Exhibit 10.42

 

CHANGE OF CONTROL EMPLOYMENT AGREEMENT (BE4 AND HIGHER)

 

CHANGE OF CONTROL EMPLOYMENT AGREEMENT, dated as of the          day of
                      , 20       (this “Agreement”), by and between COMERICA
INCORPORATED, a Delaware corporation (the “Company”), and
                                   (the “Executive”).

 

WHEREAS, the Board of Directors of the Company (the “Board”), has determined
that it is in the best interests of the Company and its stockholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined herein).  The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive’s full attention and dedication to the Company in the event of any
threatened or pending Change of Control, and to provide the Executive with
compensation and benefits arrangements upon a Change of Control that ensure that
the compensation and benefits expectations of the Executive will be satisfied
and that provide the Executive with compensation and benefits arrangements that
are competitive with those of other corporations.  Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into this
Agreement.

 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

SECTION 1.                                                  CERTAIN
DEFINITIONS.  (A) “EFFECTIVE DATE” MEANS THE FIRST DATE DURING THE CHANGE OF
CONTROL PERIOD (AS DEFINED HEREIN) ON WHICH A CHANGE OF CONTROL OCCURS. 
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IF (A) THE
EXECUTIVE’S EMPLOYMENT WITH THE COMPANY IS TERMINATED BY THE COMPANY, (B) THE
DATE OF TERMINATION IS PRIOR TO THE DATE ON WHICH A CHANGE OF CONTROL OCCURS,
AND (C) IT IS REASONABLY DEMONSTRATED BY THE EXECUTIVE THAT SUCH TERMINATION OF
EMPLOYMENT (I) WAS AT THE REQUEST OF A THIRD PARTY THAT HAS TAKEN STEPS
REASONABLY CALCULATED TO EFFECT A CHANGE OF CONTROL OR (II) OTHERWISE AROSE IN
CONNECTION WITH OR ANTICIPATION OF A CHANGE OF CONTROL (SUCH A TERMINATION OF
EMPLOYMENT, AN “ANTICIPATORY TERMINATION”), THEN FOR ALL PURPOSES OF THIS
AGREEMENT, THE “EFFECTIVE DATE” MEANS THE DATE IMMEDIATELY PRIOR TO SUCH DATE OF
TERMINATION.

 

(B)                                 “CHANGE OF CONTROL PERIOD” MEANS THE PERIOD
COMMENCING ON THE DATE HEREOF AND ENDING ON THE THIRD ANNIVERSARY OF THE DATE
HEREOF; PROVIDED, HOWEVER, THAT, COMMENCING ON THE DATE ONE YEAR AFTER THE DATE
HEREOF, AND ON EACH ANNUAL ANNIVERSARY OF SUCH DATE (SUCH DATE AND EACH ANNUAL
ANNIVERSARY THEREOF, THE “RENEWAL DATE”), UNLESS PREVIOUSLY TERMINATED, THE
CHANGE OF CONTROL PERIOD SHALL BE AUTOMATICALLY EXTENDED SO AS TO TERMINATE
THREE YEARS FROM SUCH RENEWAL DATE, UNLESS, AT LEAST 60 DAYS PRIOR TO THE
RENEWAL DATE, THE COMPANY SHALL GIVE NOTICE TO THE EXECUTIVE THAT THE CHANGE OF
CONTROL PERIOD SHALL NOT BE SO EXTENDED.

 

(C)                                  “AFFILIATED COMPANY” MEANS ANY COMPANY
CONTROLLED BY, CONTROLLING OR UNDER COMMON CONTROL WITH THE COMPANY.

 

(D)                                 “CHANGE OF CONTROL” MEANS:

 

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(1)                                  ANY INDIVIDUAL, ENTITY OR GROUP (WITHIN THE
MEANING OF SECTION 13(D)(3) OR 14(D)(2) OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED (THE “EXCHANGE ACT”)) (A “PERSON”) BECOMES THE BENEFICIAL OWNER
(WITHIN THE MEANING OF RULE 13D-3 PROMULGATED UNDER THE EXCHANGE ACT) OF 20% OR
MORE OF EITHER (A) THE THEN-OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY
(THE “OUTSTANDING COMPANY COMMON STOCK”) OR (B) THE COMBINED VOTING POWER OF THE
THEN-OUTSTANDING VOTING SECURITIES OF THE COMPANY ENTITLED TO VOTE GENERALLY IN
THE ELECTION OF DIRECTORS (THE “OUTSTANDING COMPANY VOTING SECURITIES”);
PROVIDED, HOWEVER, THAT, FOR PURPOSES OF THIS SECTION 1(D), THE FOLLOWING
ACQUISITIONS SHALL NOT CONSTITUTE A CHANGE OF CONTROL:  (I) ANY ACQUISITION
DIRECTLY FROM THE COMPANY, (II) ANY ACQUISITION BY THE COMPANY, (III) ANY
ACQUISITION BY ANY EMPLOYEE BENEFIT PLAN (OR RELATED TRUST) SPONSORED OR
MAINTAINED BY THE COMPANY OR ANY AFFILIATED COMPANY OR (IV) ANY ACQUISITION
PURSUANT TO A TRANSACTION THAT COMPLIES WITH SECTIONS 1(D)(3)(A), 1(D)(3)(B) AND
1(D)(3)(C);

 

(2)                                  INDIVIDUALS WHO, AS OF THE DATE HEREOF,
CONSTITUTE THE BOARD (THE “INCUMBENT BOARD”) CEASE FOR ANY REASON TO CONSTITUTE
AT LEAST A MAJORITY OF THE BOARD; PROVIDED, HOWEVER, THAT ANY INDIVIDUAL
BECOMING A DIRECTOR SUBSEQUENT TO THE DATE HEREOF WHOSE ELECTION, OR NOMINATION
FOR ELECTION BY THE COMPANY’S STOCKHOLDERS, WAS APPROVED BY A VOTE OF AT LEAST A
MAJORITY OF THE DIRECTORS THEN COMPRISING THE INCUMBENT BOARD SHALL BE
CONSIDERED AS THOUGH SUCH INDIVIDUAL WAS A MEMBER OF THE INCUMBENT BOARD, BUT
EXCLUDING, FOR THIS PURPOSE, ANY SUCH INDIVIDUAL WHOSE INITIAL ASSUMPTION OF
OFFICE OCCURS AS A RESULT OF AN ACTUAL OR THREATENED ELECTION CONTEST WITH
RESPECT TO THE ELECTION OR REMOVAL OF DIRECTORS OR OTHER ACTUAL OR THREATENED
SOLICITATION OF PROXIES OR CONSENTS BY OR ON BEHALF OF A PERSON OTHER THAN THE
BOARD;

 

(3)                                  CONSUMMATION OF A REORGANIZATION, MERGER,
STATUTORY SHARE EXCHANGE OR CONSOLIDATION OR SIMILAR TRANSACTION INVOLVING THE
COMPANY OR ANY OF ITS SUBSIDIARIES, A SALE OR OTHER DISPOSITION OF ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY, OR THE ACQUISITION OF ASSETS OR
STOCK OF ANOTHER ENTITY BY THE COMPANY OR ANY OF ITS SUBSIDIARIES (EACH, A
“BUSINESS COMBINATION”), IN EACH CASE UNLESS, FOLLOWING SUCH BUSINESS
COMBINATION, (A) ALL OR SUBSTANTIALLY ALL OF THE INDIVIDUALS AND ENTITIES THAT
WERE THE BENEFICIAL OWNERS OF THE OUTSTANDING COMPANY COMMON STOCK AND THE
OUTSTANDING COMPANY VOTING SECURITIES IMMEDIATELY PRIOR TO SUCH BUSINESS
COMBINATION BENEFICIALLY OWN, DIRECTLY OR INDIRECTLY, MORE THAN 50% OF THE
THEN-OUTSTANDING SHARES OF COMMON STOCK (OR, FOR A NON-CORPORATE ENTITY,
EQUIVALENT SECURITIES) AND THE COMBINED VOTING POWER OF THE THEN-OUTSTANDING
VOTING SECURITIES ENTITLED TO VOTE GENERALLY IN THE ELECTION OF DIRECTORS (OR,
FOR A NON-CORPORATE ENTITY, EQUIVALENT GOVERNING BODY), AS THE CASE MAY BE, OF
THE ENTITY RESULTING FROM SUCH BUSINESS COMBINATION (INCLUDING, WITHOUT
LIMITATION, AN ENTITY THAT, AS A RESULT OF SUCH TRANSACTION, OWNS THE COMPANY OR
ALL OR SUBSTANTIALLY ALL OF THE COMPANY’S ASSETS EITHER DIRECTLY OR THROUGH ONE
OR MORE SUBSIDIARIES) IN SUBSTANTIALLY THE SAME PROPORTIONS AS THEIR OWNERSHIP
IMMEDIATELY PRIOR TO SUCH BUSINESS COMBINATION OF THE OUTSTANDING COMPANY COMMON
STOCK AND THE OUTSTANDING COMPANY VOTING SECURITIES, AS THE CASE MAY BE, (B) NO
PERSON (EXCLUDING ANY CORPORATION RESULTING FROM SUCH BUSINESS COMBINATION OR
ANY EMPLOYEE BENEFIT PLAN (OR RELATED TRUST) OF THE COMPANY OR SUCH CORPORATION
RESULTING FROM SUCH BUSINESS COMBINATION) BENEFICIALLY OWNS, DIRECTLY OR
INDIRECTLY, 20% OR MORE OF, RESPECTIVELY, THE THEN-OUTSTANDING SHARES OF COMMON
STOCK OF THE CORPORATION RESULTING FROM SUCH BUSINESS COMBINATION OR THE
COMBINED VOTING POWER OF THE THEN-OUTSTANDING VOTING SECURITIES OF SUCH
CORPORATION, EXCEPT TO THE EXTENT THAT SUCH OWNERSHIP EXISTED PRIOR TO THE
BUSINESS COMBINATION, AND (C) AT LEAST A MAJORITY OF THE MEMBERS OF THE BOARD OF
DIRECTORS (OR, FOR A NON-CORPORATE ENTITY, EQUIVALENT GOVERNING BODY) OF THE
ENTITY RESULTING FROM SUCH BUSINESS

 

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COMBINATION WERE MEMBERS OF THE INCUMBENT BOARD AT THE TIME OF THE EXECUTION OF
THE INITIAL AGREEMENT OR OF THE ACTION OF THE BOARD PROVIDING FOR SUCH BUSINESS
COMBINATION; OR

 

(4)                                  APPROVAL BY THE STOCKHOLDERS OF THE COMPANY
OF A COMPLETE LIQUIDATION OR DISSOLUTION OF THE COMPANY.

 

SECTION 2.                                                  EMPLOYMENT PERIOD. 
THE COMPANY HEREBY AGREES TO CONTINUE THE EXECUTIVE IN ITS EMPLOY, SUBJECT TO
THE TERMS AND CONDITIONS OF THIS AGREEMENT, FOR THE PERIOD COMMENCING ON THE
EFFECTIVE DATE AND ENDING ON THE LAST DAY OF THE THIRTIETH CONSECUTIVE MONTH
FOLLOWING THE EFFECTIVE DATE (THE “EMPLOYMENT PERIOD”).  THE EMPLOYMENT PERIOD
SHALL TERMINATE UPON THE EXECUTIVE’S TERMINATION OF EMPLOYMENT FOR ANY REASON.

 

SECTION 3.                                                  TERMS OF
EMPLOYMENT.  (A)  POSITION AND DUTIES.

 

(1)                                  DURING THE EMPLOYMENT PERIOD, (A) THE
EXECUTIVE’S POSITION (INCLUDING STATUS, OFFICES, TITLES AND REPORTING
REQUIREMENTS), AUTHORITY, DUTIES AND RESPONSIBILITIES SHALL BE AT LEAST
COMMENSURATE IN ALL RESPECTS WITH THE MOST SIGNIFICANT OF THOSE HELD, EXERCISED
AND ASSIGNED AT ANY TIME DURING THE 120-DAY PERIOD IMMEDIATELY PRECEDING THE
EFFECTIVE DATE, AND (B) THE EXECUTIVE’S SERVICES SHALL BE PERFORMED AT THE
LOCATION WHERE THE EXECUTIVE WAS EMPLOYED IMMEDIATELY PRECEDING THE EFFECTIVE
DATE OR AT ANY OFFICE OR LOCATION LESS THAN 60 MILES FROM SUCH LOCATION.

 

(2)                                  DURING THE EMPLOYMENT PERIOD, AND EXCLUDING
ANY PERIODS OF VACATION AND SICK LEAVE TO WHICH THE EXECUTIVE IS ENTITLED, THE
EXECUTIVE AGREES TO DEVOTE REASONABLE ATTENTION AND TIME DURING NORMAL BUSINESS
HOURS TO THE BUSINESS AND AFFAIRS OF THE COMPANY AND, TO THE EXTENT NECESSARY TO
DISCHARGE THE RESPONSIBILITIES ASSIGNED TO THE EXECUTIVE HEREUNDER, TO USE THE
EXECUTIVE’S REASONABLE BEST EFFORTS TO PERFORM FAITHFULLY AND EFFICIENTLY SUCH
RESPONSIBILITIES.  DURING THE EMPLOYMENT PERIOD, IT SHALL NOT BE A VIOLATION OF
THIS AGREEMENT FOR THE EXECUTIVE TO (A) SERVE ON CORPORATE, CIVIC OR CHARITABLE
BOARDS OR COMMITTEES, (B) DELIVER LECTURES, FULFILL SPEAKING ENGAGEMENTS OR
TEACH AT EDUCATIONAL INSTITUTIONS AND (C) MANAGE PERSONAL INVESTMENTS, SO LONG
AS SUCH ACTIVITIES DO NOT SIGNIFICANTLY INTERFERE WITH THE PERFORMANCE OF THE
EXECUTIVE’S RESPONSIBILITIES AS AN EMPLOYEE OF THE COMPANY IN ACCORDANCE WITH
THIS AGREEMENT.  IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT, TO THE EXTENT THAT
ANY SUCH ACTIVITIES HAVE BEEN CONDUCTED BY THE EXECUTIVE PRIOR TO THE EFFECTIVE
DATE, THE CONTINUED CONDUCT OF SUCH ACTIVITIES (OR THE CONDUCT OF ACTIVITIES
SIMILAR IN NATURE AND SCOPE THERETO) SUBSEQUENT TO THE EFFECTIVE DATE SHALL NOT
THEREAFTER BE DEEMED TO INTERFERE WITH THE PERFORMANCE OF THE EXECUTIVE’S
RESPONSIBILITIES TO THE COMPANY.

 

(B)                                 COMPENSATION.  (1)  BASE SALARY.  DURING THE
EMPLOYMENT PERIOD, THE EXECUTIVE SHALL RECEIVE AN ANNUAL BASE SALARY (THE
“ANNUAL BASE SALARY”) AT AN ANNUAL RATE AT LEAST EQUAL TO 26 TIMES THE HIGHEST
BI-WEEKLY BASE SALARY PAID OR PAYABLE, INCLUDING ANY BASE SALARY THAT HAS BEEN
EARNED BUT DEFERRED, TO THE EXECUTIVE BY THE COMPANY AND THE AFFILIATED
COMPANIES IN RESPECT OF THE ONE-YEAR PERIOD IMMEDIATELY PRECEDING THE MONTH IN
WHICH THE EFFECTIVE DATE OCCURS.  THE ANNUAL BASE SALARY SHALL BE PAID TO THE
EXECUTIVE AT SUCH INTERVALS AS THE COMPANY PAYS EXECUTIVE SALARIES GENERALLY,
UNLESS THE EXECUTIVE SHALL ELECT TO DEFER THE RECEIPT OF SUCH BASE SALARY
PURSUANT TO AN ARRANGEMENT THAT MEETS THE REQUIREMENTS OF SECTION 409A OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).  DURING THE EMPLOYMENT
PERIOD, THE ANNUAL BASE SALARY SHALL BE REVIEWED AT LEAST ANNUALLY, BEGINNING NO
MORE THAN 12

 

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MONTHS AFTER THE LAST SALARY INCREASE AWARDED TO THE EXECUTIVE PRIOR TO THE
EFFECTIVE DATE.  ANY INCREASE IN THE ANNUAL BASE SALARY SHALL NOT SERVE TO LIMIT
OR REDUCE ANY OTHER OBLIGATION TO THE EXECUTIVE UNDER THIS AGREEMENT.  THE
ANNUAL BASE SALARY SHALL NOT BE REDUCED AFTER ANY SUCH INCREASE AND THE TERM
“ANNUAL BASE SALARY” SHALL REFER TO THE ANNUAL BASE SALARY AS SO INCREASED.

 

(2)                                  ANNUAL BONUS.  IN ADDITION TO THE ANNUAL
BASE SALARY, THE EXECUTIVE SHALL BE AWARDED, FOR EACH FISCAL YEAR ENDING DURING
THE EMPLOYMENT PERIOD, AN ANNUAL BONUS (THE “ANNUAL BONUS”) IN CASH AT LEAST
EQUAL TO THE AGGREGATE OF THE EXECUTIVE’S HIGHEST BONUS UNDER EACH OF

 

(i)                                     the Company’s  Management Incentive
Plan; and

 

(ii)                                  any business unit incentive plan of the
Company in which the Executive has participated during any portion of the last
three fiscal years (or any predecessor or successor plan to any thereof), as
applicable, for the last three full fiscal years prior to the Effective Date,
including any bonus or portion thereof that has been earned but deferred
(annualized in the event that the Executive was not employed by the Company for
the whole of such fiscal year and not otherwise paid a full year’s bonus for
such year) (the “Recent Annual Bonus”).  For purposes of determining the Recent
Annual Bonus, the highest bonus under the Management Incentive Plan shall be
determined by including bonuses earned for both the annual and multiyear
performance periods ending in each of the last three full fiscal years prior to
the Effective Date (or for such lesser number of full fiscal years prior to the
Effective Date for which the Executive was eligible to earn such a bonus and
annualized in the case of any pro rata bonus earned for a partial fiscal year). 
Each such Annual Bonus shall be paid no later than two and a half months after
the end of the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus pursuant to an
arrangement that meets the requirements of Section 409A of the Code.

 

(3)                                  LONG-TERM EQUITY INCENTIVES, SAVINGS AND
RETIREMENT PLANS.  DURING THE EMPLOYMENT PERIOD, THE EXECUTIVE SHALL BE ENTITLED
TO PARTICIPATE IN ALL EQUITY INCENTIVE, SAVINGS AND RETIREMENT PLANS, PRACTICES,
POLICIES, AND PROGRAMS APPLICABLE GENERALLY TO OTHER PEER EXECUTIVES OF THE
COMPANY AND THE AFFILIATED COMPANIES, BUT IN NO EVENT SHALL SUCH PLANS,
PRACTICES, POLICIES AND PROGRAMS PROVIDE THE EXECUTIVE WITH INCENTIVE
OPPORTUNITIES (MEASURED WITH RESPECT TO BOTH REGULAR AND SPECIAL INCENTIVE
OPPORTUNITIES, TO THE EXTENT, IF ANY, THAT SUCH DISTINCTION IS APPLICABLE),
SAVINGS OPPORTUNITIES AND RETIREMENT BENEFIT OPPORTUNITIES, IN EACH CASE, LESS
FAVORABLE, IN THE AGGREGATE, THAN THE MOST FAVORABLE OF THOSE PROVIDED BY THE
COMPANY AND THE AFFILIATED COMPANIES FOR THE EXECUTIVE UNDER SUCH PLANS,
PRACTICES, POLICIES AND PROGRAMS AS IN EFFECT AT ANY TIME DURING THE 120-DAY
PERIOD IMMEDIATELY PRECEDING THE EFFECTIVE DATE OR, IF MORE FAVORABLE TO THE
EXECUTIVE, THOSE PROVIDED GENERALLY AT ANY TIME AFTER THE EFFECTIVE DATE TO
OTHER PEER EXECUTIVES OF THE COMPANY AND THE AFFILIATED COMPANIES.

 

(4)                                  WELFARE BENEFIT PLANS.  DURING THE
EMPLOYMENT PERIOD, THE EXECUTIVE AND/OR THE EXECUTIVE’S FAMILY, AS THE CASE MAY
BE, SHALL BE ELIGIBLE FOR PARTICIPATION IN AND SHALL RECEIVE ALL BENEFITS UNDER
WELFARE BENEFIT PLANS, PRACTICES, POLICIES AND PROGRAMS PROVIDED BY THE COMPANY
AND THE AFFILIATED COMPANIES (INCLUDING, WITHOUT LIMITATION, MEDICAL,
PRESCRIPTION, DENTAL, DISABILITY, EMPLOYEE LIFE, GROUP LIFE, ACCIDENTAL DEATH
AND TRAVEL ACCIDENT INSURANCE PLANS

 

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AND PROGRAMS) TO THE EXTENT APPLICABLE GENERALLY TO OTHER PEER EXECUTIVES OF THE
COMPANY AND THE AFFILIATED COMPANIES, BUT IN NO EVENT SHALL SUCH PLANS,
PRACTICES, POLICIES AND PROGRAMS PROVIDE THE EXECUTIVE WITH BENEFITS THAT ARE
LESS FAVORABLE, IN THE AGGREGATE, THAN THE MOST FAVORABLE OF SUCH PLANS,
PRACTICES, POLICIES AND PROGRAMS IN EFFECT FOR THE EXECUTIVE AT ANY TIME DURING
THE 120-DAY PERIOD IMMEDIATELY PRECEDING THE EFFECTIVE DATE OR, IF MORE
FAVORABLE TO THE EXECUTIVE, THOSE PROVIDED GENERALLY AT ANY TIME AFTER THE
EFFECTIVE DATE TO OTHER PEER EXECUTIVES OF THE COMPANY AND THE AFFILIATED
COMPANIES.

 

(5)                                  EXPENSES.  DURING THE EMPLOYMENT PERIOD,
THE EXECUTIVE SHALL BE ENTITLED TO RECEIVE PROMPT REIMBURSEMENT FOR ALL
REASONABLE EXPENSES INCURRED BY THE EXECUTIVE IN ACCORDANCE WITH THE MOST
FAVORABLE POLICIES, PRACTICES AND PROCEDURES OF THE COMPANY AND THE AFFILIATED
COMPANIES IN EFFECT FOR THE EXECUTIVE AT ANY TIME DURING THE 120-DAY PERIOD
IMMEDIATELY PRECEDING THE EFFECTIVE DATE OR, IF MORE FAVORABLE TO THE EXECUTIVE,
AS IN EFFECT GENERALLY AT ANY TIME THEREAFTER WITH RESPECT TO OTHER PEER
EXECUTIVES OF THE COMPANY AND THE AFFILIATED COMPANIES.

 

(6)                                  FRINGE BENEFITS.  DURING THE EMPLOYMENT
PERIOD, THE EXECUTIVE SHALL BE ENTITLED TO FRINGE BENEFITS, INCLUDING, WITHOUT
LIMITATION, TAX PLANNING SERVICES, PAYMENT OF CLUB DUES, AND, IF APPLICABLE, USE
OF AN AUTOMOBILE AND PAYMENT OF RELATED EXPENSES, IN ACCORDANCE WITH THE MOST
FAVORABLE PLANS, PRACTICES, PROGRAMS AND POLICIES OF THE COMPANY AND THE
AFFILIATED COMPANIES IN EFFECT FOR THE EXECUTIVE AT ANY TIME DURING THE 120-DAY
PERIOD IMMEDIATELY PRECEDING THE EFFECTIVE DATE OR, IF MORE FAVORABLE TO THE
EXECUTIVE, AS IN EFFECT GENERALLY AT ANY TIME THEREAFTER WITH RESPECT TO OTHER
PEER EXECUTIVES OF THE COMPANY AND THE AFFILIATED COMPANIES.

 

(7)                                  OFFICE AND SUPPORT STAFF.  DURING THE
EMPLOYMENT PERIOD, THE EXECUTIVE SHALL BE ENTITLED TO AN OFFICE OR OFFICES OF A
SIZE AND WITH FURNISHINGS AND OTHER APPOINTMENTS, AND TO EXCLUSIVE PERSONAL
SECRETARIAL AND OTHER ASSISTANCE, AT LEAST EQUAL TO THE MOST FAVORABLE OF THE
FOREGOING PROVIDED TO THE EXECUTIVE BY THE COMPANY AND THE AFFILIATED COMPANIES
AT ANY TIME DURING THE 120-DAY PERIOD IMMEDIATELY PRECEDING THE EFFECTIVE DATE
OR, IF MORE FAVORABLE TO THE EXECUTIVE, AS PROVIDED GENERALLY AT ANY TIME
THEREAFTER WITH RESPECT TO OTHER PEER EXECUTIVES OF THE COMPANY AND THE
AFFILIATED COMPANIES.

 

(8)                                  VACATION.  DURING THE EMPLOYMENT PERIOD,
THE EXECUTIVE SHALL BE ENTITLED TO PAID VACATION IN ACCORDANCE WITH THE MOST
FAVORABLE PLANS, POLICIES, PROGRAMS AND PRACTICES OF THE COMPANY AND THE
AFFILIATED COMPANIES AS IN EFFECT FOR THE EXECUTIVE AT ANY TIME DURING THE
120-DAY PERIOD IMMEDIATELY PRECEDING THE EFFECTIVE DATE OR, IF MORE FAVORABLE TO
THE EXECUTIVE, AS IN EFFECT GENERALLY AT ANY TIME THEREAFTER WITH RESPECT TO
OTHER PEER EXECUTIVES OF THE COMPANY AND THE AFFILIATED COMPANIES.

 

SECTION 4.                                                  TERMINATION OF
EMPLOYMENT.  (A)  DEATH OR DISABILITY.  THE EXECUTIVE’S EMPLOYMENT SHALL
TERMINATE AUTOMATICALLY IF THE EXECUTIVE DIES DURING THE EMPLOYMENT PERIOD.  IF
THE COMPANY DETERMINES IN GOOD FAITH THAT THE DISABILITY (AS DEFINED HEREIN) OF
THE EXECUTIVE HAS OCCURRED DURING THE EMPLOYMENT PERIOD (PURSUANT TO THE
DEFINITION OF “DISABILITY”), IT MAY GIVE TO THE EXECUTIVE WRITTEN NOTICE IN
ACCORDANCE WITH SECTION 11(B) OF ITS INTENTION TO TERMINATE THE EXECUTIVE’S
EMPLOYMENT.  IN SUCH EVENT, THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY SHALL
TERMINATE EFFECTIVE ON THE 30TH DAY AFTER RECEIPT OF SUCH

 

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NOTICE BY THE EXECUTIVE (THE “DISABILITY EFFECTIVE DATE”), PROVIDED THAT, WITHIN
THE 30 DAYS AFTER SUCH RECEIPT, THE EXECUTIVE SHALL NOT HAVE RETURNED TO
FULL-TIME PERFORMANCE OF THE EXECUTIVE’S DUTIES.  “DISABILITY” MEANS THE ABSENCE
OF THE EXECUTIVE FROM THE EXECUTIVE’S DUTIES WITH THE COMPANY ON A FULL-TIME
BASIS FOR 180 CONSECUTIVE BUSINESS DAYS AS A RESULT OF INCAPACITY DUE TO MENTAL
OR PHYSICAL ILLNESS THAT IS DETERMINED TO BE TOTAL AND PERMANENT BY A PHYSICIAN
SELECTED BY THE COMPANY OR ITS INSURERS AND ACCEPTABLE TO THE EXECUTIVE OR THE
EXECUTIVE’S LEGAL REPRESENTATIVE.

 

(B)                                 CAUSE.  THE COMPANY MAY TERMINATE THE
EXECUTIVE’S EMPLOYMENT DURING THE EMPLOYMENT PERIOD WITH OR WITHOUT CAUSE. 
“CAUSE” MEANS:

 

(1)                                  THE WILLFUL AND CONTINUED FAILURE OF THE
EXECUTIVE TO PERFORM SUBSTANTIALLY THE EXECUTIVE’S DUTIES WITH THE COMPANY OR
ANY AFFILIATED COMPANY (OTHER THAN ANY SUCH FAILURE RESULTING FROM INCAPACITY
DUE TO PHYSICAL OR MENTAL ILLNESS), AFTER A WRITTEN DEMAND FOR SUBSTANTIAL
PERFORMANCE IS DELIVERED TO THE EXECUTIVE BY THE BOARD OR THE CHIEF EXECUTIVE
OFFICER OF THE COMPANY THAT SPECIFICALLY IDENTIFIES THE MANNER IN WHICH THE
BOARD OR THE CHIEF EXECUTIVE OFFICER OF THE COMPANY BELIEVES THAT THE EXECUTIVE
HAS NOT SUBSTANTIALLY PERFORMED THE EXECUTIVE’S DUTIES, OR

 

(2)                                  THE WILLFUL ENGAGING BY THE EXECUTIVE IN
ILLEGAL CONDUCT OR GROSS MISCONDUCT THAT IS MATERIALLY AND DEMONSTRABLY
INJURIOUS TO THE COMPANY.

 

For purposes of this Section 4(b), no act, or failure to act, on the part of the
Executive shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Company.  Any
act, or failure to act, based upon (A) authority given pursuant to a resolution
duly adopted by the Board, or if the Company is not the ultimate parent
corporation of the Affiliated Companies and is not publicly-traded, the board of
directors of the ultimate parent of the Company (the “Applicable Board”),
(B) the instructions of the Chief Executive Officer of the Company or a senior
officer of the Company or (C) the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company.  The cessation of
employment of the Executive shall not be deemed to be for Cause unless and until
there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the entire
membership of the Applicable Board (excluding the Executive, if the Executive is
a member of the Applicable Board) at a meeting of the Applicable Board called
and held for such purpose (after reasonable notice is provided to the Executive
and the Executive is given an opportunity, together with counsel for the
Executive, to be heard before the Applicable Board), finding that, in the good
faith opinion of the Applicable Board, the Executive is guilty of the conduct
described in Section 4(b)(1) or 4(b)(2), and specifying the particulars thereof
in detail.

 

(C)                                  GOOD REASON.  THE EXECUTIVE’S EMPLOYMENT
MAY BE TERMINATED DURING THE EMPLOYMENT PERIOD BY THE EXECUTIVE FOR GOOD REASON
OR BY THE EXECUTIVE VOLUNTARILY WITHOUT GOOD REASON.  “GOOD REASON” MEANS:

 

(1)                                  THE ASSIGNMENT TO THE EXECUTIVE OF ANY
DUTIES INCONSISTENT IN ANY RESPECT WITH THE EXECUTIVE’S POSITION (INCLUDING
STATUS, OFFICES, TITLES AND REPORTING REQUIREMENTS), AUTHORITY,

 

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DUTIES OR RESPONSIBILITIES AS CONTEMPLATED BY SECTION 3(A), OR ANY ACTION BY THE
COMPANY THAT RESULTS IN A DIMINUTION IN SUCH POSITION, AUTHORITY, DUTIES OR
RESPONSIBILITIES, EXCLUDING FOR THIS PURPOSE AN ISOLATED, INSUBSTANTIAL AND
INADVERTENT ACTION NOT TAKEN IN BAD FAITH AND THAT IS REMEDIED BY THE COMPANY
PROMPTLY AFTER RECEIPT OF NOTICE THEREOF GIVEN BY THE EXECUTIVE;

 

(2)                                  ANY FAILURE BY THE COMPANY TO COMPLY WITH
ANY OF THE PROVISIONS OF SECTION 3(B), OTHER THAN AN ISOLATED, INSUBSTANTIAL AND
INADVERTENT FAILURE NOT OCCURRING IN BAD FAITH AND THAT IS REMEDIED BY THE
COMPANY PROMPTLY AFTER RECEIPT OF NOTICE THEREOF GIVEN BY THE EXECUTIVE;

 

(3)                                  THE COMPANY’S REQUIRING THE EXECUTIVE TO BE
BASED AT ANY OFFICE OR LOCATION OTHER THAN AS PROVIDED IN
SECTION 4(A)(I)(B) HEREOF OR THE COMPANY’S REQUIRING THE EXECUTIVE TO TRAVEL ON
COMPANY BUSINESS TO A SUBSTANTIALLY GREATER EXTENT THAN REQUIRED IMMEDIATELY
PRIOR TO THE EFFECTIVE DATE;

 

(4)                                  ANY PURPORTED TERMINATION BY THE COMPANY OF
THE EXECUTIVE’S EMPLOYMENT OTHERWISE THAN AS EXPRESSLY PERMITTED BY THIS
AGREEMENT; OR

 

(5)                                  ANY FAILURE BY THE COMPANY TO COMPLY WITH
AND SATISFY SECTION 10(C).

 

For purposes of this Section 4(c) of this Agreement, any good faith
determination of Good Reason made by the Executive shall be conclusive.  The
Executive’s mental or physical incapacity following the occurrence of an event
described above in clauses (1) through (5) shall not affect the Executive’s
ability to terminate employment for Good Reason.

 

(D)                                 NOTICE OF TERMINATION.  ANY TERMINATION BY
THE COMPANY FOR CAUSE, OR BY THE EXECUTIVE FOR GOOD REASON, SHALL BE
COMMUNICATED BY NOTICE OF TERMINATION TO THE OTHER PARTY HERETO GIVEN IN
ACCORDANCE WITH SECTION 11(B).  “NOTICE OF TERMINATION” MEANS A WRITTEN NOTICE
THAT (1) INDICATES THE SPECIFIC TERMINATION PROVISION IN THIS AGREEMENT RELIED
UPON, (2) TO THE EXTENT APPLICABLE, SETS FORTH IN REASONABLE DETAIL THE FACTS
AND CIRCUMSTANCES CLAIMED TO PROVIDE A BASIS FOR TERMINATION OF THE EXECUTIVE’S
EMPLOYMENT UNDER THE PROVISION SO INDICATED, AND (3) IF THE DATE OF TERMINATION
(AS DEFINED HEREIN) IS OTHER THAN THE DATE OF RECEIPT OF SUCH NOTICE, SPECIFIES
THE DATE OF TERMINATION (WHICH DATE OF TERMINATION SHALL BE NOT MORE THAN 30
DAYS AFTER THE GIVING OF SUCH NOTICE).  THE FAILURE BY THE EXECUTIVE OR THE
COMPANY TO SET FORTH IN THE NOTICE OF TERMINATION ANY FACT OR CIRCUMSTANCE THAT
CONTRIBUTES TO A SHOWING OF GOOD REASON OR CAUSE SHALL NOT WAIVE ANY RIGHT OF
THE EXECUTIVE OR THE COMPANY, RESPECTIVELY, HEREUNDER OR PRECLUDE THE EXECUTIVE
OR THE COMPANY, RESPECTIVELY, FROM ASSERTING SUCH FACT OR CIRCUMSTANCE IN
ENFORCING THE EXECUTIVE’S OR THE COMPANY’S RESPECTIVE RIGHTS HEREUNDER.

 

(E)                                  DATE OF TERMINATION. “DATE OF TERMINATION”
MEANS (1) IF THE EXECUTIVE’S EMPLOYMENT IS TERMINATED BY THE COMPANY FOR CAUSE,
OR BY THE EXECUTIVE FOR GOOD REASON, THE DATE OF RECEIPT OF THE NOTICE OF
TERMINATION OR SUCH LATER DATE SPECIFIED IN THE NOTICE OF TERMINATION, AS THE
CASE MAY BE, (2) IF THE EXECUTIVE’S EMPLOYMENT IS TERMINATED BY THE COMPANY
OTHER THAN FOR CAUSE OR DISABILITY, THE DATE ON WHICH THE COMPANY NOTIFIES THE
EXECUTIVE OF SUCH TERMINATION, (3) IF THE EXECUTIVE RESIGNS WITHOUT GOOD REASON,
THE DATE ON WHICH THE EXECUTIVE NOTIFIES THE COMPANY OF SUCH TERMINATION, AND
(4) IF THE EXECUTIVE’S EMPLOYMENT IS TERMINATED BY REASON OF DEATH OR
DISABILITY, THE DATE OF DEATH OF THE EXECUTIVE OR THE DISABILITY EFFECTIVE DATE,
AS THE CASE MAY BE.  NOTWITHSTANDING THE FOREGOING, IN NO EVENT

 

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SHALL THE DATE OF TERMINATION OCCUR UNTIL THE EXECUTIVE EXPERIENCES A
“SEPARATION FROM SERVICE” WITHIN THE MEANING OF SECTION 409A OF THE CODE, AND
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE DATE ON WHICH
SUCH SEPARATION FROM SERVICE TAKES PLACE SHALL BE THE “DATE OF TERMINATION.”

 

SECTION 5.                                                  OBLIGATIONS OF THE
COMPANY UPON TERMINATION.  (A)  BY THE EXECUTIVE FOR GOOD REASON; BY THE COMPANY
OTHER THAN FOR CAUSE, DEATH OR DISABILITY.  IF, DURING THE EMPLOYMENT PERIOD,
THE COMPANY TERMINATES THE EXECUTIVE’S EMPLOYMENT OTHER THAN FOR CAUSE, DEATH OR
DISABILITY OR THE EXECUTIVE TERMINATES EMPLOYMENT FOR GOOD REASON:

 

(1)                                  THE COMPANY SHALL PAY TO THE EXECUTIVE, IN
A LUMP SUM IN CASH WITHIN 30 DAYS AFTER THE DATE OF TERMINATION, THE AGGREGATE
OF THE FOLLOWING AMOUNTS:

 

(A)                              THE SUM OF (I) THE EXECUTIVE’S ANNUAL BASE
SALARY THROUGH THE DATE OF TERMINATION TO THE EXTENT NOT THERETOFORE PAID OR
DEFERRED PURSUANT TO AN IRREVOCABLE ELECTION UNDER ANY DEFERRED COMPENSATION
ARRANGEMENT SUBJECT TO SECTION 409A, (II) ANY ACCRUED VACATION PAY TO THE EXTENT
NOT THERETOFORE PAID (THE SUM OF THE AMOUNTS DESCRIBED IN SUBCLAUSES (I) AND
(II), THE “ACCRUED OBLIGATIONS”) AND (III) AN AMOUNT EQUAL TO THE PRODUCT OF
(X) THE HIGHER OF (I) THE RECENT ANNUAL BONUS AND (II) THE AGGREGATE ANNUAL
BONUS UNDER EACH OF THE COMPANY’S  MANAGEMENT INCENTIVE PLAN AND ANY BUSINESS
UNIT INCENTIVE PLAN OF THE COMPANY IN WHICH THE EXECUTIVE HAS PARTICIPATED (OR
ANY PREDECESSOR OR SUCCESSOR PLAN TO ANY THEREOF) PAID OR PAYABLE, INCLUDING ANY
BONUS OR PORTION THEREOF THAT HAS BEEN EARNED BUT DEFERRED (AND ANNUALIZED FOR
ANY FISCAL YEAR CONSISTING OF LESS THAN 12 FULL MONTHS OR DURING WHICH THE
EXECUTIVE WAS EMPLOYED FOR LESS THAN 12 FULL MONTHS), FOR THE MOST RECENTLY
COMPLETED FISCAL YEAR DURING THE EMPLOYMENT PERIOD, IF ANY, (IT BEING UNDERSTOOD
THAT, SUCH ANNUAL BONUS SHALL BE DETERMINED BY INCLUDING BONUSES EARNED FOR BOTH
THE ANNUAL AND MULTIYEAR PERFORMANCE PERIODS ENDING IN SUCH RECENTLY COMPLETED
FISCAL YEAR DURING THE EMPLOYMENT PERIOD)  (SUCH HIGHER AMOUNT, THE “HIGHEST
ANNUAL BONUS”) AND (Y) A FRACTION, THE NUMERATOR OF WHICH IS THE NUMBER OF DAYS
IN THE CURRENT FISCAL YEAR THROUGH THE DATE OF TERMINATION AND THE DENOMINATOR
OF WHICH IS 365 (THE “PRO RATA BONUS”); AND

 

(B)                                THE AMOUNT EQUAL TO THE PRODUCT OF (I) THREE
AND (II) THE SUM OF (X) THE EXECUTIVE’S ANNUAL BASE SALARY AND (Y) THE HIGHEST
ANNUAL BONUS.

 

(2)                                  [FOR THE AGREEMENTS OF EXECUTIVES
COMMENCING EMPLOYMENT PRIOR TO JANUARY 1, 2007:  THE COMPANY SHALL PAY TO THE
EXECUTIVE, AT SUCH TIME AS SUCH AMOUNTS ARE PAYABLE UNDER THE TERMS OF EACH
APPLICABLE SERP (AS DEFINED BELOW), OR, IF THE EXECUTIVE DOES NOT PARTICIPATE IN
A SERP, IN A LUMP SUM IN CASH WITHIN 30 DAYS AFTER THE DATE OF TERMINATION, AN
AMOUNT EQUAL TO THE EXCESS OF (I) THE ACTUARIAL EQUIVALENT OF THE BENEFIT UNDER
THE COMPANY’S QUALIFIED DEFINED BENEFIT RETIREMENT PLAN (THE “RETIREMENT PLAN”)
(UTILIZING ACTUARIAL ASSUMPTIONS NO LESS FAVORABLE TO THE EXECUTIVE THAN THOSE
IN EFFECT UNDER THE RETIREMENT PLAN IMMEDIATELY PRIOR TO THE EFFECTIVE DATE) AND
ANY EXCESS OR SUPPLEMENTAL RETIREMENT PLAN IN WHICH THE EXECUTIVE PARTICIPATES
(COLLECTIVELY, THE “SERP”) (UTILIZING ACTUARIAL ASSUMPTIONS NO LESS FAVORABLE TO
THE EXECUTIVE THAN THOSE IN EFFECT UNDER THE SERP IMMEDIATELY PRIOR TO THE

 

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EFFECTIVE DATE) THAT THE EXECUTIVE WOULD RECEIVE IF THE EXECUTIVE’S EMPLOYMENT
CONTINUED FOR THREE YEARS AFTER THE DATE OF TERMINATION, ASSUMING FOR THIS
PURPOSE THAT (X) THE ACCRUED BENEFIT IS FULLY VESTED, (Y) THE EXECUTIVE’S AGE IS
INCREASED BY THE NUMBER OF YEARS (INCLUDING PARTIAL YEARS) THAT THE EXECUTIVE IS
DEEMED TO BE SO EMPLOYED AND (Z) THE EXECUTIVE’S COMPENSATION IN EACH OF THE
THREE YEARS IS THAT REQUIRED BY SECTIONS 3(B)(1) AND 3(B)(2) PAYABLE IN EQUAL
BIWEEKLY INSTALLMENTS OVER SUCH THREE-YEAR PERIOD, OVER (II) THE ACTUARIAL
EQUIVALENT OF THE EXECUTIVE’S ACTUAL BENEFIT (PAID OR PAYABLE), IF ANY, UNDER
THE RETIREMENT PLAN AND THE SERP AS OF THE DATE OF TERMINATION;]

 

[FOR THE AGREEMENTS OF EXECUTIVES COMMENCING EMPLOYMENT ON OR AFTER JANUARY 1,
2007:  THE COMPANY SHALL PAY TO THE EXECUTIVE, AT SUCH TIME AS SUCH AMOUNTS ARE
PAYABLE UNDER THE TERMS OF EACH APPLICABLE SERP (AS DEFINED BELOW), OR, IF THE
EXECUTIVE DOES NOT PARTICIPATE IN A SERP, IN A LUMP SUM IN CASH WITHIN 30 DAYS
AFTER THE DATE OF TERMINATION, AN AMOUNT EQUAL TO THE EXCESS OF (I) THE ACCOUNT
BALANCE UNDER THE COMPANY’S QUALIFIED DEFINED CONTRIBUTION RETIREMENT PLAN (THE
“DEFINED CONTRIBUTION PLAN”) AND ANY EXCESS OR SUPPLEMENTAL DEFINED CONTRIBUTION
PLAN IN WHICH THE EXECUTIVE PARTICIPATES (COLLECTIVELY, THE “SERP”) THAT THE
EXECUTIVE WOULD RECEIVE IF THE EXECUTIVE’S EMPLOYMENT CONTINUED FOR THREE YEARS
AFTER THE DATE OF TERMINATION, ASSUMING FOR THIS PURPOSE THAT (X) THE ACCOUNT
BALANCE IS FULLY VESTED, (Y) THE COMPANY MAKES A NONELECTIVE EMPLOYER
CONTRIBUTION TO THE SERP FOR EACH YEAR IN SUCH THREE-YEAR PERIOD IN AN AMOUNT
EQUAL TO THE GREATEST NONELECTIVE EMPLOYER CONTRIBUTION MADE TO SUCH PLAN DURING
THE LAST THREE FULL FISCAL YEARS PRIOR TO THE EFFECTIVE DATE AND (Z) THE
EXECUTIVE’S COMPENSATION IN EACH OF THE THREE YEARS IS THAT REQUIRED BY
SECTION 3(B)(1) AND SECTION 3(B)(2) PAYABLE IN EQUAL BIWEEKLY INSTALLMENTS FOR
SUCH THREE-YEAR PERIOD, OVER (II) THE ACCOUNT BALANCE (PAID OR PAYABLE), IF ANY,
UNDER THE DEFINED CONTRIBUTION PLAN AND THE SERP AS OF THE DATE OF TERMINATION;]

 

(3)                                  DURING THE THREE YEAR PERIOD FOLLOWING THE
DATE OF TERMINATION (THE “BENEFITS PERIOD”), THE COMPANY SHALL PROVIDE THE
EXECUTIVE, HIS SPOUSE AND HIS ELIGIBLE DEPENDENTS WITH MEDICAL AND DENTAL
INSURANCE COVERAGE (THE “HEALTH CARE BENEFITS”) AND LIFE INSURANCE BENEFITS NO
LESS FAVORABLE TO THOSE WHICH THE EXECUTIVE, HIS SPOUSE AND HIS ELIGIBLE
DEPENDENTS WERE RECEIVING IMMEDIATELY PRIOR TO THE DATE OF TERMINATION OR, IF
MORE FAVORABLE TO SUCH PERSONS, AS IN EFFECT GENERALLY AT ANY TIME THEREAFTER
WITH RESPECT TO OTHER PEER EXECUTIVES OF THE COMPANY AND THE AFFILIATED
COMPANIES; PROVIDED, HOWEVER, THAT THE HEALTH CARE BENEFITS SHALL BE PROVIDED
DURING THE BENEFITS PERIOD IN SUCH A MANNER THAT SUCH BENEFITS ARE EXCLUDED FROM
THE EXECUTIVE’S INCOME FOR FEDERAL INCOME TAX PURPOSES; PROVIDED, FURTHER,
HOWEVER, THAT IF THE EXECUTIVE BECOMES RE-EMPLOYED WITH ANOTHER EMPLOYER AND IS
ELIGIBLE TO RECEIVE HEALTH CARE BENEFITS UNDER ANOTHER EMPLOYER-PROVIDED PLAN,
THE HEALTH CARE BENEFITS PROVIDED HEREUNDER SHALL BE SECONDARY TO THOSE PROVIDED
UNDER SUCH OTHER PLAN DURING SUCH APPLICABLE PERIOD OF ELIGIBILITY.  THE RECEIPT
OF THE HEALTH CARE BENEFITS SHALL BE CONDITIONED UPON THE EXECUTIVE CONTINUING
TO PAY THE MONTHLY PREMIUM AS IN EFFECT AT THE COMPANY FROM TIME TO TIME FOR
COVERAGE PROVIDED TO FORMER EMPLOYEES UNDER SECTION 4980B OF THE CODE IN RESPECT
OF THE MAXIMUM LEVEL OF COVERAGE THAT THE EXECUTIVE COULD OTHERWISE ELECT TO
RECEIVE FOR THE EXECUTIVE, HIS SPOUSE AND ELIGIBLE DEPENDENTS IF THE EXECUTIVE
WERE STILL AN EMPLOYEE OF THE COMPANY DURING THE BENEFITS PERIOD (I.E., SINGLE,
SINGLE PLUS ONE, OR FAMILY) (THE “APPLICABLE COBRA PREMIUM”) REGARDLESS OF WHAT
LEVEL OF COVERAGE IS

 

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ACTUALLY ELECTED.  DURING THE PORTION OF THE BENEFITS PERIOD IN WHICH THE
EXECUTIVE, HIS SPOUSE AND HIS ELIGIBLE DEPENDENTS CONTINUE TO RECEIVE COVERAGE
UNDER THE COMPANY’S HEALTH CARE BENEFITS PLANS, THE COMPANY SHALL PAY TO THE
EXECUTIVE A MONTHLY AMOUNT EQUAL TO THE EXCESS OF (X) THE APPLICABLE COBRA
PREMIUM OVER (Y) THE MONTHLY EMPLOYEE CONTRIBUTION RATE THAT IS PAID BY COMPANY
EMPLOYEES GENERALLY FOR THE SAME OR SIMILAR COVERAGE, AS IN EFFECT FROM TIME TO
TIME (AND WHICH AMOUNT SHALL IN NO EVENT BE GREATER THAN THE EMPLOYEE
CONTRIBUTION RATE FOR THE APPLICABLE LEVEL OF COVERAGE AS IN EFFECT IMMEDIATELY
PRIOR TO THE EFFECTIVE DATE), WHICH PAYMENT SHALL BE PAID IN ADVANCE ON THE
FIRST PAYROLL DAY OF EACH MONTH, COMMENCING WITH THE MONTH IMMEDIATELY FOLLOWING
THE EXECUTIVE’S DATE OF TERMINATION.  THE COMPANY SHALL USE ITS REASONABLE BEST
EFFORTS TO ENSURE THAT, FOLLOWING THE END OF THE BENEFIT PERIOD, THE EXECUTIVE
SHALL BE ELIGIBLE TO ELECT CONTINUED HEALTH COVERAGE PURSUANT TO SECTION 4980B
OF THE CODE OR OTHER APPLICABLE LAW (“COBRA COVERAGE”), AS IF THE EXECUTIVE’S
EMPLOYMENT WITH THE COMPANY HAD TERMINATED AS OF THE END OF SUCH PERIOD.  FOR
PURPOSES OF DETERMINING ELIGIBILITY (BUT NOT THE TIME OF COMMENCEMENT OF
BENEFITS) OF THE EXECUTIVE FOR RETIREE WELFARE BENEFITS PURSUANT TO THE
COMPANY’S RETIREE WELFARE BENEFIT PLANS, IF ANY, THE EXECUTIVE SHALL BE
CONSIDERED TO HAVE REMAINED EMPLOYED UNTIL THE END OF THE BENEFIT PERIOD AND TO
HAVE RETIRED ON THE LAST DAY OF SUCH PERIOD.  IN ORDER TO COMPLY WITH
SECTION 409A OF THE CODE, (I) THE AMOUNT OF BENEFITS THAT THE COMPANY IS
OBLIGATED TO PROVIDE UNDER THIS SECTION 5(A)(3) IN ANY GIVEN CALENDAR YEAR SHALL
NOT AFFECT THE AMOUNT OF SUCH BENEFITS THAT THE COMPANY IS OBLIGATED TO PAY IN
ANY OTHER CALENDAR YEAR; AND (II) THE EXECUTIVE’S RIGHT TO HAVE THE COMPANY
PROVIDE SUCH BENEFITS MAY NOT BE LIQUIDATED OR EXCHANGED FOR ANY OTHER BENEFIT;
AND

 

(4)                                  THE COMPANY SHALL, AT ITS SOLE EXPENSE AS
INCURRED, PROVIDE THE EXECUTIVE WITH OUTPLACEMENT SERVICES THE SCOPE AND
PROVIDER OF WHICH SHALL BE SELECTED BY THE EXECUTIVE IN THE EXECUTIVE’S SOLE
DISCRETION, PROVIDED THAT SUCH OUTPLACEMENT BENEFITS SHALL END NOT LATER THAN
THE LAST DAY OF THE SECOND CALENDAR YEAR THAT BEGINS AFTER THE DATE OF
TERMINATION; AND

 

(5)                                  EXCEPT AS OTHERWISE SET FORTH IN THE LAST
SENTENCE OF SECTION 6, TO THE EXTENT NOT THERETOFORE PAID OR PROVIDED, THE
COMPANY SHALL TIMELY PAY OR PROVIDE TO THE EXECUTIVE ANY OTHER BENEFITS (AS
DEFINED IN SECTION 6) IN ACCORDANCE WITH THE TERMS OF THE UNDERLYING PLANS OR
AGREEMENTS.

 

Notwithstanding the foregoing provisions of Sections 5(a)(1), (2) or (3), in the
event that the Executive is a “specified employee” within the meaning of
Section 409A of the Code (as determined in accordance with the methodology
established by the Company as in effect on the Date of Termination) (a
“Specified Employee”), amounts that constitute “nonqualified deferred
compensation” within the meaning of Section 409A of the Code that would
otherwise be payable and benefits that would otherwise be provided under
Sections 5(a)(1), (2) or (3) during the six-month period immediately following
the Date of Termination (other than the Accrued Obligations) shall instead be
paid, with interest on any delayed payment at the applicable federal rate
provided for in Section 7872(f)(2)(A) of the Code (“Interest”) determined as of
the Date of Termination, or provided on the first business day after the date
that is six months following the Executive’s “separation from service” within
the meaning of Section 409A of the Code (the “Delayed Payment Date”).

 

10

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(B)                                 DEATH.  IF THE EXECUTIVE’S EMPLOYMENT IS
TERMINATED BY REASON OF THE EXECUTIVE’S DEATH DURING THE EMPLOYMENT PERIOD, THE
COMPANY SHALL PROVIDE THE EXECUTIVE’S ESTATE OR BENEFICIARIES WITH THE ACCRUED
OBLIGATIONS AND THE PRO RATA BONUS AND THE TIMELY PAYMENT OR DELIVERY OF THE
OTHER BENEFITS, AND SHALL HAVE NO OTHER SEVERANCE OBLIGATIONS UNDER THIS
AGREEMENT.  THE ACCRUED OBLIGATIONS AND THE PRO RATA BONUS SHALL BE PAID TO THE
EXECUTIVE’S ESTATE OR BENEFICIARY, AS APPLICABLE, IN A LUMP SUM IN CASH WITHIN
30 DAYS OF THE DATE OF TERMINATION.  WITH RESPECT TO THE PROVISION OF THE OTHER
BENEFITS, THE TERM “OTHER BENEFITS” AS UTILIZED IN THIS SECTION 5(B) SHALL
INCLUDE, WITHOUT LIMITATION, AND THE EXECUTIVE’S ESTATE AND/OR BENEFICIARIES
SHALL BE ENTITLED TO RECEIVE, BENEFITS AT LEAST EQUAL TO THE MOST FAVORABLE
BENEFITS PROVIDED BY THE COMPANY AND THE AFFILIATED COMPANIES TO THE ESTATES AND
BENEFICIARIES OF PEER EXECUTIVES OF THE COMPANY AND THE AFFILIATED COMPANIES
UNDER SUCH PLANS, PROGRAMS, PRACTICES AND POLICIES RELATING TO DEATH BENEFITS,
IF ANY, AS IN EFFECT WITH RESPECT TO OTHER PEER EXECUTIVES AND THEIR
BENEFICIARIES AT ANY TIME DURING THE 120-DAY PERIOD IMMEDIATELY PRECEDING THE
EFFECTIVE DATE OR, IF MORE FAVORABLE TO THE EXECUTIVE’S ESTATE AND/OR THE
EXECUTIVE’S BENEFICIARIES, AS IN EFFECT ON THE DATE OF THE EXECUTIVE’S DEATH
WITH RESPECT TO OTHER PEER EXECUTIVES OF THE COMPANY AND THE AFFILIATED
COMPANIES AND THEIR BENEFICIARIES.

 

(C)                                  DISABILITY.  IF THE EXECUTIVE’S EMPLOYMENT
IS TERMINATED BY REASON OF THE EXECUTIVE’S DISABILITY DURING THE EMPLOYMENT
PERIOD, THE COMPANY SHALL PROVIDE THE EXECUTIVE WITH THE ACCRUED OBLIGATIONS AND
PRO RATA BONUS AND THE TIMELY PAYMENT OR DELIVERY OF THE OTHER BENEFITS IN
ACCORDANCE WITH THE TERMS OF THE UNDERLYING PLANS OR AGREEMENTS, AND SHALL HAVE
NO OTHER SEVERANCE OBLIGATIONS UNDER THIS AGREEMENT.  THE ACCRUED OBLIGATIONS
AND THE PRO RATA BONUS SHALL BE PAID TO THE EXECUTIVE IN A LUMP SUM IN CASH
WITHIN 30 DAYS OF THE DATE OF TERMINATION, PROVIDED, THAT IN THE EVENT THAT THE
EXECUTIVE IS A SPECIFIED EMPLOYEE, THE PRO RATA BONUS SHALL BE PAID, WITH
INTEREST, TO THE EXECUTIVE ON THE DELAYED PAYMENT DATE.  WITH RESPECT TO THE
PROVISION OF THE OTHER BENEFITS, THE TERM “OTHER BENEFITS” AS UTILIZED IN THIS
SECTION 5(C) SHALL INCLUDE, AND THE EXECUTIVE SHALL BE ENTITLED AFTER THE
DISABILITY EFFECTIVE DATE TO RECEIVE, DISABILITY AND OTHER BENEFITS AT LEAST
EQUAL TO THE MOST FAVORABLE OF THOSE GENERALLY PROVIDED BY THE COMPANY AND THE
AFFILIATED COMPANIES TO DISABLED EXECUTIVES AND/OR THEIR FAMILIES IN ACCORDANCE
WITH SUCH PLANS, PROGRAMS, PRACTICES AND POLICIES RELATING TO DISABILITY, IF
ANY, AS IN EFFECT GENERALLY WITH RESPECT TO OTHER PEER EXECUTIVES AND THEIR
FAMILIES AT ANY TIME DURING THE 120-DAY PERIOD IMMEDIATELY PRECEDING THE
EFFECTIVE DATE OR, IF MORE FAVORABLE TO THE EXECUTIVE AND/OR THE EXECUTIVE’S
FAMILY, AS IN EFFECT AT ANY TIME THEREAFTER GENERALLY WITH RESPECT TO OTHER PEER
EXECUTIVES OF THE COMPANY AND THE AFFILIATED COMPANIES AND THEIR FAMILIES.

 

(D)                                 CAUSE; OTHER THAN FOR GOOD REASON.  IF THE
EXECUTIVE’S EMPLOYMENT IS TERMINATED FOR CAUSE DURING THE EMPLOYMENT PERIOD, THE
COMPANY SHALL PROVIDE THE EXECUTIVE WITH THE EXECUTIVE’S ANNUAL BASE SALARY
THROUGH THE DATE OF TERMINATION, AND THE TIMELY PAYMENT OR DELIVERY OF THE OTHER
BENEFITS, AND SHALL HAVE NO OTHER SEVERANCE OBLIGATIONS UNDER THIS AGREEMENT. 
IF THE EXECUTIVE VOLUNTARILY TERMINATES EMPLOYMENT DURING THE EMPLOYMENT PERIOD,
EXCLUDING A TERMINATION FOR GOOD REASON, THE COMPANY SHALL PROVIDE TO THE
EXECUTIVE THE ACCRUED OBLIGATIONS AND THE PRO RATA BONUS AND THE TIMELY PAYMENT
OR DELIVERY OF THE OTHER BENEFITS, AND SHALL HAVE NO OTHER SEVERANCE OBLIGATIONS
UNDER THIS AGREEMENT.  IN SUCH CASE, ALL THE ACCRUED OBLIGATIONS AND THE PRO
RATA BONUS SHALL BE PAID TO THE EXECUTIVE IN A LUMP SUM IN CASH WITHIN 30 DAYS
OF THE DATE OF TERMINATION, PROVIDED, THAT IN THE EVENT THAT THE EXECUTIVE IS A

 

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SPECIFIED EMPLOYEE, THE PRO RATA BONUS SHALL BE PAID, WITH INTEREST, TO THE
EXECUTIVE ON THE DELAYED PAYMENT DATE.

 

SECTION 6.                                                  NON-EXCLUSIVITY OF
RIGHTS.  NOTHING IN THIS AGREEMENT SHALL PREVENT OR LIMIT THE EXECUTIVE’S
CONTINUING OR FUTURE PARTICIPATION IN ANY PLAN, PROGRAM, POLICY OR PRACTICE
PROVIDED BY THE COMPANY OR THE AFFILIATED COMPANIES AND FOR WHICH THE EXECUTIVE
MAY QUALIFY, NOR, SUBJECT TO SECTION 11(F), SHALL ANYTHING HEREIN LIMIT OR
OTHERWISE AFFECT SUCH RIGHTS AS THE EXECUTIVE MAY HAVE UNDER ANY OTHER CONTRACT
OR AGREEMENT WITH THE COMPANY OR THE AFFILIATED COMPANIES.  AMOUNTS THAT ARE
VESTED BENEFITS OR THAT THE EXECUTIVE IS OTHERWISE ENTITLED TO RECEIVE UNDER ANY
PLAN, POLICY, PRACTICE OR PROGRAM OF OR ANY OTHER CONTRACT OR AGREEMENT WITH THE
COMPANY OR THE AFFILIATED COMPANIES AT OR SUBSEQUENT TO THE DATE OF TERMINATION
(“OTHER BENEFITS”) SHALL BE PAYABLE IN ACCORDANCE WITH SUCH PLAN, POLICY,
PRACTICE OR PROGRAM OR CONTRACT OR AGREEMENT, EXCEPT AS EXPLICITLY MODIFIED BY
THIS AGREEMENT.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE
EXECUTIVE’S RESIGNATION UNDER THIS AGREEMENT WITH OR WITHOUT GOOD REASON, SHALL
IN NO WAY AFFECT THE EXECUTIVE’S ABILITY TO TERMINATE EMPLOYMENT BY REASON OF
THE EXECUTIVE’S “RETIREMENT” UNDER, OR TO BE ELIGIBLE TO RECEIVE BENEFITS UNDER,
ANY COMPENSATION AND BENEFITS PLANS, PROGRAMS OR ARRANGEMENTS OF THE COMPANY OR
THE AFFILIATED COMPANIES, INCLUDING WITHOUT LIMITATION ANY RETIREMENT OR PENSION
PLANS OR ARRANGEMENTS OR SUBSTITUTE PLANS ADOPTED BY THE COMPANY, THE AFFILIATED
COMPANIES OR THEIR RESPECTIVE SUCCESSORS, AND ANY TERMINATION WHICH OTHERWISE
QUALIFIES AS GOOD REASON SHALL BE TREATED AS SUCH EVEN IF IT IS ALSO A
“RETIREMENT” FOR PURPOSES OF ANY SUCH PLAN.  NOTWITHSTANDING THE FOREGOING, IF
THE EXECUTIVE RECEIVES PAYMENTS AND BENEFITS PURSUANT TO SECTION 5(A) OF THIS
AGREEMENT, THE EXECUTIVE SHALL NOT BE ENTITLED TO ANY SEVERANCE PAY OR BENEFITS
UNDER ANY SEVERANCE PLAN, PROGRAM OR POLICY OF THE COMPANY AND THE AFFILIATED
COMPANIES, UNLESS OTHERWISE SPECIFICALLY PROVIDED THEREIN IN A SPECIFIC
REFERENCE TO THIS AGREEMENT.  [FOR CEO AGREEMENT ONLY: NOTWITHSTANDING ANYTHING
IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT SHALL THE BENEFITS PROVIDED IN
THE SUPPLEMENTAL PENSION AND RETIREE MEDICAL AGREEMENT DATED AS OF THE 29TH DAY
OF MAY 1998 BY AND BETWEEN THE COMPANY AND THE EXECUTIVE (THE “SUPPLEMENTAL
AGREEMENT”) BE CONSIDERED SEVERANCE PAY OR BENEFITS UNDER ANY SEVERANCE PLAN,
PROGRAM OR POLICY OF THE COMPANY FOR PURPOSES OF THE IMMEDIATELY PRECEDING
SENTENCE, AND NOTHING IN THIS AGREEMENT SHALL LIMIT THE EFFECTIVENESS OF THE
SUPPLEMENTAL AGREEMENT.]

 

SECTION 7.                                                  FULL SETTLEMENT;
LEGAL FEES.  THE COMPANY’S OBLIGATION TO MAKE THE PAYMENTS PROVIDED FOR IN THIS
AGREEMENT AND OTHERWISE TO PERFORM ITS OBLIGATIONS HEREUNDER SHALL NOT BE
AFFECTED BY ANY SET-OFF, COUNTERCLAIM, RECOUPMENT, DEFENSE, OR OTHER CLAIM,
RIGHT OR ACTION THAT THE COMPANY MAY HAVE AGAINST THE EXECUTIVE OR OTHERS.  IN
NO EVENT SHALL THE EXECUTIVE BE OBLIGATED TO SEEK OTHER EMPLOYMENT OR TAKE ANY
OTHER ACTION BY WAY OF MITIGATION OF THE AMOUNTS PAYABLE TO THE EXECUTIVE UNDER
ANY OF THE PROVISIONS OF THIS AGREEMENT, AND EXCEPT AS SPECIFICALLY PROVIDED IN
SECTION 5(A)(2), SUCH AMOUNTS SHALL NOT BE REDUCED WHETHER OR NOT THE EXECUTIVE
OBTAINS OTHER EMPLOYMENT.  THE COMPANY AGREES TO PAY AS INCURRED (WITHIN 10 DAYS
FOLLOWING THE COMPANY’S RECEIPT OF AN INVOICE FROM THE EXECUTIVE), AT ANY TIME
FROM THE CHANGE OF CONTROL THROUGH THE EXECUTIVE’S REMAINING LIFETIME (OR, IF
LONGER, THROUGH THE 20TH ANNIVERSARY OF THE CHANGE OF CONTROL) TO THE FULL
EXTENT PERMITTED BY LAW, ALL LEGAL FEES AND EXPENSES THAT THE EXECUTIVE MAY
REASONABLY INCUR AS A RESULT OF ANY CONTEST (REGARDLESS OF THE OUTCOME THEREOF)
BY THE COMPANY, THE EXECUTIVE OR OTHERS OF THE VALIDITY OR ENFORCEABILITY OF, OR
LIABILITY UNDER, ANY PROVISION OF THIS AGREEMENT OR ANY GUARANTEE OF PERFORMANCE
THEREOF (INCLUDING AS A RESULT OF ANY CONTEST BY THE EXECUTIVE ABOUT THE AMOUNT
OF

 

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ANY PAYMENT PURSUANT TO THIS AGREEMENT), PLUS, IN EACH CASE, INTEREST DETERMINED
AS OF THE DATE SUCH LEGAL FEES AND EXPENSES WERE INCURRED; PROVIDED, THAT THE
EXECUTIVE SHALL HAVE SUBMITTED AN INVOICE FOR SUCH FEES AND EXPENSES AT LEAST 10
DAYS BEFORE THE END OF THE CALENDAR YEAR NEXT FOLLOWING THE CALENDAR YEAR IN
WHICH SUCH FEES AND EXPENSES WERE INCURRED (OR, IN CONNECTION WITH A CONTEST
RELATED TO AN ANTICIPATORY TERMINATION, FOLLOWING THE CALENDAR YEAR IN WHICH
SUCH CONTEST IS FINALLY RESOLVED).  THE AMOUNT OF SUCH LEGAL FEES AND EXPENSES
THAT THE COMPANY IS OBLIGATED TO PAY IN ANY GIVEN CALENDAR YEAR SHALL NOT AFFECT
THE LEGAL FEES AND EXPENSES THAT THE COMPANY IS OBLIGATED TO PAY IN ANY OTHER
CALENDAR YEAR, AND THE EXECUTIVE’S RIGHT TO HAVE THE COMPANY PAY SUCH LEGAL FEES
AND EXPENSES MAY NOT BE LIQUIDATED OR EXCHANGED FOR ANY OTHER BENEFIT.

 

SECTION 8.                                                  CERTAIN ADDITIONAL
REDUCTIONS.

 

(A)                                  ANYTHING IN THIS AGREEMENT TO THE CONTRARY
NOTWITHSTANDING, IN THE EVENT THAT THE ACCOUNTING FIRM SHALL DETERMINE THAT
RECEIPT OF ALL PAYMENTS WOULD SUBJECT AN EXECUTIVE TO TAX UNDER SECTION 4999 OF
THE CODE, THE ACCOUNTING FIRM SHALL DETERMINE WHETHER SOME AMOUNT OF AGREEMENT
PAYMENTS MEETS THE DEFINITION OF “REDUCED AMOUNT.”  IF THE ACCOUNTING FIRM
DETERMINES THAT THERE IS A REDUCED AMOUNT, THEN THE AGGREGATE AGREEMENT PAYMENTS
SHALL BE REDUCED TO SUCH REDUCED AMOUNT.

 

(B)                                 IF THE ACCOUNTING FIRM DETERMINES THAT THE
AGGREGATE AGREEMENT PAYMENTS SHOULD BE REDUCED TO THE REDUCED AMOUNT, THE
COMPANY SHALL PROMPTLY GIVE THE APPLICABLE EXECUTIVE NOTICE TO THAT EFFECT AND A
COPY OF THE DETAILED CALCULATION THEREOF, AND THE EXECUTIVE MAY THEN ELECT, IN
HIS OR HER SOLE DISCRETION, WHICH AND HOW MUCH OF THE AGREEMENT PAYMENTS SHALL
BE ELIMINATED OR REDUCED (AS LONG AS AFTER SUCH ELECTION THE PRESENT VALUE OF
THE AGGREGATE AGREEMENT PAYMENTS EQUALS THE REDUCED AMOUNT); PROVIDED, THAT THE
EXECUTIVE SHALL NOT BE PERMITTED TO ELECT TO REDUCE ANY AGREEMENT PAYMENT THAT
CONSTITUTES “NONQUALIFIED DEFERRED COMPENSATION” FOR PURPOSES OF SECTION 409A OF
THE CODE,  AND SHALL ADVISE THE COMPANY IN WRITING OF HIS OR HER ELECTION WITHIN
TEN DAYS OF HIS OR HER RECEIPT OF NOTICE.  IF NO SUCH ELECTION IS MADE BY THE
EXECUTIVE WITHIN SUCH TEN-DAY PERIOD, THE COMPANY SHALL REDUCE THE AGREEMENT
PAYMENTS IN THE FOLLOWING ORDER: (1) BY REDUCING BENEFITS PAYABLE PURSUANT TO
SECTION 5(A)(1)(B) OF THE AGREEMENT AND THEN (2) BY REDUCING AMOUNTS PAYABLE
PURSUANT TO SECTION 5(A)(2) OF THE AGREEMENT.  ALL DETERMINATIONS MADE BY THE
ACCOUNTING FIRM UNDER THIS SECTION 8 SHALL BE BINDING UPON THE COMPANY AND THE
EXECUTIVE AND SHALL BE MADE WITHIN 60 DAYS OF THE EXECUTIVE’S DATE OF
TERMINATION.  IN CONNECTION WITH MAKING DETERMINATIONS UNDER THIS SECTION 8, THE
ACCOUNTING FIRM SHALL TAKE INTO ACCOUNT THE VALUE OF ANY REASONABLE COMPENSATION
FOR SERVICES TO BE RENDERED BY THE EXECUTIVE BEFORE OR AFTER THE CHANGE OF
CONTROL, INCLUDING ANY NON-COMPETITION PROVISIONS THAT MAY APPLY TO THE
EXECUTIVE AND THE COMPANY SHALL COOPERATE IN THE VALUATION OF ANY SUCH SERVICES,
INCLUDING ANY NON-COMPETITION PROVISIONS.

 

(C)                                  AS A RESULT OF THE UNCERTAINTY IN THE
APPLICATION OF SECTION 4999 OF THE CODE AT THE TIME OF THE INITIAL DETERMINATION
BY THE ACCOUNTING FIRM HEREUNDER, IT IS POSSIBLE THAT AMOUNTS WILL HAVE BEEN
PAID OR DISTRIBUTED BY THE COMPANY TO OR FOR THE BENEFIT OF THE EXECUTIVE
PURSUANT TO THIS AGREEMENT WHICH SHOULD NOT HAVE BEEN SO PAID OR DISTRIBUTED
(EACH, AN “OVERPAYMENT”) OR THAT ADDITIONAL AMOUNTS WHICH WILL HAVE NOT BEEN
PAID OR DISTRIBUTED BY THE COMPANY TO OR FOR THE BENEFIT OF THE EXECUTIVE
PURSUANT TO THIS AGREEMENT COULD HAVE BEEN SO PAID OR DISTRIBUTED (EACH, AN
“UNDERPAYMENT”), IN EACH CASE, CONSISTENT WITH THE CALCULATION OF THE REDUCED

 

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AMOUNT HEREUNDER.  IN THE EVENT THAT THE ACCOUNTING FIRM, BASED UPON THE
ASSERTION OF A DEFICIENCY BY THE INTERNAL REVENUE SERVICE AGAINST EITHER THE
COMPANY OR THE EXECUTIVE WHICH THE ACCOUNTING FIRM BELIEVES HAS A HIGH
PROBABILITY OF SUCCESS DETERMINES THAT AN OVERPAYMENT HAS BEEN MADE, ANY SUCH
OVERPAYMENT PAID OR DISTRIBUTED BY THE COMPANY TO OR FOR THE BENEFIT OF THE
EXECUTIVE SHALL BE REPAID BY THE EXECUTIVE TO THE COMPANY TOGETHER WITH INTEREST
AT THE APPLICABLE FEDERAL RATE PROVIDED FOR IN SECTION 7872(F)(2) OF THE CODE;
PROVIDED, HOWEVER, THAT NO SUCH REPAYMENT SHALL BE REQUIRED IF AND TO THE EXTENT
SUCH DEEMED REPAYMENT WOULD NOT EITHER REDUCE THE AMOUNT ON WHICH THE EXECUTIVE
IS SUBJECT TO TAX UNDER SECTION 1 AND SECTION 4999 OF THE CODE OR GENERATE A
REFUND OF SUCH TAXES.  IN THE EVENT THAT THE ACCOUNTING FIRM, BASED UPON
CONTROLLING PRECEDENT OR SUBSTANTIAL AUTHORITY, DETERMINES THAT AN UNDERPAYMENT
HAS OCCURRED, ANY SUCH UNDERPAYMENT SHALL BE PROMPTLY PAID BY THE COMPANY TO OR
FOR THE BENEFIT OF THE EXECUTIVE TOGETHER WITH INTEREST AT THE APPLICABLE
FEDERAL RATE PROVIDED FOR IN SECTION 7872(F)(2) OF THE CODE.

 

(D)                                 ALL FEES AND EXPENSES OF THE ACCOUNTING FIRM
IN IMPLEMENTING THE PROVISIONS OF THIS SECTION 8 SHALL BE BORNE BY THE COMPANY.

 

(E)                                  DEFINITIONS.  THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS FOR PURPOSES OF THIS SECTION 8.

 

(1)                                  A “PAYMENT” SHALL MEAN ANY PAYMENT OR
DISTRIBUTION IN THE NATURE OF COMPENSATION (WITHIN THE MEANING OF
SECTION 280G(B)(2) OF THE CODE) TO OR FOR THE BENEFIT OF THE EXECUTIVE, WHETHER
PAID OR PAYABLE PURSUANT TO THIS AGREEMENT OR OTHERWISE;

 

(2)                                  “AGREEMENT PAYMENT” SHALL MEAN A PAYMENT
PAID OR PAYABLE PURSUANT TO THIS AGREEMENT (DISREGARDING THIS SECTION);

 

(3)                                  “NET AFTER-TAX RECEIPT” SHALL MEAN THE
PRESENT VALUE OF A PAYMENT NET OF ALL TAXES IMPOSED ON THE EXECUTIVE WITH
RESPECT THERETO UNDER SECTIONS 1 AND 4999 OF THE CODE AND UNDER APPLICABLE STATE
AND LOCAL LAWS, DETERMINED BY APPLYING THE HIGHEST MARGINAL RATE UNDER SECTION 1
OF THE CODE AND UNDER STATE AND LOCAL LAWS WHICH APPLIED TO THE EXECUTIVE’S
TAXABLE INCOME FOR THE IMMEDIATELY PRECEDING TAXABLE YEAR, OR SUCH OTHER
RATE(S) AS THE EXECUTIVE SHALL CERTIFY, IN THE EXECUTIVE’S SOLE DISCRETION, AS
LIKELY TO APPLY TO THE EXECUTIVE IN THE RELEVANT TAX YEAR(S);

 

(4)                                  “ACCOUNTING FIRM” SHALL MEAN SUCH
NATIONALLY RECOGNIZED CERTIFIED PUBLIC ACCOUNTING FIRM AS MAY BE DESIGNATED BY
THE EXECUTIVE, OTHER THAN THE CERTIFIED PUBLIC ACCOUNTING FIRM SERVING AS THE
INDEPENDENT AUDITOR OF THE COMPANY OR OF ANOTHER COMPANY THAT IS A PARTY TO A
BUSINESS COMBINATION, IF APPLICABLE;

 

(5)                                  “PARACHUTE VALUE” OF A PAYMENT SHALL MEAN
THE PRESENT VALUE AS OF THE DATE OF THE CHANGE OF CONTROL FOR PURPOSES OF
SECTION 280G OF THE CODE OF THE PORTION OF SUCH PAYMENT THAT CONSTITUTES A
“PARACHUTE PAYMENT” UNDER SECTION 280G(B)(2), AS DETERMINED BY THE ACCOUNTING
FIRM FOR PURPOSES OF DETERMINING WHETHER AND TO WHAT EXTENT THE EXCISE TAX WILL
APPLY TO SUCH PAYMENT; AND

 

(6)                                  “REDUCED AMOUNT” SHALL MEAN THE AMOUNT OF
AGREEMENT PAYMENTS THAT (X) HAS A PRESENT VALUE THAT IS LESS THAN THE PRESENT
VALUE OF ALL AGREEMENT PAYMENTS AND (Y) RESULTS

 

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IN AGGREGATE NET AFTER-TAX RECEIPTS FOR ALL PAYMENTS THAT ARE GREATER THAN THE
NET AFTER-TAX RECEIPTS FOR ALL PAYMENTS THAT WOULD RESULT IF THE AGGREGATE
PRESENT VALUE OF AGREEMENT PAYMENTS WERE ANY OTHER AMOUNT THAT IS LESS THAN THE
PRESENT VALUE OF ALL AGREEMENT PAYMENTS.

 

SECTION 9.                                                  CONFIDENTIAL
INFORMATION.  THE 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 THE AFFILIATED COMPANIES, AND THEIR RESPECTIVE
BUSINESSES, WHICH INFORMATION, KNOWLEDGE OR DATA SHALL HAVE BEEN OBTAINED BY THE
EXECUTIVE DURING THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY OR THE AFFILIATED
COMPANIES AND WHICH INFORMATION, KNOWLEDGE OR DATA SHALL NOT BE OR BECOME PUBLIC
KNOWLEDGE (OTHER THAN BY ACTS BY THE EXECUTIVE OR REPRESENTATIVES OF THE
EXECUTIVE IN VIOLATION OF THIS AGREEMENT).  AFTER TERMINATION OF THE EXECUTIVE’S
EMPLOYMENT WITH THE COMPANY, THE 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 PERSONS DESIGNATED BY THE COMPANY.  IN NO EVENT SHALL
AN ASSERTED VIOLATION OF THE PROVISIONS OF THIS SECTION 9 CONSTITUTE A BASIS FOR
DEFERRING OR WITHHOLDING ANY AMOUNTS OTHERWISE PAYABLE TO THE EXECUTIVE UNDER
THIS AGREEMENT.

 

SECTION 10.                                           SUCCESSORS.  (A)  THIS
AGREEMENT IS PERSONAL TO THE EXECUTIVE, AND, WITHOUT THE PRIOR WRITTEN CONSENT
OF THE COMPANY, SHALL NOT BE ASSIGNABLE BY THE EXECUTIVE OTHER THAN BY WILL OR
THE LAWS OF DESCENT AND DISTRIBUTION.  THIS AGREEMENT SHALL INURE TO THE BENEFIT
OF AND BE ENFORCEABLE BY THE EXECUTIVE’S LEGAL REPRESENTATIVES.

 

(B)                                 THIS AGREEMENT SHALL INURE TO THE BENEFIT OF
AND BE BINDING UPON THE COMPANY AND ITS SUCCESSORS AND ASSIGNS.  EXCEPT AS
PROVIDED IN SECTION 10(C), WITHOUT THE PRIOR WRITTEN CONSENT OF THE EXECUTIVE
THIS AGREEMENT SHALL NOT BE ASSIGNABLE BY THE COMPANY.

 

(C)                                  THE COMPANY WILL REQUIRE ANY SUCCESSOR
(WHETHER DIRECT OR INDIRECT, BY PURCHASE, MERGER, CONSOLIDATION OR OTHERWISE) TO
ALL OR SUBSTANTIALLY ALL OF THE BUSINESS AND/OR ASSETS OF THE COMPANY TO ASSUME
EXPRESSLY 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.  “COMPANY” MEANS THE COMPANY AS HEREINBEFORE DEFINED AND ANY
SUCCESSOR TO ITS BUSINESS AND/OR ASSETS AS AFORESAID THAT ASSUMES AND AGREES TO
PERFORM THIS AGREEMENT BY OPERATION OF LAW OR OTHERWISE.

 

SECTION 11.                                           MISCELLANEOUS.  (A)  THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS.  THE
CAPTIONS OF THIS AGREEMENT ARE NOT PART OF THE PROVISIONS HEREOF AND SHALL HAVE
NO FORCE OR EFFECT.  SUBJECT TO THE LAST SENTENCE OF SECTION 11(H), THIS
AGREEMENT MAY NOT BE AMENDED OR MODIFIED OTHER THAN BY A WRITTEN AGREEMENT
EXECUTED BY THE PARTIES HERETO OR THEIR RESPECTIVE SUCCESSORS AND LEGAL
REPRESENTATIVES.

 

(b)                                 All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

 

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if to the Executive:

 

At the most recent address on file at the Company.

 

if to the Company:

 

Comerica Incorporated

Comerica Bank Tower

1717 Main Street, MC 6404

Dallas, Texas  75201

Attention:  General Counsel

 

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.

 

(C)                                  THE INVALIDITY OR UNENFORCEABILITY OF ANY
PROVISION OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF
ANY OTHER PROVISION OF THIS AGREEMENT.

 

(D)                                 THE COMPANY MAY WITHHOLD FROM ANY AMOUNTS
PAYABLE UNDER THIS AGREEMENT SUCH UNITED STATES FEDERAL, STATE OR LOCAL OR
FOREIGN TAXES AS SHALL BE REQUIRED TO BE WITHHELD PURSUANT TO ANY APPLICABLE LAW
OR REGULATION.

 

(E)                                  THE EXECUTIVE’S OR THE COMPANY’S FAILURE TO
INSIST UPON STRICT COMPLIANCE WITH ANY PROVISION OF THIS AGREEMENT OR THE
FAILURE TO ASSERT ANY RIGHT THE EXECUTIVE OR THE COMPANY MAY HAVE HEREUNDER,
INCLUDING, WITHOUT LIMITATION, THE RIGHT OF THE EXECUTIVE TO TERMINATE
EMPLOYMENT FOR GOOD REASON PURSUANT TO SECTIONS 4(C)(1) THROUGH 4(C)(5), SHALL
NOT BE DEEMED TO BE A WAIVER OF SUCH PROVISION OR RIGHT OR ANY OTHER PROVISION
OR RIGHT OF THIS AGREEMENT.

 

(F)                                    THE EXECUTIVE AND THE COMPANY ACKNOWLEDGE
THAT, EXCEPT AS MAY OTHERWISE BE PROVIDED UNDER ANY OTHER WRITTEN AGREEMENT
BETWEEN THE EXECUTIVE AND THE COMPANY, THE EMPLOYMENT OF THE EXECUTIVE BY THE
COMPANY IS “AT WILL” AND, SUBJECT TO SECTION 1(A), PRIOR TO THE EFFECTIVE DATE,
THE EXECUTIVE’S EMPLOYMENT MAY BE TERMINATED BY EITHER THE EXECUTIVE OR THE
COMPANY AT ANY TIME PRIOR TO THE EFFECTIVE DATE, IN WHICH CASE THE EXECUTIVE
SHALL HAVE NO FURTHER RIGHTS UNDER THIS AGREEMENT.  FROM AND AFTER THE EFFECTIVE
DATE, EXCEPT AS SPECIFICALLY PROVIDED HEREIN, THIS AGREEMENT SHALL SUPERSEDE ANY
OTHER AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF IN
EFFECT IMMEDIATELY PRIOR TO THE EXECUTION OF THIS AGREEMENT [FOR CEO AGREEMENT
ONLY: OTHER THAN THE SUPPLEMENTAL AGREEMENT]. [FOR PERSONS COVERED OR WHO MAY BE
COVERED BY TARP: THE EXECUTIVE ACKNOWLEDGES, UNDERSTANDS AND AGREES THAT THE
EXECUTIVE IS CURRENTLY OR MAY BE IN THE FUTURE SUBJECT TO THE PROVISIONS OF THE
EMERGENCY ECONOMIC STABILIZATION ACT OF 2008, AS MODIFIED OR AMENDED FROM TIME
TO TIME, INCLUDING PURSUANT TO THE AMERICAN RECOVERY AND REINVESTMENT ACT OF
2009 (“EESA”) AND THE RULES, REGULATIONS AND GUIDANCE ISSUED THEREUNDER FROM
TIME TO TIME (INCLUDING WITHOUT LIMITATION THE RULES AND REGULATIONS ISSUED FROM
TIME TO TIME BY THE

 

16

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DEPARTMENT OF THE TREASURY (THE “DEPARTMENT”), WHICH SHALL INCLUDE THE TARP
STANDARDS FOR CORPORATE GOVERNANCE ISSUED UNDER 31 CFR PART 30 AS PUBLISHED IN
THE FEDERAL REGISTER ON JUNE 15, 2009, AS AMENDED FROM TIME TO TIME) (SUCH
RULES, REGULATIONS AND GUIDANCE, COLLECTIVELY, THE “EESA GUIDANCE”)) FOR THE
PERIOD REQUIRED BY EESA AND THE EESA GUIDANCE.  IN ADDITION, THE EXECUTIVE
AGREES THAT THE EXECUTIVE’S RIGHTS TO COMPENSATION UNDER THIS AGREEMENT AND
PARTICIPATION IN THE COMPANY’S COMPENSATION AND BENEFITS ARRANGEMENTS (THIS
AGREEMENT AND ANY AND ALL SUCH ARRANGEMENTS, COLLECTIVELY, THE “BENEFIT PLANS”)
WILL OR MAY IN THE FUTURE BE LIMITED TO ENSURE THAT SUCH BENEFIT PLANS COMPLY
WITH AND ARE ADMINISTERED IN ACCORDANCE WITH THE PROVISIONS OF EESA AND THE EESA
GUIDANCE.  ACCORDINGLY, THE EXECUTIVE HEREBY (A) ACKNOWLEDGES AND UNDERSTANDS
THAT THE COMPENSATION PAYABLE TO THE EXECUTIVE UNDER ANY BENEFIT PLAN, INCLUDING
WITHOUT LIMITATION UNDER THIS AGREEMENT, MAY BE SUBJECT TO EESA AND THE EESA
GUIDANCE, INCLUDING, WITHOUT LIMITATION, (X) THE POTENTIAL FOR CLAWBACK OF ANY
BONUS, RETENTION OR INCENTIVE COMPENSATION PAID OR GRANTED TO THE EXECUTIVE
UNDER ANY BENEFIT PLAN BASED ON STATEMENTS OF EARNINGS, REVENUES, GAINS OR OTHER
CRITERIA THAT ARE LATER FOUND TO BE MATERIALLY INACCURATE OR AS OTHERWISE
PROVIDED UNDER THE EESA GUIDANCE AND (Y) THE POTENTIAL FOR THE REDUCTION OR
ELIMINATION OF THE AMOUNTS PAYABLE TO THE EXECUTIVE UNDER THIS AGREEMENT OR
OTHERWISE AS A RESULT OF THE LIMITATIONS ON GOLDEN PARACHUTE PAYMENTS UNDER EESA
AND THE EESA GUIDANCE, (B) CONSENTS TO ANY MODIFICATIONS AND LIMITATIONS PRIOR
TO A CHANGE OF CONTROL WITH RESPECT TO, AND UNDER, THE BENEFIT PLANS TO THE
EXTENT NECESSARY TO ENSURE COMPLIANCE WITH EESA AND THE EESA GUIDANCE,
(C) VOLUNTARILY WAIVES ANY CLAIM AGAINST THE COMPANY AND THE AFFILIATED
COMPANIES FOR ANY CHANGES PRIOR TO A CHANGE OF CONTROL TO THE EXECUTIVE’S
COMPENSATION OR BENEFITS THAT ARE REQUIRED TO COMPLY WITH THE EESA GUIDANCE IN
CONSIDERATION FOR THE BENEFITS THAT THE EXECUTIVE WILL RECEIVE AS A RESULT OF
THE COMPANY’S PARTICIPATION IN THE DEPARTMENT’S CAPITAL PURCHASE PROGRAM OR ANY
OTHER PROGRAM UNDER EESA, AND (E) AGREES THAT SUCH WAIVER AND CONSENT SHALL
CONSTITUTE A PART OF AND BE INTEGRATED WITH THIS AGREEMENT.]

 

(G)                             THE AGREEMENT IS INTENDED TO COMPLY WITH THE
REQUIREMENTS OF SECTION 409A OF THE CODE OR AN EXEMPTION OR EXCLUSION THEREFROM
AND SHALL IN ALL RESPECTS BE ADMINISTERED IN ACCORDANCE WITH SECTION 409A OF THE
CODE.  EACH PAYMENT UNDER THIS AGREEMENT SHALL BE TREATED AS A SEPARATE PAYMENT
FOR PURPOSES OF SECTION 409A OF THE CODE.  IN NO EVENT MAY THE EXECUTIVE,
DIRECTLY OR INDIRECTLY, DESIGNATE THE CALENDAR YEAR OF ANY PAYMENT TO BE MADE
UNDER THIS AGREEMENT.  IF THE EXECUTIVE DIES FOLLOWING THE DATE OF TERMINATION
AND PRIOR TO THE PAYMENT OF THE ANY AMOUNTS DELAYED ON ACCOUNT OF SECTION 409A
OF THE CODE, SUCH AMOUNTS SHALL BE PAID TO THE PERSONAL REPRESENTATIVE OF THE
EXECUTIVE’S ESTATE WITHIN 30 DAYS AFTER THE DATE OF THE EXECUTIVE’S DEATH.  ALL
REIMBURSEMENTS AND IN-KIND BENEFITS THAT CONSTITUTE DEFERRED COMPENSATION WITHIN
THE MEANING OF SECTION 409A PROVIDED UNDER THIS AGREEMENT SHALL BE MADE OR
PROVIDED IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 409A OF THE CODE,
INCLUDING, WITHOUT LIMITATION, THAT (I) IN NO EVENT SHALL REIMBURSEMENTS BY THE
COMPANY UNDER THIS AGREEMENT BE MADE LATER THAN THE END OF THE CALENDAR YEAR
NEXT FOLLOWING THE CALENDAR YEAR IN WHICH THE APPLICABLE FEES AND EXPENSES WERE
INCURRED, PROVIDED, THAT THE EXECUTIVE SHALL HAVE SUBMITTED AN INVOICE FOR SUCH
FEES AND EXPENSES AT LEAST 10 DAYS BEFORE THE END OF THE CALENDAR YEAR NEXT
FOLLOWING THE CALENDAR YEAR IN WHICH SUCH FEES AND EXPENSES WERE INCURRED;
(II) THE AMOUNT OF IN-KIND BENEFITS THAT THE COMPANY IS OBLIGATED TO PAY OR
PROVIDE IN ANY GIVEN CALENDAR YEAR SHALL NOT AFFECT THE IN-KIND BENEFITS THAT
THE COMPANY IS OBLIGATED TO PAY OR PROVIDE IN ANY OTHER CALENDAR YEAR; (III) THE
EXECUTIVE’S RIGHT TO HAVE THE COMPANY PAY OR PROVIDE SUCH REIMBURSEMENTS AND
IN-KIND BENEFITS MAY NOT BE LIQUIDATED OR EXCHANGED FOR ANY OTHER BENEFIT; AND
(IV) IN NO EVENT SHALL THE COMPANY’S OBLIGATIONS TO MAKE SUCH REIMBURSEMENTS OR
TO PROVIDE

 

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SUCH IN-KIND BENEFITS APPLY LATER THAN THE EXECUTIVE’S REMAINING LIFETIME (OR IF
LONGER, THROUGH THE 20TH ANNIVERSARY OF THE EFFECTIVE DATE).  PRIOR TO THE
EFFECTIVE DATE BUT WITHIN THE TIME PERIOD PERMITTED BY THE APPLICABLE TREASURY
REGULATIONS, THE COMPANY MAY, IN CONSULTATION WITH THE EXECUTIVE, MODIFY THE
AGREEMENT, IN THE LEAST RESTRICTIVE MANNER NECESSARY AND WITHOUT ANY DIMINUTION
IN THE VALUE OF THE PAYMENTS TO THE EXECUTIVE, IN ORDER TO CAUSE THE PROVISIONS
OF THE AGREEMENT TO COMPLY WITH THE REQUIREMENTS OF SECTION 409A OF THE CODE, SO
AS TO AVOID THE IMPOSITION OF  TAXES AND PENALTIES ON THE EXECUTIVE PURSUANT TO
SECTION 409A OF THE CODE.

 

SECTION 12.                                           SURVIVORSHIP.  UPON THE
EXPIRATION OR OTHER TERMINATION OF THIS AGREEMENT OR THE EXECUTIVE’S EMPLOYMENT,
THE RESPECTIVE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL SURVIVE TO THE
EXTENT NECESSARY TO CARRY OUT THE INTENTIONS OF THE PARTIES UNDER THIS
AGREEMENT.

 

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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

 

 

 

 

[Name of Executive]

 

 

 

 

 

COMERICA INCORPORATED

 

 

 

 

 

By:

 

 

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