Exhibit 10(b)-11

 

TCF FINANCIAL INCENTIVE STOCK PROGRAM

 

NONQUALIFIED STOCK OPTION AGREEMENT

 

NQO No. 33

 

 

                This option is granted on July 31, 2008 by TCF Financial
Corporation (“TCF Financial” or “Company”) to William A. Cooper (the “Optionee”)
in accordance with the terms and conditions set forth in this Nonqualified Stock
Option Agreement (the “Agreement”):

 

                                                1.             Option Grant,
Vesting and Exercise Period.

 

                                a.             TCF Financial hereby grants to
the Optionee an Option (the “Option”) to purchase, pursuant to the TCF Financial
Stock Incentive Program (the “Plan”), and upon the terms and conditions therein
and hereinafter set forth, up to but not exceeding in the aggregate 800,000
shares (the “Option Shares”) of common stock of TCF Financial at an exercise
price of $12.85 per share.  A copy of the Plan, as currently in effect, is
incorporated herein by reference and is attached hereto.

 

                                b.             This Option shall be exercisable
only during the period (“Exercise Period”) commencing on the date of grant of
this Option and ending at 5:00 p.m., Minneapolis, Minnesota time, on the date
ten years and one day after the date of grant of this Option, such time and date
being hereinafter referred to as the “Expiration Date.”  This Option shall
become exercisable (“vest”) with respect to fifty percent (50%) of the Option
Shares on January 1, 2011 and with respect to the remaining fifty percent (50%)
of the Option Shares on January 1, 2012, except as may be otherwise provided
under paragraphs 5 and 9 of this Agreement.  Once the Option has vested, it may
be exercised, in whole or in part, at any time and from time to time during the
remainder of the Exercise Period, provided that the total percentage vesting
under this Agreement shall never in any event exceed 100% of the Option Shares.

 

                2.             Method of Exercise of this Option.  To the extent
it is exercisable under subparagraph 1.b of this Agreement, this Option may be
exercised during the Exercise Period by giving written notice to TCF Financial
specifying the number of Option Shares to be purchased. The notice must be in
the form prescribed by the committee referred to in section 2 of the Plan or its
successor (the “Committee”) and directed to the address set forth in paragraph
12 below.  The date of exercise is the date on which such notice is received by
TCF Financial.  Such notice must be accompanied by payment in full for the
Option Shares to be purchased upon such exercise.  Payment shall be made either
(i) in cash, which may be in the form of a check, bank draft, or money order
payable to TCF Financial, or (ii) if the Committee shall have previously
approved such form of payment, by delivering shares of Common Stock already
owned by the Optionee having a “Fair Market Value” (as defined in the Plan as in
effect on the date of the grant of this Option) on the date of exercise equal to
the applicable exercise price, or (iii) if the Committee shall have previously
approved such form of payment, a combination of cash and such already-owned
shares or (iv) if the Committee shall have previously approved a cashless
exercise program, the Optionee may also exercise the Option in accordance with a
cashless exercise program by electing to have withheld

 

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from shares of Common Stock otherwise issuable to Optionee upon exercise of the
Option a number of shares of Common Stock whose “Fair Market Value” (as defined
in the Plan) on the date of exercise is equal to the applicable exercise price. 
Promptly after such payment, subject to paragraph 3 below, TCF Financial shall
issue and deliver to the Optionee or other person exercising this Option a
certificate or certificates representing the shares of Common Stock so
purchased, registered in the name of the Optionee (or such other person), or,
upon request, in the name of the Optionee (or other person) and in the name of
another jointly with right of survivorship.

 

                3.             Delivery and Registration of Shares of Common
Stock.  TCF Financial’s obligation to deliver shares of Common Stock hereunder
shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Optionee or any other
person to whom such shares are to be delivered, in such form as the Committee
shall determine to be necessary or advisable to comply with the provisions of
the Securities Act of 1933, as amended, or any other Federal, state, or local
securities law or regulation.  In requesting any such representation, it may be
provided that such representation requirement shall become inoperative upon a
registration of such shares or other action eliminating the necessity of such
representation under such Securities Act or other securities law or regulation. 
TCF Financial shall not be required to deliver any shares upon exercise of the
Option prior to (i) the admission of such shares to listing on any stock
exchange or system on which the shares of Common Stock may then be listed, and
(ii) the completion of such registration or other qualification of such shares
under any state or Federal law, rule, or regulation, as the Committee shall
determine to be necessary or advisable.

 

                4.             Non-transferability of this Option.  This Option
may not be assigned, encumbered, or transferred except, in the event of the
death of the Optionee, by will or the laws of descent and distribution to the
extent provided in paragraph 5 below.  This Option is exercisable during the
Optionee’s lifetime only by the Optionee.  The provisions of the Option shall be
binding upon, inure to the benefit of, and be enforceable by the parties hereto,
the successors and assigns of TCF Financial, and any person to whom this Option
is transferred by will or by the laws of descent and distribution.

 

                5.             Termination of Service or Death of the Optionee.

 

                                a.             Except as otherwise provided in
subparagraphs b., c., or d. of this paragraph 5 or in paragraph 9, if prior to
January 1, 2012, the Optionee shall cease to be employed as a result of
retirement, voluntary resignation or termination by the Company for Cause, the
Optionee may exercise this Option but only during the Exercise Period set forth
in paragraph 1.b and only to the extent the Option was vested at the date of
such termination.  Option Shares that have not vested as of the date of such
termination shall thereupon expire.  For purposes of this Agreement, termination
for Cause includes one or more of the following:  (1) engaging in willful and
recurring misconduct in not following the legitimate directions of the Board of
Directors of the Company after fair warning; (2) conviction of a felony and all
appeals from such conviction have been exhausted; (3) habitual drunkenness;
(4) excessive absence from work which absence is not related to disability,
illness, sick leave or vacations; or (5) engaging in continuous conflicts of
interest between his personal interests and the interests of the Company after
fair warning.

 

                                b.             If prior to January 1, 2012, the
Optionee shall cease to be employed due to

 

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termination for Good Reason by the Optionee or termination without Cause by the
Company, this Option shall not expire with respect to either vested or unvested
Option Shares, and shall continue to be subject to the vesting and Exercise
Period set forth in paragraph 1.b without the requirement that Optionee continue
in the employ of the Company.  For purposes of this Agreement, Good Reason
termination includes one or more of the following: (1) any material diminution
in the scope of the Optionee’s authority and responsibility (provided, however,
in the event of any illness or injury which disables the Optionee from
performing the Optionee’s duties, the Company may reassign the Optionee’s duties
to one or more other employees until the Optionee is able to perform such
duties); (2) a material diminution in the Optionee’s base compensation (salary,
bonus opportunity, benefits or perquisites); (3) a material diminution in the
authority, duties, responsibilities of the supervisor to whom the Optionee is
required to report; (4) a material diminution in the budget over which the
Optionee  retains authority; (5) a material change in geographic location at
which the Optionee must perform the services; (6) any other action or inaction
that constitutes a material breach by the Company of the Optionee’s  employment
agreement under which the Optionee provides services.

 

                                c.             In the event of termination of
employment due to disability (as determined by the Committee) or death after the
date of grant but prior to January 1, 2012, a prorated portion of this Option
shall not expire and shall continue to be subject to the vesting and Exercise
Period set forth in paragraph 1.b without the requirement that Optionee continue
in the employ of the Company.  The prorated portion shall be equal to the sum
of:

 

                                                (1)           the number of
Option Shares (rounding up to the next highest whole share but not to exceed 50%
of the Option Shares) obtained by multiplying (a) the number of Option Shares
subject to this Option that would have vested on January 1, 2011 had such
termination of employment not occurred by (b) a fraction, the numerator of which
is the number of Optionee’s full calendar months of Continuous Service from
August 1, 2008 through the date of such termination; and the denominator of
which is 29, provided, however, this clause (1) shall apply only if the event of
termination occurs on a date prior to January 1, 2011; and

 

                                                (2)           the number of
Option Shares (rounding up to the next highest whole share but not to exceed 50%
of the aggregate Option Shares) obtained by multiplying (a) the number of Option
Shares subject to this Option that would have vested on January 1, 2012 had such
termination of employment not occurred by (b) a fraction, the numerator of which
is the number of Optionee’s full calendar months of Continuous Service from
August 1, 2008 through the date of such termination; and the denominator of
which is 41.

 

As to the remaining Option Shares that do not become exercisable based on the
calculations in clauses (1) and (2) above, all rights under this Option shall
expire immediately.

 

                                d.             In the event of termination of
employment for any reason after January 1, 2012, and during the Exercise Period,
the Optionee (or in the case of death, the person to whom the Option has been
transferred by will or by the laws of descent and distribution, to the extent
the Optionee was entitled to exercise this Option immediately prior to such
death) may exercise this Option at any time during the Exercise Period set forth
in paragraph 1.b.  Following the death of the

 

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Optionee, the Committee may, as an alternative means of settlement of this
Option, elect to pay to the person to whom this Option is transferred by will or
by the laws of descent and distribution the amount by which the Fair Market
Value (as defined in the Plan) of a share of Common Stock on the date of
exercise of this Option shall exceed the Exercise Price per Option Share,
multiplied by the number of Option Shares with respect to which this Option is
properly exercised.  Any such settlement of this Option shall be considered an
exercise of this Option for all purposes of this Option and of the Plan.

 

                6.             No Notice of Sale.  The Optionee or any person to
whom the Option or the Option Shares shall have been transferred by will or by
the laws of descent and distribution shall not be required to give notice to TCF
Financial in the event of the sale or other disposition of Option Shares
subsequent to exercise of the Option, except to the extent the Optionee is
required to report transactions in TCF Financial common stock in general.

 

                7.             Adjustments for Changes in Capitalization of TCF
Financial.  In the event of any change in the outstanding shares of Common Stock
by reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation, or any change in the
corporate structure of TCF Financial or in the shares of Common Stock, the
number and class of shares covered by this Option and the Exercise Price shall
be appropriately adjusted by the Committee, whose determination shall be
conclusive.  Notwithstanding the foregoing, the Committee shall not make any
modifications that would cause the Option to become subject to 409A of the
Internal Revenue Code.

 

                8.             Effect of Merger.  In the case of any merger,
consolidation, or combination of TCF Financial with or into another corporation
or other business organization (other than a merger, consolidation, or
combination in which TCF Financial is the continuing entity and which does not
result in the outstanding shares of Common Stock being converted into or
exchanged for different securities, cash or other property, or any combination
thereof), the Committee may authorize the issuance or assumption of Benefits (as
defined in the Plan) as it may deem appropriate.  Notwithstanding the foregoing,
the Committee shall not make any modifications that would cause the Option to
become subject to 409A of the Internal Revenue Code.

 

                9.             Effect of Change in Control.  Each of the events
specified in the following clauses (a) through (c) of this paragraph 9 shall be
deemed a “change in control” of TCF Financial:

 

                                                                                               
(a)           any “person” as defined in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”) is or becomes the
“beneficial owner” as defined in Rule 13d-3 under the Exchange Act, directly or
indirectly, of securities of the Company representing thirty percent (30%) or
more of the combined voting power of the Company’s then outstanding securities. 
For purposes of this clause (a), the term “beneficial owner” does not include
any employee benefit plan maintained by the Company that invests in the
Company’s voting securities; or

 

                                                                                               
(b)           during any period of two (2) consecutive years (not including any
period prior to the date on which the Plan was approved by the Company’s Board
of Directors) there shall cease to be a majority of the Company’s Board of
Directors (“Board”)

 

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comprised as follows:  individuals who at the beginning of such period
constitute the Board or new directors whose nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved; or

 

                                                                                               
(c)           the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 70% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation, or the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company’s assets; provided, however,
that no change in control will be deemed to have occurred if such merger,
consolidation, sale or disposition of assets, or liquidation is not subsequently
consummated.

 

This Option shall (to the extent it is not then exercisable) become exercisable
in full upon the happening of a change in control and shall remain so
exercisable until the Expiration Date, provided that (a) the provisions of this
paragraph 9 shall not be deemed to cause this Option to be exercisable to the
extent it has previously been exercised or otherwise terminated; and (b) the
provisions of this paragraph 9 shall not cause this Option to become exercisable
within six months after the date of grant if the Optionee is then subject to the
restrictions of Section 16(b) of the Securities Exchange Act of 1934.

 

                10.           Stockholder Rights not Granted by this Option. 
The Optionee is not entitled by virtue hereof to any rights of a stockholder of
TCF Financial or to notice of meetings of stockholders or to notice of any other
proceedings of TCF Financial.

 

                11.           Withholding Tax.  Where the Optionee or another
person is entitled to receive Option Shares pursuant to the exercise of this
Option, the Optionee may pay all or a portion of the federal, state and local
taxes, including FICA withholding tax, or may direct TCF Financial or any of it
affiliates to withhold the applicable taxes with respect to such Option Shares,
or, in lieu thereof, to retain, or sell a sufficient number of such shares to
cover the amount of withholding tax or in lieu of any of the foregoing, to
withhold a sufficient sum from the Optionee’s compensation to satisfy such tax
withholding requirements.  Notwithstanding the foregoing, TCF Financial’s method
of satisfying its withholding obligations shall be solely in the discretion of
TCF Financial, subject to applicable federal, state, and local law.

 

                12.           Notices.  All notices hereunder to TCF Financial
shall be delivered or mailed to it addressed to TCF Financial Corporation, 200
East Lake Street, Wayzata, Minnesota 55391.  Any notices hereunder to the
Optionee shall be delivered personally or mailed to the Optionee’s address noted
below.  Such addresses for the service of notices may be changed at any time
provided written notice of the change is furnished in advance to TCF Financial
or to the Optionee, as the case

 

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may be.

 

                13.           Plan and Plan Interpretations as Controlling. 
This Option and the terms and conditions herein set forth are subject in all
respects to the terms and conditions of the Plan, which are controlling.  All
determinations and interpretations of the Committee shall be binding and
conclusive upon the Optionee or his legal representatives with regard to any
question arising hereunder or under the Plan.

 

                14.           Optionee Service.  Nothing in this Option shall
limit the right of TCF Financial or any of its affiliates to terminate the
Optionee’s service as a director, officer, or employee, or otherwise impose upon
TCF Financial or any of its affiliates any obligation to employ or accept the
services of the Optionee.

 

15.           Optionee Acceptance.  The Optionee shall signify his or her
acceptance of the terms and conditions of this Option by signing in the space
provided below and returning a signed copy hereof to TCF Financial at the
address set forth in paragraph 12 above.

 

16.           Non-Competition and Non-Solicitation Obligations.  The Optionee
acknowledges that Optionee is subject to certain non-competition,
non-solicitation and other obligations (the “Obligations”) under separate
contractual agreement(s) with TCF Financial or TCF National Bank.  Optionee
affirms that this Agreement and the Shares awarded hereunder constitute
additional consideration for the Obligations, which Optionee hereby re-affirms
as binding and enforceable obligations of the Optionee, and that the Options and
other consideration awarded hereunder may be cancelled or forfeited in the event
Optionee breaches the Obligations.

 

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                IN WITNESS WHEREOF, the parties hereto have caused this Option
to be executed as of the date first above written.

 

 

TCF FINANCIAL CORPORATION

 

 

 

 

 

 

 

By

/s/ Gregory J. Pulles

 

 

Gregory J. Pulles, Vice Chairman

 

 

 

 

 

ACCEPTED

 

 

 

 

 

/s/ William A. Cooper

 

 

 

 

 

 

 

 

(Street address)

 

 

 

 

 

 

 

 

(City, State and Zip Code)

 

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