 per
                  month and pay for the insurance, maintenance and gasoline
                  utilized by Employee while in Manistique, Michigan and while
                  traveling to and from Columbus, Ohio, on a bi-monthly basis.

         (e)      During the term of this Agreement provide a living allowance
                  to Employee of one thousand dollars ($1,000) per month.

3.       Bonus and Options

         Subject to the rules and regulations applicable thereto, the
         Corporation shall provide for Employee's participation in any option,
         incentive employee benefit plans or compensation programs administered
         by the Corporation or the Bank or under its direction, including any
         employee bonus plans as may presently exist or are to be placed into
         effect after the date hereof.

4.       Termination of Employment

         The employment of the Employee under the terms of this Agreement shall
         cease and terminate as follows:

         (a)      Expiration of Term

                  On the Termination Date; or,

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         (b)      Death

                  On the date of his death; or,

         (c)      Disability

                  Upon receipt by the Employee of written notice from the
                  Corporation that, in its opinion, based on reliable medical
                  evidence, the Employee is unable by reason of permanent
                  physical or mental disability to continue the proper
                  performance of his duties hereunder. For purposes of this
                  Employment Agreement, the Employee's "permanent disability"
                  shall be deemed to have occurred after thirty (30) consecutive
                  days, during which thirty (30) days the Employee, by reason of
                  his physical or mental disability or illness, shall have been
                  unable, in the reasonable opinion of the Corporation, to
                  discharge his duties under this Employment Agreement. The date
                  of permanent disability shall be such thirtieth (30th) day;
                  or,

         (d)      Termination by the Corporation with Cause

                  For Cause at any time by action of the Board. For purposes
                  hereof, the term "Cause" shall mean receipt of any written
                  criticism of the performance of Employee by a regulatory
                  agency having jurisdiction over the Corporation or the Bank,
                  failure of the Employee to satisfactorily perform his duties
                  as determined annually in a written performance review by the
                  President and CEO, or the Employee's willful and repeated
                  failure to perform his duties under this Employment Agreement,
                  which failure has not been cured within thirty (30) days after
                  the Corporation gives notice thereof to the Employee; or,

         (e)      Termination by Employee's Resignation without Good Reason.

                  The Employee may terminate his employment at any time by
                  resignation without Good Reason.

         (f)      Termination by the Corporation without Cause

                  At the election of the Corporation, at any time during the
                  term of this Agreement without cause.

         (g)      Termination Other Than for Cause; Resignation by the Employee
                  for Good Reason.

                  If the Company terminates the Employee's employment for any
                  reason other than Cause (as defined in Section 4(c)), or in
                  the event of the Employee's Resignation for Good Reason, the
                  Employee shall be entitled to receive the payments provided
                  for herein. "Resignation for Good Reason" shall mean the
                  termination of this Agreement by the Employee in the event
                  that (i) Employee is required to provide services at a work
                  location other than the Corporation's main office in
                  Manistique,

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                  Michigan, or within a fifty mile radius thereof (ii)
                  Employee's duties are substantially reduced, or (iii) the
                  breach of this Agreement by the Corporation, or (iv) there is
                  any reduction in the Base Pay of Employee, or a reduction in
                  the other benefits provided to the Employee by the
                  Corporation, other than an immaterial change in the benefits
                  provided to Employee resulting from changes in service
                  providers, insurance companies and similar changes affecting
                  all employees generally under the Corporation's health and
                  welfare benefit plans.

         (h)      Payments Upon Termination

                  Upon termination of employment of the Employee pursuant to
                  Section 4(b),(c),(d) or (e) above, the Employee shall be
                  entitled to receive the amount of Base Pay and Benefits
                  (including cash payment for any unused vacation) provided for
                  in Paragraphs 2 and 3 hereof through the date of his
                  termination of employment. In the event of the termination of
                  employment of Employee pursuant to Sections 4(f) or (g) above,
                  the Corporation shall pay to the Employee his Base Pay and
                  other benefits listed in Paragraphs 2 and 3 through the
                  Termination Date, and at Employee's election shall pay the
                  aggregate amount of Base Pay, any accrued bonus, and unused
                  vacation pay otherwise payable to Employee, in a single lump
                  sum at such termination of employment.

5.       Change in Control Provision.

         If during the term of this Agreement or within one (1) year following
         the Termination Date, the Corporation engages in a Change in Control
         transaction as hereinafter defined, Employee's employment hereunder
         shall automatically terminate two (2) months following the consummation
         of the Change in Control Transaction (if not earlier terminated) and
         Employee shall receive: (A) the payments provided to Employee upon a
         termination without cause as set forth in 4(f), and (B) one year of
         Employee's then Base Pay. In the event of: (X) Employee's termination
         of employment prior to the Termination Date pursuant to 4(f) or (g),
         the provisions of this paragraph 5 shall apply notwithstanding such
         earlier termination of employment, and (Y) the provisions of this
         paragraph 5 shall not apply and shall be void in the event of
         termination of employment pursuant to 4(b)(c)(d)(and(e).

         A "Change in Control" shall result if, and shall be deemed to have
         occurred on the date of, a transaction pursuant to which:

         (a)      Any person or group (as such terms are used in connection with
                  Sections 13(d) and 14(d) of the Exchange Act) becomes the
                  "beneficial owner" (as defined in Rule 13(d)(3) and 13(d)(5)
                  under the Exchange Act), directly or indirectly, of securities
                  of the Corporation representing twenty-five percent (25%) or
                  more of the combined voting power of the Corporation's then
                  outstanding securities;

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         (b)      A merger, consolidation, sale of assets, reorganization, or
                  proxy contest is consummated and, as a consequence of which,
                  members of the Board in office immediately prior to such
                  transaction or event constitute less than a majority of the
                  Board thereafter;

         (c)      During any period of 24 consecutive months, individuals who at
                  the beginning of such period constitute the Board (including
                  for this purpose any new director whose election or nomination
                  for election by the Corporation's stockholders was approved by
                  a vote of at least one-half of the directors then still in
                  office who were directors at the beginning of such period)
                  cease for any reason to constitute at least a majority of the
                  Board; or

         (d)      A merger, consolidation or reorganization is consummated with
                  any other corporation pursuant to which the shareholders of
                  the Corporation immediately prior to the merger, consolidation
                  or reorganization do not immediately thereafter directly or
                  indirectly own more than fifty percent (50%) of the combined
                  voting power of the voting securities entitled to vote in the
                  election of directors of the merged, consolidated or
                  reorganized entity.

         Notwithstanding the foregoing, no trust department or designated
         fiduciary or other trustee of such trust department of the Corporation
         or a subsidiary of the Corporation, or other similar fiduciary capacity
         of the Corporation with direct voting control of the stock shall be
         treated as a person or group within the meaning of subsection (i)(a)
         hereof. Further, no profit-sharing, employee stock ownership, employee
         stock purchase and savings, employee pension, or other employee benefit
         plan of the Corporation or any of its subsidiaries, and no trustee of
         any such plan in its capacity as such trustee, shall be treated as a
         person or group within the meaning of subsection (i)(a) hereof.

6.       Internal Revenue Code Section 280G.

         In the event the payments required under this Agreement, when added
         together with any other amounts required to be included by Employee
         under the provisions of the Internal Revenue Code of 1986, as amended,
         result in an "Excess Parachute Payment," as that term is defined in
         Section 280G of the Code, then the amount of the payments provided for
         in this agreement shall be reduced in an amount which eliminates any
         and all excise tax to be imposed under Section 4999 (or any successor
         thereto) of the Code.

7.       Right to Other Benefits.

         Except as otherwise specified herein, nothing in this Agreement shall
         abridge, eliminate, or cause Employee to lose Employee's right or
         entitlement to any other Corporation benefit to which Employee may be
         entitled due to his status as an employee under any plan or policy of
         Corporation on such terms and conditions as are required of any
         employee under any plan or policy of Corporation. Further, nothing in
         this Agreement shall create in Employee any greater rights or
         entitlements, except as specified in this

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         Agreement. The plans and policies referred to in this Paragraph 7
         include, but are not limited to, life insurance plans, dental,
         disability or health insurance benefits, severance policies, club
         memberships, and accrued vacation pay.

8.       Confidential Information

         Employee shall not at any time, in any manner, while employed by the
         Corporation or thereafter, either directly or indirectly, except in the
         course of carrying out the Corporation's business or as previously
         authorized in writing on behalf of the Corporation, disclose or
         communicate to any person, firm, or corporation, any information of any
         kind concerning any matters affecting or relating to the Corporation's
         business or any of its data, figures, projections, estimates, customer
         lists, tax records, personnel histories, and accounting procedures of
         the Corporation, without regard to whether any or all of such
         information would otherwise be deemed confidential or material.

9        Non-Assignability

         (a)      Except as provided herein, neither party to this Agreement
                  shall have the right to assign this Agreement or any rights or
                  obligations hereunder provided that nothing herein shall
                  prevent the Employee from designating one or more members of
                  his family or a trust or trusts for the members of his family
                  as a beneficiary or beneficiaries entitled to receive payments
                  hereunder as heretofore specified.

         (b)      Except as provided above, no title to any payments which shall
                  become due and payable to the Employee, his personal
                  representative or designated beneficiary under the provisions
                  hereof, shall be vested in him or any of them until the actual
                  payment thereof is made to such person by the Corporation in
                  accordance with the provisions of this Agreement. Neither he
                  nor any of them shall have the right or power to transfer,
                  assign, anticipate or encumber any interest in any such
                  payment, prior to the actual receipt thereof from the
                  Corporation. Neither this Agreement, the Corporation nor any
                  person's rights hereunder shall be liable for the debt,
                  contract or engagement of any of them. None of them shall be
                  permitted to appoint any agent or attorney-in-fact and except
                  as provided herein, to collect or receive his share of such
                  payments or any part thereof unless permission to do so shall
                  be specifically granted by the Corporation in writing. The
                  Corporation, in the absence of such written permission, shall
                  not in any manner recognize such appointment, transfer,
                  assignment or encumbrance.

         (c)      If the Employee or any personal representative or any
                  designated beneficiary attempts to transfer, assign or
                  encumber his interest in such payments, or any part thereof,
                  prior to the payment or distribution thereof to him or her;
                  or, if any transfer or seizure thereof is attempted to be made
                  or brought through the operation of any bankruptcy or
                  insolvency law, the right of the person taking such action or
                  concerned therein or affected thereby, and who would, but for
                  this

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                  provision, be entitled to receive such payments, or any part
                  thereof, shall forthwith and ipso facto terminate, all rights
                  bestowed on any such person being hereby, on the happening of
                  any such event, expressly revoked; and the Corporation shall
                  thereafter, in its absolute discretion, at such time or times
                  as it deems proper, cause such part of such person's
                  theretofore existing share of such payments to be paid to such
                  person or persons, including the Employee, of any parent,
                  spouse or child of said person, as the Corporation, in its
                  uncontrolled discretion, shall deem advisable; and the
                  remainder of such payments, if any, may be distributed by the
                  Corporation to the person or person who would have been
                  entitled to receive the same if such person had died
                  immediately prior to said attempted transfer, assignment or
                  encumbrance, or attempted transfer or seizure by operation of
                  law.

10.      Binding Effect

         This Agreement shall be binding upon and inure to the benefit of any
         successor of the Corporation, and any such successor shall be deemed
         substituted for the Corporation under the terms of this Agreement. As
         used in this Agreement, the term "successor" shall include any person,
         firm, corporation, or other business entity which, at any time, whether
         by merger, purchase, or otherwise, acquires all or substantially all of
         the assets or business of the Corporation.

11.      Entire Agreement

         This Agreement contains the entire agreement of the parties hereto
         concerning the subject matter hereof, and cancels any and all other
         oral or written agreements or understandings between the parties with
         respect to the subject matter hereof. The Agreement may not be changed
         orally, but only by agreement in writing signed by both parties.

12.      Authorization for Acts of Corporation

         Any act, request, approval, consent or opinion of the Corporation
         hereunder shall be authorized, given or expressed by resolution of its
         Board of Directors.

13.      Arbitration.

         The parties hereto agree to arbitrate any issue, misunderstanding,
         disagreement or dispute in connection with the terms in effect in this
         Agreement before one arbitrator mutually agreeable to the parties. The
         arbitration shall be administered by the National Arbitration Forum
         ("NAF") and conducted under its rules, except as otherwise provided
         below. If either party determines that the parties have been unable to
         agree upon one arbitrator, then such party may appoint one arbitrator
         and require the other party to appoint a second arbitrator. Whereupon,
         the two appointed arbitrators shall appoint a third neutral arbitrator.
         If the arbitrators selected by the parties are unable or fail to agree
         upon the third arbitrator, the NAF shall select the third arbitrator.
         Failure by a party to either (i) accept as mutually agreeable, or (ii)
         appoint an arbitrator, within 30 days of receipt of

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         notice of the appointment of an arbitrator by the other party, shall be
         deemed as acceptance of arbitration by such single arbitrator. The
         arbitration shall occur in Manistique, Michigan, or such other place as
         mutually agreed upon. The prevailing party shall be entitled to recover
         any and all costs associated with any arbitration proceeding (and any
         subsequent proceeding to enforce rights thereunder) including the
         recovery of reasonable attorneys fees. Judgment on the award rendered
         by the arbitrator(s) may be entered in any court having jurisdiction
         thereof. This arbitration agreement shall be governed by the Michigan
         Arbitration Act, MCLA Section 600.5001, et seq. Information may be
         obtained from the NAF on-line at www.arb-forum.com, by calling
         800-474-2371 or writing to P.O. Box 50191, Minneapolis, MN, 55405.

14.      Noncompetition and Nonsolicitation Agreement and Business Protection.

         Notwithstanding anything to the contrary contained elsewhere in this
         Agreement:

         (a)      Noncompetition Agreement and Nonsolicitation Agreement

             (i)  In view of Employee's importance to the success of the
                  Corporation, Employee and Corporation agree that the
                  Corporation would likely suffer significant harm from
                  Employee's competing with Corporation during Employee's term
                  of employment with Corporation and for some period of time
                  thereafter. Accordingly, Employee agrees that Employee shall
                  not engage in competitive activities while employed by
                  Corporation and during the Restricted Period. Employee shall
                  be deemed to engage in competitive activities if he shall,
                  without the prior written consent of the Corporation, (i)
                  within a seventy-five (75) mile radius of the main office or
                  any branch office of the Bank, render services directly or
                  indirectly, as an employee, officer, director, consultant,
                  advisor, partner or otherwise, for any organization or
                  enterprise which competes directly or indirectly with the
                  business of Corporation or any of its affiliates in providing
                  financial products or services (including, without limitation,
                  banking, insurance, or securities products or services) to
                  consumers and businesses, or (ii) directly or indirectly
                  acquires any financial or beneficial interest in (except as
                  provided in the next sentence) any organization which conducts
                  or is otherwise engaged in a business or enterprise within a
                  seventy-five (75) mile radius of the main office or any branch
                  office of the Bank, which competes directly or indirectly with
                  the business of Corporation or any of its affiliates in
                  providing financial products or services (including, without
                  limitation, banking, insurance or securities products or
                  services) to consumers and businesses. Notwithstanding the
                  preceding sentence, Employee shall not be prohibited from
                  owning less that 5 percent of any publicly traded corporation,
                  whether or not such corporation is in competition with
                  Corporation. For purposes of this Paragraph 14 the term
                  "Restricted Period" shall equal twelve months, commencing as
                  of the date of Employee's termination of employment.

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            (ii)  While employed by Corporation and for a period of twelve
                  months following Employee's termination of employment with
                  Corporation, Employee agrees that Employee shall not, in any
                  manner directly (i) solicit by mail, by telephone, by personal
                  meeting, or by any other means, any customer or prospective
                  customer of Corporation to whom Employee provided services, or
                  for whom Employee transacted business, or whose identity
                  become known to Employee in connection with Employee's
                  services to Corporation (including employment with or services
                  to any predecessor or successor entities), to transact
                  business with a person or an entity other than the Corporation
                  or its affiliates or reduce or refrain from doing any business
                  with the Corporation or its affiliates or (ii) interfere with
                  or damage (or attempt to interfere with or damage) any
                  relationship between Corporation or its affiliates and any
                  such customer or prospective customer. The term "solicit" as
                  used in this Agreement means any communication of any kind
                  whatsoever, inviting, encouraging or requesting any person to
                  take or refrain from taking any action with respect to the
                  business of Corporation and its subsidiaries.

            (iii) While employed by Corporation and for a period of twelve
                  months following Employee's termination of employment with
                  Corporation, Employee agrees that Employee shall not, in any
                  manner directly solicit any person who is an employee of
                  Corporation or any of its affiliates to apply for or accept
                  employment or a business opportunity with any other person or
                  entity in which he has an ownership interest or directly or
                  indirectly receives compensation therefrom.

            (iv)  The parties agree that nothing herein shall be construed
                  to limit or negate the common law of torts or trade secrets or
                  Michigan Law where it provides broader protection than that
                  provided herein.

         (b)      Confidential Information

         Employee has obtained and may obtain confidential information
         concerning the businesses, operations, financial affairs,
         organizational and personnel matters, policies, procedures and other
         non-public matters of Corporation and its affiliates, and those of
         third-parties that is not generally disclosed to persons not employed
         by Corporation or its subsidiaries. Such information (referred to
         herein as the "Confidential Information") may have been or may be
         provided in written form or orally. Employee shall not disclose to any
         other person the Confidential Information at any time during his
         employment with Corporation or after the termination of his employment,
         provided that Employee may disclose such Confidential Information only
         to a person who is then a director, officer, employee, partner,
         attorney or agent of Corporation who, in Employee's reasonable good
         faith judgment, has a need to know the Confidential Information. At
         Employee's termination of employment, Employee shall return to the
         Corporation any and all memorandum, notes, records, papers, financial
         models, flowcharts, work papers, computer codes, software and any other
         documents relating to the operations of the business of the Corporation
         or the Bank.

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         (c)      Remedies

             (i)  Employee acknowledges that a violation on Employee's part
                  of this Paragraph 14 would cause immeasurable and irreparable
                  damage to Corporation. Accordingly, Employee agrees that
                  notwithstanding Paragraph 13 hereof, Corporation shall be
                  entitled to injunctive relief in any court of competent
                  jurisdiction for any actual or threatened violation of any of
                  the provisions of this Paragraph 14, in addition to any other
                  remedies it may have at law.

             (ii) In addition to Corporation's right to seek injunctive
                  relief as set forth in subsection (i) above of this Section
                  14(c) in the event that Employee shall violate the terms and
                  conditions of this Paragraph 14, Corporation may: (i) make a
                  general claim for damages and (ii) terminate any payments or
                  benefits payable by Corporation, if applicable, to Employee.

15.      Confidential Information

         Employee shall not at any time, in any manner, while employed by the
         Corporation or thereafter, either directly or indirectly, except in the
         course of carrying out the Corporation's business or as previously
         authorized in writing on behalf of the Corporation, disclose or
         communicate to any person, firm, or corporation, any information of any
         kind concerning any matters affecting or relating to the Corporation's
         business or any of its data, figures, projections, estimates, customer
         lists, tax records, personnel histories, and accounting procedures of
         the Corporation, without regard to whether any or all of such
         information would otherwise be deemed confidential or material.

16.      Governing Law

         This Agreement is executed and delivered in the State of Michigan and
         is intended to be interpreted, construed and enforced in accordance
         with the laws of such State.

17.      Regulatory Approval of Agreement.

         Employee and the Corporation acknowledge and agree that: (i) certain
         approvals of state and federal banking regulatory agencies are required
         to be received by the Corporation in order to fully bind the
         Corporation to the terms hereof; and (ii) the Corporation shall submit
         this Agreement to any and all state and federal banking regulatory
         agencies with supervisory and regulatory authority over the Corporation
         and/or the Bank as soon as practicable following its execution and
         agrees to use its best efforts to obtain as promptly as practicable any
         all consents required to permit the full enforcement of the provisions
         of this Agreement, including the payment of all compensation, benefits,
         bonuses, and change in control payments of any and all types
         contemplated herein as may be required by law, regulation, enforcement
         action or otherwise; (iii) Employee agrees that this Agreement shall
         not be binding until all required regulatory approvals to which the

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         Corporation is subject have been received; and (iv) Employee
         acknowledges and agrees that all terms of this Agreement may, to the
         extent permitted or required by law, applicable banking regulations, or
         by a written agreement between the Corporation (or Bank) and its (or
         their) banking regulatory agencies and not otherwise waived in writing,
         be modified, terminated, or prohibited (from enforcement) by the
         banking regulatory agencies having jurisdiction or oversight authority
         regarding the Corporation and the Bank.

         IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by the Chairman of its Board of Directors, and the
Employee has signed this Agreement, all as of the date and year first above
written.

                                    North Country Financial Corporation

                                   By: /s/ C. James Bess
                                       -----------------------------------------
                                       C. James Bess
                                       President and Chief Executive Officer

                                       /s/ Kelly W. George
                                       -----------------------------------------
                                       Kelly W. George

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