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EXHIBIT (10)H
MANAGEMENT CONTINUITY AGREEMENT
The Amendment and Renewal of this Agreement is effective as of November
20, 1996 between FIRST OF AMERICA BANK CORPORATION, a Michigan Corporation with
an office at 000 X. Xxxx Xx., Xxxxxxxxx, Xxxxxxxx 00000 (the "Company") [,
[Bank name], a wholly owned subsidiary of the Company] and
[Officer name]
whose address is: [Officer address]
(the "Officer")
W I T N E S S E T H
WHEREAS, the Officer is employed by the [Company/Bank] as an officer of
the [Company/Bank] with the title and salary current at the effective date of
this Agreement as set forth in this Agreement; and
WHEREAS, the Officer [and/,] the Company [and the Bank] are parties to a
Management Continuity Agreement effective [date], and the Officer [and/,] the
Company [and the Bank] wish to amend and renew said Management Continuity
Agreement; and
WHEREAS, the Company wishes to attract and retain highly qualified
executives and to achieve this goal it is in the best interests of the Company
to secure the continued services of the Officer regardless of a change in
control of the Company; and
WHEREAS, the Company is willing, in order to provide the Officer a measure
of security with respect to his employment with the [Company/Bank] in the event
of a change in control of the Company so that the Officer will be in a position
to act with respect to a possible change in control of the Company in the best
interests of First of America Bank Corporation and its shareholders, without
concern as to the Officer's own financial security, and in order to induce the
Officer to remain in employment with the [Company/Bank], to agree that
employment of the Officer shall be terminable only for cause for a limited
period after a change in control of the Company.
NOW, THEREFORE, the Company[, the Bank] and the Officer agree as follows:
Section 1
Employment
1.1 Term. The [Company/Bank] shall employ the Officer as [title] and the
Officer shall remain in employment with the [Company/Bank] for a period of five
years from the effective date of this Agreement (the "Term") unless terminated
prior to the expiration of the Term pursuant to Section 2.
1.2 Compensation. As compensation for services provided to the
[Company/Bank] by the Officer pursuant to this Agreement, the [Company/Bank]
shall pay the Officer an annual base salary of $[amount], which salary may be
increased from time to time by the [Company/Bank]. The Officer shall also be
eligible to actively participate in any other compensation and benefit plans
generally available to executive employees of the Company of like grade and
salary including, but not limited to, retirement plans, group life, disability,
accidental death and dismemberment, travel and accident, and health and dental
insurance plans, incentive compensation plans, stock compensation plans,
deferred compensation plans, supplemental retirement plans and excess benefit
plans. Such other compensation and benefit plans are hereinafter referred to
collectively as the "Compensation and Benefit Plans".
1.3 Duties. The Officer shall perform such duties and functions as are
assigned to him by the bylaws of the [Company/Bank], as amended or restated,
the Board of Directors of the [Company/Bank], or by a
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duly authorized committee of the Board of Directors of the Company, or by an
officer of more senior rank than the Officer. In the event of an actual or
potential Change in Control (as defined in Section 2.9), the Officer shall
perform his duties and functions in a manner that is consistent with the best
interest of [the Bank and] the Company and its shareholders, without regard to
the effect that the potential or actual Change in Control may have on the
Officer personally.
1.4 Duty of Loyalty. The Officer shall work full-time for the
[Company/Bank] only, provided that:
(a) he may also engage in charitable, civic and other similar
activities;
(b) with the consent of the Board of Directors of the Company [or
the Chief Executive Officer of the Company], he may serve as a
director of a business organization not competing with the
Company; and
(c) he may make such investments and reinvestment in business
activities as shall not require a substantial portion of his
time.
1.5 Duty Not to Disclose Confidential Information. The Officer
acknowledges that his relationship with the [Company/Bank] is one of high trust
and confidence, and that he has access to Confidential Information (as
hereinafter defined) of [the Bank and] the Company. The Officer shall not,
directly or indirectly, communicate, deliver, exhibit or provide any
Confidential Information to any person, firm, partnership, corporation,
organization or entity, except as required in the normal course of the
Officer's duties. The duties contained in this paragraph shall be binding upon
the Officer during the time that he is employed by the [Company/Bank] and
following the termination of such employment. Such duties will not apply to
any such Confidential Information which is or becomes in the public domain
through no action on the part of the Officer, is generally disclosed to third
parties by the Company without restriction on such third parties, or is
approved for release by written authorization of the Board of Directors of the
Company. The term "Confidential Information" shall mean any and all
confidential, proprietary, or secret information relating to [the Bank's or]
the Company's business, services, customers, business operations, or activities
and any and all trade secrets, products, methods of conducting business,
information, skills, knowledge, ideas, know-how or devices used in, developed
by, or pertaining to [the Bank's or] the Company's business and not generally
known, in whole or in part, in any trade or industry in which [the Bank or] the
Company is engaged.
Section 2
Termination
2.1 Termination of Agreement. Unless sooner terminated in accordance
with the terms of this Section 2, this Agreement shall terminate at the
expiration of the Term, and all obligations hereunder shall terminate except as
specifically set forth in Section 2.5. The Officer may, with the consent of
[the Bank or] the Company, continue in the employ of the [Company/Bank] after
the expiration of the Term on such terms and conditions as may be agreed upon
by [the Bank or] the Company and the Officer.
2.2 Termination by the Officer. The Officer may voluntarily terminate
this Agreement by providing two weeks notice to the Company, in which event the
[Company/Bank] shall have no further obligation to the Officer hereunder from
the date of such termination and the Officer shall have no further obligation
to [the Bank and] the Company hereunder except the duty to not disclose
Confidential Information in accordance with Section 1.5. In the event the
Officer's employment with the [Company/Bank] is terminated due to the Officer's
death, [the Bank and] the Company shall have no further obligation to the
Officer, his heirs or legatees hereunder from the date of such termination,
except to pay any benefits due under the Compensation and Benefit Plans and for
a period of one year from the date of the Officer's
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death, to pay to the Officer's surviving spouse the salary payments
described in Section 1.2, in the amount in effect on the Officer's
date of death. In the event the Officer's employment with the
[Company/Bank] is terminated due to the Officer's Permanent
Disability, the Company shall have no further obligation to the
Officer, hereunder from the date of such termination, except, for a
period of six months from the date salary continuation payments under
the Company's short term disability policy cease, to pay to the
Officer the salary payments described in Section 1.2, in the amount in effect
on the date the Officer becomes permanently disabled, but less the amount of
any benefits received by the Officer during such period from the Company's
long-term disability plan, to pay any other benefits due under the Compensation
and Benefit Plans and for a period of one year from the date of the Officer's
Permanent Disability, to provide benefits to the Officer under the Company's
dental and health plans.
For purposes of this Agreement, the term "Permanent Disability" means a
physical or mental condition of the Officer which:
(a) has continued uninterrupted for six months;
(b) is expected to continue indefinitely; and
(c) is determined by the Company to render the Officer incapable of
adequately performing his duties under Section 1.3 of this
Agreement.
2.3 Termination by the Company Without Cause. The Company may terminate
this Agreement without cause prior to the Firm Term, by providing two weeks
notice to the Officer. In such event, the Officer shall have no further
obligation to [the Bank and] the Company hereunder, except the duty to not
disclose Confidential Information in accordance with Section 1.5, and [the Bank
and] the Company shall have no further obligation to the Officer hereunder from
the date of such termination except the obligation to pay any other benefits
due under the Compensation and Benefit Plans.
2.4 termination by the Company With Cause. During the Firm Term, the
Company may terminate this Agreement for Cause. For purposes of this
Agreement, Cause shall mean;
(a) the Officer's willful and material breach of the provisions of
this Agreement, other than such breach resulting from incapacity
due to physical or mental disability, after the Board of
Directors of the Company [or the Chief Executive Officer of the
Company] delivers a written demand to cure such breach, which
specifically identifies the manner in which the Board of
Directors of the Company [or the Chief Executive Officer of the
Company] believes that the Officer has not substantially
performed his duties, or
(b) the Officer willfully engages in illegal conduct or gross
misconduct which materially and demonstrably injures [the Bank
or] the Company.
For purposes of this determining whether "Cause" exists, no act or
failure to act, on the Officer's part shall be considered "willful,"
unless it is done, or omitted to be done, by the Officer in bad faith
or without reasonable belief by the Officer that his action or
omission was in the best interests of [the Bank and] the Company. Any act or
failure to act, based upon authority given pursuant to a resolution adopted by
the Board of Directors of the Company [, or upon the instructions of the Chief
Executive Officer of the Company,] shall be conclusively presumed to be done,
or omitted to be done, by the Officer in good faith and in the best interests
of [the Bank and] the Company. The cessation of the Officer's employment shall
not be deemed for "Cause," unless and until the Officer receives a copy of a
resolution adopted by the affirmative vote of not less than two-thirds of the
entire membership of the Board of Directors of the Company at a meeting called
and held for such purpose (after reasonable notice is
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provided to the Officer and the Officer is given the opportunity,
together with counsel, to be heard before the Board of Directors),
finding that, in the good faith opinion of the Board of Directors, the
Officer's termination is for Cause.
In the event of the Officer's termination for Cause, [the Bank and] the
Company will have no further obligation to the Officer under the Agreement from
the date of such termination.
2.5 Termination Following Change in Control. In the event there is a
Change in Control of the Company, as defined in Section 2.8, during the Term,
and:
(a) within the period commencing three months prior to the date of a
Change in Control and ending two years following the date of the
Change in Control (the "Firm Term"), the Officer's employment
hereunder is terminated by the [Company/Bank] other than for
Cause, as defined in Section 2.4;
(b) within the Firm Term, the Officer resigns from his employment
hereunder upon thirty days written notice given to the Company
within thirty days following a material change in the Officer's
title, authorities or duties, in effect immediately prior to the
Change in Control, a reduction in the compensation or a
reduction in benefits provided pursuant to this Agreement or the
Compensation and Benefit Plans below the amount of compensation
and benefits in effect immediately prior to the Change in
Control, or a change of the Officer's principal place of
employment without his consent to a city different from the city
which is the principal place of the Officer's employment
immediately prior to the Change in Control, or
(c) the Officer voluntarily terminates his employment with the
[Company/Bank] during the thirty day period immediately
following the first anniversary of the Change in Control,
then the Officer shall be entitled to receive the compensation and
benefits described in Section 2.6. The date of the Officer's
termination of employment under subsection (a), (b) or (c) shall be
referred to in this Agreement as the "Termination Date."
2.6 Change in Control Severance Payments. Upon any of the events
described in Section 2.5, the Company shall pay the Officer compensation and
benefits for the three year period immediately following the Termination Date
(the "Continuation Period"), as follows:
(a) during the Continuation Period, the Officer shall (i) continue
to receive salary under Section 1.2 at the greater of the rate
in effect at the Termination Date or the rate in effect
immediately prior to the Change in Control, and (ii) continue to
actively participate in the Compensation and Benefit Plans,
except as otherwise provided below, that he actively
participated in as of the Termination Date as though he
continued in the employment of the [Company/Bank] (without
regard to any amendment or termination of the Compensation and
Benefit Plans made on or after the date of a Change in Control);
provided, however, that any benefit to be provided by a
Compensation and Benefit Plan may be provided by the Company
through cash of equivalent value or through a nonqualified
arrangement or arrangements if, in the judgment of the Company,
permitting the Officer to participate in such plan after the
Termination Date would adversely affect the tax status of such
plan; and
(b) the Officer shall receive a lump sum payment within thirty days
after the Termination Date equal to the product of three and the
greatest of the Officer's
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target annual incentive award (expressed as a dollar value)
under the Company's Annual Incentive Compensation Plan (the
"Annual Target Award") as of the Termination Date, the Annual
Target Award as of the date of the Change in Control, or the
Officer's annual target incentive award (expressed as a dollar
value) under any annual incentive compensation plan of the
Company's successor; and
(c) the Officer shall receive a lump sum payment within thirty days
after the Termination Date equal to the Officer's target long
term incentive award (expressed as a dollar value and based on
the greater of the Officer's Salary as of the date of the Change
in Control, or as of the Termination Date), if any, under the
Company's Long Term Incentive Compensation Plan, or if greater,
the Officer's target award under any long term incentive plan of
the Company's successor, for the performance period ending in
the fiscal year in which the Termination Date occurs; and
(d) during the Continuation Period, the Officer shall not
participate in the Company's Stock Compensation Plan, except
that options giving the Officer the right to purchase any stock
of the Company or any affiliate of the Company and shares of
restricted stock, which had been granted prior to the Officer's
Termination Date, shall, to the extent provided for by the terms
and conditions of the Stock Compensation Plan, and any
agreements between the Company and the Officer thereunder,
become immediately and fully exercisable (or, in the case of
restricted stock shares, become nonforfeitable) or shall be paid
in the form of limited stock appreciation rights.
The payments described in this Section 2.6 shall be in addition to any
salary payments or Compensation and Benefit Plan payments due to the Officer as
of the Termination Date.
The Company's [or the Bank's] obligation to make payments under this
Section 2.6 shall not be affected by the earnings or any other income of the
Officer, except to the extent provided in the non- compete provisions contained
in Section 2.7. To the extent benefits to be provided pursuant to this Section
2.6 are determined on the basis of the Officer's compensation, the compensation
to be used to determine such benefits after the Officer's Termination Date
shall be the greater of the Officer's compensation used to determine such
benefits immediately prior to the Change in Control or the Officer's
compensation used to determine such benefits immediately prior to the Officer's
Termination Date. The Officer's compensation, which is used to determine
benefits under this Section 2.6, shall be assumed to have continued for the
entire Continuation Period, regardless of whether such payments are paid in a
lump-sum payment pursuant to this Agreement or an election of the Officer. To
the extent that benefits to be provided by the Company pursuant to this Section
2.6 are matching contributions pursuant to the Company Reserve Plus Retirement
Savings Plan or Supplemental Savings Plan, the amount of matching contributions
to be paid by the Company in any year following the date of the Officer's
Termination Date shall be the greater of the amount of the matching
contribution made by the Company for the most recent plan year that ended prior
to the Change in Control or the amount of matching contributions made by the
Company for the most recent plan year that ended prior to the Officer's
Termination Date. To the extent benefits payable pursuant to this Section 2.6
are determined by reference to the Officer's years of service with the Company,
such as the determination of the Officer's accrued benefits under the Company's
qualified or nonqualified retirement plans, such years of service shall be
determined by including years that occur during the Continuation Period,
regardless of whether the Officer elects to receive salary payments payable to
him in a lump-sum payment pursuant to Section 2.8 of this Agreement. In
addition, to the extent the Officer is less than 100% vested in any benefits
provided by the Compensation and Benefit Plans, he shall become 100% vested
upon his Termination Date.
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For purposes of determining an Officer's right under this Section 2.6 to
accrue benefits during the Continuation Period under the Company Employees'
Retirement Plan, Supplemental Retirement Plan and Excess Benefit Plan, the
Officer's accrued benefits (including early retirement subsidies) shall be
calculated by taking into account the years of service that the Officer would
have accrued during the Continuation Period, the Officer's compensation, as
such term is defined in the Company Employees' Retirement Plan ("Retirement
Compensation"), payable for the Continuation Period and the retirement points
that the Officer would have accumulated under the Company Employees' Retirement
Plan based on the Officer's projected age and years of service at the end of
the Continuation Period. The benefit accrued pursuant to this Section 2.6
shall include both the additional benefit, based on the service, Retirement
Compensation, and retirement points that are credited during the Continuation
Period, and the increase in the retirement benefits accrued prior to the
Continuation Period due to the crediting of additional service, Retirement
Compensation and retirement points during the Continuation Period. All of the
retirement benefits accrued pursuant to this Section 2.6 shall be paid in a
single, lump-sum payment, pursuant to Section 2.8 of this Agreement.
In addition to any cash equivalency payment or medical benefit coverage
provided to the Officer for the Continuation Period, the Officer shall also be
eligible to receive a lump-sum cash payment equal to the difference between the
amount of retiree medical premium payments that would be paid by the Company
until the Officer's attainment of age 65 under the Company Employees' Health
Care Plan, as in effect immediately prior to the Change in Control (the "Health
Care Plan"), based on the Officer's age and years of service on the date of the
Officer's Termination Date, and the amount of such premium payments that would
have been paid under the Health Care Plan based on the projected age and years
of service of the Officer through the end of the Continuation Period. If,
after taking into consideration the Officer's projected age and years of
service through the end of the Continuation Period, the Officer would not have
been entitled to Company paid retiree medical premium payments, but the Officer
would have completed five or more years of service with the Company and
attained age 55 (thereby making the Officer eligible for retiree medical
coverage under the Health Care Plan), then the lump-sum payment shall be
calculated by assuming that the Company would have paid 25% of the cost of
retiree medical premium payments until the Officer's attainment of age 65. For
purposes of determining the amount of any lump-sum payment to the Officer under
this paragraph, amounts that the Company would have paid for retiree medical
premium payments shall be determined by assuming that the Company's Health Care
Plan premium costs would increase at the rate of 7% per year. For purposes of
determining the lump-sum payment of retiree medical premium payments and cash
equivalency or medical benefit coverage to be provided to the Officer during
the Continuation Period, such amounts or benefits shall include coverage for
the Officer's spouse, provided that the Officer's spouse was covered by the
Health Care Plan immediately prior to the Change in Control.
2.7 Non-Compete Provisions. In the event of the Officer's termination of
employment following a Change in Control, and the Officer becomes entitled to
compensation and benefit payments under Section 2.6 of this Agreement, the
Officer agrees not to compete with [the Bank or] the Company, pursuant to the
following terms and conditions.
For a period of [number] months following the Termination Date, the
Officer shall not engage in any employment activity or directly or indirectly
own (except for passive investments in which the Officer owns less than a 5%
ownership interest), manage, operate, control or be employed by, participate in
or be connected in any manner with the ownership, operation or control of any
business that provides commercial, retail or mortgage lending services or sells
financial products or services, which are competitive with or substantially
similar to the commercial, retail, mortgage, trust, investment or insurance
services or products of the Company, its subsidiaries and other affiliates, at
any location in [geographic area]. If any court shall determine that the
duration or geographical limit of any restriction contained in this covenant
not to compete (the "Covenant") is unenforceable under applicable law, the
Covenant shall not thereby be terminated, but shall be deemed amended to the
extent required to
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render it valid and enforceable, such amendment to apply only with
respect to the operation of the Covenant in the jurisdiction of the
Court that has made such determination.
Other than amendments that are deemed to be made pursuant to the preceding
paragraph of this Agreement, no change or modification of this Covenant shall
be valid unless the same be in writing and signed by [the Bank,] the Company
and Officer.
Upon a breach by Officer of this Covenant, the Company shall be entitled
to recover, as liquidated damages, one and one-half times the greater of the
Officer's annual base salary in effect on the date of the Termination Date or
the Officer's base salary in effect immediately prior to the date of the Change
in Control. This amount shall be deducted from the payments due to the Officer
pursuant to Section 2.6 of this Agreement. In the event that all payments
pursuant to Section 2.6 have been made to the Officer, the Officer shall pay
the aforementioned amount to the Company.
If any legal action or proceeding is brought for the enforcement of this
Covenant, or because of an alleged dispute, breach, default or
misrepresentation in connection with this Covenant, the successful or
prevailing party in such action shall be entitled to recover reasonable
attorneys' fees and costs connected with such action or proceeding in addition
to all other recovery or relief.
2.8 Timing of Payments. All salary payments to be made by [the Bank or]
the Company pursuant to Section 2.6 shall be made in monthly installments
during the Continuation Period, on the first day of each month following the
Officer's Termination Date. Notwithstanding the foregoing, by an election in
writing and delivered to the Company at least thirty days prior to the Firm
Term, the Officer may elect to receive any or all such salary payments in a
single lump-sum payment, payable within thirty days following the Termination
Date. All other payments to be made in cash pursuant to Section 2.6 shall be
paid in a single lump-sum payment, payable within thirty days following the
Officer's Termination Date. Any lump-sum payment to be made to the Officer
shall be equal to the present value of the payments otherwise payable to the
Officer, using an interest rate assumption equal to the annual, short-term,
adjusted applicable federal interest rate, as determined for the month during
which the lump-sum payment is made pursuant to Section 1274(d) of the Internal
Revenue Code of 1986 (the "Code"), except that the lump-sum payment of any
nonqualified retirement benefit (other than benefits from the Company
Supplemental Savings Plan or Reserve Plus Retirement Savings Plan) payable to
the Officer shall be calculated pursuant to the actuarial assumptions of the
Company Employees' Retirement Plan in effect on the date of the Change in
Control. The [Bank or the] Company shall withhold any applicable taxes from
any amounts payable to the Officer pursuant to this Agreement, which the
Company determines, in good faith, it is required to withhold pursuant to
applicable law.
2.9 Change in Control Defined. A Change in Control of the Company shall
have occurred:
(a) on the fifth day preceding the scheduled expiration date of a
tender offer by, or exchange offer by any corporation, person,
other entity or group (other than the Company or any of its
wholly owned subsidiaries), to acquire Voting Stock of the
Company if:
(i) after giving effect to such offer such corporation, person,
other entity or group would own 25% or more of the Voting
Stock of the Company;
(ii) there shall have been filed documents with the Securities
and Exchange Commission in connection therewith (or, if no
such filing is required, public evidence that the offer has
already commenced); and
(iii) such corporation, person, other entity or group has secured
all required regulatory approvals to own or control 25% or
more of the Voting Stock of
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the Company;
(b) if the shareholders of the Company approve a definitive
agreement to merge or consolidate the Company with or into
another corporation in a transaction in which neither the
Company nor any of its wholly owned subsidiaries will be the
surviving corporation, or to sell or otherwise dispose of all or
substantially all of the Company's assets to any corporation,
person, other entity or group (other that the Company or any of
its wholly owned subsidiaries), and such definitive agreement is
consummated;
(c) if any corporation, person, other entity or group (other than
the Company or any of its wholly owned subsidiaries) becomes the
Beneficial Owner (as defined in the Company's Articles of
Incorporation) of stock representing 25% or more of the Voting
Stock of the Company; or
(d) if during any period of two consecutive years Continuing
Directors cease to comprise a majority of the Company's Board of
Directors.
The term "Continuing Director" means:
(a) any member of the Board of Directors of the Company at the
beginning of any period of two consecutive years; and
(b) any person who subsequently becomes a member of the Board of
Directors of the Company; if
(i) such person's nomination for election or election to the
Board of Directors of the Company is recommended or
approved by resolution of a majority of the Continuing
Directors; or
(ii) such person is included as a nominee in a proxy statement
of the Company distributed when a majority of the Board of
Directors of the Company consists of Continuing Directors.
"Voting Stock" shall mean those shares of the Company entitled to
vote generally in the election of directors.
2.10 Obligation to Reimburse for Taxes. The [Bank and the] Company shall
not be obligated to reimburse the Officer due to the Officer's liability to pay
any applicable federal, state or local income or employment taxes which result
from any payments made pursuant to this Agreement. Notwithstanding the
foregoing, in the event it shall be determined that any payment by [the Bank
or] the Company to or for the benefit of the Officer (whether paid or payable
pursuant to the terms of this Agreement, but determined without regard to any
additional payments required by this Section 2.10) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest
or penalties are incurred by the Officer with respect to such excise tax (such
excise tax, together with any such interest and penalties are hereinafter
collectively referred to as the "Excise Tax"), then the Officer shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Officer of all taxes (including 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, the Officer retains an amount
of the Gross-Up payment equal to the Excise Tax imposed upon the Payments.
Subject to the remaining provisions of Section 2.10, all determinations
required to be made under this Section 2.10, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall by made by
KPMG Peat Marwick or such other certified public accounting firm that may be
designated by the Company, and agreed to by the Officer (the "Accounting
Firm"). All
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fees and expenses of the Accounting Firm shall be borne by [the Bank
or] the Company. Any Gross-Up Payment, as determined pursuant to this Section
2.10, shall be paid by [the Bank or] the Company to the Officer within thirty
days of the receipt of the Accounting Firm's determination. Any determination
by the Accounting Firm shall be binding upon the [Bank and the] Company and the
Officer. 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 which will not have been made
by the Company should have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to provisions of this Section 2.10 below, and
the Officer 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 Bank or] the
Company to or for the benefit of the Officer.
The Officer shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by [the
Bank or] the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Officer is
informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Officer shall not pay such claim prior to the expiration of the thirty day
period following the date on which he 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 Officer in writing prior to
the expiration of such period that it desires to contest such claim, the
Officer shall:
(a) give the Company any information reasonably requested by the
Company relating to such claim,
(b) 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 selected by the
Company,
(c) cooperate with the Company in good faith in order to effectively
contest such claim, and
(d) permit [the Bank or] the Company to participate in any
proceedings relating to such claim,
provided, however, that [the Bank or] 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
Officer harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses. Without limitation on
the foregoing, [the Bank or] the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Officer to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Officer 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 directs the Officer to pay
such claim and xxx for a refund, [the Bank or] the Company shall advance the
amount of such payment to the Officer, on an interest-free basis and shall
indemnify and hold the Officer harmless, on an after-tax basis, from any Excise
Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the Officer
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of the
contest shall be
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limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Officer 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.
If, after the receipt by the Officer of any amount advanced by [the Bank
or] the Company pursuant to the preceding paragraph, the Officer becomes
entitled to receive any refund with respect to such claim, the Officer shall
(subject to [the Bank's or] the Company's complying with the requirements of
the preceding paragraph) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Officer of an amount advanced by [the
Bank or] the Company pursuant to the preceding paragraph, a determination is
made that the Officer shall not be entitled to any refund with respect to such
claim and [the Bank or] the Company does not notify the Officer in writing of
its intent to contest such denial of refund prior to the expiration of thirty
days after such determination, then such advance shall be forgiven and shall
not be required to be repaid and the amount of such advance shall offset, to
the extent thereof, the amount of the Gross-Up Payment required to be paid.
2.11 Officer's Costs of Enforcement. The [Bank or the] Company shall pay
all expenses of the Officer, including but not limited to attorney fees,
incurred in enforcing payments by [the Bank or] the Company pursuant to this
Agreement.
Section 3
Miscellaneous
3.1 Assignment of Officer's Rights The Officer may not assign, pledge or
otherwise transfer any of the benefits of this Agreement either before or after
termination of employment, and any purported assignment, pledge or transfer of
any payment to be made by [the Bank or] the Company hereunder shall be void and
of no effect. No payment to be made to the Officer hereunder shall be subject
to the claims of creditors of the Officer.
3.2 Agreements Binding on Successors. This Agreement shall be binding
and inure to the benefit of the parties hereto and their respective successors,
assigns, personal representatives, heirs, legatees and beneficiaries. [In the
event the Officer becomes an officer of the Company, the Company shall assume
all of the obligations of the Bank under this Agreement.]
3.3 Notices. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing and sent by first class mail to
the Officer or the Company at his or its address as set forth above, or to such
other address of which either the Officer or the Company shall notify the other
in writing.
3.4 Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by [either/any of] the Officer[, the Bank,] or the
Company.
3.5 Entire Agreement. This Agreement contains the entire understanding
of the parties [and supersedes the Management Continuity Agreement between the
Officer[, the Bank] and the Company, which was effective [date]]. It may be
modified or amended only by an agreement in writing signed by the party against
whom enforcement of any change or amendment is sought.
3.6 Severability of Provisions. If for any reason any paragraph, term or
provision of this Agreement is held to be invalid or unenforceable, all other
valid provisions herein shall remain in full force and effect and all
paragraphs, terms and provisions of this Agreement shall be deemed to be
severable in nature.
3.7 Governing Law. This Agreement is made in, and shall be governed by,
the laws of the State of Michigan.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first set forth above.
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_________________________________
Officer
Attest: FIRST OF AMERICA BANK CORPORATION
______________________ By: _____________________________
Secretary
Its: ____________________________
[Attest: [[BANK NAME]
______________________ By: _____________________________
Secretary]
Its: ____________________________]
