Exhibit 10.1
CHANGE OF CONTROL EMPLOYMENT
AGREEMENT (BE4 AND HIGHER)
CHANGE OF CONTROL EMPLOYMENT AGREEMENT, dated as of
the
day of
,
20
(this Agreement), by and between COMERICA INCORPORATED, a Delaware
corporation (the Company), and
(the Executive).
WHEREAS, the Board of Directors of the Company (the Board),
has determined that it is in the best interests of the Company and its
stockholders
to assure that the Company will
have the continued dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined herein). The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control
and to encourage the Executives full attention and dedication to the Company
in the event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
that ensure that the compensation and benefits expectations of the Executive
will be satisfied and that provide the Executive with compensation and benefits
arrangements that are competitive with those of other corporations. Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
Section 1.
Certain
Definitions
.
(a) Effective Date means the first
date during the Change of Control Period (as defined herein) on which a Change
of Control occurs. Notwithstanding
anything in this Agreement to the contrary, if (A) the Executives
employment with the Company is terminated by the Company, (B) the Date of
Termination is prior to the date on which a Change of Control occurs, and (C) it
is reasonably demonstrated by the Executive that such termination of employment
(i) was at the request of a third party that has taken steps reasonably
calculated to effect a Change of Control or (ii) otherwise arose in
connection with or anticipation of a Change of Control (such a termination of
employment, an Anticipatory Termination), then for all purposes of this
Agreement, the Effective Date means the date immediately prior to such Date
of Termination.
(b)
Change
of Control Period means the period commencing on the date hereof and ending on
the third anniversary of the date hereof;
provided
,
however
, that, commencing on the date one year after the
date hereof, and on each annual anniversary of such date (such date and each
annual anniversary thereof, the Renewal Date), unless previously terminated,
the Change of Control Period shall be automatically extended so as to terminate
three years from such Renewal Date, unless, at least 60 days prior to the
Renewal Date, the Company shall give notice to the Executive that the Change of
Control Period shall not be so extended.
(c)
Affiliated
Company means any company controlled by, controlling or under common control
with the Company.
(d)
Change
of Control means:
(1)
Any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange
Act)) (a Person) becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (A) the
then-outstanding shares of common stock of the Company (the Outstanding
Company Common Stock) or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the Outstanding Company Voting Securities);
provided
,
however
, that,
for purposes of this Section 1(d), the following acquisitions shall not
constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Affiliated Company or (iv) any
acquisition pursuant to a transaction that complies with Sections 1(d)(3)(A),
1(d)(3)(B) and 1(d)(3)(C);
(2)
Individuals
who, as of the date hereof, constitute the Board (the Incumbent Board) cease
for any reason to constitute at least a majority of the Board;
provided
,
however
, that
any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Companys stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual was a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board;
(3)
Consummation
of a reorganization, merger, statutory share exchange or consolidation or
similar transaction involving the Company or any of its subsidiaries, a sale or
other disposition of all or substantially all of the assets of the Company, or
the acquisition of assets or stock of another entity by the Company or any of
its subsidiaries (each, a Business Combination), in each case unless,
following such Business Combination, (A) all or substantially all of the
individuals and entities that were the beneficial owners of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than
50% of the then-outstanding shares of common stock (or, for a non-corporate
entity, equivalent securities) and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election
of directors (or, for a non-corporate entity, equivalent governing body), as
the case may be, of the entity resulting from such Business Combination (including,
without limitation, an entity that, as a result of such transaction, owns the
Company or all or substantially all of the Companys assets either directly or
through one or more subsidiaries) in substantially the same proportions as
their ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities,
as the case may be, (B) no Person (excluding any corporation resulting
from such Business Combination or any employee benefit plan (or related trust)
of the Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then-outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then-outstanding
voting securities of such corporation, except to the extent that such ownership
existed prior to the Business Combination, and (C) at least a majority of
the members of the board of directors (or, for a non-corporate entity,
equivalent governing body) of the entity resulting from such Business
2
Combination were members of the Incumbent Board
at the time of the execution of the initial agreement or of the action of the
Board providing for such Business Combination; or
(4)
Approval
by the stockholders
of the Company
of a complete liquidation or dissolution of the Company.
Section 2.
Employment
Period
.
The Company hereby agrees to continue the
Executive in its employ, subject to the terms and conditions of this Agreement,
for the period commencing on the Effective Date and ending on the last day of
the thirtieth consecutive month following the Effective Date (the Employment
Period). The Employment Period shall
terminate upon the Executives termination of employment for any reason.
Section 3.
Terms
of Employment
.
(a)
Position
and Duties
.
(1)
During
the Employment Period, (A) the Executives position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all respects with the most
significant of those held, exercised and assigned at any time during the
120-day period immediately preceding the Effective Date, and (B) the
Executives services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or at any office or location
less than 60 miles from such location.
(2)
During
the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder, to use the Executives reasonable best
efforts to perform faithfully and efficiently such responsibilities. During the Employment Period, it shall not be
a violation of this Agreement for the Executive to (A) serve on corporate,
civic or charitable boards or committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (C) manage
personal investments, so long as such activities do not significantly interfere
with the performance of the Executives responsibilities as an employee of the
Company in accordance with this Agreement.
It is expressly understood and agreed that, to the extent that any such
activities have been conducted by the Executive prior to the Effective Date,
the continued conduct of such activities (or the conduct of activities similar
in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executives
responsibilities to the Company.
(b)
Compensation
.
(1)
Base
Salary
.
During the
Employment Period, the Executive shall receive an annual base salary (the Annual
Base Salary) at an annual rate at least equal to 26 times the highest
bi-weekly base salary paid or payable, including any base salary that has been
earned but deferred, to the Executive by the Company and the Affiliated
Companies in respect of the one-year period immediately preceding the month in
which the Effective Date occurs. The
Annual Base Salary shall be paid to the Executive at such intervals as the
Company pays executive salaries generally, unless the Executive shall elect to
defer the receipt of such Base Salary pursuant to an arrangement that meets the
requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the Code). During the
Employment Period, the Annual Base Salary shall be reviewed at least annually,
beginning no more than 12
3
months after the last salary increase awarded to
the Executive prior to the Effective Date.
Any increase in the Annual Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement. The Annual Base Salary shall not be reduced
after any such increase and the term Annual Base Salary shall refer to the
Annual Base Salary as so increased.
(2)
Annual Bonus
.
In addition to the Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the Employment
Period, an annual bonus (the Annual Bonus) in cash at least equal to the
aggregate of the Executives highest bonus under each of
(i)
the
Companys Management Incentive Plan; and
(ii)
any business
unit incentive plan of the Company in which the Executive has participated
during any portion of the last three fiscal years (or any predecessor or
successor plan to any thereof), as applicable, for the last three full fiscal
years prior to the Effective Date, including any bonus or portion thereof that
has been earned but deferred (annualized in the event that the Executive was
not employed by the Company for the whole of such fiscal year and not otherwise
paid a full years bonus for such year) (the Recent Annual Bonus). For purposes of determining the Recent Annual
Bonus, the highest bonus under the Management Incentive Plan shall be
determined by including bonuses earned for both the annual and multiyear
performance periods ending in each of the last three full fiscal years prior to
the Effective Date (or for such lesser number of full fiscal years prior to the
Effective Date for which the Executive was eligible to earn such a bonus and
annualized in the case of any pro rata bonus earned for a partial fiscal
year). Each such Annual Bonus shall be
paid no later than two and a half months after the end of the fiscal year for
which the Annual Bonus is awarded, unless the Executive shall elect to defer
the receipt of such Annual Bonus pursuant to an arrangement that meets the
requirements of Section 409A of the Code.
(3)
Long-Term Equity Incentives, Savings and
Retirement Plans
.
During the Employment Period, the
Executive shall be entitled to participate in all equity incentive, savings and
retirement plans, practices, policies, and programs applicable generally to other
peer executives of the Company and the Affiliated Companies, but in no event
shall such plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in
each case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and the Affiliated Companies for the Executive under
such plans, practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, those provided generally at any time after the Effective
Date to other peer executives of the Company and the Affiliated Companies.
(4)
Welfare Benefit Plans
.
During
the Employment Period, the Executive and/or the Executives family, as the case
may be, shall be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs provided by the
Company and the Affiliated Companies (including, without limitation, medical,
prescription, dental, disability, employee life, group life, accidental death
and travel accident insurance plans
4
and programs) to the extent applicable generally
to other peer executives of the Company and the Affiliated Companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with benefits that are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company
and the Affiliated Companies.
(5)
Expenses
.
During
the Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
accordance with the most favorable policies, practices and procedures of the
Company and the Affiliated Companies in effect for the Executive at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated Companies.
(6)
Fringe Benefits
.
During
the Employment Period, the Executive shall be entitled to fringe benefits,
including, without limitation, tax planning services, payment of club dues,
and, if applicable, use of an automobile and payment of related expenses, in
accordance with the most favorable plans, practices, programs and policies of
the Company and the Affiliated Companies in effect for the Executive at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and the Affiliated Companies.
(7)
Office and Support Staff
.
During
the Employment Period, the Executive shall be entitled to an office or offices
of a size and with furnishings and other appointments, and to exclusive
personal secretarial and other assistance, at least equal to the most favorable
of the foregoing provided to the Executive by the Company and the Affiliated
Companies at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as provided generally at
any time thereafter with respect to other peer executives of the Company and
the Affiliated Companies.
(8)
Vacation
.
During
the Employment Period, the Executive shall be entitled to paid vacation in
accordance with the most favorable plans, policies, programs and practices of
the Company and the Affiliated Companies as in effect for the Executive at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and the Affiliated
Companies.
Section 4.
Termination
of Employment
.
(a)
Death or
Disability
.
The Executives
employment shall terminate automatically if the Executive dies during the Employment
Period. If the Company determines in
good faith that the Disability (as defined herein) of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability),
it may give to the Executive written notice in accordance with Section 11(b) of
its intention to terminate the Executives employment. In such event, the Executives employment
with the Company shall terminate effective on the 30th day after receipt of
such
5
notice by the Executive (the Disability
Effective Date),
provided
that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executives duties. Disability
means the absence of the Executive from the Executives duties with the Company
on a full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness that is determined to be total and
permanent by a physician selected by the Company or its insurers and acceptable
to the Executive or the Executives legal representative.
(b)
Cause
.
The
Company may terminate the Executives employment during the Employment Period
with or without Cause. Cause means:
(1)
the
willful and continued failure of the Executive to perform substantially the
Executives duties with the Company or any Affiliated Company (other than any
such failure resulting from incapacity due to physical or mental illness),
after a written demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the Company that
specifically identifies the manner in which the Board or the Chief Executive
Officer of the Company believes that the Executive has not substantially
performed the Executives duties, or
(2)
the
willful engaging by the Executive in illegal conduct or gross misconduct that
is materially and demonstrably injurious to the Company.
For purposes of this Section 4(b), no act, or
failure to act, on the part of the Executive shall be considered willful
unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executives action or omission was in the
best interests of the Company. Any act,
or failure to act, based upon (A) authority given pursuant to a resolution
duly adopted by the Board, or if the Company is not the ultimate parent
corporation of the Affiliated Companies and is not publicly-traded, the board
of directors of the ultimate parent of the Company (the Applicable Board), (B) the
instructions of the Chief Executive Officer of the Company or a senior officer
of the Company or (C) the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of employment of the Executive
shall not be deemed to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the Applicable
Board (excluding the Executive, if the Executive is a member of the Applicable
Board) at a meeting of the Applicable Board called and held for such purpose
(after reasonable notice is provided to the Executive and the Executive is
given an opportunity, together with counsel for the Executive, to be heard
before the Applicable Board), finding that, in the good faith opinion of the
Applicable Board, the Executive is guilty of the conduct described in Section 4(b)(1) or
4(b)(2), and specifying the particulars thereof in detail.
(c)
Good Reason
.
The
Executives employment may be terminated during the Employment Period by the
Executive for Good Reason or by the Executive voluntarily without Good
Reason. Good Reason means:
(1)
the
assignment to the Executive of any duties inconsistent in any respect with the
Executives position (including status, offices, titles and reporting
requirements), authority,
6
duties or responsibilities as contemplated by Section 3(a),
or any action by the Company that results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and that is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(2)
any
failure by the Company to comply with any of the provisions of Section 3(b),
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and that is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(3)
the
Companys requiring the Executive to be based at any office or location other
than as provided in Section 4(a)(i)(B) hereof or the Companys
requiring the Executive to travel on Company business to a substantially
greater extent than required immediately prior to the Effective Date;
(4)
any
purported termination by the Company of the Executives employment otherwise
than as expressly permitted by this Agreement; or
(5)
any
failure by the Company to comply with and satisfy Section 10(c).
For purposes of this Section 4(c) of
this Agreement, any good faith determination of Good Reason made by the
Executive shall be conclusive.
Anything in this Agreement to the
contrary notwithstanding, a termination by the Executive for any reason
pursuant to a Notice of Termination given during the 30-day period immediately
following the first anniversary of the Effective Date shall be deemed to be a
termination for Good Reason for all purposes of this Agreement. The Executives mental or physical incapacity
following the occurrence of an event described above in clauses (1) through
(5) shall not affect the Executives ability to terminate employment for
Good Reason.
(d)
Notice of Termination
.
Any
termination by the Company for Cause, or by the Executive for Good Reason, shall
be communicated by Notice of Termination to the other party hereto given in
accordance with Section 11(b). Notice
of Termination means a written notice that (1) indicates the specific
termination provision in this Agreement relied upon, (2) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executives employment under the
provision so indicated, and (3) if the Date of Termination (as defined
herein) is other than the date of receipt of such notice, specifies the Date of
Termination (which Date of Termination shall be not more than 30 days after the
giving of such notice). The failure by
the Executive or the Company to set forth in the Notice of Termination any fact
or circumstance that contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact
or circumstance in enforcing the Executives or the Companys respective rights
hereunder.
(e)
Date of Termination
.
Date
of Termination means (1) if the Executives employment is terminated by
the Company for Cause, or by the Executive for Good Reason, the date of receipt
of the Notice of Termination or such later date specified in the Notice of
Termination, as the case may be, (2) if the Executives employment is
terminated by the Company other than for Cause or Disability, the date on which
the Company notifies the Executive of such termination, (3) if the
Executive resigns without Good Reason, the date on
7
which the Executive notifies the Company of such
termination, and (4) if the Executives employment is terminated by reason
of death or Disability, the date of death of the Executive or the Disability
Effective Date, as the case may be.
Notwithstanding the foregoing, in no event shall the Date of Termination
occur until the Executive experiences a separation from service within the
meaning of Section 409A of the Code, and notwithstanding anything
contained herein to the contrary, the date on which such separation from
service takes place shall be the Date of Termination.
Section 5.
Obligations
of the Company upon Termination
. (a)
By the Executive for
Good Reason; By the Company Other Than for Cause, Death
or Disability
.
If, during the Employment Period, the Company
terminates the Executives employment other than for Cause, Death or Disability
or the Executive terminates employment for Good Reason:
(1)
the Company
shall pay to the Executive, in a lump sum in cash within 30 days after the Date
of Termination, the aggregate of the following amounts:
(A)
the sum of (i) the
Executives Annual Base Salary through the Date of Termination to the extent
not theretofore paid or deferred pursuant to an irrevocable election under any
deferred compensation arrangement subject to Section 409A, (ii) any
accrued vacation pay to the extent not theretofore paid (the sum of the amounts
described in subclauses (i) and (ii), the Accrued Obligations) and (iii) an
amount equal to the product of (x) the higher of (I) the Recent
Annual Bonus and (II) the aggregate Annual Bonus under each of the Companys Management Incentive Plan and any business
unit incentive plan of the Company in which the Executive has participated
(or
any predecessor or successor plan to any thereof) paid or payable, including
any bonus or portion thereof that has been earned but deferred (and annualized
for any fiscal year consisting of less than 12 full months or during which the
Executive was employed for less than 12 full months), for the most recently
completed fiscal year during the Employment Period, if any, (it being
understood that, such Annual Bonus shall be determined by including bonuses
earned for both the annual and multiyear performance periods ending in such
recently completed fiscal year during the Employment Period) (such higher amount, the Highest Annual
Bonus) and (y) a fraction, the numerator of which is the number of days
in the current fiscal year through the Date of Termination and the denominator
of which is 365 (the Pro Rata Bonus); and
(B)
the amount
equal to the product of (i) three
and (ii) the
sum of (x) the Executives Annual Base Salary and (y) the Highest
Annual Bonus.
(2)
[
FOR THE AGREEMENTS OF EXECUTIVES COMMENCING EMPLOYMENT PRIOR TO JANUARY
1, 2007:
the Company shall
pay to the Executive, at such time as such amounts are payable under the terms
of each applicable SERP (as defined below), or, if the Executive does not
participate in a SERP, in a lump sum in cash within 30 days after the Date of
Termination, an amount equal to the excess of (i) the actuarial equivalent
of the benefit under the Companys qualified defined benefit retirement plan
(the Retirement Plan) (utilizing actuarial assumptions no less
8
favorable to the
Executive than those in effect under the Retirement Plan immediately prior to
the Effective Date) and any excess or supplemental retirement plan in which the
Executive participates (collectively, the SERP) (utilizing actuarial
assumptions no less favorable to the Executive than those in effect under the
SERP immediately prior to the Effective Date) that the Executive would receive
if the Executives employment continued for three years after the Date of
Termination, assuming for this purpose that (x) the accrued benefit is fully vested, (y) the Executives age
is increased by the number of years (including partial years) that the
Executive is deemed to be so employed and (z) the Executives compensation
in each of the three years is that required by Sections 3(b)(1) and 3(b)(2) payable
in equal biweekly installments
over such three-year period, over (ii) the actuarial equivalent of the
Executives actual benefit (paid or payable), if any, under the Retirement Plan
and the SERP as of the Date of Termination;]
[
FOR THE
AGREEMENTS OF EXECUTIVES COMMENCING EMPLOYMENT ON OR AFTER JANUARY 1,
2007:
the Company shall pay
to the Executive, at such time as such amounts are payable under the terms of
each applicable SERP (as defined below),
or, if the Executive does not participate in a SERP, in a lump sum in
cash within 30 days after the Date of Termination, an amount equal to the excess of (i) the account balance under the
Companys qualified defined contribution retirement plan (the Defined
Contribution Plan) and any excess or supplemental defined contribution
plan in which the Executive participates (collectively, the SERP) that the Executive would receive if the
Executives employment continued for three years after the Date of Termination,
assuming for this purpose that (x) the account balance is fully vested, (y) the
Company makes a nonelective employer contribution to the SERP for each year in
such three-year period in an amount equal to the greatest nonelective employer
contribution made to such plan during the last three full fiscal years prior to
the Effective Date and (z) the Executives compensation in each of the
three years is that required by Section 3(b)(1) and Section 3(b)(2) payable
in equal biweekly installments for such three-year period, over (ii) the
account balance (paid or payable), if any, under the Defined Contribution Plan
and the SERP as of the Date of Termination;]
(3)
during the three year period following the
Date of Termination (the Benefits Period), the Company shall provide the
Executive, his spouse and his eligible dependents with medical and dental
insurance coverage (the Health Care Benefits) and life insurance benefits no
less favorable to those which the Executive, his spouse and his eligible
dependents were receiving immediately prior to the Date of Termination
or, if more
favorable to such persons, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated Companies;
provided
,
however
, that
the
Health Care
Benefits
shall be provided during the Benefits Period in such a manner that such
benefits are excluded from the Executives income for federal income tax
purposes;
provided, further, however
, that if the
Executive becomes re-employed with another employer and is eligible to receive
health care benefits under another employer-provided plan, the health care
benefits provided hereunder shall be secondary to those provided under such
other plan during such applicable period of eligibility
. The
receipt of the Health Care Benefits shall be conditioned upon the Executive
continuing to pay the
monthly
premium as in effect at the Company from time to time for coverage provided to
former employees under Section 4980B of the Code
in
9
respect of the maximum level of coverage that the
Executive could otherwise elect to receive for the Executive, his spouse and
eligible dependents if the Executive were still an employee of the Company
during the Benefits Period (
i.e.
, single,
single plus one, or family) (the Applicable COBRA Premium) regardless of what
level of coverage is actually elected.
During the
portion of the Benefits Period in which the Executive, his spouse and his
eligible dependents continue to receive coverage under the Companys
Health Care
Benefits
plans, the Company shall pay to the Executive a monthly amount equal to the excess of (x) the Applicable COBRA
Premium over (y) the monthly employee contribution rate that is paid by
Company employees generally for the same or similar coverage, as in effect from
time to time
(and which amount shall in no event be greater than the employee
contribution rate for the applicable level of coverage as in effect immediately
prior to the Effective Date), which payment shall be paid in advance on the
first payroll day of each month, commencing with the month immediately following
the Executives Date of Termination. The Company shall use its reasonable best
efforts to ensure that, following the end of the Benefit Period, the Executive
shall be eligible to elect continued health coverage pursuant to Section 4980B
of the Code or other applicable law (COBRA Coverage), as if the Executives
employment with the Company had terminated as of the end of such period. For purposes of determining eligibility (but
not the time of commencement of benefits) of the Executive for retiree welfare
benefits pursuant to the Companys retiree welfare benefit plans, if any, the
Executive shall be considered to have remained employed until the end of the
Benefit Period and to have retired on the last day of such period. In order to comply with Section 409A of
the Code, (i) the amount of benefits that the Company is obligated to
provide under this Section 5(a)(3) in any given calendar year shall
not affect the amount of such benefits that the Company is obligated to pay in
any other calendar year; and (ii) the Executives right to have the
Company provide such benefits may not be liquidated or exchanged for any other
benefit
; and
(4)
the
Company shall, at its sole expense as incurred, provide the Executive with
outplacement services the scope and provider of which shall be selected by the
Executive in the Executives sole discretion,
provided
that such outplacement benefits shall end not later than the last day of the
second calendar year that begins after the Date of Termination; and
(5)
except
as otherwise set forth in the last sentence of Section 6, to the extent
not theretofore paid or provided, the Company shall timely pay or provide to
the Executive any Other Benefits (as defined in Section 6) in accordance
with the terms of the underlying plans or agreements.
Notwithstanding the foregoing provisions of Sections 5(a)(1), (2) or
(3), in the event that the Executive is a specified employee within the
meaning of Section 409A of the Code (as determined in accordance with the
methodology established by the Company as in effect on the Date of Termination)
(a Specified Employee), amounts that constitute nonqualified deferred
compensation within the meaning of Section 409A of the Code that would
otherwise be payable and benefits that would otherwise be provided under
Sections 5(a)(1), (2) or (3) during the six-month period immediately
following the Date of Termination (other than the Accrued Obligations) shall
instead be paid, with interest on any delayed payment at the applicable federal
10
rate provided for in Section 7872(f)(2)(A) of the Code (Interest)
determined as of the Date of Termination, or provided on the first business day
after the date that is six months following the Executives separation from
service within the meaning of Section 409A of the Code (the Delayed
Payment Date).
(b)
Death
.
If the
Executives employment is terminated by reason of the Executives death during
the Employment Period, the Company shall provide the Executives estate or
beneficiaries with the Accrued Obligations and the Pro Rata Bonus and the
timely payment or delivery of the Other Benefits, and shall have no other
severance obligations under this Agreement.
The Accrued Obligations and the Pro Rata Bonus shall be paid to the
Executives estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. With
respect to the provision of the Other Benefits, the term Other Benefits as
utilized in this Section 5(b) shall include, without limitation, and
the Executives estate and/or beneficiaries shall be entitled to receive,
benefits at least equal to the most favorable benefits provided by the Company
and the Affiliated Companies to the estates and beneficiaries of peer
executives of the Company and the Affiliated Companies under such plans,
programs, practices and policies relating to death benefits, if any, as in
effect with respect to other peer executives and their beneficiaries at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executives estate and/or the Executives beneficiaries,
as in effect on the date of the Executives death with respect to other peer
executives of the Company and the Affiliated Companies and their beneficiaries.
(c)
Disability
.
If
the Executives employment is terminated by reason of the Executives
Disability during the Employment Period, the Company shall provide the
Executive with the Accrued Obligations and Pro Rata Bonus and the timely
payment or delivery of the Other Benefits in accordance with the terms of the
underlying plans or agreements, and shall have no other severance obligations
under this Agreement. The Accrued
Obligations and the Pro Rata Bonus shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination,
provided
,
that in the event that the Executive is a Specified Employee, the Pro Rata
Bonus shall be paid, with Interest, to the Executive on the Delayed Payment
Date. With respect to the provision of
the Other Benefits, the term Other Benefits as utilized in this Section 5(c) shall
include, and the Executive shall be entitled after the Disability Effective
Date to receive, disability and other benefits at least equal to the most
favorable of those generally provided by the Company and the Affiliated
Companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at
any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executives family, as in effect
at any time thereafter generally with respect to other peer executives of the
Company and the Affiliated Companies and their families.
(d)
Cause; Other Than for Good Reason
.
If
the Executives employment is terminated for Cause during the Employment
Period, the Company shall provide the Executive with the Executives Annual
Base Salary through the Date of Termination, and the timely payment or delivery
of the Other Benefits, and shall have no other severance obligations under this
Agreement. If the Executive voluntarily
terminates employment during the Employment Period, excluding a termination for
Good Reason, the Company shall provide to the Executive the Accrued Obligations
and the Pro Rata Bonus and the timely payment or delivery of the Other
11
Benefits, and shall have no other
severance obligations under this Agreement.
In such case, all the Accrued Obligations and the Pro Rata Bonus shall
be paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination,
provided
, that in the event that
the Executive is a Specified Employee, the Pro Rata Bonus shall be paid, with
Interest, to the Executive on the Delayed Payment Date.
Section 6.
Non-exclusivity
of Rights
.
Nothing in this Agreement shall prevent or
limit the Executives continuing or future participation in any plan, program,
policy or practice provided by the Company or the Affiliated Companies and for
which the Executive may qualify, nor, subject to Section 11(f), shall anything
herein limit or otherwise affect such rights as the Executive may have under
any other contract or agreement with the Company or the Affiliated
Companies. Amounts that are vested
benefits or that the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any other contract or agreement with the Company
or the Affiliated Companies at or subsequent to the Date of Termination (Other
Benefits) shall be payable in accordance with such plan, policy, practice or
program or contract or agreement, except as explicitly modified by this
Agreement. Without limiting the
generality of the foregoing, the Executives resignation under this Agreement
with or without Good Reason, shall in no way affect the Executives ability to
terminate employment by reason of the Executives retirement under, or to be
eligible to receive benefits under, any compensation and benefits plans,
programs or arrangements of the Company or the Affiliated Companies, including
without limitation any retirement or pension plans or arrangements or
substitute plans adopted by the Company, the Affiliated Companies or their
respective successors, and any termination which otherwise qualifies as Good
Reason shall be treated as such even if it is also a retirement for purposes
of any such plan. Notwithstanding the
foregoing, if the Executive receives payments and benefits pursuant to Section
5(a) of this Agreement, the Executive shall not be entitled to any severance
pay or benefits under any severance plan, program or policy of the Company and
the Affiliated Companies, unless otherwise specifically provided therein in a
specific reference to this Agreement. [
FOR CEO AGREEMENT ONLY:
Notwithstanding anything in this
Agreement to the contrary, in no event shall the benefits provided in the
Supplemental Pension and Retiree Medical Agreement dated as of the 29
th
day of May 1998 by and between the Company and
the Executive (the Supplemental Agreement) be considered severance pay or
benefits under any severance plan, program or policy of the Company for
purposes of the immediately preceding sentence, and nothing in this Agreement
shall limit the effectiveness of the Supplemental Agreement.]
Section 7.
Full
Settlement; Legal Fees
.
The Companys obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense, or other claim,
right or action that the Company may have against the Executive or others. In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement,
and except as specifically provided in Section 5(a)(2), such amounts shall not
be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred (within
10 days following the Companys receipt of an invoice from the Executive), at
any time from the Change of Control through the Executives remaining lifetime
(or, if longer, through the 20
th
anniversary of the Change of Control) to the
full extent permitted by law, all legal fees and expenses that the Executive
may reasonably incur as a result of any contest
12
(regardless
of the outcome thereof) by the Company, the Executive or others of the validity
or enforceability of, or liability under, any provision of this Agreement or
any guarantee of performance thereof (including as a result of any contest by
the Executive about the amount of any payment pursuant to this Agreement),
plus, in each case, Interest determined as of the date such legal fees and
expenses were incurred;
provided
, that
the Executive shall have submitted an invoice for such fees and expenses at
least 10 days before the end of the calendar year next following the calendar
year in which such fees and expenses were incurred (or, in connection with a
contest related to an Anticipatory Termination, following the calendar year in
which such contest is finally resolved).
The amount of such legal fees and expenses that the Company is obligated
to pay in any given calendar year shall not affect the legal fees and expenses
that the Company is obligated to pay in any other calendar year, and the
Executives right to have the Company pay such legal fees and expenses may not
be liquidated or exchanged for any other benefit.
Section 8.
Certain Additional Payments by the Company
.
(a)
Anything in this Agreement to the
contrary notwithstanding and except as set forth below, in the event it shall
be determined that any Payment would be subject to the Excise Tax, then the
Executive shall be entitled to receive an additional payment (the Gross-Up
Payment) in an amount such that, after payment by the Executive of all taxes
(and any interest or penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, but
excluding any income taxes and penalties imposed pursuant to Section 409A
of the Code, the Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Payments.
Notwithstanding the foregoing provisions of this Section 8(a), if
it shall be determined that the Executive is entitled to the Gross-Up Payment,
but that the Parachute Value of all Payments does not exceed 110% of the Safe
Harbor Amount, then no Gross-Up Payment shall be made to the Executive and the
amounts payable under this Agreement shall be reduced so that the Parachute
Value of all Payments, in the aggregate, equals the Safe Harbor Amount. The reduction of the amounts payable
hereunder, if applicable, shall be made by reducing the payments and benefits
under the following sections in the following order: (i) Section 5(a)(1)(B),
(ii) Section 5(a)(1)(C), (iii) Section 5(a)(1)(A)(v) and
(iv) Section 5(a)(2). For
purposes of reducing the Payments to the Safe Harbor Amount, only amounts
payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amount payable under
this Agreement would not result in a reduction of the Parachute Value of all
Payments to the Safe Harbor Amount, no amounts payable under the Agreement
shall be reduced pursuant to this Section 8(a) and the Executive
shall be entitled to the Gross-Up Payment.
The Companys obligation to make Gross-Up Payments under this Section 8
shall not be conditioned upon the Executives termination of employment.
(b)
Subject to the provisions of Section 8(c),
all determinations required to be made under this Section 8, including
whether and when a Gross-Up Payment is required, the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by Ernst & Young LLP, or such other nationally
recognized certified public accounting firm as may be designated by the
Executive (the Accounting Firm). The
Accounting Firm shall provide detailed supporting calculations both to the
Company and the Executive within 15 business days of the receipt of notice from
the Executive that there has been
13
a Payment or such earlier time as is
requested by the Company. In the event
that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Executive may
appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder).
All fees and expenses of the Accounting Firm shall be borne solely by
the Company. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments that will not have been made by the Company should have been made (the
Underpayment), consistent with the calculations required to be made
hereunder. In the event the Company
exhausts its remedies pursuant to Section 8(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
(c)
The Executive shall notify the Company in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable, but no later than 10 business days after the Executive is informed
in writing of such claim. The Executive
shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes with respect
to such claim is due). If the Company
notifies the Executive in writing prior to the expiration of such period that
the Company desires to contest such claim, the Executive shall:
(1)
give the Company any information
reasonably requested by the Company relating to such claim,
(2)
take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,
(3)
cooperate with the Company in good faith
in order effectively to contest such claim; and
(4)
permit the Company to participate in any
proceedings relating to such claim;
provided
,
however
, that
the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest,
and shall indemnify and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax (including interest and penalties) imposed as a
result of such representation and payment of costs and expenses. Without limitation on the foregoing
provisions of this Section 8(c), the Company shall control all proceedings
taken in connection with such contest, and, at its sole discretion, may pursue
or forgo any and all administrative appeals, proceedings, hearings and
conferences with the applicable taxing authority in respect of such claim and
may, at its sole discretion, either pay the tax claimed to the appropriate
taxing authority on behalf of the
14
Executive and direct the Executive to sue for a refund or to contest
the claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine;
provided
,
however
,
that, if the Company pays such claim and directs the Executive to sue for a
refund, the Company shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties) imposed with respect to such payment or with respect to any imputed
income in connection with such payment; and
provided
,
further
, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the
Companys control of the contest shall be limited to issues with respect to
which the Gross-Up Payment would be payable hereunder, and the Executive shall
be entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.
(d)
If, after the receipt by the Executive of
a Gross-Up Payment or payment by the Company of an amount on the Executives
behalf pursuant to Section 8(c), the Executive becomes entitled to receive
any refund with respect to the Excise Tax to which such Gross-Up Payment
relates or with respect to such claim, the Executive shall (subject to the
Companys complying with the requirements of Section 8(c), if applicable)
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after payment by the Company of an amount
on the Executives behalf pursuant to Section 8(c), a determination is
made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days
after such determination, then the amount of such payment shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.
(e)
Any Gross-Up Payment, as determined
pursuant to this Section 8, shall be paid by the Company to the Executive
within five days of the receipt of the Accounting Firms determination;
provided
that, the Gross-Up Payment shall in all events be
paid no later than the end of the Executives taxable year next following the
Executives taxable year in which the Excise Tax (and any income or other
related taxes or interest or penalties thereon) on a Payment are remitted to
the Internal Revenue Service or any other applicable taxing authority or, in
the case of amounts relating to a claim described in Section 8(c) that
does not result in the remittance of any federal, state, local and foreign
income, excise, social security and other taxes, the calendar year in which the
claim is finally settled or otherwise resolved.
Notwithstanding any other provision of this Section 8, the Company
may, in its sole discretion, withhold and pay over to the Internal Revenue
Service or any other applicable taxing authority, for the benefit of the
Executive, all or any portion of any Gross-Up Payment, and the Executive hereby
consents to such withholding.
(f)
Definitions
.
The following terms shall have the following meanings for purposes of
this Section 8.
(i)
Excise
Tax shall mean the excise tax imposed by Section 4999 of the Code,
together with any interest or penalties imposed with respect to such excise tax.
15
(ii)
Parachute
Value of a Payment shall mean the present value as of the date of the change
of control for purposes of Section 280G of the Code of the portion of such
Payment that constitutes a parachute payment under Section 280G(b)(2),
as determined by the Accounting Firm for purposes of determining whether and to
what extent the Excise Tax will apply to such Payment.
(iii)
A
Payment shall mean any payment or distribution in the nature of compensation
(within the meaning of Section 280G(b)(2) of the Code) to or for the
benefit of the Executive, whether paid or payable pursuant to this Agreement or
otherwise.
(iv)
The
Safe Harbor Amount means 2.99 times the Executives base amount, within the
meaning of Section 280G(b)(3) of the Code.
Section 9.
Confidential Information
.
The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or the Affiliated Companies, and
their respective businesses, which information, knowledge or data shall have
been obtained by the Executive during the Executives employment by the Company
or the Affiliated Companies and which information, knowledge or data shall not
be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After termination of the Executives
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those persons designated by the Company. In no event shall an asserted violation of
the provisions of this Section 9 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this
Agreement.
Section 10.
Successors
.
(a) This Agreement is personal to the
Executive, and, without the prior written consent of the Company, shall not be
assignable by the Executive other than by will or the laws of descent and
distribution. This Agreement shall inure
to the benefit of and be enforceable by the Executives legal representatives.
(b)
This Agreement shall inure to the benefit
of and be binding upon the Company and its successors and assigns. Except as provided in Section 10(c),
without the prior written consent of the Executive this Agreement shall not be
assignable by the Company.
(c)
The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company to
assume expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place. Company
means the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid that assumes and agrees to perform this Agreement by
operation of law or otherwise.
Section 11.
Miscellaneous
.
(a) This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws.
The captions of this Agreement are not part of the
16
provisions
hereof and shall have no force or effect.
Subject to the last sentence of Section 11(h), this Agreement may
not be amended or modified other than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b)
All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
if to the Executive:
At the most recent address on file at
the Company.
if to the
Company:
Comerica Incorporated
Comerica Bank Tower
1717 Main Street, MC 6404
Dallas, Texas 75201
Attention: General
Counsel
or to such other address as either party shall have furnished to the
other in writing in accordance herewith.
Notice and communications shall be effective when actually received by
the addressee.
(c)
The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(d)
The Company may withhold from any amounts
payable under this Agreement such United States federal, state or local or
foreign taxes as shall be required to be withheld pursuant to any applicable
law or regulation.
(e)
The Executives or the Companys failure
to insist upon strict compliance with any provision of this Agreement or the
failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Sections 4(c)(1) through 4(c)(5),
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
(f)
The Executive and the Company acknowledge
that, except as may otherwise be provided under any other written agreement
between the Executive and the Company, the employment of the Executive by the
Company is at will and, subject to Section 1(a), prior to the Effective
Date, the Executives employment may be terminated by either the Executive or
the Company at any time prior to the Effective Date, in which case the
Executive shall have no further rights under this Agreement. From and after the Effective Date, except as
specifically provided herein, this Agreement shall supersede any other
agreement between the
17
parties with respect to the subject
matter hereof in effect immediately prior to the execution of this Agreement
[other than
[FOR CEO AGREEMENT ONLY:
the
Supplemental Agreement, ] [
FOR TARP SENIOR EXECUTIVE
OFFICERS:
the Waiver signed by Executive in connection with the
Companys
participation
in the United States Department of the Treasurys Troubled Assets Relief
Program (TARP) Capital Purchase Program,
and the Capital Purchase Program Senior
Executive Officer Consent to the Companys amendments to compensation, bonus,
incentive and other benefit plans, arrangements and agreements in connection with
the Companys
participation
in the United States Department of the Treasurys TARP Capital Purchase Program
(the TARP Amendments). For the
avoidance of doubt, this Agreement shall be subject in all respects to the TARP
Amendments].
(g)
The Agreement is intended to comply with
the requirements of Section 409A of the Code or an exemption or exclusion
therefrom and shall in all respects be administered in accordance with Section 409A
of the Code. Each payment under this
Agreement shall be treated as a separate payment for purposes of Section 409A
of the Code. In no event may the
Executive, directly or indirectly, designate the calendar year of any payment
to be made under this Agreement. If the
Executive dies following the Date of Termination and prior to the payment of
the any amounts delayed on account of Section 409A of the Code, such
amounts shall be paid to the personal representative of the Executives estate
within 30 days after the date of the Executives death. All reimbursements and in-kind benefits that
constitute deferred compensation within the meaning of Section 409A
provided under this Agreement shall be made or provided in accordance with the
requirements of Section 409A of the Code, including, without limitation,
that (i) in no event shall reimbursements by the Company under this
Agreement be made later than the end of the calendar year next following the
calendar year in which the applicable fees and expenses were incurred, provided,
that the Executive shall have submitted an invoice for such fees and expenses
at least 10 days before the end of the calendar year next following the
calendar year in which such fees and expenses were incurred; (ii) the
amount of in-kind benefits that the Company is obligated to pay or provide in
any given calendar year shall not affect the in-kind benefits that the Company
is obligated to pay or provide in any other calendar year; (iii) the
Executives right to have the Company pay or provide such reimbursements and
in-kind benefits may not be liquidated or exchanged for any other benefit; and (iv) in
no event shall the Companys obligations to make such reimbursements or to
provide such in-kind benefits apply later than the Executives remaining
lifetime (or if longer, through the 20th anniversary of the Effective
Date). Prior to the Effective Date but
within the time period permitted by the applicable Treasury Regulations, the
Company may, in consultation with the Executive, modify the Agreement, in the
least restrictive manner necessary and without any diminution in the value of
the payments to the Executive, in order to cause the provisions of the
Agreement to comply with the requirements of Section 409A of the Code, so
as to avoid the imposition of taxes and penalties on the Executive pursuant to Section 409A
of the Code.
Section 12.
Survivorship
. Upon the expiration or other termination of
this Agreement or the Executives employment, the respective rights and
obligations of the parties hereto shall survive to the extent necessary to
carry out the intentions of the parties under this Agreement.
18
IN WITNESS WHEREOF, the Executive has
hereunto set the Executives hand and, pursuant to the authorization from its
Board of Directors, the Company has caused these presents to be executed in its
name on its behalf, all as of the day and year first above written.
|
|
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[Name
of Executive]
|
|
|
|
|
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COMERICA INCORPORATED
|
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By:
|
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19
Exhibit
10.2
CHANGE OF CONTROL EMPLOYMENT
AGREEMENT (BE2-BE3)
CHANGE OF CONTROL EMPLOYMENT AGREEMENT, dated as of
the
day of
,
20
(this Agreement), by and between COMERICA INCORPORATED, a Delaware
corporation (the Company), and
(the Executive).
WHEREAS, the Board of Directors of the Company (the Board),
has determined that it is in the best interests of the Company and its
stockholders
to assure that the Company will
have the continued dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined herein). The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control
and to encourage the Executives full attention and dedication to the Company
in the event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
that ensure that the compensation and benefits expectations of the Executive
will be satisfied and that provide the Executive with compensation and benefits
arrangements that are competitive with those of other corporations. Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
Section 1.
Certain Definitions
.
(a) Effective Date means the first
date during the Change of Control Period (as defined herein) on which a Change
of Control occurs. Notwithstanding
anything in this Agreement to the contrary, if (A) the Executives employment
with the Company is terminated by the Company, (B) the Date of Termination
is prior to the date on which a Change of Control occurs, and (C) it is
reasonably demonstrated by the Executive that such termination of employment (i)
was at the request of a third party that has taken steps reasonably calculated
to effect a Change of Control or (ii) otherwise arose in connection with
or anticipation of a Change of Control (such a termination of employment, an Anticipatory
Termination), then for all purposes of this Agreement, the Effective Date
means the date immediately prior to such Date of Termination.
(b)
Change of Control Period means the
period commencing on the date hereof and ending on the third anniversary of the
date hereof;
provided
,
however
,
that, commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof, the Renewal
Date), unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such Renewal Date,
unless, at least 60 days prior to the Renewal Date, the Company shall give
notice to the Executive that the Change of Control Period shall not be so
extended.
(c)
Affiliated Company means any company
controlled by, controlling or under common control with the Company.
(d)
Change of Control means:
(1)
Any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the Exchange Act)) (a Person) becomes the
beneficial owner (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (A) the then-outstanding shares of
common stock of the Company (the Outstanding Company Common Stock) or (B) the
combined voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors (the Outstanding
Company Voting Securities);
provided
,
however
, that, for purposes of this Section 1(d), the
following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any Affiliated Company or (iv) any acquisition pursuant to a
transaction that complies with Sections 1(d)(3)(A), 1(d)(3)(B) and
1(d)(3)(C);
(2)
Individuals who, as of the date hereof,
constitute the Board (the Incumbent Board) cease for any reason to constitute
at least a majority of the Board;
provided
,
however
, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the Companys
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual was a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board;
(3)
Consummation of a reorganization, merger,
statutory share exchange or consolidation or similar transaction involving the
Company or any of its subsidiaries, a sale or other disposition of all or
substantially all of the assets of the Company, or the acquisition of assets or
stock of another entity by the Company or any of its subsidiaries (each, a Business
Combination), in each case unless, following such Business Combination, (A) all
or substantially all of the individuals and entities that were the beneficial
owners of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of
common stock (or, for a non-corporate entity, equivalent securities) and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors (or, for a non-corporate entity,
equivalent governing body), as the case may be, of the entity resulting from
such Business Combination (including, without limitation, an entity that, as a
result of such transaction, owns the Company or all or substantially all of the
Companys assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately prior to such
Business Combination of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then-outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior to the
Business Combination, and (C) at least a majority of the members of the
board of directors (or, for a non-corporate entity, equivalent governing body)
of the entity resulting from such Business
2
Combination were members of the Incumbent
Board at the time of the execution of the initial agreement or of the action of
the Board providing for such Business Combination; or
(4)
Approval by the stockholders
of the Company of a complete liquidation or dissolution of
the Company.
Section 2.
Employment Period
.
The Company hereby agrees to continue the
Executive in its employ, subject to the terms and conditions of this Agreement,
for the period commencing on the Effective Date and ending on the last day of
the thirtieth consecutive month following the Effective Date (the Employment
Period). The Employment Period shall
terminate upon the Executives termination of employment for any reason.
Section 3.
Terms of Employment
.
(a)
Position
and Duties
.
(1)
During the Employment Period, (A) the
Executives position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all respects with the most significant of those held, exercised
and assigned at any time during the 120-day period immediately preceding the
Effective Date, and (B) the Executives services shall be performed at the
location where the Executive was employed immediately preceding the Effective
Date or at any office or location less than 60 miles from such location.
(2)
During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent necessary
to discharge the responsibilities assigned to the Executive hereunder, to use
the Executives reasonable best efforts to perform faithfully and efficiently
such responsibilities. During the
Employment Period, it shall not be a violation of this Agreement for the Executive
to (A) serve on corporate, civic or charitable boards or committees, (B) deliver
lectures, fulfill speaking engagements or teach at educational institutions and
(C) manage personal investments, so long as such activities do not
significantly interfere with the performance of the Executives
responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood
and agreed that, to the extent that any such activities have been conducted by
the Executive prior to the Effective Date, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
subsequent to the Effective Date shall not thereafter be deemed to interfere
with the performance of the Executives responsibilities to the Company.
(b)
Compensation
.
(1)
Base Salary
.
During the Employment Period, the
Executive shall receive an annual base salary (the Annual Base Salary) at an
annual rate at least equal to 26 times the highest bi-weekly base salary paid
or payable, including any base salary that has been earned but deferred, to the
Executive by the Company and the Affiliated Companies in respect of the
one-year period immediately preceding the month in which the Effective Date
occurs. The Annual Base Salary shall be
paid to the Executive at such intervals as the Company pays executive salaries
generally, unless the Executive shall elect to defer the receipt of such Base
Salary pursuant to an arrangement that meets the requirements of Section 409A
of the Internal Revenue Code of 1986, as amended (the Code). During the Employment Period, the Annual Base
Salary shall be reviewed at least annually, beginning no more than 12
3
months after the last salary increase
awarded to the Executive prior to the Effective Date. Any increase in the Annual Base Salary shall
not serve to limit or reduce any other obligation to the Executive under this
Agreement. The Annual Base Salary shall
not be reduced after any such increase and the term Annual Base Salary shall
refer to the Annual Base Salary as so increased.
(2)
Annual Bonus
.
In
addition to the Annual Base Salary, the Executive shall be awarded, for each
fiscal year ending during the Employment Period, an annual bonus (the Annual
Bonus) in cash at least equal to the aggregate of the Executives highest
bonus under each of
(i)
the
Companys Management Incentive Plan; and
(ii)
any business
unit incentive plan of the Company in which the Executive has participated during
any portion of the last three fiscal years (or any predecessor or successor
plan to any thereof), as applicable, for the last three full fiscal years prior
to the Effective Date, including any bonus or portion thereof that has been
earned but deferred (annualized in the event that the Executive was not
employed by the Company for the whole of such fiscal year and not otherwise
paid a full years bonus for such year) (the Recent Annual Bonus). For purposes of determining the Recent Annual
Bonus, the highest bonus under the Management Incentive Plan shall be
determined by including bonuses earned for both the annual and multiyear
performance periods ending in each of the last three full fiscal years prior to
the Effective Date (or for such lesser number of full fiscal years prior to the
Effective Date for which the Executive was eligible to earn such a bonus and
annualized in the case of any pro rata bonus earned for a partial fiscal
year). Each such Annual Bonus shall be
paid no later than two and a half months after the end of the fiscal year for
which the Annual Bonus is awarded, unless the Executive shall elect to defer
the receipt of such Annual Bonus pursuant to an arrangement that meets the
requirements of Section 409A of the Code.
(3)
Long-Term Equity Incentives,
Savings and Retirement Plans
.
During the Employment Period, the
Executive shall be entitled to participate in all equity incentive, savings and
retirement plans, practices, policies, and programs applicable generally to
other peer executives of the Company and the Affiliated Companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in
each case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and the Affiliated Companies for the Executive under
such plans, practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and the Affiliated Companies.
(4)
Welfare Benefit Plans
.
During
the Employment Period, the Executive and/or the Executives family, as the case
may be, shall be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs provided by the
Company and the Affiliated Companies (including, without limitation, medical,
prescription, dental, disability, employee life, group life, accidental death
and travel accident insurance plans
4
and programs) to the extent applicable
generally to other peer executives of the Company and the Affiliated Companies,
but in no event shall such plans, practices, policies and programs provide the
Executive with benefits that are less favorable, in the aggregate, than the
most favorable of such plans, practices, policies and programs in effect for
the Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company
and the Affiliated Companies.
(5)
Expenses
.
During
the Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
accordance with the most favorable policies, practices and procedures of the
Company and the Affiliated Companies in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated Companies.
(6)
Fringe Benefits
.
During
the Employment Period, the Executive shall be entitled to fringe benefits,
including, without limitation, tax planning services, payment of club dues,
and, if applicable, use of an automobile and payment of related expenses, in
accordance with the most favorable plans, practices, programs and policies of
the Company and the Affiliated Companies in effect for the Executive at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and the Affiliated Companies.
(7)
Office and Support Staff
.
During
the Employment Period, the Executive shall be entitled to an office or offices
of a size and with furnishings and other appointments, and to exclusive
personal secretarial and other assistance, at least equal to the most favorable
of the foregoing provided to the Executive by the Company and the Affiliated
Companies at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as provided generally at
any time thereafter with respect to other peer executives of the Company and
the Affiliated Companies.
(8)
Vacation
.
During
the Employment Period, the Executive shall be entitled to paid vacation in
accordance with the most favorable plans, policies, programs and practices of
the Company and the Affiliated Companies as in effect for the Executive at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and the Affiliated
Companies.
Section 4.
Termination of Employment
.
(a)
Death or
Disability
.
The Executives
employment shall terminate automatically if the Executive dies during the Employment
Period. If the Company determines in
good faith that the Disability (as defined herein) of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability),
it may give to the Executive written notice in accordance with Section 11(b) of
its intention to terminate the Executives employment. In such event, the Executives employment
with the Company shall terminate effective on the 30th day after receipt of
such
5
notice
by the Executive (the Disability Effective Date),
provided
that,
within the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executives duties. Disability means the absence of the
Executive from the Executives duties with the Company on a full-time basis for
180 consecutive business days as a result of incapacity due to mental or
physical illness that is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executives legal representative.
(b)
Cause
.
The
Company may terminate the Executives employment during the Employment Period with
or without Cause. Cause means:
(1)
the willful and continued failure of the
Executive to perform substantially the Executives duties with the Company or
any Affiliated Company (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board or the Chief Executive
Officer of the Company that specifically identifies the manner in which the
Board or the Chief Executive Officer of the Company believes that the Executive
has not substantially performed the Executives duties, or
(2)
the willful engaging by the Executive in
illegal conduct or gross misconduct that is materially and demonstrably
injurious to the Company.
For purposes of this Section 4(b), no act, or
failure to act, on the part of the Executive shall be considered willful
unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executives action or omission was in the
best interests of the Company. Any act,
or failure to act, based upon (A) authority given pursuant to a resolution
duly adopted by the Board, or if the Company is not the ultimate parent
corporation of the Affiliated Companies and is not publicly-traded, the board
of directors of the ultimate parent of the Company (the Applicable Board), (B) the
instructions of the Chief Executive Officer of the Company or a senior officer
of the Company or (C) the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation of employment of the Executive
shall not be deemed to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the Applicable
Board (excluding the Executive, if the Executive is a member of the Applicable
Board) at a meeting of the Applicable Board called and held for such purpose
(after reasonable notice is provided to the Executive and the Executive is
given an opportunity, together with counsel for the Executive, to be heard
before the Applicable Board), finding that, in the good faith opinion of the
Applicable Board, the Executive is guilty of the conduct described in Section 4(b)(1) or
4(b)(2), and specifying the particulars thereof in detail.
(c)
Good Reason
.
The
Executives employment may be terminated during the Employment Period by the
Executive for Good Reason or by the Executive voluntarily without Good
Reason. Good Reason means:
(1)
the assignment to the Executive of any
duties inconsistent in any respect with the Executives position (including
status, offices, titles and reporting
6
requirements),
authority, duties or responsibilities as contemplated by Section 3(a), or
any action by the Company that results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and that is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(2)
any failure by the Company to comply with
any of the provisions of Section 3(b), other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and that is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
(3)
the Companys requiring the Executive to
be based at any office or location other than as provided in Section 4(a)(i)(B) hereof
or the Companys requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the Effective
Date;
(4)
any purported termination by the Company
of the Executives employment otherwise than as expressly permitted by this
Agreement; or
(5)
any failure by the Company to comply with
and satisfy Section 10(c).
For purposes of this Section 4(c) of
this Agreement, any good faith determination of Good Reason made by the
Executive shall be conclusive.
The Executives mental or physical
incapacity following the occurrence of an event described above in clauses (1) through
(5) shall not affect the Executives ability to terminate employment for
Good Reason.
(d)
Notice of Termination
.
Any
termination by the Company for Cause, or by the Executive for Good Reason,
shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 11(b). Notice
of Termination means a written notice that (1) indicates the specific
termination provision in this Agreement relied upon, (2) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executives employment under the
provision so indicated, and (3) if the Date of Termination (as defined
herein) is other than the date of receipt of such notice, specifies the Date of
Termination (which Date of Termination shall be not more than 30 days after the
giving of such notice). The failure by
the Executive or the Company to set forth in the Notice of Termination any fact
or circumstance that contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact
or circumstance in enforcing the Executives or the Companys respective rights
hereunder.
(e)
Date of Termination
.
Date of Termination means (1) if the Executives
employment is terminated by the Company for Cause, or by the Executive for Good
Reason, the date of receipt of the Notice of Termination or such later date
specified in the Notice of Termination, as the case may be, (2) if the
Executives employment is terminated by the Company other than for Cause or
Disability, the date on which the Company notifies the Executive of such
termination, (3) if the Executive resigns without Good Reason, the date on
7
which the Executive notifies the Company
of such termination, and (4) if the Executives employment is terminated
by reason of death or Disability, the date of death of the Executive or the
Disability Effective Date, as the case may be.
Notwithstanding the foregoing, in no event shall the Date of Termination
occur until the Executive experiences a separation from service within the
meaning of Section 409A of the Code, and notwithstanding anything contained
herein to the contrary, the date on which such separation from service takes
place shall be the Date of Termination.
Section 5.
Obligations of the Company upon Termination
. (a) By the Executive for
Good Reason; By the Company Other Than for Cause, Death or Disability
.
If, during the Employment Period, the Company
terminates the Executives employment other than for Cause, Death or Disability
or the Executive terminates employment for Good Reason:
(1)
the
Company shall pay to the Executive, in a lump sum in cash within 30 days after
the Date of Termination, the aggregate of the following amounts:
(A)
the
sum of (i) the Executives Annual Base Salary through the Date of
Termination to the extent not theretofore paid or deferred pursuant to an irrevocable
election under any deferred compensation arrangement subject to Section 409A,
(ii) any accrued vacation pay to the extent not theretofore paid (the sum
of the amounts described in subclauses (i) and (ii), the Accrued
Obligations) and (iii) an amount equal to the product of (x) the
higher of (I) the Recent Annual Bonus and (II) the aggregate Annual
Bonus under each of the Companys Management Incentive Plan and any business
unit incentive plan of the Company in which the Executive has participated
(or any predecessor or successor plan to
any thereof) paid or payable, including any bonus or portion thereof that has
been earned but deferred (and annualized for any fiscal year consisting of less
than 12 full months or during which the Executive was employed for less than 12
full months), for the most recently completed fiscal year during the Employment
Period, if any, (it being understood that, such Annual Bonus shall be
determined by including bonuses earned for both the annual and multiyear performance
periods ending in such recently completed fiscal year during the Employment
Period) (such higher amount, the Highest
Annual Bonus) and (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the Date of Termination and the
denominator of which is 365 (the Pro Rata Bonus); and
(B)
the
amount equal to the product of (i) two
and (ii) the
sum of (x) the Executives Annual Base Salary and (y) the Highest
Annual Bonus.
(2)
[
FOR THE AGREEMENTS OF EXECUTIVES COMMENCING EMPLOYMENT PRIOR TO JANUARY
1, 2007:
the Company shall
pay to the Executive, at such time as such amounts are payable under the terms
of each applicable SERP (as defined below), or, if the Executive
8
does not participate in
a SERP, in a lump sum in cash within 30 days after the Date of Termination, an
amount equal to the excess of (i) the actuarial equivalent of the benefit
under the Companys qualified defined benefit retirement plan (the Retirement
Plan) (utilizing actuarial assumptions no less favorable to the Executive than
those in effect under the Retirement Plan immediately prior to the Effective
Date) and any excess or supplemental retirement plan in which the Executive
participates (collectively, the SERP) (utilizing actuarial assumptions no
less favorable to the Executive than those in effect under the SERP immediately
prior to the Effective Date) that the Executive would receive if the Executives
employment continued for two years after the Date of Termination, assuming for
this purpose that (x) the accrued
benefit is fully vested, (y) the Executives age is increased by
the number of years (including partial years) that the Executive is deemed to
be so employed and (z) the Executives compensation in each of the two
years is that required by Sections 3(b)(1) and 3(b)(2) payable in
equal biweekly installments over
such two-year period, over (ii) the actuarial equivalent of the Executives
actual benefit (paid or payable), if any, under the Retirement Plan and the
SERP as of the Date of Termination;]
[
FOR THE
AGREEMENTS OF EXECUTIVES COMMENCING EMPLOYMENT ON OR AFTER JANUARY 1,
2007:
the Company shall pay
to the Executive, at such time as such amounts are payable under the terms of
each applicable SERP (as defined below),
or, if the Executive does not participate in a SERP, in a lump sum in
cash within 30 days after the Date of Termination, an amount equal to the excess of (i) the account balance under the
Companys qualified defined contribution retirement plan (the Defined
Contribution Plan) and any excess or supplemental defined contribution
plan in which the Executive participates (collectively, the SERP) that the Executive would receive if the
Executives employment continued for two years after the Date of Termination,
assuming for this purpose that (x) the account balance is fully vested, (y)
the Company makes a nonelective employer contribution to the SERP for each year
in such two-year period in an amount equal to the greatest nonelective employer
contribution made to such plan during the last two full fiscal years prior to
the Effective Date and (z) the Executives compensation in each of the two
years is that required by Section 3(b)(1) and Section 3(b)(2) payable
in equal biweekly installments for such two-year period, over (ii) the
account balance (paid or payable), if any, under the Defined Contribution Plan
and the SERP as of the Date of Termination;]
(3)
during the two year period following the Date of
Termination (the Benefits Period), the Company shall provide the Executive,
his spouse and his eligible dependents with medical and dental insurance
coverage (the Health Care Benefits) and life insurance benefits no less
favorable to those which the Executive, his spouse and his eligible dependents
were receiving immediately prior to the Date of Termination
or,
if more favorable to such persons, as in effect generally at any time
thereafter with respect to other peer executives of the Company and the
Affiliated Companies;
provided
,
however
, that the
Health
Care
Benefits shall be provided during the Benefits Period
in such a manner that such benefits are excluded from the Executives income
for federal income tax purposes;
provided, further, however
,
that if the Executive becomes re-employed
9
with another employer
and is eligible to receive health care benefits under another employer-provided
plan, the health care benefits provided hereunder shall be secondary to those
provided under such other plan during such applicable period of eligibility
. The
receipt of the Health Care Benefits shall be conditioned upon the Executive
continuing to pay the
monthly
premium as in effect at the Company from time to time for coverage provided to
former employees under Section 4980B of the Code
in
respect of the maximum level of coverage that the Executive could otherwise
elect to receive for the Executive, his spouse and eligible dependents if the
Executive were still an employee of the Company during the Benefits Period (
i.e.
, single, single plus one, or family) (the Applicable
COBRA Premium) regardless of what level of coverage is actually elected.
During the portion of
the Benefits Period in which the Executive, his spouse and his eligible
dependents continue to receive coverage under the Companys
Health Care
Benefits
plans, the Company shall pay to the Executive a monthly amount equal to the excess of (x) the Applicable COBRA
Premium over (y) the monthly employee contribution rate that is paid by
Company employees generally for the same or similar coverage, as in effect from
time to time
(and which amount shall in no event be greater than the employee
contribution rate for the applicable level of coverage as in effect immediately
prior to the Effective Date), which payment shall be paid in advance on the
first payroll day of each month, commencing with the month immediately
following the Executives Date of Termination. The Company shall use its
reasonable best efforts to ensure that, following the end of the Benefit
Period, the Executive shall be eligible to elect continued health coverage
pursuant to Section 4980B of the Code or other applicable law (COBRA
Coverage), as if the Executives employment with the Company had terminated as
of the end of such period. For purposes
of determining eligibility (but not the time of commencement of benefits) of
the Executive for retiree welfare benefits pursuant to the Companys retiree
welfare benefit plans, if any, the Executive shall be considered to have
remained employed until the end of the Benefit Period and to have retired on
the last day of such period. In order to
comply with Section 409A of the Code, (i) the amount of benefits that
the Company is obligated to provide under this Section 5(a)(3) in any
given calendar year shall not affect the amount of such benefits that the
Company is obligated to pay in any other calendar year; and (ii) the
Executives right to have the Company provide such benefits may not be
liquidated or exchanged for any other benefit
; and
(4)
the Company shall, at its sole expense as
incurred, provide the Executive with outplacement services the scope and
provider of which shall be selected by the Executive in the Executives sole
discretion,
provided
that such outplacement benefits
shall end not later than the last day of the second calendar year that begins
after the Date of Termination; and
(5)
except as otherwise set forth in the last
sentence of Section 6, to the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive any Other Benefits (as
defined in Section 6) in accordance with the terms of the underlying plans
or agreements.
10
Notwithstanding the foregoing provisions of Sections 5(a)(1), (2) or
(3), in the event that the Executive is a specified employee within the
meaning of Section 409A of the Code (as determined in accordance with the
methodology established by the Company as in effect on the Date of Termination)
(a Specified Employee), amounts that constitute nonqualified deferred
compensation within the meaning of Section 409A of the Code that would
otherwise be payable and benefits that would otherwise be provided under
Sections 5(a)(1), (2) or (3) during the six-month period immediately
following the Date of Termination (other than the Accrued Obligations) shall
instead be paid, with interest on any delayed payment at the applicable federal
rate provided for in Section 7872(f)(2)(A) of the Code (Interest)
determined as of the Date of Termination, or provided on the first business day
after the date that is six months following the Executives separation from
service within the meaning of Section 409A of the Code (the Delayed
Payment Date).
(b)
Death
.
If the Executives employment is terminated by reason of the Executives
death during the Employment Period, the Company shall provide the Executives
estate or beneficiaries with the Accrued Obligations and the Pro Rata Bonus and
the timely payment or delivery of the Other Benefits, and shall have no other
severance obligations under this Agreement.
The Accrued Obligations and the Pro Rata Bonus shall be paid to the
Executives estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. With
respect to the provision of the Other Benefits, the term Other Benefits as
utilized in this Section 5(b) shall include, without limitation, and
the Executives estate and/or beneficiaries shall be entitled to receive,
benefits at least equal to the most favorable benefits provided by the Company
and the Affiliated Companies to the estates and beneficiaries of peer
executives of the Company and the Affiliated Companies under such plans,
programs, practices and policies relating to death benefits, if any, as in
effect with respect to other peer executives and their beneficiaries at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executives estate and/or the Executives beneficiaries,
as in effect on the date of the Executives death with respect to other peer
executives of the Company and the Affiliated Companies and their beneficiaries.
(c)
Disability
.
If the Executives employment is
terminated by reason of the Executives Disability during the Employment
Period, the Company shall provide the Executive with the Accrued Obligations
and Pro Rata Bonus and the timely payment or delivery of the Other Benefits in
accordance with the terms of the underlying plans or agreements, and shall have
no other severance obligations under this Agreement. The Accrued Obligations and the Pro Rata
Bonus shall be paid to the Executive in a lump sum in cash within 30 days of
the Date of Termination,
provided
, that
in the event that the Executive is a Specified Employee, the Pro Rata Bonus
shall be paid, with Interest, to the Executive on the Delayed Payment
Date. With respect to the provision of
the Other Benefits, the term Other Benefits as utilized in this Section 5(c) shall
include, and the Executive shall be entitled after the Disability Effective
Date to receive, disability and other benefits at least equal to the most
favorable of those generally provided by the Company and the Affiliated Companies
to disabled executives and/or their families in accordance with such plans,
programs, practices and policies relating to disability, if any, as in effect
generally with respect to other peer executives and their families at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executives family, as in effect at any
time thereafter generally with respect to other peer executives of the Company
and the Affiliated Companies and their families.
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(d)
Cause;
Other Than for Good Reason
.
If
the Executives employment is terminated for Cause during the Employment
Period, the Company shall provide the Executive with the Executives Annual
Base Salary through the Date of Termination, and the timely payment or delivery
of the Other Benefits, and shall have no other severance obligations under this
Agreement. If the Executive voluntarily
terminates employment during the Employment Period, excluding a termination for
Good Reason, the Company shall provide to the Executive the Accrued Obligations
and the Pro Rata Bonus and the timely payment or delivery of the Other Benefits,
and shall have no other severance obligations under this Agreement. In such case, all the Accrued Obligations and
the Pro Rata Bonus shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination,
provided
, that
in the event that the Executive is a Specified Employee, the Pro Rata Bonus
shall be paid, with Interest, to the Executive on the Delayed Payment Date.
Section 6.
Non-exclusivity of
Rights
.
Nothing in this
Agreement shall prevent or limit the Executives continuing or future
participation in any plan, program, policy or practice provided by the Company
or the Affiliated Companies and for which the Executive may qualify, nor,
subject to Section 11(f), shall anything herein limit or otherwise affect
such rights as the Executive may have under any other contract or agreement with
the Company or the Affiliated Companies.
Amounts that are vested benefits or that the Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any other
contract or agreement with the Company or the Affiliated Companies at or
subsequent to the Date of Termination (Other Benefits) shall be payable in
accordance with such plan, policy, practice or program or contract or
agreement, except as explicitly modified by this Agreement. Without limiting the generality of the
foregoing, the Executives resignation under this Agreement with or without
Good Reason, shall in no way affect the Executives ability to terminate
employment by reason of the Executives retirement under, or to be eligible
to receive benefits under, any compensation and benefits plans, programs or
arrangements of the Company or the Affiliated Companies, including without
limitation any retirement or pension plans or arrangements or substitute plans
adopted by the Company, the Affiliated Companies or their respective
successors, and any termination which otherwise qualifies as Good Reason shall
be treated as such even if it is also a retirement for purposes of any such
plan. Notwithstanding the foregoing, if
the Executive receives payments and benefits pursuant to Section 5(a) of
this Agreement, the Executive shall not be entitled to any severance pay or
benefits under any severance plan, program or policy of the Company and the
Affiliated Companies, unless otherwise specifically provided therein in a
specific reference to this Agreement.
Section 7.
Full Settlement; Legal Fees
.
The
Companys obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense, or other claim, right or action
that the Company may have against the Executive or others. In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement,
and except as specifically provided in Section 5(a)(2), such amounts shall
not be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred (within
10 days following the Companys receipt of an invoice from the Executive), at
any time from the Change of Control through the Executives remaining lifetime
(or, if longer, through the 20
th
anniversary of the Change of
Control) to the full extent permitted by law, all
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legal
fees and expenses that the Executive may reasonably incur as a result of any
contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a
result of any contest by the Executive about the amount of any payment pursuant
to this Agreement), plus, in each case, Interest determined as of the date such
legal fees and expenses were incurred;
provided
, that
the Executive shall have submitted an invoice for such fees and expenses at
least 10 days before the end of the calendar year next following the calendar
year in which such fees and expenses were incurred (or, in connection with a
contest related to an Anticipatory Termination, following the calendar year in
which such contest is finally resolved).
The amount of such legal fees and expenses that the Company is obligated
to pay in any given calendar year shall not affect the legal fees and expenses
that the Company is obligated to pay in any other calendar year, and the
Executives right to have the Company pay such legal fees and expenses may not
be liquidated or exchanged for any other benefit.
Section 8.
Certain Additional Payments
by the Company
.
(a) Anything
in this Agreement to the contrary notwithstanding and except as set forth
below, in the event it shall be determined that any Payment would be subject to
the Excise Tax, then the Executive shall be entitled to receive an additional
payment (the Gross-Up Payment) in an amount such that, after payment by the
Executive of all taxes (and any interest or penalties imposed with respect to
such taxes), including, without limitation, any income taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, but excluding any income taxes and penalties imposed pursuant
to Section 409A of the Code, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of
this Section 8(a), if it shall be determined that the Executive is
entitled to the Gross-Up Payment, but that the Parachute Value of all Payments
does not exceed 110% of the Safe Harbor Amount, then no Gross-Up Payment shall
be made to the Executive and the amounts payable under this Agreement shall be
reduced so that the Parachute Value of all Payments, in the aggregate, equals
the Safe Harbor Amount. The reduction of
the amounts payable hereunder, if applicable, shall be made by reducing the
payments and benefits under the following sections in the following order: (i) Section 5(a)(1)(B),
(ii) Section 5(a)(1)(C), (iii) Section 5(a)(1)(A)(v) and
(iv) Section 5(a)(2). For
purposes of reducing the Payments to the Safe Harbor Amount, only amounts
payable under this Agreement (and no other Payments) shall be reduced. If the reduction of the amount payable under
this Agreement would not result in a reduction of the Parachute Value of all
Payments to the Safe Harbor Amount, no amounts payable under the Agreement
shall be reduced pursuant to this Section 8(a) and the Executive shall be entitled to the Gross-Up
Payment. The Companys obligation to
make Gross-Up Payments under this Section 8 shall not be conditioned upon
the Executives termination of employment.
(b) Subject
to the provisions of Section 8(c), all determinations required to be made
under this Section 8, including whether and when a Gross-Up Payment is
required, the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Ernst &
Young LLP, or such other nationally recognized certified public accounting firm
as may be designated by the Executive (the Accounting Firm). The Accounting Firm shall provide detailed
supporting calculations both to the Company and the
13
Executive
within 15 business days of the receipt of notice from the Executive that there
has been a Payment or such earlier time as is requested by the Company. In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, the Executive may appoint another nationally recognized
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm
shall be borne solely by the Company.
Any determination by the Accounting Firm shall be binding upon the
Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments that will not have been made by the Company
should have been made (the Underpayment), consistent with the calculations
required to be made hereunder. In the
event the Company exhausts its remedies pursuant to Section 8(c) and
the Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive.
(c) The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of the Gross-Up Payment. Such
notification shall be given as soon as practicable, but no later than 10
business days after the Executive is informed in writing of such claim. The Executive shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on which
the Executive gives such notice to the Company (or such shorter period ending
on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that the Company desires to
contest such claim, the Executive shall:
(1) give
the Company any information reasonably requested by the Company relating to such
claim,
(2) take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,
(3) cooperate
with the Company in good faith in order effectively to contest such claim; and
(4) permit
the Company to participate in any proceedings relating to such claim;
provided
,
however
, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest, and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties) imposed as a result of such representation and payment
of costs and expenses. Without
limitation on the foregoing provisions of this Section 8(c), the Company
shall control all proceedings taken in connection with such contest, and, at
its sole
14
discretion, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the applicable taxing authority in
respect of such claim and may, at its sole discretion, either pay the tax
claimed to the appropriate taxing authority on behalf of the Executive and
direct the Executive to sue for a refund or to contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine;
provided
,
however
,
that, if the Company pays such claim and directs the Executive to sue for a
refund, the Company shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties) imposed with respect to such payment or with respect to any imputed
income in connection with such payment; and
provided
,
further
, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the
Companys control of the contest shall be limited to issues with respect to
which the Gross-Up Payment would be payable hereunder, and the Executive shall
be entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.
(d) If,
after the receipt by the Executive of a Gross-Up Payment or payment by the
Company of an amount on the Executives behalf pursuant to Section 8(c),
the Executive becomes entitled to receive any refund with respect to the Excise
Tax to which such Gross-Up Payment relates or with respect to such claim, the
Executive shall (subject to the Companys complying with the requirements of Section 8(c),
if applicable) promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after taxes applicable
thereto). If, after payment by the
Company of an amount on the Executives behalf pursuant to Section 8(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then the amount of such payment shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid.
(e) Any
Gross-Up Payment, as determined pursuant to this Section 8, shall be paid
by the Company to the Executive within five days of the receipt of the
Accounting Firms determination;
provided
that, the Gross-Up Payment shall in all events be paid no later than the end of
the Executives taxable year next following the Executives taxable year in
which the Excise Tax (and any income or other related taxes or interest or
penalties thereon) on a Payment are remitted to the Internal Revenue Service or
any other applicable taxing authority or, in the case of amounts relating to a
claim described in Section 8(c) that does not result in the
remittance of any federal, state, local and foreign income, excise, social
security and other taxes, the calendar year in which the claim is finally
settled or otherwise resolved.
Notwithstanding any other provision of this Section 8, the Company
may, in its sole discretion, withhold and pay over to the Internal Revenue
Service or any other applicable taxing authority, for the benefit of the
Executive, all or any portion of any Gross-Up Payment, and the Executive hereby
consents to such withholding.
(f)
Definitions
. The following terms shall have the following
meanings for purposes of this Section 8.
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(i) Excise Tax shall
mean the excise tax imposed by Section 4999 of the Code, together with any
interest or penalties imposed with respect to such excise tax.
(ii) Parachute Value
of a Payment shall mean the present value as of the date of the change of
control for purposes of Section 280G of the Code of the portion of such
Payment that constitutes a parachute payment under Section 280G(b)(2),
as determined by the Accounting Firm for purposes of determining whether and to
what extent the Excise Tax will apply to such Payment.
(iii) A Payment shall
mean any payment or distribution in the nature of compensation (within the
meaning of Section 280G(b)(2) of the Code) to or for the benefit of
the Executive, whether paid or payable pursuant to this Agreement or otherwise.
(iv) The Safe Harbor
Amount means 2.99 times the Executives base amount, within the meaning of Section 280G(b)(3) of
the Code.
Section 9.
Confidential Information
.
The
Executive shall hold in a fiduciary capacity for the benefit of the Company all
secret or confidential information, knowledge or data relating to the Company
or the Affiliated Companies, and their respective businesses, which
information, knowledge or data shall have been obtained by the Executive during
the Executives employment by the Company or the Affiliated Companies and which
information, knowledge or data shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of
the Executives employment with the Company, the Executive shall not, without
the prior written consent of the Company or as may otherwise be required by law
or legal process, communicate or divulge any such information, knowledge or
data to anyone other than the Company and those persons designated by the
Company. In no event shall an asserted
violation of the provisions of this Section 9 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.
Section 10.
Successors
.
(a)
This Agreement is personal to the Executive, and, without the prior written
consent of the Company, shall not be assignable by the Executive other than by
will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executives legal representatives.
(b) This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns. Except as
provided in Section 10(c), without the prior written consent of the
Executive this Agreement shall not be assignable by the Company.
(c) The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Company means the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid that
assumes and agrees to perform this Agreement by operation of law or otherwise.
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Section 11.
Miscellaneous
.
(a)
This Agreement shall be governed by and construed in accordance with the laws
of the State of Delaware, without reference to principles of conflict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. Subject to the last sentence of Section 11(h),
this Agreement may not be amended or modified other than by a written agreement
executed by the parties hereto or their respective successors and legal representatives.
(b) All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
if to the Executive:
At the most recent address on file at the
Company.
if to the Company:
Comerica Incorporated
Comerica Bank Tower
1717 Main Street, MC 6404
Dallas, Texas
75201
Attention:
General Counsel
or to such other address as either party shall have furnished to the
other in writing in accordance herewith.
Notice and communications shall be effective when actually received by
the addressee.
(c) The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.
(d) The
Company may withhold from any amounts payable under this Agreement such United
States federal, state or local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The
Executives or the Companys failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right the Executive or
the Company may have hereunder, including, without limitation, the right of the
Executive to terminate employment for Good Reason pursuant to Sections 4(c)(1) through
4(c)(5), shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
(f) The
Executive and the Company acknowledge that, except as may otherwise be provided
under any other written agreement between the Executive and the Company, the
employment of the Executive by the Company is at will and, subject to Section 1(a),
prior to the Effective Date, the Executives employment may be terminated by
either the
17
Executive
or the Company at any time prior to the Effective Date, in which case the
Executive shall have no further rights under this Agreement. From and after the Effective Date, except as
specifically provided herein, this Agreement shall supersede any other
agreement between the parties with respect to the subject matter hereof in
effect immediately prior to the execution of this Agreement.
(g) The Agreement is intended to comply with the requirements
of Section 409A of the Code or an exemption or exclusion therefrom and
shall in all respects be administered in accordance with Section 409A of
the Code. Each payment under this
Agreement shall be treated as a separate payment for purposes of Section 409A
of the Code. In no event may the
Executive, directly or indirectly, designate the calendar year of any payment
to be made under this Agreement. If the
Executive dies following the Date of Termination and prior to the payment of
the any amounts delayed on account of Section 409A of the Code, such
amounts shall be paid to the personal representative of the Executives estate
within 30 days after the date of the Executives death. All reimbursements and in-kind benefits that
constitute deferred compensation within the meaning of Section 409A
provided under this Agreement shall be made or provided in accordance with the
requirements of Section 409A of the Code, including, without limitation,
that (i) in no event shall reimbursements by the Company under this
Agreement be made later than the end of the calendar year next following the
calendar year in which the applicable fees and expenses were incurred, provided,
that the Executive shall have submitted an invoice for such fees and expenses
at least 10 days before the end of the calendar year next following the
calendar year in which such fees and expenses were incurred; (ii) the
amount of in-kind benefits that the Company is obligated to pay or provide in
any given calendar year shall not affect the in-kind benefits that the Company
is obligated to pay or provide in any other calendar year; (iii) the
Executives right to have the Company pay or provide such reimbursements and
in-kind benefits may not be liquidated or exchanged for any other benefit; and (iv) in
no event shall the Companys obligations to make such reimbursements or to
provide such in-kind benefits apply later than the Executives remaining lifetime
(or if longer, through the 20th anniversary of the Effective Date). Prior to the Effective Date but within the
time period permitted by the applicable Treasury Regulations, the Company may,
in consultation with the Executive, modify the Agreement, in the least restrictive
manner necessary and without any diminution in the value of the payments to the
Executive, in order to cause the provisions of the Agreement to comply with the
requirements of Section 409A of the Code, so as to avoid the imposition of
taxes and penalties on the Executive
pursuant to Section 409A of the Code.
Section 12.
Survivorship
. Upon
the expiration or other termination of this Agreement or the Executives
employment, the respective rights and obligations of the parties hereto shall
survive to the extent necessary to carry out the intentions of the parties
under this Agreement.
18
IN WITNESS WHEREOF, the Executive has
hereunto set the Executives hand and, pursuant to the authorization from its
Board of Directors, the Company has caused these presents to be executed in its
name on its behalf, all as of the day and year first above written.
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[Name of
Executive]
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COMERICA INCORPORATED
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By:
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