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EXHIBIT 10.32
Amended and Restated
Change in Control Termination Agreement
THIS AGREEMENT ("Agreement") is effective the 1st day of November,
2000, by and between FirstMerit Corporation, an Ohio corporation (the "Company")
and the executive employee who has executed this Agreement ("Employee").
R E C I T A L S:
A. The Employee serves as an executive and is considered a key
corporate officer of the Company or one of its affiliates.
B. The Board of Directors of the Company has determined that the
interests of the Company's shareholders will be best served by assuring that its
key corporate officers will adhere to the policies of the Board of Directors and
senior management with respect to any event by which another entity would
acquire effective control of the Company.
C. The Board of Directors has also determined that it is in the best
interest of the shareholders to promote stability among key officers and
employees.
D. Employee and the Company may have previously entered into a
Termination Agreement which agreement is being replaced in its entirety by this
Agreement, and may also enter into a Displacement Agreement which protects
Employee in the circumstance of a displacement of the Employee which occurred
due to a merger or acquisition, and that Employee will not be entitled to the be
paid benefits under both this Agreement and the Displacement Agreement.
IN CONSIDERATION OF THE FOREGOING, the mutual covenants hereinafter
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the Company and Employee agree as follows:
1. DUTIES OF EMPLOYEE. Employee shall support the position of the Board
of Directors and senior management and shall take any action reasonably
requested by the Board of Directors with respect to any event by which another
entity would acquire effective control of the Company.
2. CHANGE IN CONTROL. The term "Change in Control" shall mean the
occurrence of any one of the following events:
(a) individuals who, on April 19, 2000, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent
to April 19, 2000 whose election or nomination for election
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was approved by a vote of at least 2/3rds of the Incumbent Directors then on the
Board (either by a specific vote or by approval of the proxy statement of the
Company in which such person is named as a nominee for director, without written
objection to such nomination) shall be an Incumbent Director; provided, however,
that no director of the Company initially as a result of an actual or threatened
election contest with respect to directors or any other actual or threatened
solicitation of proxies or consents by or on behalf of any person other than the
Board shall be deemed to be an Incumbent Director;
(b) any "person" (as such term is defined in Section 3(a)(9)
of the Securities Exchange Act of 1934 (the "Exchange Act") and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities eligible to
vote for the election of the Board (the "Company Voting Securities"); provided,
however, that the event described in this paragraph (b) shall not be deemed to
be a Change in Control by virtue of any of the following acquisitions:
(i) by the Company or any Subsidiary,
(ii) by any employee benefit plan sponsored or
maintained by the Company or any Subsidiary,
(iii) by any underwriter temporarily holding
securities pursuant to an offering of such securities,
(iv) pursuant to a Non-Control Transaction (as
defined in paragraph (c)), or
(v) a transaction (other than one described in (c)
below) in which Company Voting Securities are acquired from
the Company, if a majority of the Incumbent Directors then on
the Board approve a resolution providing expressly that the
acquisition pursuant to this clause (v) does not constitute a
Change in Control under this paragraph (b);
(c) the consummation of a merger, consolidation, statutory
share exchange or similar form of corporate transaction involving the Company or
any of its Subsidiaries that requires the approval of the Company's
shareholders, whether for such transaction or the issuance of securities in the
transaction (a "Business Combination"), unless immediately following such
Business Combination:
(i) more than 50% of the total voting power of (x)
the corporation resulting from such Business Combination (the
"Surviving Entity"), or (y) if applicable, the ultimate parent
corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect
directors ("Total Voting Power") of the Surviving Entity (the
"Parent Entity"), is represented by Company Voting Securities
that were outstanding immediately prior to such Business
Combination (or, if
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applicable, shares into which such Company Voting Securities
were converted pursuant to such Business Combination), and
such voting power among the holders thereof is in
substantially the same proportion as the voting power of such
Company Voting Securities among the holders thereof
immediately prior to the Business Combination,
(ii) no person (other than any employee benefit plan
(or related trusts) sponsored or maintained by the Surviving
Entity or the Parent Entity), is or becomes the beneficial
owner, directly or indirectly, of 25% or more of the Total
Voting Power of the outstanding voting securities eligible to
elect directors of the Parent Entity (or, if there is no
Parent Entity, the Surviving Entity), and
(iii) at least a majority of the members of the board
of directors of the Parent Entity (or, if there is no Parent
Entity, the Surviving Entity) following the consummation of
the Business Combination were Incumbent Directors at the time
of the Board's approval of the execution of the initial
agreement providing for such Business Combination (any
Business Combination which satisfies all of the criteria
specified in (i), (ii) and (iii) above shall be deemed to be a
"Non-Control Transaction"); or
(d) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a Change in Control of the
Company shall not be deemed to occur solely because any person acquires
beneficial ownership of more than 25% of the Company Voting Securities as a
result of the acquisition of Company Voting Securities by the Company which
reduces the number of Company Voting Securities outstanding; provided, that if
after such acquisition by the Company such person becomes the beneficial owner
of additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person by more
than one percent, a Change in Control of the Company shall then occur.
3. COMPANY'S RIGHT TO TERMINATE. The Company may terminate the
Employee's employment at any time during the term of this Agreement, subject to
the terms of this Agreement and providing the benefits stated herein if vested.
4. TERMINATION FOLLOWING CHANGE IN CONTROL. In the event of
termination of employment subsequent to a Change in Control and prior to the
expiration of the term of this Agreement, the Employee shall be entitled to the
benefits provided in paragraph 6 unless such termination is (a) because of the
Employee's death, Retirement or Disability, (b) by the Company for Cause, or (c)
by the Employee other than for Good Reason.
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(a) DISABILITY OR RETIREMENT. Termination of employment by
the Company based on "Disability" shall mean termination
because of Total and Permanent Disability as defined in the
Long-Term Disability Plan of the Company, in effect from time
to time, in which the Employee is participating. Termination
of employment based on "Retirement" shall mean termination of
employment by the Employee in accordance with the retirement
policy (including early retirement policy) which is in effect
from time to time and is generally applicable to the Company's
salaried employees.
(b) CAUSE. The term "Cause" shall mean termination
upon one or more of the following acts of the Employee:
(i) Felonious criminal activity whether or not
affecting the Company;
(ii) Disclosure to unauthorized persons of Company
information which is believed by the Board of
Directors of the Company to be confidential;
(iii) Breach of any contract with, or violation of
any legal obligation to, the Company or
dishonesty; or
(iv) Gross negligence or insubordination in the
performance of duties of the position held by
the Employee.
(c) GOOD REASON. The term "Good Reason" shall mean
voluntary termination of employment by the Employee based on
any of the following:
(i) Involuntary reduction in the Employee's base
salary, as in effect immediately prior to a
Change in Control unless such reduction occurs
simultaneously with a Company-wide reduction in
officers' salaries;
(ii) Involuntary discontinuance or reduction in the
Employee's incentive compensation award
opportunities under plans applicable to the
Employee and in existence at the time of a
Change in Control, unless a Company-wide
reduction of all officers' incentive award
opportunities occurs simultaneously with such
discontinuance or reduction;
(iii) Involuntary relocation to another office
located more than 50 miles from the Employee's
office location at the time the Change in
Control occurs;
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(iv) Significant reduction in the Employee's
responsibilities and status within the
Company's organization or change in the
Employee's title or office without prior
written consent of the Employee;
(v) Involuntary discontinuance of the Employee's
participation in any employee benefit plans
maintained by the Company unless such plans
are discontinued by reason of law or loss of
tax deductibility to the Company with respect
to contributions to such plans, or are
discontinued as a matter of the Company's
policy applied equally to all participants in
such plans;
(vi) Involuntary reduction of the Employee's paid
vacation to less than 20 working days per
calendar year;
(vii) Failure to obtain an assumption of the
Company's obligations under this Agreement by
any successor to the Company, regardless of
whether such entity becomes a successor to the
Company as a result of a merger,
consolidation, sale of the assets of the
Company, or other form of reorganization; or
(viii) Termination of employment which is not
effected pursuant to a Notice of Termination
satisfying the requirements of paragraph 5
herein.
5. NOTICE OF TERMINATION. Any purported termination of the
Employee's employment by the Company or by the Employee shall be communicated by
written Notice of Termination to the other party. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon, shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee's employment under the provisions so
indicated and shall specify a "Date of Termination."
6. COMPENSATION AND BENEFITS UPON TERMINATION.
(a) If, after a Change in Control has occurred and prior to
the expiration of the term of this Agreement, the Employee's employment by the
Company shall be terminated: (1) by the Company other than for Cause,
Disability, Retirement, or death or (2) by the Employee for Good Reason, then
the Employee shall be entitled to the compensation and benefits provided in
subparagraph (c) below.
(b) If either of the conditions in subparagraph (a) above are
satisfied, the Employee shall be eligible to receive the compensation and
benefits described in subparagraph (c) below. The compensation described in
subparagraphs (c)(1), (c)(2) and (c)(3) shall be paid by the Company to the
Employee in a lump sum on or before the fifth day following the Date of
Termination.
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For purposes of this Agreement, the term "Month" shall mean a
period of 30 days.
(c) The compensation and benefits payable to an Employee
pursuant to this paragraph 6 shall be as follows:
(1) BASE SALARY TO DATE OF TERMINATION. The Company shall
pay to the Employee his/her full base salary through the Date
of Termination at the rate in effect at the time Notice of
Termination is given or immediately preceding a Change in
Control, whichever is higher.
(2) BASE SALARY. The Company shall pay to the Employee an
amount equal to (i) the Employee's annual base salary (at the
rate in effect at the time Notice of Termination is given or
immediately preceding a Change in Control, whichever is
higher) multiplied by (ii) the lesser of the number indicated
in Item 6(c)(2)A on Exhibit A, which Exhibit is attached
hereto and incorporated by reference herein, or a fraction the
numerator of which is the number of months from and including
the month in which the Date of Termination occurs to and
including the month in which the Employee would attain the age
of 65 and the denominator of which is Item 6(c)(2)B on Exhibit
A.
(3) INCENTIVE COMPENSATION. The Company shall pay to the
Employee an incentive award in an amount equal to (i) the
incentive compensation payment the Employee would receive if
payout was made at the "target" percentage for the Employee
under the Company's Executive Incentive Plan in the year of
Employee's Date of Termination multiplied by (ii) the lesser
of the number indicated in Item 6(c)(3)A on Exhibit A, or a
fraction the numerator of which is the number of months from
and including the month in which the Date of Termination
occurs to and including the month in which the Employee would
attain the age of 65 and denominator of which is the number
indicated in Item 6(c)(3)B on Exhibit A.
(4) STOCK PLANS. The Employee shall be entitled to
immediate vesting of all stock options and other stock,
phantom stock, stock appreciation rights or similar
arrangements in which he participates. Notwithstanding any
plan provisions to the effect that rights under any such plan
terminate upon termination of employment, the Employee shall
be given the longer of 90 days after the Date of Termination,
or the remaining period provided in the grant, to realize or
exercise all rights or options provided under such plans.
(5) MEDICAL AND LIFE INSURANCE. The Company shall maintain
in full force and effect for the Employee's continued benefit
until the earlier of the anniversary listed in Item 6(c)(5)A
on Exhibit A of the Date of Termination or the calendar month
in which the Employee reaches the age of 67 all medical, life,
and accidental death and dismemberment insurance (including
conversion rights), with coverage and limits identical to
those in effect with respect to the Employee immediately prior
to the
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Change in Control. If the Employee is a participant in the
Company's Executive Committee Life Insurance Program, the
Company shall pay the premium for the Employee on such
insurance for a period ending the earlier of the period listed
in Item 6(c)(5)B on Exhibit A after the Date of Termination or
the calendar month in which the Employee reaches the age of
67, plus an additional amount to the Employee equal to the
Employee's projected federal, state, county and municipal
income taxes on the premiums so paid, which projected taxes
shall be calculated at the highest marginal tax rates. For the
sole purpose of determining the Employee's eligibility to
participate in the Company's medical, life, and accidental
death and dismemberment insurance plans, the Employee shall be
considered to be on a paid leave of absence as long as he/she
is receiving benefits under this Agreement.
In lieu of the benefits provided to Employee under
this subparagraph 6(c)(5) for medical insurance, within six
months after the Date of Termination, the Employee may
irrevocably elect in writing to receive a lump sum cash
payment. The payment will equal the Company's current cost to
provide the medical insurance benefits over the remaining
period (without a present value reduction). The amount payable
under this paragraph shall be paid by the Company to the
Employee on or before the 14th day following the receipt by
the Company of the writing from the Employee.
(6) EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN. The
following shall apply for purposes of calculating the
Employee's benefits under the FirstMerit Corporation Executive
Supplemental Retirement Plan (the "SERP"):
(i) for purposes of calculating the Employee's
Monthly Retirement Income (as defined in the SERP) under
Sections 4.01 and 4.02 of the SERP and for purposes of
determining the Employee's vested Monthly Retirement Income
under Section 4.05 of the SERP, the Employee's Years of
Service (as defined in the SERP) shall be increased by the
Employee's Protection Period (as hereinafter defined);
(ii) for purposes of calculating the Employee's
Monthly Retirement Income under Section 4.02 of the SERP, the
Employee's Attained Age (as defined in the SERP) shall be
increased by the Employee's Protection Period (as hereinafter
defined); and
(iii) the Employee's Average Monthly Earnings for
purposes of the SERP shall be deemed to be equal to the total
of (A) the highest, monthly base salary earned by the Employee
during the 24 months immediately preceding the Change in
Control and (B) the incentive compensation payment the
Employee would receive if payout was made at the "target"
percentage for the Employee under the Company's Executive
Incentive Plan in the year of Employee's Date of Termination
divided by 12.
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The terms of this subparagraph (6) shall supersede
any contrary provisions of the SERP and any membership
agreement executed between the Company and the Employee in
connection with the Employee's participation in the SERP,
unless expressly provided otherwise in such membership
agreement. The Employee's SERP benefit, calculated using the
provisions of subparagraphs 6(i), (ii) and (iii) above, is
assumed to commence on the earliest date upon which the
Employee is eligible to retire under the SERP for purposes of
determining the Actuarial Equivalent (as defined in the SERP)
of such benefit. Further, for purposes of this subparagraph
(6), the Employee's Protection Period is 24 months.
(7) Outplacement Fees. For a period not to exceed one year
after the Date of Termination, the Company will pay the
reasonable expenses associated with outplacement training of
the Employee by a professional placement firm and in an amount
not to exceed that listed as Item 6(c)(6) on Exhibit A.
7. OVERALL LIMITATION ON BENEFITS. Notwithstanding any
provision in this Agreement to the contrary, if the compensation and benefits
provided to the Employee pursuant to or under this Agreement, either alone or
with other compensation and benefits received by the Employee, would constitute
"parachute payments" within the meaning of Section 280G of the Internal Revenue
Code (the "Code"), or the regulations adopted or proposed thereunder, then the
compensation and benefits payable pursuant to or under this Agreement shall be
reduced to the extent necessary so that no portion thereof shall be subject to
the excise tax imposed by Section 4999 of the Code. The Employee or any other
party entitled to receive the compensation or benefits hereunder may request a
determination as to whether the compensation or benefit would constitute a
parachute payment and, if requested, such determination shall be made by
independent tax counsel selected by the Company and approved by the party
requesting such determination. In the event that any reduction is required under
this paragraph 7, the Company shall consult with the Employee in determining the
order in which compensation and benefits shall be reduced.
8. LEGAL FEES. The Company shall pay all legal fees and
expenses incurred by the Employee in enforcing any right or benefit provided by
this Agreement.
9. TERM OF AGREEMENT. This Agreement shall continue in effect
until the earliest to occur of the following:
(1) the last day of the month which is the number of
months listed in Item 9(1) on Exhibit A, after a Change in
Control occurs; or
(2) the date as of which the Employee is removed or
resigns from his then titled position immediately before his
removal or resignation, unless such removal or resignation
occurs after a Change of Control and is for other than Cause,
Disability, Retirement or death, in the case of removal, or
for Good Reason, in the case of
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resignation.
In the event that the Employee becomes entitled to the
compensation or benefits provided in paragraph 6 of this Agreement before an
event of termination occurs as provided in this paragraph 9, such compensation
and benefits shall continue for the period provided in paragraph 6
notwithstanding the occurrence of such event of termination.
10. NOTICE. For the purposes of this Agreement, notices and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, provided that all
notices to the Company shall be directed to the attention of the President of
the Company with a copy to the Secretary of the Company, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
11. MISCELLANEOUS. No provisions of this Agreement may be
modified, waived, or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Employee and such officer as may be
specifically designated by the Board of Directors of the Company. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar provisions or conditions at
the same or at any prior or subsequent time.
This Agreement is intended to replace and supersede the
existing Termination Agreement between the parties which prior agreement shall
become invalid as of the date of signing of this Agreement. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement; provided, however, that this Agreement shall not
supersede or in any way limit the rights, duties of obligations you may have
under any other written agreement with the Company.
12. Validity. The validity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Ohio.
13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original by all of
which together will constitute one and the same instrument.
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[Signatures on Next Page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date above first written.
FirstMerit Corporation
By:___________________________________
Xxxxxxxxxxx X. Xxxxxx, Executive
Vice President
Employee:
______________________________________
(Signature)
______________________________________
(Print Name)
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Amended and Restated
Change in Control Termination Agreement
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EXHIBIT A
Name of Executive: ____________________________________ (print)
Item 6(c)(2)A: Multiplied By: ______ (insert number)
Item 6(c)(2)B: Denominator: ______ (insert number)
Item 6(c)(3)A: ______ (insert number)
Item 6(c)(3)B: ______ (insert number)
Item 6(c)(5)A: Anniversary: ______ anniversary (insert number)
Item 6(c)(5)B: Years in Effect: ______ years (insert number)
Item 6(c)(7):Outplacement Fee: $______________
Item 9(1): Month: ______ (insert number)
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