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[COMERICA INCORORATED LETTERHEAD]
EXHIBIT 10.12
December 21, 1995
Michael T. Monahan, President
Comerica Incorporated
One Detroit Center
500 Woodward Avenue
Detroit, MI 48236
Re: Severance Agreement ("Agreement")
Dear Mike:
This letter will evidence our agreement with the inclusion of the following
additions to the understandings set forth in Agreement between you and Comerica
Incorporated ("Company") of even date:
1. If you voluntarily terminate your employment with the Company prior
to February 1, 1999, your entitlement to the Stock Award and any
non-vested stock options will be determined by the specific
agreements relating to those two benefits, notwithstanding Section
III.1 of the Agreement.
2. On the other hand, if (i) your employment by the Company is
involuntarily terminated prior to February 1, 1999; (ii) your
employment terminates for any reason on February 1, 1999; or (iii)
your employment terminates for any reason specified in paragraphs
III.2 or III.3 of the Agreement prior to February 1, 1999, your
unvested stock options shall vest as of the date of termination and
any restrictions applicable to your Stock Award shall lapse as of
such date, notwithstanding any inconsistent provision in any separate
agreement.
To evidence your agreement with the foregoing additional provisions to the
Agreement, please sign and date a copy of this letter in the place indicated
below and return such copy to the undersigned.
Very truly yours,
COMERICA INCORPORATED
By: Richard A. Collister
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Richard A. Collister
Michael T. Monahan
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Michael T. Monahan
December 21, 1995
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SEVERANCE AGREEMENT
Comerica Incorporated, a Delaware corporation (together with its
subsidiaries and affiliates being hereinafter referred to as the "Company"),
and Michael T. Monahan ("Executive") hereby agree to the provisions set forth
below.
I.
Purpose
To induce Executive to continue in the employment of the Company, this
Severance Agreement ("Agreement") sets forth the understanding of the Company
and the Executive with respect to certain payments and benefits the Executive
(or his Beneficiaries, as hereinafter defined) will become entitled to receive
upon the subsequent termination of his employment with the Company on or prior
to February 1, 1999.
II
Definitions
Whenever used in this Agreement and capitalized, the following terms
shall have the meaning set forth below:
1. "Severance Payment" means a cash payment in the amount of $3,000,000.
2. "Insurance Coverage" means continuation of long-term disability coverage,
accident insurance coverage, group-term life
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insurance coverage and coverage under the whole life insurance policies in
effect at June 30, 1995, for three years subsequent to the date of Executive's
termination of employment; provided, however, that such coverage or any portion
thereof will be discontinued if Executive receives substantially similar
coverage from a subsequent employer during such three-year period.
3. "Medical Benefits" means medical benefits for Executive and/or
his spouse for the remainder of their respective lives which are substantially
similar to those provided to Executive and his spouse at the date of execution
of this Agreement; provided, however, that payment of such medical benefits
shall be coordinated with any medical benefits Executive may become entitled
to receive from a subsequent employer, Medicare, Social Security or any similar
source applying generally accepted procedures for the coordination of benefits.
4. "Stock Award" means the 15,000 shares of Common Stock of the
Company awarded to Executive, subject to restrictions, on July 16, 1993.
5. "Outstanding Options" means any non-vested employee stock
options held by Executive at the date of termination of his employment by the
Company.
III.
Circumstances Under which Executive
Will Receive Payments and/or Benefits
1. If Executive voluntarily retires from the Company before
February 1, 1999, he shall receive (i) the Severance Payment, (ii)
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Insurance Coverages and (iii) Medical Benefits.
2. If Executive dies before February 1, 1999, (i) his
beneficiary(ies) shall receive the Severance Payment and insurance Coverages
(except disability insurance), (ii) his Outstanding Options shall vest at the
date of his death, (iii) any remaining restrictions applicable to the Stock
Award shall lapse as of his date of death, and (iv) his surviving spouse shall
continue to receive Medical Benefits.
3. If Executive becomes disabled before February 1, 1999, he
shall receive (i) the Severance Payment, (ii) applicable Insurance Coverages,
and (iii), together with his spouse, Medical Benefits. Further, his
Outstanding Options shall vest as of the date of termination of his employment,
and any remaining restrictions applicable to the Stock Award shall lapse as of
the date of termination of his employment by the Company.
4. If Executive's employment is involuntarily terminated before
February 1, 1999, or if his employment terminates for any reason on February 1,
1999, he shall receive (i) the Severance Payment, (ii) applicable Insurance
Coverages, and (iii), together with his spouse, Medical Benefits. Further, his
Outstanding Options shall vest as of the date of termination of his employment,
and any remaining restrictions applicable to the Stock Award shall lapse as of
the date of termination of his employment by the Company.
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IV.
Designation of Beneficiary
Executive may designate a beneficiary(ies) to receive the amounts
payable and the other benefits bestowed hereunder upon his death.
V.
Remuneration for Services Prior to February, 1999
The receipt of the Severance Payment and all or a portion of the other
benefits specified in paragraph I of this Agreement by Executive, or by the
other party(ies) entitled thereto, shall be exclusive of, and unrelated to, the
remuneration (including salary, bonuses, options and stock awards) to which
Executive may be entitled in consideration for the continuation of his services
as an officer or employee of the Company between the date of this Agreement and
February 1, 1999.
VI.
Miscellaneous
Both the Company and Executive acknowledge and agree that (i) this
Agreement is being made after the "change of control" of Manufacturers National
Corporation contemplated by the July 3, 1990 Manufacturers National Corporation
Key Employees Retention Plan occurred; and (ii) Executive shall not be entitled
to receive severance benefits under any change of control agreement under the
terms of which the Company bestows, or is required to bestow, benefits on or
prior to February 1, 1999, upon officers or key employees of the Company.
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VII.
Successor(s) and Assign(s)
This Agreement will inure to the benefit of Executive, and to the benefit
of his spouse, personal representative(s), beneficiary(ies), legatee(s),
successor(s), administrator(s), trustee(s) and/or other fiduciary(ies)
(collectively, "Beneficiaries"), and will be binding upon the Company and upon
its successor(s) and assign(s), irrespective of whether such successor(s) or
assign(s) come into existence by reason or as a result of (i) a merger(s) or
consolidation(s) in which the Company is not the survivor, (ii) a sale(s) of all
or substantially all of the assets of the Company, or (iii) any other
restructuring(s) of the Company.
VIII.
Term of Agreement
This Agreement will become effective on the date it is executed and
delivered by the Company and the Executive, and shall remain in effect through
February 1, 1999. No amounts will be payable nor benefits provided hereunder
if Executive's employment with the Company continues after February 1, 1999.
IX.
Release
Executive or his Beneficiaries agree to release the Company from liability
with respect to any and all matters relating to his
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employment with the Company upon satisfaction of its obligations hereunder.
X.
Arbitration
If any dispute shall arise with respect to the performance of the
Company's obligations hereunder, such dispute shall be resolved by an
arbitration conducted in Detroit, Michigan, in accordance with the rules of the
American Arbitration Association. The selection of the arbitrator(s), the
hearing and the rendition of the arbitrator(s)' decision shall be completed
within thirty (30) days after written demand for the arbitration is delivered
by the Executive to the Company. All of the expenses, including the fees of
the arbitrator(s) and the fees of the attorneys retained by each of the parties,
shall be borne by the Company. The decision of the arbitrator(s) shall be
conclusive and binding upon the Company and the Executive. A judgment may be
entered upon the arbitration award, if any, in the Circuit Court for the County
of Wayne, State of Michigan, in accordance with applicable Michigan statutes.
XI.
Execution
The Company and the Executive hereto have entered into this Agreement
this 21st day of December, 1995.
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COMERICA INCORPORATED
By: Richard A. Collister
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Its: Executive Vice President
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Michael T. Monahan
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MICHAEL T. MONAHAN
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