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EXHIBIT (10.1) - Employment Agreement dated May 29, 1998
between the Corporation and Xxxxx X. Xxxx
EMPLOYMENT AGREEMENT (EXEC. OFF.)
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AGREEMENT, dated as of the 29th day of May, 1998, by
and between COMERICA INCORPORATED, a Delaware corporation
(the "Company") and XXXXX X. XXXX XX. (the "Executive") who
resides at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx Xxxxx, Xxxxxxxx
00000.
The Board of Directors of the Company (the "Board"),
has determined that it is in the best interests of the Com-
pany and its shareholders 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 below) of the Company. 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 Executive's full
attention and dedication to the Company currently and 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 which ensure that the
compensation and benefits expectations of the Executive will
be satisfied and which 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:
1. Certain Definitions. (a) The "Effective Date"
shall mean the first date during the Agreement Period (as
defined in Section 1(b)) on which a Change of Control(as
defined in Section 2) occurs. Anything in this Agreement to
the contrary notwithstanding, if a Change of Control occurs
and if the Executive's employment with the Company is termi-
nated prior to the date on which the Change of Control oc-
curs, and if it is reasonably demonstrated by the Executive
that such termination of employment (i) was at the request
of a third party who 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, then
for all purposes of this Agreement the "Effective Date"
shall mean the date immediately prior to the date of such
termination of employment.
(b) The "Agreement Period" shall mean the period
commencing on the date hereof and ending on the third an-
niversary of the date hereof; provided, however, that
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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 shall be hereinafter referred to
as the "Renewal Date"), unless previously terminated, the
Agreement 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 Agreement Period
shall not be so extended.
2. Change of Control. For the purpose of this
Agreement, a "Change of Control" shall mean:
(a) The acquisition by 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") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common
Stock") or (ii) the combined voting power of the then out-
standing 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 subsection (a), the following acquisitions
shall not constitute a Change of Control: (i) any acquisi-
tion 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 corporation controlled by the Company or (iv) any acqui-
sition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c)
of this Section 2; or
(b) 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 Company's shareholders, 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 were a member of the Incumbent Board, but exclud-
ing, 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 solicita-
tion of proxies or consents by or on behalf of a Person
other than the Board; or
(c) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Business
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Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then out-
standing shares of common stock and the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business Combina-
tion (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or sub-
stantially all of the Company's 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 Outstanding Company Voting Securities, as the case may
be, (ii) 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 out-
standing 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 (iii) at least a
majority of the members of the board of directors of the
corporation resulting from such Business 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
(d) Approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
3. Employment Period. The Company hereby agrees to
continue the Executive in its employ, and the Executive
hereby agrees to remain in the employ of the Company 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 such
date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties.
(i) During the Employment Period, (A) the Executive's posi-
tion (including status, offices, titles and reporting re-
quirements), authority, duties and responsibilities shall be
at least commensurate in all material respects with the most
significant of those held, exercised and assigned at any
time during the 120-day period immediately preceding the Ef-
fective Date and (B) the Executive's services shall be
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performed at the location where the Executive was employed
immediately preceding the Effective Date or any office or
location less than 60 miles from such location.
(ii) During the Employment Period, and excluding
any periods of vacation and sick leave to which the Ex-
ecutive is entitled, the Executive agrees to devote reason-
able 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 Executive's reasonable best
efforts to perform faithfully and efficiently such responsi-
bilities. 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 invest-
ments, so long as such activities do not significantly
interfere with the performance of the Executive's
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 Executive's
responsibilities to the Company.
(b) Compensation. (i) Base Salary. During the
Employment Period, the Executive shall receive an annual
base salary ("Annual Base Salary"), which shall be paid at a
monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base xxx-
ary which has been earned but deferred, to the Executive by
the Company and its affiliated companies in respect of the
twelve-month period immediately preceding the month in which
the Effective Date occurs. During the Employment Period,
the Annual Base Salary shall be reviewed no more than 12
months after the last salary increase awarded to the
Executive prior to the Effective Date and thereafter at
least annually. Any increase in Annual Base Salary shall
not serve to limit or reduce any other obligation to the
Executive under this Agreement. Annual Base Salary shall
not be reduced after any such increase and the term Annual
Base Salary as utilized in this Agreement shall refer to An-
nual Base Salary as so increased. As used in this
Agreement, the term "affiliated companies" shall include any
company controlled by, controlling or under common control
with the Company.
(ii) Annual Bonus. In addition to Annual Base
Salary, the Executive shall be awarded, for each fiscal year
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ending during the Employment Period, an annual bonus (the
"Annual Bonus") in cash at least equal to the Executive's
highest bonus under the Company's Management Incentive
Plan, Long-Term Incentive Plan and/or business unit
incentive plan (or any predecessor or successor plan to any
thereof) as applicable, for the last three full fiscal years
prior to the Effective Date (annualized in the event that
the Executive was not employed by the Company for the whole
of such fiscal year) (the "Recent Annual Bonus"). Each such
Annual Bonus shall be paid no later than the end of the
third month of the fiscal year next following the fiscal
year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual
Bonus.
(iii) Incentive, Savings and Retirement Plans.
During the Employment Period, the Executive shall be
entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company
and its 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 its af-
filiated 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 its affiliated
companies.
(iv) Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's 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
its affiliated companies (including, without limitation,
medical, prescription, dental, disability, employee life,
group life, accidental death and travel accident insurance
plans and programs) to the extent applicable generally to
other peer executives of the Company and its affiliated com-
panies, but in no event shall such plans, practices,
policies and programs provide the Executive with benefits
which 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
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time after the Effective Date to other peer executives of
the Company and its affiliated companies.
(v) 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 its affiliated companies in
effect for the Executive at any time during the 120-day pe-
riod 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 its affiliated companies.
(vi) Fringe Benefits. During the Employment
Period, the Executive shall be entitled to fringe benefits,
including, without limitation, tax and financial 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 poli-
cies of the Company and its affiliated companies in effect
for the Executive at any time during the 120-day period im-
mediately 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 its affiliated companies.
(vii) Office and Support Staff. During the
Employment Period, the Executive shall be entitled to an of-
fice or offices of a size and with furnishings and other ap-
pointments, 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 its
affiliated companies at any time during the 120-day period
immediately preceding the Effective Date or, if more favor-
able to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the
Company and its affiliated companies.
(viii) Vacation. During the Employment Period,
the Executive shall be entitled to paid vacation in ac-
cordance with the most favorable plans, policies, programs
and practices of the Company and its 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 its affiliated companies.
5. Termination of Employment. (a) Death or Dis-
ability. The Executive's employment shall terminate auto-
matically upon the Executive's death during the Employment
Period. If the Company determines in good faith that the
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Disability of the Executive has occurred during the
Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written
notice in accordance with Section 12(b) of this Agreement of
its intention to terminate the Executive's employment. In
such event, the Executive's employment with the Company
shall terminate effective on the 30th day after receipt of
such 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 Executive's duties. For purposes of this
Agreement, "Disability" shall mean the absence of the
Executive from the Executive's 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 which
is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to
the Executive or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For
purposes of this Agreement, "Cause" shall mean:
(i) the willful and continued failure of the Ex-
ecutive to perform substantially the Executive's duties
with the Company or one of its affiliated companies
(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 which specifically identifies the manner
in which the Board or Chief Executive Officer believes
that the Executive has not substantially performed the
Executive's duties, or
(ii) the willful engaging by the Executive in il-
legal conduct or gross misconduct which is materially
and demonstrably injurious to the Company.
For purposes of this provision, no act or failure to act, on
the part of the Executive, shall be considered "willful" un-
less it is done, or omitted to be done, by the Executive in
bad faith or without reasonable belief that the Executive's
action or omission was in the best interests of the Company.
Any act, or failure to act, based upon authority given pur-
suant to a resolution duly adopted by the Board or upon the
instructions of the Chief Executive Officer or a senior of-
ficer of the Company or based upon 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
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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 Board at a meeting of the 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, to be heard before the
Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in
clauses (i) or (ii) above, and specifying the particulars
thereof in detail.
(c) Good Reason. The Executive's employment may be
terminated by the Executive for Good Reason. For purposes
of this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's
position (including status, offices, titles and
reporting requirements), authority, duties or
responsibilities as contemplated by Section 4(a) of
this Agreement, or any other action by the Company
which 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 which is remedied by
the Company promptly after receipt of notice thereof
given by the Executive;
(ii) any failure by the Company to comply with any
of the provisions of Section 4(b) of this Agreement,
other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be
based at any office or location other than as provided
in Section 4(a)(i)(B) hereof or the Company's requiring
the Executive to travel on Company business to a
substantially greater extent than required immediately
prior to the Effective Date;
(iv) any purported termination by the Company of
the Executive's employment otherwise than as expressly
permitted by this Agreement; or
(v) any failure by the Company to comply with and
satisfy Section 11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determina-
tion of "Good Reason" made by the Executive shall be conclu-
sive. Anything in this Agreement to the contrary notwith-
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standing, a termination by the Executive for any reason dur-
ing the 30-day period immediately following the first an-
niversary of the Effective Date shall be deemed to be a ter-
mination for Good Reason for all purposes of this Agreement.
(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 12(b) of this
Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the
date of receipt of such notice, specifies the termination
date (which date shall be not more than thirty 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 which 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 Executive's or the
Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means
(i) if the Executive's 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 any later
date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by the Company other
than for Cause or Disability, the Date of Termination shall
be the date on which the Company notifies the Executive of
such termination and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or
the Disability Effective Date, as the case may be.
6. Obligations of the Company upon Termination. (a)
Good Reason; Other Than for Cause, Death or Disability. If,
during the Employment Period, the Company shall terminate
the Executive's employment other than for Cause or
Disability or the Executive shall terminate employment for
Good Reason:
(i) 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:
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A. the sum of (1) the Executive's Annual
Base Salary through the Date of Termination to the
extent not theretofore paid, (2) the product of (x)
the higher of (I) the Recent Annual Bonus and (II)
the Annual Bonus paid or payable, including any
bonus or portion thereof which has been earned but
deferred (and annualized for any fiscal year
consisting of less than twelve full months or
during which the Executive was employed for less
than twelve full months), for the most recently
completed fiscal year during the Employment Period,
if any (such higher amount being referred to as 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
and (3) any compensation previously deferred by the
Executive (together with any accrued interest or
earnings thereon) and any accrued vacation pay, in
each case to the extent not theretofore paid (the
sum of the amounts described in clauses (1), (2),
and (3) shall be hereinafter referred to as the
"Accrued Obligations"); and
B. the amount equal to the product of (1)
three and (2) the sum of (x) the Executive's Annual
Base Salary and (y) the Highest Annual Bonus; and
C. an amount equal to the excess of (a) the
actuarial equivalent of the benefit under the
Company's qualified defined benefit retirement plan
(the "Retirement Plan") (utilizing actuarial
assumptions no less favorable to the Executive than
those in effect under the Company's Retirement
Plan immediately prior to the Effective Date), and
any excess or supplemental retirement plan in which
the Executive participates (together, the "SERP")
which the Executive would receive if the
Executive's employment continued for three years
after the Date of Termination assuming for this
purpose that (x) all accrued benefits are fully
vested, (y) the Executive is three years older and
(z) the Executive is credited with three more years
of service, and, assuming that the Executive's
compensation in each of the three years is that
required by Section 4(b)(i) and Section 4(b)(ii),
over (b) the actuarial equivalent of the
Executive's actual benefit (paid or payable), if
any, under the Retirement Plan and the SERP as of
the Date of Termination;
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(ii) for three years after the Executive's Date of
Termination, or such longer period as may be provided
by the terms of the appropriate plan, program, practice
or policy, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal
to those which would have been provided to them in
accordance with the plans, programs, practices and
policies described in Section 4(b)(iv) of this
Agreement if the Executive's employment had not been
terminated 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 its
affiliated companies and their families, provided,
however, that if the Executive becomes reemployed with
another employer and is eligible to receive medical or
other welfare benefits under another employer provided
plan, the medical and other welfare benefits described
herein shall be secondary to those provided under such
other plan during such applicable period of
eligibility. For purposes of determining eligibility
(but not the time of commencement of benefits) of the
Executive for retiree benefits pursuant to such plans,
practices, programs and policies, the Executive shall
be considered to have remained employed until three
years after the Date of Termination and to have retired
on the last day of such period;
(iii) the Company shall, at its sole expense as in-
curred, provide the Executive with outplacement
services the scope and provider of which shall be
selected by the Executive in his sole discretion; and
(iv) to the extent not theretofore paid or pro-
vided, the Company shall timely pay or provide to the
Executive any other amounts or benefits required to be
paid or provided or which the Executive is eligible to
receive under any plan, program, policy or practice or
contract or agreement of the Company and its affiliated
companies (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits").
(b) Death. If the Executive's employment is termi-
nated by reason of the Executive's death during the Employ-
ment Period, this Agreement shall terminate without further
obligations to the Executive's legal representatives under
this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the
Executive's 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 Other Benefits, the term Other
Benefits as utilized in this Section 6(b) shall include,
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without limitation, and the Executive's estate and/or
beneficiaries shall be entitled to receive, benefits at
least equal to the most favorable benefits provided by the
Company and affiliated companies to the estates and
beneficiaries of peer executives of the Company and such af-
filiated 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 favor-
able to the Executive's estate and/or the Executive's
beneficiaries, as in effect on the date of the Executive's
death with respect to other peer executives of the Company
and its affiliated companies and their beneficiaries.
(c) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability during
the Employment Period, this Agreement shall terminate
without further obligations to the Executive, other than for
payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be
paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in
this Section 6(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 its
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 Executive's family, as in effect at any
time thereafter generally with respect to other peer
executives of the Company and its affiliated companies and
their families.
(d) Cause, Etc.; Other than for Good Reason. If the
Executive's employment shall be terminated for Cause during
the Employment Period, this Agreement shall terminate
without further obligations to the Executive other than the
obligation to pay to the Executive (x) his Annual Base
Salary through the Date of Termination, (y) the amount of
any compensation previously deferred by the Executive, and
(z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment
during the Employment Period, excluding a termination for
Good Reason, this Agreement shall terminate without further
obligations to the Executive, other than for Accrued Obliga-
tions and the timely payment or provision of Other Benefits.
In such case, all Accrued Obligations shall be paid to the
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Executive in a lump sum in cash within 30 days of the Date
of Termination.
7. Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit the Executive's continuing
or future participation in any plan, program, policy or
practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor,
subject to Section 12(f), shall anything herein limit or
otherwise affect such rights as the Executive may have under
any contract or agreement with the Company or any of its af-
filiated companies. Amounts which are vested benefits or
which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated
companies at or subsequent to the Date of Termination shall
be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly
modified by this Agreement.
8. Full Settlement. The Company's 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 which 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 such
amounts shall not be reduced whether or not the Executive
obtains other employment. The Company agrees to pay as
incurred, to the full extent permitted by law, all legal
fees and expenses which 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 Execu-
tive about the amount of any payment pursuant to this Agree-
ment), plus, in each case, interest on any delayed payment
at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code").
9. Certain Additional Payments by the Company.
------------------------------------------
(a) Anything in this Agreement to the contrary not-
withstanding and except as set forth below, in the event it
shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid
or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this
14
Section 9) (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 Executive 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 Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive 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 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
9(a), if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that the Payments do not
exceed 110% of the greatest amount (the "Reduced Amount")
that could be paid to the Executive such that the receipt of
Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the
Payments, in the aggregate, shall be reduced to the Reduced
Amount.
(b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, in-
cluding 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 be made
by Ernst & Young LLP or such other certified public ac-
counting firm as may be designated by the Executive (the
"Accounting Firm") which 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 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 shall appoint another nationally recognized ac-
counting firm to make the determinations required hereunder
(which accounting firm shall then be referred to as the Ac-
counting Firm hereunder). All fees and expenses of the Ac-
counting Firm shall be borne solely by the Company. Any
Gross-Up Payment, as determined pursuant to this Section 9,
shall be paid by the Company to the Executive within five
days of the receipt of the Accounting Firm's determination.
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 which
15
will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required
to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 9(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 ten business days after the
Executive is informed in writing of such claim and shall ap-
prise 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 it 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 it desires to
contest such claim, the Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) 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,
(iii) cooperate with the Company in good faith in
order effectively to contest such claim, and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay di-
rectly 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 with respect thereto) imposed as a
result of such representation and payment of costs and
16
expenses. Without limitation on the foregoing provisions of
this Section 9(c), the Company shall control all proceedings
taken in connection with such contest and, at its sole op-
tion, 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 Executive to pay the tax
claimed and xxx for a refund or 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 directs the Executive
to pay such claim and xxx for a refund, the Company shall
advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Execu-
tive 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 Executive 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 limited to issues with respect to which a
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 an
amount advanced by the Company pursuant to Section 9(c), the
Executive becomes entitled to receive any refund with
respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c))
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
Executive of an amount advanced by the Company pursuant to
Section 9(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
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 Gross-Up Payment required
to be paid.
17
10. 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 any of its affiliated companies,
and their respective businesses, which shall have been ob-
tained by the Executive during the Executive's employment by
the Company or any of its affiliated companies and which
shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in vio-
lation of this Agreement). After termination of the
Executive's 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, communi-
cate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it.
In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive
under this Agreement.
11. 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 otherwise
than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and
be binding upon the Company and its successors and assigns.
(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. As used in this
Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement
by operation of law, or otherwise.
12. 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 con-
flict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified otherwise than
18
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:
-------------------
Xxxxx X. Xxxx Xx.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
If to the Company:
-----------------
Comerica Incorporated
Comerica Tower at Detroit Center
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Executive Vice President
and 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 pro-
vision 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 Federal, state, local or foreign
taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
(e) The Executive's or the Company's 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 Section 5(c)(i)-(v) of this Agreement,
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
19
agreement between the Executive and the Company, the employ-
ment of the Executive by the Company is "at will" and, sub-
ject to Section 1(a) hereof, prior to the Effective Date,
the Executive's employment and/or this Agreement 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 this Agreement shall
supersede any other agreement between the parties with
respect to the subject matter hereof.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's 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.
/s/ Xxxxx X. Xxxx Xx.
-------------------------------
XXXXX X. XXXX XX.
COMERICA INCORPORATED
By /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Date: May 29, 1998
