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Form 10K
Exhibit 10(s)
CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement ("Agreement") is made by and between
Citizens Banking Corporation, a Michigan corporation ("Corporation"), and
"Executive" (see schedule A attached).
The Executive has been effective in his service to the Corporation as a
key executive employee of the Corporation or a subsidiary bank of the
Corporation;
The Corporation recognizes the valuable services that the Executive has
rendered and is desirous of having some assurance that the Executive will
continue as an employee; and
The Executive is willing to continue to serve as an employee of the
Corporation or a subsidiary bank but desires assurance that in the event of a
change in control of the Corporation, he will continue to have the
responsibility and status he has earned.
Accordingly, the Corporation and the Executive agree as follows:
1. In order to protect the Executive against the possible consequences
of a change in control of the Corporation, as defined in paragraph 2 below, and
thereby to induce the Executive to serve as an officer of the Corporation or a
subsidiary bank, the Corporation agrees that if (a) there is such a change in
control of the Corporation and (b) the Executive's employment with the
Corporation or a subsidiary bank is terminated under the circumstances described
in paragraph 3 below, then:
A. The Corporation shall pay the Executive a lump sum amount in cash
equal to: (i) two times the combined annual salary and bonus (under the Citizens
Banking Corporation Management Incentive Plan) earned by the Executive in his
last full calendar year of employment with the Corporation or a subsidiary bank;
or (ii) if termination of the Executive's employment occurs on or after the
one-year anniversary of this Agreement, two times the average combined annual
salary and bonus earned by the Executive in the last two full calendar years of
such employment; or (iii) in the event of termination of the Executive's
employment on or after the two-year anniversary of this Agreement, two times the
average combined annual salary and bonus earned by the Executive in the last
three full calendar years of such employment. The applicable amount shall be
payable within 60 days following the date of the Executive's termination of
employment.
B. The Executive shall continue to be covered, at the Corporation's
cost, by the medical, dental and life insurance benefit plans that are in effect
on the date of his termination and that cover executive employees, for a period
of 18 months after his termination of employment; provided, however, that if
during such time period the Executive should enter into other employment
providing comparable benefits, his participation in such plans of the
Corporation shall cease to the extent of his coverage by his new employer's
plans. Any such non-cash benefit that is tied to compensation shall be based on
the Executive's annual compensation averaged over the same period as applicable
under paragraph A above.
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C. If the Executive has been furnished with an automobile for business
or personal use at the Corporation's expense within the previous 12 months prior
to the change in control, then the Corporation shall offer that automobile (or
one of comparable value) for sale to the Executive at a price equal to the
residual lease value or so-called "blue-book value" in the case of a vehicle
owned by the Corporation. Similarly, if the Executive was furnished with a club
membership, that membership will be transferred by the Corporation to the
Executive at no cost to the Executive, who immediately following the transfer
shall become subject to monthly dues charges of the club.
D. All stock options previously granted by the Corporation to the
Executive, whether or not then exercisable, shall become immediately vested and
exercisable upon the Executive's termination of employment in accordance with
the change in control provisions of the Citizens Banking Corporation Stock
Option Plan.
E. If the payment of any of the foregoing amounts or benefits (when
added to any other payments or benefits provided to the Executive in the nature
of compensation) will result in the payment of an excess parachute payment as
that term is defined in Section 280G of the Internal Revenue Code of 1986
("Code"), then in such event, the Corporation shall pay the Executive an
additional amount for each calendar year in which an excess parachute payment is
received by the Executive. The additional amount is intended to cover the
Executive's liability for any parachute tax under Code Section 4999 on such
excess parachute payment, as well as federal and state income taxes and
parachute tax on the additional amount, and shall be computed as follows:
A = Pt/(1 - T -t), where --
A is the additional amount for any calendar year,
P is the amount of the excess parachute payment for the calendar
year in excess of the allocable base amount as defined in Code
Section 280G(b)(3),
T is the effective marginal rate of federal and state income tax
applicable to the Executive for the calendar year; and
t is the rate of parachute tax under Code Section 4999.
The effective marginal rate of federal and state income tax shall be
computed as follows:
T = F + S(1 - 0.8F) + m, where --
F is the highest marginal rate of federal income tax applicable to
the Executive for the calendar year, currently 39.5%, and
S is the highest marginal rate of state income tax applicable to the
Executive for the calendar year in the State of Michigan, currently
4.40%, and
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m is the employee's portion of the Medicare tax, currently 1.45%.
Payment of the additional amount shall be made to the Executive on or
before December 31 of each calendar year for which an excess parachute
payment is received by the Executive.
2. For purposes of this Agreement, a change in control of the
Corporation means the occurrence of any of the following events: (a) if any
"person," together with all of such person's "affiliates" and "associates" (as
such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934 and Rule 12b-2 promulgated under such Exchange Act), or group of persons
acting in concert, other than the Corporation, a subsidiary or an employee
benefit plan or employee benefit plan trust maintained by the Corporation or a
subsidiary, becomes the "beneficial owner" (as such term is defined in Rule
13d-3 promulgated under the Exchange Act, except that a person also shall be
deemed the beneficial owner of all securities which such person may have a right
to acquire, whether or not such right is presently exercisable), directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding securities
ordinarily having the right to vote in the election of directors, provided that
a person shall not be deemed the beneficial owner of shares such person has the
right to vote solely as a result of the receipt of a revocable proxy or proxies
given in response to a public solicitation made in accordance with the
applicable rules of the Exchange Act and provided further that the acquisition
of 20% or more of such securities is not approved by the Corporation's board of
directors; (b) a liquidation or dissolution of the Corporation, sale of
substantially all of the assets of the Corporation, or a merger, consolidation
or combination in which the Corporation is not the survivor; or (c) the addition
of new members to the board within any consecutive 24-month period, which
members constitute a majority of the board, unless a majority of the board
consists of (i) incumbent members of the board in office prior to the
commencement of such 24-month period, plus (ii) new members who were recommended
or appointed by a majority of the incumbent directors in office immediately
prior to the addition of such new members to the board.
3. Termination of the Executive's employment shall mean the Executive's
termination of employment at any time on or within 24 months after a change in
control of the Corporation as defined in paragraph 2 above either by (a)
involuntary dismissal by the Corporation or (b) the Executive's constructive
termination as described in the following sentences of this paragraph 3. If (i)
there is a significant reduction in the scope of the Executive's authority or in
the extent of his powers, functions, duties or responsibilities, or (ii) the
Executive's annual rate of compensation is reduced or fringe benefits, including
relocation benefits, are not provided to him on a basis commensurate with other
executives of the Corporation and its subsidiary banks, or (iii) there are
changes in the Executive's responsibilities for the Corporation which require
moving the Executive's job location to a location outside of the lower peninsula
of the State of Michigan, then the Executive shall be entitled to give written
notice thereof to the board of directors of the Corporation. If within 60 days
following such notice, the Executive and the board of directors of the
Corporation do not resolve the Executive's concerns to the satisfaction of the
Executive (the Executive's satisfaction or dissatisfaction to be communicated to
the board of directors in writing within such 60 days), the Executive's
employment shall be deemed to be constructively terminated at the end of such
60-day period.
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4. The specific arrangements referred to above are not intended to
exclude the Executive's participation in other benefits available to executive
personnel of the Corporation generally or to preclude other compensation or
benefits as may be authorized by the Corporation's board of directors from time
to time.
5. As partial consideration for the above, the Executive agrees not to
disclose any confidential information about the Corporation and its operation to
which the Executive was privy during the course of his employment by the
Corporation. Further, the Executive agrees not to accept employment or consult
for or otherwise assist any competitor of the Corporation for a period of 24
months following his termination of employment. For purposes of the foregoing,
"competitor" means any financial institution that conducts business from any
location within 50 miles of any Corporation or subsidiary bank location.
6. This Agreement shall be binding upon and shall inure to the benefit
of the respective successors, assigns, legal representatives and heirs to the
parties.
7. Any payment or delivery required under this Agreement shall be
subject to all requirements of the law with regard to withholding, filing,
making of reports and the like, and the Corporation shall use its best efforts
to satisfy promptly all such requirements.
8. Notwithstanding anything contained herein to the contrary, this
Agreement shall be terminated and no benefits to the Executive shall be payable
if, at any time, the Executive shall resign voluntarily, retire at or after
normal retirement age, become incapacitated, voluntarily take another position
requiring a substantial portion of his time, or die. This Agreement also shall
terminate upon termination for cause of the Executive's employment as an officer
of the Corporation or any subsidiary bank by the board of directors of the
Corporation, as that board is constituted prior to any change in control of the
Corporation as defined in paragraph 2. For purposes of the foregoing,
"termination for cause" means termination due to the Executive's conviction of a
felony, a determination that the Executive is guilty of sexual harassment of
another employee, the Executive's proven embezzlement from the Corporation or a
subsidiary bank, the Executive's gross misconduct or incompetence, the
Executive's disclosure of confidential information of the Corporation or
intentional assistance of a competitor of the Corporation (as defined in
paragraph 5), or any other activity of the Executive which has or may have a
serious adverse impact on the finances or business reputation of the Corporation
or a subsidiary bank.
9. Any and all disputes, controversies or claims arising out of or in
connection with or relating to this Agreement or any breach or alleged breach
thereof shall, upon the request of either party, be submitted to and settled by
arbitration in the State of Michigan pursuant to the Voluntary Labor Arbitration
Rules, then in effect, of the American Arbitration Association (or at any other
place or under any other form of arbitration mutually acceptable to the parties
involved). The parties hereto specifically agree to arbitrate with the other
party in a proceeding with regard to all issues and disputes, and to permit
pre-hearing discovery in the time and manner provided by the then applicable
Federal Rules of Civil Procedure. This agreement to arbitrate shall be
specifically enforceable under the prevailing arbitration law. Notice of the
demand for arbitration shall be filed, in writing, with the other
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party to this Agreement and with the American Arbitration Association. The
demand for arbitration shall be made within a reasonable time after the claim,
dispute, or other matter in question arose where the party asserting the claim
should reasonably have been aware of the same, but in no event later than the
applicable Michigan or Federal statute of limitations. The arbitrator shall have
no power to add to, subtract from, or alter the terms of this Agreement, and
shall render a written decision setting forth findings and conclusions only as
to the claims or disputes at issue. Any award by the arbitrator shall be final
and conclusive upon the parties, and a judgment thereon may be entered in the
highest court for the forum, state or federal, having jurisdiction. All expenses
of the arbitration process shall be borne by the Corporation, except for
attorneys' fees and fees of experts, which shall be paid by the respective
parties that retain them.
10. The invalidity or unenforceability of any provision of this
Agreement shall not affect the enforceability or validity of any other provision
hereof.
11. This Agreement shall be governed by the laws of the State of
Michigan.
This Agreement has been executed by the parties on and effective as of
November 6, 1997.
CITIZENS BANKING CORPORATION
/s/ Virginia S. Carmody By: /s/ Charles R. Weeks
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Witness
Its: Chairman of the Board of Directors
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EXECUTIVE
See attached schedule A
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Witness
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SCHEDULE A - LIST OF EXECUTIVES COVERED BY CHANGE IN CONTROL AGREEMENT:
Robert J. Vitito
John W. Ennest
Wayne G. Schaeffer
Nicholas J. Cilfone
Gary P. Drainville
James M. VanTiflin
Thomas C. Shafer
Richard T. Albee
Thomas W. Gallagher
Jack S. Werner
Richard J. Mitsdarfer
Marilyn K. Allor
Daniel E. Bekemeier
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