EXHIBIT 10.16
COMERICA INCORPORATED
EXECUTIVE OFFICER CONTINUITY AGREEMENT
TABLE OF CONTENTS
ARTICLE 1.PURPOSE, ESTABLISHMENT AND TERM
1.1. Purpose and Establishment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Term of the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2.NATURE OF RIGHTS UNDER AGREEMENT
2.1. Contractual Rights to Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Effect on Other Benefits and Rights as Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3. Employment Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 3.DEFINITIONS AND CONSTRUCTION
3.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
A. Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
B. Annual Base Salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
C. Annual Management Incentive Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
D. Beneficial Owner or Beneficial Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
E. Benefit Equalization Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
F. Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
G. Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
H. Change of Control of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
I. Claims Arbiter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
J. Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
K. Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
L. Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
M. Company Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
N. Deferred Compensation Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
O. Disability or Diabled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
P. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Q. Employee Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
R. Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
S. Executive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
T. Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
U. Good Reason . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
V. Long-Term Incentive Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
W. Notice of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
X. Official Employment Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Y. Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Z. Potential Change of Control of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
AA. Preferred Savings Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
AB. Qualifying Circumstance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
AC. Receipt and Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
AD. Restricted Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
AE. Retirement or Retiring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
AF. Retirement Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
AG. Severance Benefit(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.2. Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.3. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.4. Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.5. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
-ii-
ARTICLE 4.
CONTINUATION OF COMPENSATION AND
SEVERANCE BENEFITS
4.1. Continuation of Compensation Through Date of
Termination and Severance Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
A. Continuation of Compensation Through
Date of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
B. Severance Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.2. Qualifying Circumstance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.3. Description of Severance Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.4. Effect of Death, Disability or Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.5. Effect of Termination for Cause
or Other Than for Good Reason . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.6. Notice of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 5.
FORM AND TIMING OF SEVERANCE BENEFITS
5.1. Form and Timing of Severance Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.2. Withholding of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 6.SUCCESSORS
6.1. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.2. Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
-iii-
ARTICLE 7.
ADMINISTRATION AND CONFIDENTIALITY OF INFORMATION;
OBLIGATIONS OF EXECUTIVE UPON A POTENTIAL CHANGE OF CONTROL
7.1 Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.2 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.3 Obligations of Executive Upon a Potential
Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 8.MISCELLANEOUS PROVISIONS
8.1. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.2. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.4. Claims and Disputes; Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.5. Limitation of Company's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
-iv-
COMERICA INCORPORATED
EXECUTIVE OFFICER CONTINUITY AGREEMENT
AGREEMENT by and between Comerica Incorporated, a Delaware corporation
(the "Company") and ____________________ ("Executive"), dated as of the 1st day
of January, 1996.
-1-
ARTICLE 1.
PURPOSE, ESTABLISHMENT AND TERM
1.1 Purpose and Establishment. The Board of Directors of the
Company (the "Board"), has determined that it is in the best interests of the
Company and its shareholders that the Company maintain the continued dedication
of Executive, notwithstanding the possibility, threat or occurrence of a Change
of Control of the Company (as defined below). To alleviate the inevitable
distraction associated with a pending or threatened Change of Control of the
Company and to encourage Executive's full attention and dedication to the
Company currently and in the event of any threatened or pending Change of
Control of the Company, the Board believes that it is imperative that it take
steps, consistent with those taken by other similarly situated organizations,
to provide Executive with compensation and benefits arrangements upon a Change
of Control of the Company which ensure that the compensation and benefits
expectations of Executive will be satisfied. In order to accomplish the
foregoing objectives, the Board has caused the Company to enter into this
Agreement. Upon the execution of this Agreement by Executive and approval by
the Board, this Agreement shall become effective as of January 1, 1996 (the
"Effective Date"), and shall remain in effect as provided in Section 1.2
herein.
1.2. Term of the Agreement. The term of this Agreement will commence
on the Effective Date and continue through December 31, 1998. Beginning January
1, 1999, and each third succeeding January 1st thereafter, the term of this
Agreement shall be extended automatically for three additional years unless the
Committee delivers written notice to Executive at least fifteen months prior to
the end of the original term, or any extended term, that the
-2-
Agreement will not be extended. Upon the delivery of such written notice to
Executive, the term of the Agreement will expire at the end of the original
term, or extended term, then in progress; provided, however, that if a Change
of Control of the Company occurs during the original term or during any
extended term of this Agreement, this Agreement will not expire until the
elapse of the longer of the following periods: (i) the period which ends on the
last day of the twenty-fourth month subsequent to the month in which the Change
of Control of the Company occurs (or, in the case of a Change of Control of the
Company described in Section 3.1.H(3) or (4) hereof, the period which ends on
the earlier of (a) the last day of the twenty-fourth month subsequent to the
month in which consummation of the transaction, approval of which constitutes
the Change of Control of the Company, occurs, or (b) the last day of the
thirtieth month subsequent to the month in which the Change of Control of the
Company occurs); or (ii) the period which ends on the date all benefits owing
to Executive hereunder have been paid.
-3-
ARTICLE 2.
NATURE OF RIGHTS UNDER AGREEMENT
2.1. Contractual Rights to Benefits. This Agreement establishes a
contractual right to the Severance Benefits Executive may become entitled to
hereunder following the occurrence of a Change of Control of the Company.
2.2 Effect on Other Benefits and Rights as Employee. Entry into
this Agreement shall not affect Executive's right to receive any amounts
payable to Executive under any benefit, incentive, retirement, or other plan or
arrangement, or under any employment agreement, except to the extent that the
express provisions of such other agreement, plan or arrangement preclude the
payment of or provide for offset of benefits thereunder upon receipt of
benefits under this Agreement. Further, Executive's entry into this Agreement
shall not adversely affect Executive's rights as an Employee of the Company,
whether those rights exist now or arise hereafter.
2.3. Employment Status. The provisions hereof shall not be deemed
to create a contract between the Company and Executive to employ Executive for
any fixed period of time. Executive's employment with the Company may be
terminated at will by either the Company or Executive, with or without Cause,
subject to fulfillment by the Company of its obligation to provide such
Severance Benefits as may be required hereunder.
-4-
ARTICLE 3.
DEFINITIONS AND CONSTRUCTION
3.1. Definitions. Whenever used in the Agreement, the following
terms shall have the meanings set forth below, and when the meaning is
intended, the initial letter of the term is capitalized.
AH. "Agreement" means the Comerica Incorporated
Executive Officer Continuity Agreement as
herein set forth.
AI. "Annual Base Salary" means Executive's rate
of annual salary in effect, except as
otherwise specifically provided herein, as of
the date a Change of Control of the Company
occurs, or if such rate is higher as of the
date Executive experiences a Qualifying
Circumstance, Executive's rate of annual
salary in effect as of the date he or she
experiences a Qualifying Circumstance.
Annual Base Salary shall include (i) any
amount which is contributed by the Company
pursuant to an elective deferral which is not
includable in Executive's gross income under
Code Sections 125 or 402(e)(3) and (ii) any
amount contributed by the Company to the
Deferred Compensation Plan pursuant to
Executive's election.
AJ. "Annual Management Incentive Program" means
the Comerica Incorporated annual management
incentive program or any plan or program
adopted or implemented by the Company as a
successor to such program.
AK. "Beneficial Owner" or "Beneficial Ownership"
or "Beneficially Owns" or "Beneficially
Owned" shall have
-5-
the meanings ascribed to such terms in
Exchange Act Rule 13d-3.
AL. "Benefit Equalization Plan" means the Benefit
Equalization Plan For Employees of Comerica
Incorporated or any plan adopted by the
Company as a successor to such plan.
AM. "Board" means the Board of Directors of
Comerica Incorporated.
AN. "Cause" shall be deemed to have arisen if
Executive has conducted himself or herself in
a manner described in (1) or (2) below:
(1) If Executive has willfully and
continually failed to perform
substantially all of his or her
duties with the Company or one of
its affiliates (unless such failure
occurs (i) as a result of
Executive's incapacity precipitated
by physical or mental illness or
(ii) after Executive's issuance of a
Notice of Termination for Good
Reason pursuant to Section 4.6
hereof), after a written demand to
perform is delivered to Executive by
the Board or Chief Executive Officer
of the Company which demand must
specifically identify the manner in
which the Board or Chief Executive
Officer believes that Executive has
not performed substantially all of
his or her duties, provided that
Executive fails to remedy the
situation within ten (10) business
days of receiving such notice; or
-6-
(2) If Executive has engaged willfully
in illegal or gross misconduct which
is materially and demonstrably
injurious to the Company, monetarily
or otherwise. However, no act, or
failure to act, on Executive's part
shall be considered "willful" unless
Executive took such action (or
failed to take such action) other
than in good faith and without
reasonable belief that his or her
action or omission was in the best
interests of the Company.
AO. "Change of Control of the Company" shall be
deemed to have occurred if, during the term
of this Agreement, the conditions set forth
in any of the following paragraphs shall have
been satisfied:
(1) any Person is or becomes the
Beneficial Owner, directly or
indirectly, of securities of the
Company (not including in the
securities Beneficially Owned by
such Person any securities acquired
directly from the Company or its
affiliates) which represent 26% or
more of the combined voting power of
the Company's then outstanding
securities; or
(2) during any period of up to two
consecutive years (not including any
period prior to the Effective Date
of this Agreement), individuals who
constitute the Board at the
beginning of such period and any new
director (other than a director
whose initial assumption of office
is in connection with an actual or
threatened election contest,
including
-7-
but not limited to, a consent
solicitation relating to the
election of directors of the
Company, as such terms are used in
Rule 14a-11 of Regulation 14A under
the Exchange Act) whose election by
the Board or nomination for election
by the Company's stockholders was
approved by a vote of at least
two-thirds (2/3rds) of the directors
then still in office who either were
directors at the beginning of the
period or whose election or
nomination for election was
previously so approved, cease for
any reason to constitute a majority
of the Board; or
(3) the shareholders of the Company (i)
approve a merger or consolidation of
the Company with any other
corporation, or (ii) approve the
issuance of voting securities of the
Company pursuant to applicable stock
exchange requirements in connection
with a merger or consolidation of
the Company or any direct or
indirect subsidiary of the Company
with any other corporation, other
than in either (i) or (ii) above a
merger or consolidation which would
result in the voting securities of
the Company outstanding immediately
prior thereto continuing to
represent (either by remaining
outstanding or by being converted
into voting securities of the
surviving entity), in combination
with shares owned by any trustee or
other fiduciary holding securities
under an employee benefit plan of
the Company, at least 75% of the
combined voting
-8-
power of the voting securities of the
Company or such surviving entity
outstanding immediately after such
merger or consolidation; or
(4) the shareholders of the Company approve a
plan of complete liquidation of the Company
or an agreement to sell or dispose of all or
substantially all of the Company's assets.
AP. "Claims Arbiter" means such person or persons
as the Company designates to mediate disputes
involving the Agreement. No such person
shall be an employee of the Company.
AQ. "Code" means the Internal Revenue Code of
1986, as amended. All references to sections
of the Code shall be deemed to refer to any
successor provisions to such sections.
AR. "Committee" means the Compensation Committee
of the Board of Directors of Comerica Incorporated.
AS. "Company" means Comerica Incorporated, a
Delaware corporation (including any and all
subsidiaries), and any successor to its
business and/or assets which assumes this
Agreement by operation of law, or otherwise
(except in determining, under Section 3.1.H.
hereof, whether or not a Change of Control of
the Company has occurred in connection with
any such succession).
AT. "Company Shares" means shares of $5.00 par
value common stock of the Company or any
equity securities into which such shares have
been converted.
-9-
AU. "Deferred Compensation Plan" means the
Comerica Incorporated Deferred Compensation
Plan, the Manufacturers National Corporation
Executive Incentive Plan, or any plan adopted
by the Company as a successor to either such
plan.
AV. "Disability" or "Disabled" means "Totally
Disabled" within the meaning of such term as
set forth in the Long-Term Disability Plan
of Comerica Incorporated, the provisions of
which are incorporated herein by reference.
AW. "Effective Date" means January 1, 1996.
AX. "Employee Options" means options to purchase
Company Shares granted pursuant to the Long-Term
Incentive Plan.
AY. "Exchange Act" means the Securities Exchange
Act of 1934, as amended. All references to
sections of the Exchange Act shall be deemed
to refer to any successor provisions to such
sections.
AZ. "Executive" means the senior officer of the
Company who has signed this Agreement as Executive.
BA. "Expiration Date" means the date the
Agreement expires, as provided in Section 1.2 herein.
BB. "Good Reason" to justify Executive's decision
to terminate his or her employment means the
occurrence (without the express written
consent of Executive) of any one or more of
the following acts by the Company, or
failures by the Company to act, unless any
such act or failure to act is corrected prior
to Executive's Official Employment
Termination Date:
-10-
(1) Assignment of any duties to Executive
inconsistent with his or her position as an
executive officer of the Company or a substantial
reduction in the nature of Executive's
responsibilities compared to his or her
responsibilities as they existed immediately
prior to the occurrence of the Change of Control
of the Company;
(2) Relocation of Executive's principal work station
to a location more than sixty miles away from
Executive's principal office at the time of the
occurrence of the Change of Control of the
Company;
(3) Any reduction in the amount of Executive's Annual
Base Salary from the rate in effect on the date a
Change of Control of the Company occurs or a
reduction in Executive's salary range of 15% or
more from his or her salary range in effect on
the date a Change of Control of the Company
occurs;
(4) Failure to pay to Executive his or her (i) Annual
Base Salary on the date scheduled for payment
unless Executive has voluntarily deferred the
receipt of any amount not paid, (ii) annual bonus
under the Annual Management Incentive Program (or
under any other short-term compensation plan in
which Executive was eligible to participate
before the occurrence of a Change of Control of
the Company) at the normal payment time unless
non-payment of the bonus is attributable to the
Company's failure to attain a level of
performance which would generate a bonus pool or
to inadequate performance by Executive, or (iii)
deferred compensation under the Deferred
Compensation Plan
-11-
(or under any other deferred compensation program
of the Company), within sixty days of the date
such compensation is scheduled to be paid;
(5) (i) Discontinuance of any compensation plan in
which Executive is eligible to participate
immediately prior to the occurrence of the Change
of Control of the Company which provides benefits
material vis-a-vis Executive's overall
remuneration (including, but not limited to, the
Annual Management Incentive Program, the
Long-Term Incentive Plan, the Preferred Savings
Plan, the Retirement Plan, the Benefit
Equalization Plan, the Deferred Compensation
Plan, or any substitute plans adopted by the
Company prior to the occurrence of the Change of
Control of the Company), unless an equitable
arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to
any such plan, or (ii) failure to continue
Executive's coverage under any such plan or
arrangement on a basis at least as favorable,
both in terms of the amount of benefits provided
and the level of Executive's coverage relative to
other executives, as existed at the time of the
occurrence of the Change of Control of the
Company;
(6) (i) Failure to continue to provide coverage
(and/or benefits) to Executive similar to that he
or she enjoyed under the company-sponsored life
insurance, medical, health and accident,
disability or other welfare benefit or material
fringe benefit plans at the time of the
occurrence of the Change of Control
-12-
of the Company, or (ii) the taking of any action
which would materially reduce, directly or
indirectly, any such coverage or which would
deprive Executive of any material welfare or fringe
benefit he or she enjoyed at the time of the
occurrence of the Change of Control of the Company,
provided, in either situation, the Company's
action occurs other than as a result of an
across-the-board adjustment in coverage and/or
benefits which affects all senior officers of the
Company and all senior officers of any Person in
control of the Company;
(7) Failure to obtain a satisfactory agreement from
any successor to assume the Company's obligations
under this Plan, as required under Section 6.1
hereof; and
(8) The taking of action by the Company which purports
to terminate Executive's employment without
providing Executive a Notice of Termination which
satisfies the requirements of Section 3.1.W.
hereof.
Executive's right to resign for Good Reason shall
not be affected by his or her incapacity due to
physical or mental illness nor shall Executive's
continuation of employment following the occurrence
of any circumstance constituting Good Reason
constitute consent to such circumstance or a waiver
of rights hereunder.
-13-
BC. "Long-Term Incentive Plan" means the Comerica
Incorporated Long Term Incentive Plan or any plan
adopted by the Company as a successor to such
plan.
BD. "Notice of Termination" means a written notice
which shall indicate the specific termination
provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and
circumstances claimed to provide a basis for
termination of Executive's employment under the
provision so indicated. Further, a Notice of
Termination for Cause is required to include 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 which was called and held
for the purpose of considering such termination
after reasonable notice to Executive and an
opportunity for Executive, together with
Executive's counsel, to be heard before the Board
(i) which finds that, in the good faith opinion
of the Board, Executive was guilty of conduct set
forth in clause (1) and/or (2) of the definition
of Cause herein, and (ii) which specifies the
particulars thereof in detail.
BE. "Official Employment Termination Date", with
respect to any purported termination of
Executive's employment after the occurrence of a
Change of Control of the Company and during the
term of this Agreement, means: (i) if
Executive's employment is terminated due to Disability,
thirty days after Notice of Termination is given
(provided that Executive shall not have returned to the
full-time performance of his or her duties during
such thirty-day period), and (ii) if Executive's
employment is
-14-
terminated for any other reason, the date specified in
the Notice of Termination [which, in the case of a
termination by either the Company or Executive, shall be
not less than thirty days (except in the case of a
termination for Cause or except in the case where the
event constituting Good Reason occurred during the last
thirty days of the term of this Agreement)] from the date
such Notice of Termination is given.
BF. "Person" shall have the meaning set forth in
Section 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof;
however, a Person shall not include (i) the
Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities
under an employee benefit plan sponsored by the
Company or any of its subsidiaries, (iii) an
underwriter temporarily holding securities
pursuant to an offering of such securities, or
(iv) a corporation, owned directly or indirectly,
by the stockholders of the Company, in which
their ownership interests are in substantially
the same proportions as their ownership interests
in stock of the Company.
BG. "Potential Change of Control of the Company"
shall be deemed to have occurred if the
conditions set forth in any one of the following
paragraphs shall have been satisfied:
(1) the Company enters into an agreement, the
consummation of which would result in the
occurrence of a Change of Control of the
Company;
(2) the Company or any Person publicly announces
an intention to take or to consider taking
actions
-15-
which, if consummated, would constitute a
Change of Control of the Company;
(3) any Person who is, or becomes, the Beneficial
Owner, directly or indirectly, of securities
of the Company, which represent 10% or more
of the combined voting power of the Company's
then outstanding securities, increases such
Person's Beneficial Ownership of such
securities by 5% or more over the percentage
so owned by such Person on the Effective
Date; or
(4) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a
Potential Change of Control of the Company
has occurred.
BH. "Preferred Savings Plan" means the Comerica
Incorporated Preferred Savings Plan or any plan
adopted by the Company as a successor to such
plan.
BI. "Qualifying Circumstance" means any of the events
described in Section 4.2 hereof.
BJ. "Receipt and Release" means a receipt for payment
of benefits hereunder and a release of claims
against the Company in the form set forth in
Exhibit A. The provisions of Exhibit A are
incorporated herein by reference.
DD. "Restricted Shares" means Company Shares granted
to Executive under the Long-Term Incentive Plan
subject to restrictions.
EE. "Retirement" or "Retiring" shall be deemed to be
the reason for the termination by the Company or
Executive of Executive's employment if
Executive's employment is terminated in
accordance with (i) the Company's
-16-
retirement policy (excluding its early retirement
policy), which applies to its salaried employees,
as in effect immediately prior to the occurrence
of the Change of Control of the Company, or (ii)
any retirement arrangement which Executive has
consented to.
FF. "Retirement Plan" means the Comerica Incorporated
Retirement Plan or any plan adopted by the
Company as a successor to such plan.
GG. "Severance Benefit(s)" means the items of
severance compensation as provided in Article 4
hereof.
-17-
3.2. Gender and Number. The masculine, feminine and neuter, wherever
used in the Plan, shall refer to either the masculine, feminine or neuter; and,
unless the context otherwise requires, the singular shall include the plural and
the plural the singular.
3.3. Severability. In the event any provision of this Agreement shall
be held illegal or invalid for any reason, the illegality or invalidity of the
provision shall not affect the remaining provisions of the Agreement, and the
Agreement shall be construed and enforced as if the illegal or invalid provision
had not been included.
3.4. Modification. No provision of this Agreement may be modified,
waived, or discharged unless such modification, waiver, or discharge is agreed
to in writing and signed by Executive and by the Chairman of the Committee.
3.5. Applicable Law. To the extent not preempted by the laws of the
United States, the laws of the State of Delaware shall be the controlling law in
all matters relating to this Agreement.
-18-
ARTICLE 4.
CONTINUATION OF COMPENSATION AND
SEVERANCE BENEFITS
4.1. Continuation of Compensation Through Date of Termination and
Severance Benefits.
A. Continuation of Compensation Through Date of Termination.
Following a Change of Control of the Company and during the term of this
Agreement, during any period that Executive fails to perform Executive's
full-time duties with the Company as a result of incapacity due to physical or
mental illness, the Company shall pay Executive's full base salary to Executive
at the rate in effect at the commencement of any such period, together with all
compensation and benefits payable to Executive under the terms of any
compensation or benefit plan, program or arrangement maintained by the Company
during such period, until Executive's employment is terminated by the Company
for Disability. Further, the Company shall pay Executive's normal
post-termination compensation and benefits to Executive as such payments become
due. Such post- termination compensation and benefits shall be determined
under, and paid in accordance with, the Company's retirement, insurance and
other compensation or benefit plans, programs and arrangements.
If Executive's employment shall be terminated for any reason following
the occurrence of a Change of Control of the Company and during the term of
this Agreement, the Company shall pay Executive's full salary to Executive
through Executive's Official Employment Termination Date at the rate in effect
at the time the Notice of Termination is given, together with all compensation
and benefits payable to Executive through Executive's Official
-19-
Employment Termination Date under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period.
Further, the Company shall pay Executive's normal post-termination compensation
and benefits to Executive as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance
with, the Company's retirement, insurance and other compensation or benefit
plans, programs and arrangements.
B. Severance Benefits. Executive shall be entitled to receive the
Severance Benefits described in Section 4.3 hereof provided there has been a
Change of Control of the Company, not later than the end of the twenty-fourth
month which begins after the month in which the Change of Control of the Company
occurs(1), Executive experiences a Qualifying Circumstance and Executive signs a
Receipt and Release and delivers it to the Company. Executive shall not be
entitled to receive Severance Benefits if his or her employment is terminated
for Cause or ends as a result of Executive becoming Disabled, Retiring, dying or
resigning without Good Reason.
4.2. Qualifying Circumstance. The occurrence or deemed occurrence of
any one or more of the following events not later than the end of the period
referred to in Section 4.1.B. (or not
- - ---------------
(1)In the case of a Change of Control of the Company described in
Section 3.1.H.(3) or (4) hereof, the period during which Executive must
experience a Qualifying Circumstance in order to become entitled to Severance
Benefits shall be, in lieu of the period referred to above, the period which
ends on the earlier of (a) the last day of the twenty-fourth month subsequent to
the month in which consummation of the transaction, approval of which
constitutes the Change of Control of the Company, occurs, or (b) the last day of
the thirtieth month subsequent to the month in which the Change of Control of
the Company occurs.
-20-
later than the period referred to in footnote (1), if applicable) shall be
considered to be a Qualifying Circumstance:
BK. A successor company fails or refuses to assume the Company's
obligations under this Agreement;
BL. The Company or any successor company breaches any of the
provisions of this Agreement;
BM. Executive's employment with the Company ends unless his or her
employment is terminated for Cause, or ends as a result of
Executive becoming Disabled, Retiring, dying or resigning
without Good Reason; or
D. Executive's resigns for Good Reason.
Executive's employment shall be deemed to have been terminated
following a Change of Control of the Company by Executive with
Good Reason if Executive's employment is terminated prior to
the occurrence of a Change of Control of the Company without
Cause at the direction of a Person who has entered into an
agreement with the Company the consummation of which will
constitute a Change of Control of the Company or if Executive
terminates his employment with Good Reason prior to the
occurrence of a Change of Control of the Company (determined by
treating a Potential Change of Control of the Company as a
Change of Control of the Company in applying the definition of
Good Reason) if the circumstance or event which constitutes
Good Reason occurs at the direction of such Person.
4.3. Description of Severance Benefits. The following items
constitute the Severance Benefits Executive may receive
hereunder:
BN. A severance payment equal to 2.99 times Executive's Annual
Base Salary; provided, however, that the amount of this
payment, together with other amounts and/or benefits Executive
receives hereunder (or under other plans,
-21-
agreements, or arrangements sponsored by the Company or to
which the Company is a party) as a result of the occurrence of
the Change of Control of the Company which constitute
"parachute payments" under Section 280G of the Code may not
exceed the maximum amount deductible under Section 280G of the
Code, and, if necessary to remain within the deduction
limitation imposed by Code Section 280G, this severance
payment shall be reduced to the maximum amount (but not below
zero) which may be paid without loss of the Company's
deduction under Code Section 280G;
BO. An amount (in lieu of any amounts Executive may be entitled to
receive as an eligible participant under the Annual Management
Incentive Program) equal to the sum of (i) any incentive
compensation Executive earned (or, if such amount has not yet
been determined, the amount he or she would have earned
assuming the Company's annual profit plan performance
threshold was achieved) under the Annual Management Incentive
Program for the fiscal year immediately preceding the year in
which Executive's Official Employment Termination Date occurs,
provided any such sum has not yet been paid; (ii) any
incentive compensation Executive earned under the Annual
Management Incentive Program with respect to any multi-year
performance period which was completed on or prior to
Executive's Official Employment Termination Date provided any
such sum has not yet been paid; and (iii) a pro rata portion
of the aggregate estimated value of all incentive compensation
awards to Executive relating to all
-22-
uncompleted one-year performance periods(2) under the Annual
Management Incentive Program calculated by assuming the
Company's annual profit plan performance threshold was
achieved(3);
BP. Early lapse of restrictions applicable to all Restricted
Shares which were awarded to Executive under the Long-Term
Incentive Plan prior to the time a Change of Control of the
Company occurs (or, in the case of a Change of Control of the
Company described in Section 3.1.H(3) or (4) hereof, any such
shares awarded prior to consummation of the transaction,
approval of which constitutes the Change of Control of the
Company), and acceleration of vesting of all outstanding
Employee Options granted to Executive under the Long-Term
Incentive Plan prior to the time a Change of Control of the
Company occurs (or, in the case of a Change of Control of the
Company described in Section 3.1.H(3) or (4) hereof, any such
options granted prior to consummation of the transaction,
approval of which constitutes the Change of Control of the
Company);
- - ---------------
(2)Executive shall not be entitled to receive a pro rata payment with
respect to awards to be computed under multi-year performance periods which
have not been completed on or prior to Executive's Official Employment
Termination Date.
(3)The pro rata portion of any such award shall be the amount payable
(i) assuming the Company's performance threshold in the annual profit plan for
the year in which Executive's Official Employment Termination Date occurs was
achieved, and (ii) that a multiplier was utilized based on the multiplier which
would have applied had that performance occurred in the prior fiscal year, said
amount to be multiplied by a fraction, the numerator of which is the number of
full months which elapsed from the beginning of the performance period through
Executive's Official Employment Termination Date and the denominator of which
is twelve.
-23-
BQ. Continuation of medical, dental, accident, and life insurance
coverage for three full years subsequent to the Official
Employment Termination Date; provided, however, that this
coverage will be discontinued prior to the end of the
three-year period if Executive receives substantially similar
benefits from a subsequent employer (or such benefits are made
available to Executive without cost during such period), as
determined by the Committee (and any such benefits actually
received by Executive or made available to Executive shall be
reported to the Company by Executive); and, provided, further,
that if the value of the coverage to be provided under this
subsection causes a reduction in the Severance Benefits to be
paid to Executive and such benefits are thereafter reduced by
reason of Executive's receipt of similar benefits, the Company
shall, at the time such benefits are reduced, pay to Executive
the lesser of (i) the amount by which Executive's Severance
Benefits were previously reduced, or (ii) the maximum amount
which can be paid to Executive without such amount being, or
causing any other payment to be, nondeductible by reason of
Section 280G of the Code; and
BR. Payment by the Company of all legal fees and expenses incurred
by Executive in connection with the resolution of issues
regarding his or her rights under this Agreement; provided
however, that such fees and expenses shall not exceed five
percent of the amount of the Severance Benefits payable to
Executive under this Agreement determined without reduction
for taxes thereon.
-24-
4.4. Effect of Death, Disability or Retirement. If, during the term of
this Agreement, Executive (i) dies, (ii) fails to perform his or her duties with
the Company on a full-time basis for six consecutive months due to Disability,
and fails to recommence the full-time performance of his or her duties within
thirty days after a written Notice of Termination is given to Executive (which
notice may be given after Executive fails to perform his or her duties with the
Company on a full-time basis for five consecutive months due to Disability), or
(iii) ends his or her employment by Retiring, this Plan shall expire as of the
date of Executive's death, Official Employment Termination Date or date of
Retirement, as the case may be, without any obligation on the part of the
Company or its successors to pay any Severance Benefits to or with respect to
Executive hereunder.
4.5. Effect of Termination for Cause or Other Than for Good Reason.
Following a Change of Control of the Company, if Executive's employment is
terminated either (i) by the Company for Cause; or (ii) by Executive without
Good Reason, subject to Section 4.1.A. hereof, the Company shall have no further
obligations to Executive under this Agreement.
4.6. Notice of Termination. After a Change of Control of the Company
and during the term of this Agreement, any purported termination of Executive's
employment (other than by reason of death), shall be communicated by a Notice of
Termination from one party hereto to the other party hereto in accordance with
Section 8.3 hereof, and no purported termination which fails to comply with this
requirement shall be effective.
-25-
ARTICLE 5.
FORM AND TIMING OF SEVERANCE BENEFITS
5.1. Form and Timing of Severance Benefits. Following Executive's
satisfaction of the applicable conditions, the Severance Benefits shall be paid
or provided in the manner and at the times hereinafter set forth. Severance
Benefits described in Sections 4.3.A. and 4.3.B. hereof shall be paid in cash
(except as otherwise provided herein) to Executive in a single lump sum as soon
as practicable following Executive's Official Employment Termination Date,
provided, however, that if the amounts of such payments cannot be finally
determined within ninety days after such date, the Company shall pay Executive
an estimate of the amount Executive is entitled to receive not later than such
ninetieth day. Such estimate shall be determined in good faith by the Company.
The Company shall pay the remainder of such payments (together with interest at
the rate provided in Section 1274(b)(2) of the Code) as soon as the final
amount thereof can be determined. If the estimated payments exceed the amount
subsequently determined to be due, any excess shall constitute a loan by the
Company to Executive, which shall be repayable to the Company on the fifth
business day after demand by the Company (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code). At the time that payments are
made hereunder, the Company shall provide
-26-
Executive with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations.
If a decision is rendered by a court or a determination is made by the
Internal Revenue Service that the aggregate "parachute payments" which were
paid to or for Executive's benefit exceeded the maximum amount deductible under
Code Section 280G, and such decision or determination has become final, then
Executive shall be obligated to repay to the Company upon demand an amount
equal to the sum of (i) the excess of the aggregate "parachute payments" which
were paid to or for Executive's benefit over the aggregate "parachute payments"
that could have been paid to or for Executive's benefit without loss of
deduction under Section 280G of the Code with respect to any portion of such
"parachute payments", and (ii) interest on the amount set forth in clause (i)
of this sentence at the rate provided in Section 1274(b)(2)(B) of the Code from
the date of Executive's receipt of such excess until the date of Executive's
repayment thereof.
Early lapse of restrictions relating to Restricted Shares and
acceleration of vesting of Employee Options under Section 4.3.C. shall occur as
of Executive's Official Employment Termination Date. Severance Benefits
described in Section 4.3.D. hereof shall be provided to Executive beginning on
the Official Employment
-27-
Termination Date, and subject to Section 4.3.D hereof, shall continue for three
full calendar years from such date. Payments of Executive's legal fees and
expenses by the Company referred to in Section 4.3.E. hereof shall be made
within thirty days after written requests by Executive for payment accompanied
by such evidence of payment or incurrence of fees and expenses as the Company
may reasonably require.
5.2. Withholding of Taxes. Company shall withhold from any amounts
payable under this Agreement all Federal, state, city, or other taxes as
legally required.
-28-
ARTICLE 6.
SUCCESSORS
6.1. Successors. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation, or otherwise) of all or
substantially all of the business and/or assets of the Company to expressly
assume 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. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Executive to receive Severance Benefits from the
Company in the same amount and on the same terms as Executive would be entitled
to hereunder if Executive voluntarily terminated his or her employment for Good
Reason after the occurrence of a Change of Control of the Company, except, for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed to be Executive's Official Employment
Termination Date.
6.2. Beneficiaries. This Agreement shall inure to the benefit of and
be enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees. If
Executive should die
-29-
while any amount would still be payable to him or her hereunder had he or she
continued to live, all such amounts, unless otherwise provided herein, shall be
paid to Executive's estate or, if the Company is satisfied that there will be
no probate proceeding involving Executive's estate, and Executive has executed
a will which does not specifically refer to the Severance Benefits hereunder
but which pours over the residue of Executive's estate to a trustee under a
revocable inter vivos trust established by Executive during his or her
lifetime, then all such amounts shall be paid to the trustee or successor
trustee of such trust.
-30-
ARTICLE 7.
ADMINISTRATION AND CONFIDENTIALITY OF INFORMATION;
OBLIGATIONS OF EXECUTIVE UPON A POTENTIAL CHANGE OF CONTROL
7.1 Administration. This Agreement shall be administered by the
Board, as advised by the Committee. In such advisory capacity, and with the
approval of a majority of the Board concerning all such actions hereunder, the
Committee, to the extent any of its actions are not contrary to the express
provisions of the Agreement, is authorized to interpret this Agreement, to
prescribe and rescind rules and regulations, to provide conditions and
assurances deemed necessary and advisable to protect the interests of the
Company, to recommend individuals for participation, and to make all other
determinations necessary or advisable in connection with the administration of
this Agreement.
In fulfilling its administrative duties hereunder, the Board and the
Committee may rely on outside counsel, independent accountants, or other
consultants to render advice or assistance, and shall be indemnified by the
Company for acting in reliance on such advice.
7.2 Confidential Information. 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 obtained by Executive
during Executive's employment by the Company or any of its affiliated
-31-
companies and which shall not be or have become public knowledge (other than by
acts by Executive or representatives of Executive in violation of this
Agreement). After termination of Executive's employment with the Company,
Executive shall not, without the prior written consent of the Company or as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 7.2 constitute a basis for deferring or withholding any amounts
otherwise payable to Executive under this Agreement.
7.3 Obligations of Executive Upon a Potential Change of Control.
Executive agrees that, subject to the terms and conditions of this Agreement,
in the event of the occurrence of a Potential Change of Control of the Company
during the term of this Agreement, he or she will remain in the employ of the
Company until the earliest of (i) a date which is six months from the date such
Potential Change of Control of the Company occurs; (ii) the date of occurrence
of a Change of Control of the Company; (iii) the date of termination by
Executive of his or her employment for Good Reason (determined by treating the
Potential Change of Control of the Company as a Change of Control of the
Company in applying the definition of Good Reason), by reason of death,
Disability or Retirement; or (iv) the date of termination by the Company of
Executive's employment.
-32-
ARTICLE 8.
MISCELLANEOUS PROVISIONS
8.1. Entire Agreement. This Agreement shall constitute the entire
agreement between the Company and Executive and shall supersede those provisions
of any employment agreement between Executive and the Company or severance plan
sponsored by the Company which agreement or plan, as the case may be, affects
Executive's rights to receive benefits as a result of his or her termination of
employment following the occurrence of a Change of Control of the Company. In
all other respects, any employment agreement or plan shall continue in full
force and effect, and is hereby ratified and confirmed.
8.2. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same instrument.
8.3. Notices. Except as otherwise specified herein, for 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
delivered or mailed by United States registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth below, or to
such other address as either party may have furnished to the other in
-33-
writing in accordance herewith, except that notice of change of address shall
be effective only upon actual receipt:
To the Company:
Executive Vice President of Corporate
Staff and Human Resources
Comerica Tower at Detroit Center
500 Woodward Avenue, 31st Floor
Detroit, Michigan 48226
To Executive (current home address):
-------------------------------------
8.4. Claims and Disputes; Arbitration. Claims for benefits under this
Agreement shall be made in writing to the Company. If the claim is rejected or
not acted upon within thirty days, a copy of the claim shall be presented to the
Claims Arbiter. The Claims Arbiter shall provide a reasonable opportunity (not
to exceed thirty days) for both parties to present relevant evidence and shall
schedule a hearing if required by applicable law or if the Claims Arbiter
otherwise determines to hold a hearing. The Claims Arbiter shall, within a
reasonable period of time but not later than thirty days after receipt of the
claim or the date of a hearing, whichever is later, provide written notice of
disposition of the claim. If the claim is denied in whole or in part, such
notice shall also set forth:
-34-
A. The specific reason or reasons for denial; and
B. Specific reference to the pertinent provisions of the
Agreement upon which the denial is based.
Unless waived by the Company in writing, Executive shall be required to
exhaust his or her remedies under the foregoing claims procedure as a condition
precedent to filing a claim for arbitration in accordance with the following
paragraph.
Any controversy arising out of or relating to this Agreement, or
alleged breach thereof, shall be settled by binding arbitration in Wayne
County, Michigan in accordance with the laws of the State of Michigan by three
arbitrators, one of whom shall be appointed by the Company, one by Executive
(or in the event of his or her death, Executive's legal representative) and the
third of whom shall be appointed by the first two arbitrators. The arbitration
shall be conducted as a de novo review in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. Judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
8.5 Limitation of Company's Liability. Notwithstanding any other
provision hereof, the Company shall not be liable for any actual or potential
loss or diminution of value Executive may incur or allege due to legal,
financial accounting and/or internal Company policy restrictions applicable to
Executive by reason of his or her position with the Company, including, without
limitation, restrictions imposed by Section 16 of the Exchange Act,
-35-
the Securities Act of 1933, as amended, the Company's internal trading blackout
policy and the pooling-of-interest financial accounting rules applicable to
dispositions of stock by "affiliates". Executive further agrees that he or she
will not make any claim against the Company for reimbursement or otherwise in
connection with any adverse financial consequences he or she may incur in
complying with such rules and policy.
IN WITNESS WHEREOF, Executive has hereunto set Executive's hand, and
pursuant to authorization from its Board, the Company has caused this Agreement
to be executed in its name on its behalf, all as of the day and year first
written above.
EXECUTIVE: COMERICA INCORPORATED
By
-------------------------- ------------------------------
Richard A. Collister
--------------------------
Title
---------------------------
Executive Vice President
-36-
Exhibit A to
Comerica Incorporated
Executive Officer
Continuity Agreement
RECEIPT AND RELEASE
Executive hereby acknowledges that he or she has been advised by
Comerica Incorporated (the "Company") that he or she is entitled to receive a
severance payment in the net amount of _______________ _____________________
Dollars ($___________) under Sections 4.3.A. and 4.3.B. of the Comerica
Incorporated Executive Officer Continuity Agreement (the "Agreement") and that
said sum is the correct amount owing to him or her under Sections 4.3.A. and
4.3.B. of the Agreement. Upon receipt by Executive of a check from the Company
payable to the order of Executive in the above amount which is backed by
sufficient funds, Executive hereby agrees to refrain from making any claim
against the Company or any of its affiliates (or against any successors of the
Company or of any of its affiliates) for any further sums under Sections 4.3.A.
and 4.3.B. of the Agreement. Executive further reaffirms and agrees to honor
all obligations Executive has under the Agreement.
EXECUTIVE
Dated: _____________________ ________________________________
NAMES OF EMPLOYEES WHO ARE
PARTICIPANTS OF THE
COMERICA INCORPORATED
EXECUTIVE OFFICER CONTINUITY AGREEMENT
(Effective Date of Coverage January 1, 1996)
LEWIS, J.
FULTON, J.
JOHNSON, T.
GREENE, D.
HAGGERTY, J.
MARCINELLI, R.
STEPHENS, D.
WHITE, D.
BERAN, J.
BUTTIGIEG III, J.
COLLISTER, R.
ESHELMAN, G.
GUMMER, C.
MADISON, G.
TALBOTT, F