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Exhibit 10(f)
FIRSTMERIT CORPORATION TERMINATION AGREEMENT
AGREEMENT made as of this 1st day of March, 1995, by and between
FirstMerit Corporation, an Ohio corporation (the "Company"), and John R.
Cochran ("Employee").
R E C I T A L S :
A. The Board of Directors of the Company has determined that the
interests of FirstMerit Corporation stockholders will be best served by
assuring that its key corporate officers will adhere to the policy of the Board
of Directors with respect to any event by which another entity would acquire
effective control of the Company, including but not limited to a tender offer.
B. The Board of Directors has also determined that it is in the
best interest of the shareholders to promote stability among key officers and
employees.
IN CONSIDERATION OF THE FOREGOING, the mutual covenants hereinafter
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the Company and Employee agree as follows:
1. DUTIES OF EMPLOYEE. Employee shall support the position of
the Board of Directors and shall take any action reasonably requested by the
Board of Directors with respect to any event by which another entity would
acquire effective control of the Company, including but not limited to a tender
offer.
2. CHANGE OF CONTROL. The term "Change of Control" shall mean a
change in control of a nature that would be required to be reported by persons
or entities subject to the reporting requirements of Section 14(a) of the
Securities Exchange Act of 1934 in response to item 5(f) of Schedule 14A of
Regulation 14(A) as in effect on the date hereof, or successor provisions
thereto, provided that, without limitation, such a change in control shall be
deemed to have occurred if (a) any unaffiliated "person," "entity," or "group"
(as defined in Rule 13(d)-3 issued under the Securities Exchange Act of 1934)
directly or indirectly becomes the owner of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities or (b) at any time during any period of two consecutive
calendar years individuals, who at the beginning of such period constitute the
Board of Directors of the Company, cease for any reason to constitute at least
the majority of such Board unless the election, or the nomination for election,
by the Company's shareholders of each new director was approved by a vote of at
least two-thirds of the directors still in office who were directors of the
Company at the beginning of such two-year period.
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3. COMPANY'S RIGHT TO TERMINATE. The Company may terminate the
Employee's employment at any time during the term of this Agreement, subject to
providing the benefits hereinafter specified if a Change of Control has
occurred.
4. TERMINATION FOLLOWING CHANGE OF CONTROL. If the Employee's
employment is terminated subsequent to a Change of Control and prior to the
expiration of the term of this Agreement, the Employee shall be entitled to the
benefits provided in paragraph 6 unless such termination is (a) because of the
Employee's death, Retirement or Disability, (b) by the Company for Cause, or
(c) by the Employee other than for Good Reason.
(a) DISABILITY OR RETIREMENT. Termination of employment
by the Company based on "Disability" shall mean termination because of
Total and Permanent Disability as defined in the Company's Long-Term
Disability Plan in effect from time to time. Termination of
employment based on "Retirement" shall mean termination of employment
by the Employee in accordance with the Company's retirement policy
(including early retirement policy) which is in effect from time to
time and is generally applicable to the Company's salaried employees,
excluding, however, a termination of employment by the Employee under
the Company's retirement policy which is for Good Reason.
(b) CAUSE. The term "Cause" shall mean termination upon
one or more of the following acts of the Employee:
(1) Felonious criminal activity whether or not
effecting the Company;
(2) Disclosure to unauthorized persons of Company
information which is believed by the Board of Directors of the
Company, acting in good faith, to be confidential; provided,
however, that any such disclosure shall not be considered to
be "cause" for termination to the extent that:
(a) it is required of the Employee pursuant
to an order of a court having competent jurisdiction
or a subpoena from an appropriate government agency;
or
(b) it is made by the Employee in the
ordinary course of business within the scope of his
authority;
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(3) Dishonesty or breach of any contract with or
violation of any legal obligation to the Company; or
(4) Gross negligence or insubordination in the
performance of duties held by the President and Chief
Executive Officer of the Company.
(c) GOOD REASON. The term "Good Reason" shall mean
voluntary termination of employment by the Employee, including his
retirement, based on any of the following:
(1) Involuntary reduction in the Employee's base
salary as in effect immediately prior to a Change of Control
unless such reduction occurs simultaneously with a
Company-wide reduction in officers' salaries;
(2) Involuntary discontinuance or reduction in
the Employee's incentive compensation award opportunities
under plans in existence at the time of a Change of Control,
unless a Company-wide reduction of all officers' incentive
award opportunities occurs simultaneously with such
discontinuance or reduction;
(3) Significant reduction in the Employee's
responsibilities and status within the Company's organization
or change in the Employee's title or office without prior
written consent of the Employee;
(4) Involuntary discontinuance of the Employee's
participation in any employee benefit plans maintained by the
Company unless such plans are discontinued by reason of law or
loss of tax deductibility to the Company with respect to
contributions to such plans, or are discontinued as a matter
of the Company's policy applied equally to all participants in
such plans;
(5) Failure to obtain an assumption of the
Company's obligations under this Agreement by any successor to
the Company, regardless of whether such entity becomes a
successor to the Company as a result of a merger,
consolidation, sale of the assets of the Company, or other
form of reorganization; or
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(6) Termination of employment which is not
effected pursuant to a Notice of Termination satisfying the
requirements of paragraph 5 herein.
5. NOTICE OF TERMINATION. Any purported termination of the
Employee's employment by the Company or by the Employee shall be communicated
by written Notice of Termination to the other party. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon, shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee's employment under the provisions so
indicated and shall specify a "Date of Termination."
6. COMPENSATION AND BENEFITS UPON TERMINATION. If, after a
Change of Control has occurred and prior to the expiration of the term of this
Agreement, the Employee's employment by the Company shall be terminated (a) by
the Company other than for Cause, Disability, Retirement, or Death or (b) by
the Employee for Good Reason, then the Employee shall be entitled to the
benefits provided below. Such compensation and benefits shall continue to be
paid or provided until the third (3rd) anniversary of the Date of Termination
of the Employee's employment by the Company. In no event, however, shall such
compensation and benefits continue beyond age sixty-five (65) or the Employee's
death, whichever first occurs. For the sole purpose of determining the
Employee's eligibility to participate in the Company's medical, life, and
disability insurance plans, the Employee shall be considered to be on a paid
leave of absence as long as he is receiving compensation or benefits under this
Agreement.
(a) BASE SALARY. The Company shall pay to the Employee
his full base salary at the rate in effect at the time Notice of
Termination is given or immediately preceding a Change of Control,
whichever is higher. Such payments shall be made periodically
according to the same schedule as salary payments are made to the
Company's salaried employees.
(b) INCENTIVE COMPENSATION. The Company shall annually
pay to the Employee an incentive award equal to the average of the
incentive compensation paid to the Employee in the two (2) calendar
years immediately preceding the year in which a Change of Control
occurs. Such amount shall be paid in equal monthly installments.
(c) STOCK PLANS. The Employee shall be entitled to
immediate vesting of all stock options, to the extent provided in the
Employee Stock Option Agreement, dated as of March 1, 1995, between
the Company and the Employee, restricted stock awards, to the extent
provided in the Restricted Stock Award Agreement, dated as of March 1,
1995, between the Company and the Employee, and other stock, phantom
stock, stock
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appreciation rights or similar arrangements in which he participates.
Notwithstanding any plan provisions to the effect that rights under
any such plan terminate upon termination of employment, the Employee
shall be given the longer of any period stated in such plan or
agreement under such plan or ninety (90) days after the Date of
Termination to realize or exercise all rights or options provided
under such plans.
(d) MEDICAL, DISABILITY AND LIFE INSURANCE. The
Company shall provide medical, health and accident, disability, and
life insurance (including conversion rights) with coverage and limits
identical to those in effect with respect to the Employee immediately
prior to the Change of Control.
(e) OUTPLACEMENT FEES. For a period not to exceed one
(1) year after the Date of Termination, the Company will pay the
reasonable expenses associated with outplacement of the Employee in a
position comparable to that held by the Employee prior to the Change
of Control through a professional placement firm and in an amount not
to exceed Thirty-five Thousand Dollars ($35,000).
Notwithstanding the foregoing, to avoid duplication of the benefits
provided under this Agreement, amounts payable, and benefits provided, to the
Employee pursuant to this paragraph 6 shall be reduced by amounts that are
paid, and benefits that are provided, to the Employee, following termination of
his employment with the Company (including a termination of employment as a
result of the Employee's retirement) and regardless of whether there is a
Change of Control, under any other employment agreement or employee benefit
plan or program to which the Employee is a party or in which he participates,
including, without limitation, amounts paid to the Employee upon termination of
his employment pursuant to Section 7.5 of the Employment Agreement, effective
as of March 1, 1995, between the Company and the Employee.
7. OVERALL LIMITATION ON BENEFITS. Notwithstanding any provision
in this Agreement to the contrary, if the compensation and benefits provided to
the Employee pursuant to or under this Agreement, either alone or with other
compensation and benefits received by the Employee, would constitute "parachute
payments" within the meaning of Section 280G of the Internal Revenue code (the
"Code"), or the regulations adopted or proposed thereunder, then the
compensation and benefits payable pursuant to or under this Agreement, and
under any other employment agreement to which the Employee is a party or
employee benefit plan or program in which the Employee is participating, shall
be reduced to the extent necessary so that no portion thereof shall be subject
to the excise tax imposed by Section 4999 of the Code. The Employee or any
other party entitled to receive the compensation or benefits hereunder may
request a determination as to whether the compensation or benefit would
constitute a parachute payment and, if requested, such
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determination shall be made by independent tax counsel selected by the Company
and approved by the party requesting such determination. In the event that any
reduction is required under this paragraph 7, the Company shall consult with
the Employee in determining the order in which compensation and benefits shall
be reduced.
8. LEGAL FEES. The Company shall pay all legal fees and expenses
incurred by the Employee in enforcing any right or benefit provided by this
Agreement.
9. OTHER EMPLOYMENT. The Employee shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment. Moreover, the amount of any payment provided for in this
Agreement shall not be reduced by any compensation earned or benefits provided
as the result of employment of the Employee by another employer or as a result
of the Employee being self-employed after the Date of Termination.
10. TERM OF AGREEMENT. This Agreement shall continue in effect
until the earlier of (a) the third (3rd) Anniversary of the date that a Change
of Control occurs or (b) the date of the Employee's termination of employment
by the Company for Cause, Disability, Retirement or death or by the Employee
for other than Good Reason; provided that if prior to the termination of this
Agreement an event occurs which entitles the Employee to benefits under
paragraph 6 of this Agreement, such benefits will be paid or provided for the
period specified in paragraph 6 regardless of whether such period extends
beyond the expiration of the term of this Agreement pursuant to this paragraph
10.
11. NOTICE. For the purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by certified
or registered mail, return receipt requested, postage prepaid, provided that
all notices to the Company shall be directed to the attention of the President
with a copy to the Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
12. MISCELLANEOUS. No provisions of this Agreement may be
modified, waived, or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by the Employee and such officer as may be
specifically designated by the Board of Directors of the Company. No waiver by
either party hereto at any time or any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral and otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly
set forth in this
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Agreement; provided, however, that this Agreement shall not supersede or in any
way limit the rights, duties or obligations you may have under any other
written agreement with the Company. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Ohio.
13. VALIDITY. The validity or unenforceability of any provisions
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original by all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date above first written.
FIRSTMERIT CORPORATION
Attest: /s/ Philip A. Lloyd By: /s/ Howard L. Flood
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Name: Howard L. Flood
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Title: Chairman
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COMPANY
Witness: /s/ Philip A. Lloyd /s/ John R. Cochran
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John R. Cochran
EMPLOYEE
[1087451]
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