EXHIBIT 10(v)
[CEO AGREEMENT]
EMPLOYMENT AGREEMENT
This Agreement is made and entered into this 9th day of February, 1995, by
and among Great Lakes Bancorp, a Federal Savings Bank, a federal savings bank
(the "Bank"), TCF Financial Corporation, a Delaware corporation ("TCF")(and,
as to each, any successor by operation of law or Section 10 hereof), and
Robert J. Delonis (the "Employee").
WHEREAS, Employee and Bank were previously parties to an employment
agreement and Employee wishes to relinquish all rights thereunder, pursuant
to Section 17 hereof, in order to enter into this new employment agreement
with Bank and TCF;
WHEREAS, the Board of Directors of the Bank and TCF believe it is in the
best interests of the Bank and TCF to enter into this Employment Agreement
("Agreement") with the Employee in order to assure management continuity of
the Bank consistent with TCF's goals and philosophies as sole shareholder of
the Bank, to reinforce and encourage the continued attention and dedication
of the Employee to his assigned duties following the acquisition of the Bank
by TCF and to provide assurance that the Employee will not be distracted by
the potentially disruptive circumstances which may arise from a change in
control of the Bank;
WHEREAS, the Boards believe that entering into this type of Agreement
with key employees will contribute significantly to the safety and soundness
of the Bank, will enhance the orderly operation of the Bank in conjunction
with TCF's other banks and subsidiaries and will encourage its orderly
adoption of TCF's established regulatory compliance procedures, business
practices and operating systems;
WHEREAS, the Boards of Directors of the Bank and TCF have approved and
authorized the execution of this Agreement with the Employee to take effect
upon the date stated in Section 4 below; and
WHEREAS, the Employee serves as a Director, as Chairman of the Board of
Directors and Chief Executive Officer of the Bank;
NOW, THEREFORE, in consideration of the respective terms and conditions
in this Agreement, it is agreed as follows:
1. EMPLOYMENT. The Employee is employed as Chairman and Chief
Executive Officer of the Bank and shall continue to render administrative and
management services to the Bank such as are customarily performed by persons
employed in this capacity. The Employee shall continue to devote his best
efforts and substantially all his business time and
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attention to the business of the Bank and its subsidiaries and affiliated
companies according to such reasonable standards as the Board shall establish.
2. COMPENSATION. The Bank agrees to pay the Employee during the term
of this Agreement an annual salary established by the Board of Directors at
the time this Agreement is signed (the "Commencement Date") of $260,000. The
Employee's salary shall be payable not less frequently than monthly and not
later than the tenth day of the following month. The amount of the
Employee's salary shall be reviewed not less often than annually by the
Bank's Board of Directors at the same time the salaries of other officers of
comparable rank at the Bank are customarily reviewed and may be increased or
decreased (but not decreased below the Employee's salary as of the
Commencement Date) as the Board in its absolute discretion may decide,
subject to the customary withholding tax and other employee taxes as
required. The Employee shall also be entitled to receive prompt reimbursement
of all reasonable expenses incurred in accordance with the polices applicable
to comparable officers of the Bank.
3. BENEFITS.
(a) PARTICIPATION IN RETIREMENT AND EMPLOYEE BENEFIT PLANS. The
Employee shall be entitled to participate in and receive benefits or awards
under all plans of the Bank relating to stock options, stock awards, stock
purchases, pension, thrift, profit-sharing, group life insurance, medical
coverage, education, cash or stock bonuses, and other retirement or employee
benefits that are now or later maintained by the Bank for the benefit of its
officers of comparable rank or for employees generally, upon the same terms
and conditions as are applicable to other participants in such plans.
Contemporaneously with the execution of this Agreement an award of restricted
stock is being made to Employee by TCF. Nothing contained in this Agreement
shall modify or affect the terms or provisions of any stock option or
restricted stock award made to Employee; Employee's rights pursuant to any
such awards shall be governed by the award agreement signed by Employee and
the plan under which the award was granted, rather than this Agreement.
(b) FRINGE BENEFITS. The Employee shall be eligible to participate in
and receive benefits under any other fringe benefits programs which may be or
become applicable to the Bank's or TCF's officers of comparable rank
(Employee shall be deemed for purposes of this subsection 3(b) to be the
equivalent of an Executive Vice President of TCF) or for Bank employees
generally, including use of an automobile, a reasonable expense account, the
payment of reasonable expenses for attending annual and periodic meetings of
trade associations, and any other benefits which are commensurate with the
responsibilities and functions to be performed by the Employee under this
Agreement.
4. TERM.
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(a) INITIAL TERM. The term of employment under this Agreement shall be
for a period of three years commencing on the Commencement Date subject to
earlier termination as provided herein and further subject to extension as
provided in Section 4(b).
(b) OPTION FOR TWO ONE-YEAR EXTENSIONS OF TERM. Employee may elect to
extend the term of this Agreement after the expiration of its initial term
for an additional term of one year, and thereafter for another additional
term of one year, provided that no such extension shall occur unless such
extension is approved in advance by the Board of the Bank following its
review of a formal performance evaluation of the Employee conducted by the
Board or a committee thereof and such approval (and the justification for it)
is reflected in the minutes of the Board and PROVIDED FURTHER, in the event
the Board of Directors of the Bank does not act to extend the term of this
Agreement pursuant to this Section 4(b), TCF hereby agrees to employ Employee
as an Executive Vice President under the terms of this Agreement at his
current location for the remainder of any such extended terms elected by
Employee. Reference to the term of this Agreement shall refer both to the
initial term and any such extensions thereof.
5. VACATIONS. The Employee shall be entitled, without loss of pay, to
be absent voluntarily from the performance of his employment under this
Agreement, all such voluntary absences to count as vacation time, provided
that:
(a) The Employee shall be entitled to an annual vacation in accordance
with the Bank's policies.
(b) The timing of the vacations shall be scheduled in a reasonable
manner by the Employee and in compliance with the Bank's policies on taking
consecutive days of vacation.
(c) In addition to the aforesaid paid vacations, the Employee shall be
entitled, without loss of pay, to absent himself voluntarily from the
performance of his employment with the Bank for such additional periods of
time and for such valid and legitimate reasons as the Board of Directors in
its discretion may determine. Further, the Board of Directors shall, solely
at the Employee's request, be entitled to grant to the Employee a leave or
leaves of absence with or without pay and such time or times and upon such
terms and conditions as the Board, in its discretion, may determine.
6. TERMINATION OF EMPLOYMENT.
(a) The Board of Directors of Bank or TCF may terminate the Employee's
employment at any time with or without cause and upon such action by either
such board the Employee's services shall terminate with respect to both Bank
and TCF. If the employment of the Employee is involuntarily terminated other
than (i) for "cause" (as defined in the next Section) under this section
6(a), (ii) pursuant to Section 9 or (iii) by reason of death or disability as
provided in Sections 6(c) or 7 of this Agreement, the Bank shall: (1) pay the
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Employee's salary through the remaining term of this Agreement, at the time
such payments are due under Section 2 of this Agreement, reduced by the
amounts earned by the Employee from other employment during the remaining
term of this Agreement; (2) provide the Employee with health insurance
benefits maintained by the Bank for its senior officers or for its employees
generally during the remaining term of this Agreement or a period of eighteen
(18) months from the Termination Date whichever is less, and (3) thereafter
permit the Employee to purchase health insurance benefits, at the Bank's
group rate (or pay the employee the difference between that rate and any
higher rate he is required to pay because he cannot be included in the group
rate) until the Employee confirms that he has obtained comparable health
insurance at comparable cost to the Employee through another employer, dies
or reaches age 65, whichever comes first.
The Employee shall have no right to receive compensation or other benefits
for any period after termination for cause. Termination for cause shall
include termination for any reason set forth in Section 9 hereof, personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule, regulation (other than traffic violations
or similar offenses) or final cease-and-desist order, or material breach of
any provision of this Agreement. A termination shall not be for cause unless
it occurs after a board meeting at which the termination is reviewed, with
reasonable advance notice to the Employee of the meeting and the purpose
thereof and at which the Employee and his counsel (if any) has an opportunity
to present information and arguments concerning whether there is cause for
termination. The Employee shall not be deemed to have been terminated for
cause unless and until there shall have been delivered to the Employee a copy
of a resolution, duly adopted by not less than a disinterested majority of
the entire membership of the board stating that in the good faith opinion of
such board the Employee was guilty of conduct constituting cause (as defined
earlier in this paragraph) and stating the specific factual basis for the
board's opinion. In reaching its conclusions, such board shall be entitled
to conclusively rely upon any information presented or reviewed at the
meeting which the Employee has the opportunity to rebut and does not do so,
or with respect to which the board determines in good faith that the
Employee's rebuttal is not convincing, without any requirement to personally
interview witnesses or independently verify the information presented to it
(it being acknowledged that a meeting conducted in accordance with the
foregoing procedures constitutes a reasonable investigation) and the board
shall be absolutely protected against liability to Employee for its
dissemination of such information and its conclusions in compliance with the
requirements of this paragraph.
(b) This Agreement may be voluntarily terminated by the Employee at
any time upon 90 days written notice to the Bank or upon such shorter period
as may be agreed upon between the Employee and the Board of Directors of the
Bank. In the event of such voluntary termination, the Bank shall be
obligated only to pay the Employee's salary through the 90 days (or fewer)
remaining in the term of this Agreement. In the event, however, the OTS
prohibits such payment by the Bank, TCF shall be obligated to make such
payments.
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(c) In the event of death of the Employee during the term of this
Agreement, the Employee's estate, or such person as the Employee may have
previously designated in writing, shall be entitled to receive the salary due
the Employee through the last day of the calendar month in which the death
occurs.
(d) In the event the Bank purports to terminate the Employee for cause,
but it is determined by a court of competent jurisdiction or by an arbitrator
under Section 16 that the Employee was improperly terminated, the Employee
shall be entitled to reimbursement for all reasonable cost, including
attorney's fees, in challenging such termination or collecting such amounts.
Such reimbursement shall be in addition to all rights which the Employee is
otherwise entitled to under this Agreement.
(e) For purposes of this Agreement, the term "Date of Termination" or
"Termination Date" means the earlier of (i) the date upon which the Bank or
TCF gives notice to the Employee of the termination of his employment or (ii)
the date upon which the Employee ceases to serve as an employee of the Bank
or TCF.
7. DISABILITY. If the Employee shall become disabled or incapacitated
to the extent of being unable to perform the duties anticipated by this
Agreement, the Employee shall be entitled to receive disability benefits of
the type provided for other comparable officers of the Bank. In such event,
the rights of the Employee to receive the salary stated in Section 2 hereof
shall be suspended until the Employee is able to fully perform his duties.
In the event of Employee's termination of employment due to ongoing inability
to perform his duties, any benefits payable to Employee from the long term
disability plan of Bank or TCF on account of such disability shall be in lieu
of any other payments that would otherwise be payable under this Agreement
after a termination of employment.
8. CHANGE IN CONTROL COMPENSATION.
(a) ELIGIBILITY. In lieu of amounts the Employee might otherwise
receive under Section 6 or other Sections of this Agreement, in the event of
a termination of employment after a "change in control" (as herein defined)
the Employee shall be eligible to receive compensation, in the amounts and at
the times described in Section 8 (c), if:
(1) his employment with the Bank and all of its affiliates is
terminated within 18 months after there has been a change in control,
and
(2) the Employee's termination of employment is involuntary and is
not on account of death, a physical or mental disability such that the
Employee qualifies for benefits under any long term disability plan
maintained by the Bank or its affiliates, or cause, as defined in Section
6 of this Agreement. For purposes of Section 6 and this Section 8 an
"involuntary termination" or "involuntarily terminated" means termination
of the Employee's employment without the Employee's express written
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consent or material diminution of or interference with the Employee's
duties, responsibilities and benefits as Chairman and Chief Executive
Officer of the Bank. By way of example and not by way of limitation,
any of the following actions, if unreasonable or materially adverse to
the employee, shall constitute such diminution or interference unless
consented to in writing by the Employee: (a) a significant reduction
in the size or a material change in the location of the Employee's
office; (b) a reduction or adverse change in the scope or nature of the
secretarial or other administrative support of the Employee; (c) a
reduction or adverse change in the Employee's title and decision-making
responsibilities; (d) a reduction in the number or seniority of other
Bank personnel reporting to the Employee, other than as part of a
Bank-wide reduction in staff, or a reduction in the frequency with
which, or in the nature of the matters with respect to which, such
personnel are to report to the Employee; (e) an increase in the
number of, or a decrease in the seniority of, the persons (other
than the Board of Directors) to whom the Employee must report,
other than is normal and customary for an executive officer of a
similarly situated financial institution; or an increase in the
frequency of, or in the nature of matters with respect to which,
such reports by the Employee shall be required; (f) a reduction or
adverse change in the salary, perquisites, benefits, contingent
benefits or vacation time which had theretofore been provided to
the Employee, other than as part of an overall program applied
uniformly and with equitable effect to all members of the senior
management of the Bank; and (g) a material increase in the required
hours of work or the workload of the Employee.
(b) CHANGE IN CONTROL. For the purposes of this Agreement, a
"change in control" shall be deemed to have occurred if:
(1) the shareholders of TCF shall adopt a resolution providing
for its dissolution or liquidation, or for a merger, consolidation,
or other corporate reorganization of TCF under circumstances in
which TCF will not be the surviving party; or
(2) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934) (other than TCF or
any of its subsidiaries or any employee benefit plan of TCF or any
of its subsidiaries) becomes a beneficial owner, directly or
indirectly, of securities of TCF representing 25% or more of the
voting power of all of TCF's then outstanding securities; or
(3) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors
of TCF ceased for any reason to constitute at least a majority
thereof (unless the nomination of each new director was approved by
a vote of at least two thirds of the directors then still in office
who were directors at the beginning of such period); or
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(4) the Board of Directors of TCF shall approve the sale of all,
or substantially all, of the business or assets of TCF.
(5) the acquisition of control of the Bank (but not including the
acquisition of the Bank by TCF pursuant to the Agreement and Plan
of Reorganization dated September 8, 1994) as defined in 12 C.F.R.
[Section] 574.4, or any successor regulation, which would require the
filing of an application for acquisition of control or a notice of
change in control under 12 C.F.R. [Section] 574.3 or any successor
regulation.
(c) AMOUNT AND PAYMENT OF SEVERANCE PAY. The Employee shall receive:
(1) a lump sum cash payment, no later than 30 days after the
Termination Date, in an amount equal to three times the
Employee's annual rate of salary as of the Termination Date;
(2) continuation of coverage under the employer's group medical,
group life, and group long-term disability plans, if any, and under
any individual policy or policies of life insurance maintained by
his employer, with the same rate of employer contributions as for
active employees, until the earliest to occur of:
(i) the expiration of 24 months from the Employee's Termination
Date or, in the case of medical benefits only, if longer, until
the Employee confirms that he has obtained comparable health
insurance coverage at comparable cost to the Employee through
another employer, dies or reaches age 65, whichever occurs first;
or
(ii) the date on which the Employee obtains comparable coverage
at comparable cost provided by a new employer.
(3) a lump sum cash payment, payable no later than 30 days after
the Termination Date, in an amount equal to the sum of: (i) the
amount by which the fair market value of that number of shares of
stock subject to any stock option which is forfeited or which
otherwise becomes nonexercisable by the Employee by reason of
termination of employment (determined as of such Termination Date)
exceeds the option price for such shares; (ii) such additional
amounts (or the fair market value of such additional property) in
excess of the amount determined pursuant to subSection (i) that
would have been paid or distributed to Employee upon exercise of
any such forfeited stock options, had such options been
exercisable, and exercised, by Employee as of his Termination Date;
(iii) an amount equal to the fair market value of any shares of
restricted stock forfeited by the Employee by reason of such
termination of employment, determined as of such Termination Date;
and (iv) an amount equal to the amount that Employee would have
received if any stock appreciation right which is forfeited or
which otherwise becomes nonexercisable by
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such termination of employment had been exercisable, and exercised,
by Employee as of the Termination Date. It is understood and
agreed that this payment is to occur only to the extent Employee is
not entitled to exercise options or stock appreciation rights, or
to retain restricted stock, after the termination of employment
under the provisions of Employee's stock option, restricted stock,
or stock appreciation rights agreements.
(4) LIMITATIONS. If any part of the amounts to be paid to or for
the benefit of the Employee pursuant to this Section 8, as
determined by TCF's auditors, constitute "parachute payments"
within the meaning of section 280G of the Internal Revenue Code of
1986, as from time to time amended (the "Code"), such amounts shall
be reduced as provided below so that the aggregate present value of
all parachute payments to the Employee will be equal to 299% of the
Employee's "annualized includible compensation for the base
period," as such term is defined in section 280G(d)(1) of the Code.
Such reduction shall be made in the benefits provided pursuant to
subparagraph 8(c)(2), in the inverse order of their anticipated
payment, before any reductions are made in the amounts payable
pursuant to subSection 8(c)(1) or (3). For the purpose of this
subsection, present value shall be determined in accordance with
section 1274(b)(2) of the Code.
(5) FUNDING OF CHANGE IN CONTROL COMPENSATION. Nothing herein
contained shall require or be deemed to require the Bank or a
subsidiary to segregate, earmark, or otherwise set aside any funds
or other assets to provide for any payments required to be made
hereunder, and the rights of the terminating Employee to
compensation hereunder shall be solely those of a general,
unsecured creditor of the Bank. However, the Bank may, in its
discretion, deposit cash or property, or both, equal in value to
all or a portion of the amounts anticipated to be payable hereunder
for any or all Employees into a trust, the assets of which are to
be distributed at such times as determined by the trustee of such
trust; PROVIDED that such assets shall be subject at all times to
the rights of the Bank's general creditors.
9. OBLIGATIONS OF THE BANK SUBJECT TO FEDERAL BANKING LAW. The
obligations of the Bank (which includes TCF for these purposes) under this
Agreement shall be suspended or terminated in the circumstances stated below
and are further subject to any other applicable federal banking statutes,
regulations, orders and directives.
(a) If the Employee is suspended from office and/or temporarily
prohibited from participating in the conduct of the Bank's affairs by a
notice served under Section 9(e) of the Federal Deposit Insurance Act
("FDIC") (12 U.S.C. 1818(e)(3) or (g)(1)), the Bank's obligations under this
Agreement shall be suspended as of the date of service unless stayed by
appropriate proceedings. If the charges in the notice are dismissed the Bank
may in its discretion (i) pay the Employee all or part of the compensation
withheld which its obligations
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under this Agreement were suspended and (ii) reinstate in whole or in
part any of the obligations which were suspended.
(b) If the Employee is removed from office and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an
order issued under Section 8(e)(4) or (g)(1) of the FDIC (12 U.S.C.
1818(e)(4) and (g)(1)), all obligations of the Bank under this Agreement
shall terminate, as of the effective date of the order, but vested rights of
the parties shall not be affected.
(c) If the Bank becomes in default (as defined in Section 3(x)(1) of
the FDIC (12 U.S.C. 1818(x)(1)), all obligations under this Agreement shall
terminate as of the date of default, but any vested rights of the parties
shall not be affected.
(d) All obligations under this Agreement may be terminated: (i) by the
Director of the Office of Thrift Supervision ("OTS") at the time the Federal
Deposit Insurance Corporation or the Resolution Trust Corporation enters into
an agreement to provide assistance to or on behalf of the Bank under the
authority contained in Section 13(c) of the FDIC (12 U.S.C. 1823(c)); and
(ii) by the Director of the OTS or his designee at the time the Director of
the OTS or his designee approves a supervisory merger to resolve problems
related to operations of the Bank or when the Bank is determined by the
Director of the OTS to be in an unsafe or unsound condition. Any rights of
the parties that have already vested, however, shall not be affected by such
action.
(e) Any payments made to the Employee pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12
U.S.C. [Section] 1828(k) and any regulations promulgated thereunder.
Notwithstanding any other limitations in this Agreement, the total payments to
Employee under this Agreement by the Bank may not exceed three times the
Employee's five year average compensation, as determined in accordance with
RB#27a of the OTS.
10. NO ASSIGNMENTS. This Agreement is personal to all of the parties
hereto, and no party may assign or delegate any of its rights or obligations
hereunder without first obtaining the written consent of the other parties.
(a) The Bank and TCF agree to require any successor to substantially
all of the business or assets of the Bank (other than a holding company of
the Bank in connection with a holding company reorganization) or TCF, as the
case may be, to assume and agree to perform this Agreement as written.
Failure of the Bank and TCF to do so will be a breach by the Bank and TCF
which entitles the Employee to compensation pursuant to Section 8(c).
(b) The rights of the Employee under this Agreement shall be
enforceable by his personal and legal representatives, heirs, devisees and
beneficiaries.
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11. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth below in this Agreement (provided that all notices to the
Bank shall be directed to the attention of the Board of Directors of the Bank
with a copy to the Secretary of the Bank), or to such other address as either
party may have furnished to the other in writing in accordance herewith.
12. AMENDMENTS. No amendments or additions to this Agreement shall
be binding unless in writing and signed by all parties, except herein
otherwise provided.
13. SECTION HEADING. The Section headings used in this Agreement are
included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
14. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
15. GOVERNING LAW. This Agreement shall be governed by the laws of the
United States and the State of Michigan.
16. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction.
17. PRIOR CONTRACT. This Agreement supersedes any prior employment
contract between Employee and Bank or TCF and, upon execution of this
Agreement, any such prior contract shall be null and void.
18. JOINT BENEFITS AND OBLIGATIONS. Unless otherwise provided in this
Agreement, the benefits and obligations of the Bank hereunder are the joint
and several benefits and obligations of the Bank and TCF. Notwithstanding
the foregoing, Employee's compensation hereunder shall be charged solely to
the Bank unless a corporate allocation is duly agreed to by and between TCF
and the Bank or Employee's compensation is payable solely by TCF under
subsection 4(b) or subsection 6(b) hereof.
IN WITNESS WHEREOF, the parties have executed this agreement on the day
and year first hereinabove written.
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GREAT LAKES BANCORP,
A Federal Savings Bank
401 East Liberty Street
Ann Arbor, MI 48104
By: /s/ Barry N. Winslow
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Title: President
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EMPLOYEE
/s/ Robert J. Delonis
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TCF FINANCIAL CORPORATION
801 Marquette Avenue
Minneapolis, MN 55402
By: /s/ Thomas A. Cusick
-------------------------
Title: Vice Chairman
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