Exhibit 10.2

 

CHANGE OF CONTROL EMPLOYMENT AGREEMENT (BE2-BE3)

 

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

 

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REQUIREMENTS), AUTHORITY, 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

 

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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 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) TWO 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

 

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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 EFFECTIVE DATE) THAT THE
EXECUTIVE WOULD RECEIVE IF THE EXECUTIVE’S EMPLOYMENT CONTINUED FOR TWO 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 TWO YEARS IS THAT REQUIRED
BY SECTIONS 3(B)(1) AND 3(B)(2) PAYABLE IN EQUAL BIWEEKLY INSTALLMENTS OVER SUCH
TWO-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 TWO 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 TWO-YEAR PERIOD IN AN AMOUNT
EQUAL TO THE GREATEST NONELECTIVE EMPLOYER CONTRIBUTION MADE TO SUCH PLAN DURING
THE LAST TWO FULL FISCAL YEARS PRIOR TO THE EFFECTIVE DATE AND (Z) THE
EXECUTIVE’S COMPENSATION IN EACH OF THE TWO YEARS IS THAT REQUIRED BY
SECTION 3(B)(1) AND SECTION 3(B)(2) PAYABLE IN EQUAL BIWEEKLY INSTALLMENTS FOR
SUCH TWO-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 TWO 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

 

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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
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.

 

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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”).

 

(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.

 

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(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 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.

 

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

 

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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 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 PAYMENTS BY THE COMPANY.

 

(A)           ANYTHING IN THIS AGREEMENT TO THE CONTRARY NOTWITHSTANDING AND
EXCEPT AS SET FORTH BELOW, IN THE EVENT IT SHALL BE DETERMINED THAT ANY PAYMENT
WOULD BE SUBJECT TO THE EXCISE TAX, THEN THE EXECUTIVE SHALL BE ENTITLED TO
RECEIVE AN ADDITIONAL PAYMENT (THE “GROSS-UP PAYMENT”) IN AN AMOUNT SUCH THAT,
AFTER PAYMENT BY THE EXECUTIVE OF ALL TAXES (AND ANY INTEREST OR PENALTIES
IMPOSED WITH RESPECT TO SUCH TAXES), INCLUDING, WITHOUT LIMITATION, ANY INCOME
TAXES (AND ANY INTEREST AND PENALTIES IMPOSED WITH RESPECT THERETO) AND EXCISE
TAX IMPOSED UPON THE GROSS-UP PAYMENT, BUT EXCLUDING ANY INCOME TAXES AND
PENALTIES IMPOSED PURSUANT TO SECTION 409A OF THE CODE, THE EXECUTIVE RETAINS AN
AMOUNT OF THE GROSS-UP PAYMENT EQUAL TO THE EXCISE TAX IMPOSED UPON THE
PAYMENTS.  NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SECTION 8(A), IF IT
SHALL BE DETERMINED THAT THE EXECUTIVE IS ENTITLED TO THE GROSS-UP PAYMENT, BUT
THAT THE PARACHUTE VALUE OF ALL PAYMENTS DOES NOT EXCEED 110% OF THE SAFE HARBOR
AMOUNT, THEN NO GROSS-UP PAYMENT SHALL BE MADE TO THE EXECUTIVE AND THE AMOUNTS
PAYABLE UNDER THIS AGREEMENT SHALL BE REDUCED SO THAT THE PARACHUTE VALUE OF ALL
PAYMENTS, IN THE AGGREGATE, EQUALS THE SAFE HARBOR AMOUNT.  THE REDUCTION OF THE
AMOUNTS PAYABLE HEREUNDER, IF APPLICABLE, SHALL BE MADE BY REDUCING THE PAYMENTS
AND BENEFITS UNDER THE FOLLOWING SECTIONS IN THE FOLLOWING ORDER:
(I) SECTION 5(A)(1)(B), (II) SECTION 5(A)(1)(C), (III) SECTION 5(A)(1)(A)(V) AND
(IV) SECTION 5(A)(2).  FOR PURPOSES OF REDUCING THE PAYMENTS TO THE SAFE HARBOR
AMOUNT, ONLY AMOUNTS PAYABLE UNDER THIS AGREEMENT (AND NO OTHER PAYMENTS) SHALL
BE REDUCED.  IF THE REDUCTION OF THE AMOUNT PAYABLE UNDER THIS AGREEMENT WOULD
NOT RESULT IN A REDUCTION OF THE PARACHUTE VALUE OF ALL PAYMENTS TO THE SAFE
HARBOR AMOUNT, NO AMOUNTS PAYABLE UNDER THE AGREEMENT SHALL BE REDUCED PURSUANT
TO THIS SECTION 8(A) AND THE  EXECUTIVE SHALL BE ENTITLED TO THE GROSS-UP
PAYMENT.  THE COMPANY’S OBLIGATION TO MAKE GROSS-UP PAYMENTS UNDER THIS
SECTION 8 SHALL NOT BE CONDITIONED UPON THE EXECUTIVE’S TERMINATION OF
EMPLOYMENT.

 

(B)           SUBJECT TO THE PROVISIONS OF SECTION 8(C), ALL DETERMINATIONS
REQUIRED TO BE MADE UNDER THIS SECTION 8, INCLUDING WHETHER AND WHEN A GROSS-UP
PAYMENT IS REQUIRED, THE AMOUNT OF SUCH GROSS-UP PAYMENT AND THE ASSUMPTIONS TO
BE UTILIZED IN ARRIVING AT SUCH DETERMINATION, SHALL BE MADE BY ERNST & YOUNG
LLP, OR SUCH OTHER NATIONALLY RECOGNIZED CERTIFIED PUBLIC ACCOUNTING FIRM AS MAY
BE DESIGNATED BY THE EXECUTIVE (THE “ACCOUNTING FIRM”).  THE ACCOUNTING FIRM
SHALL PROVIDE DETAILED SUPPORTING CALCULATIONS BOTH TO THE COMPANY AND THE

 

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EXECUTIVE WITHIN 15 BUSINESS DAYS OF THE RECEIPT OF NOTICE FROM THE EXECUTIVE
THAT THERE HAS BEEN A PAYMENT OR SUCH EARLIER TIME AS IS REQUESTED BY THE
COMPANY.  IN THE EVENT THAT THE ACCOUNTING FIRM IS SERVING AS ACCOUNTANT OR
AUDITOR FOR THE INDIVIDUAL, ENTITY OR GROUP EFFECTING THE CHANGE OF CONTROL, THE
EXECUTIVE MAY APPOINT ANOTHER NATIONALLY RECOGNIZED ACCOUNTING FIRM TO MAKE THE
DETERMINATIONS REQUIRED HEREUNDER (WHICH ACCOUNTING FIRM SHALL THEN BE REFERRED
TO AS THE ACCOUNTING FIRM HEREUNDER).  ALL FEES AND EXPENSES OF THE ACCOUNTING
FIRM SHALL BE BORNE SOLELY BY THE COMPANY.  ANY DETERMINATION BY THE ACCOUNTING
FIRM SHALL BE BINDING UPON THE COMPANY AND THE EXECUTIVE.  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
GROSS-UP PAYMENTS THAT WILL NOT HAVE BEEN MADE BY THE COMPANY SHOULD HAVE BEEN
MADE (THE “UNDERPAYMENT”), CONSISTENT WITH THE CALCULATIONS REQUIRED TO BE MADE
HEREUNDER.  IN THE EVENT THE COMPANY EXHAUSTS ITS REMEDIES PURSUANT TO
SECTION 8(C) AND THE EXECUTIVE THEREAFTER IS REQUIRED TO MAKE A PAYMENT OF ANY
EXCISE TAX, THE ACCOUNTING FIRM SHALL DETERMINE THE AMOUNT OF THE UNDERPAYMENT
THAT HAS OCCURRED AND ANY SUCH UNDERPAYMENT SHALL BE PROMPTLY PAID BY THE
COMPANY TO OR FOR THE BENEFIT OF THE EXECUTIVE.

 

(C)           THE EXECUTIVE SHALL NOTIFY THE COMPANY IN WRITING OF ANY CLAIM BY
THE INTERNAL REVENUE SERVICE THAT, IF SUCCESSFUL, WOULD REQUIRE THE PAYMENT BY
THE COMPANY OF THE GROSS-UP PAYMENT.  SUCH NOTIFICATION SHALL BE GIVEN AS SOON
AS PRACTICABLE, BUT NO LATER THAN 10 BUSINESS DAYS AFTER THE EXECUTIVE IS
INFORMED IN WRITING OF SUCH CLAIM.  THE EXECUTIVE SHALL APPRISE THE COMPANY OF
THE NATURE OF SUCH CLAIM AND THE DATE ON WHICH SUCH CLAIM IS REQUESTED TO BE
PAID.  THE EXECUTIVE SHALL NOT PAY SUCH CLAIM PRIOR TO THE EXPIRATION OF THE
30-DAY PERIOD FOLLOWING THE DATE ON WHICH THE EXECUTIVE GIVES SUCH NOTICE TO THE
COMPANY (OR SUCH SHORTER PERIOD ENDING ON THE DATE THAT ANY PAYMENT OF TAXES
WITH RESPECT TO SUCH CLAIM IS DUE).  IF THE COMPANY NOTIFIES THE EXECUTIVE IN
WRITING PRIOR TO THE EXPIRATION OF SUCH PERIOD THAT THE COMPANY DESIRES TO
CONTEST SUCH CLAIM, THE EXECUTIVE SHALL:

 

(1)           give the Company any information reasonably requested by the
Company relating to such claim,

 

(2)           take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,

 

(3)           cooperate with the Company in good faith in order effectively to
contest such claim; and

 

(4)           permit the Company to participate in any proceedings relating to
such claim;

 

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest, and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties) imposed as a result of such representation and payment of costs and
expenses.  Without limitation on the foregoing provisions of this Section 8(c),
the Company shall control all proceedings taken in connection with such contest,
and, at its sole

 

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discretion, may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the applicable taxing authority in respect of such
claim and may, at its sole discretion, either pay the tax claimed to the
appropriate taxing authority on behalf of the Executive and direct the Executive
to sue for a refund or to contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that, if
the Company pays such claim and directs the Executive to sue for a refund, the
Company shall indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income tax (including interest or penalties) imposed with
respect to such payment or with respect to any imputed income in connection with
such payment; and provided, further, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount.  Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which the Gross-Up Payment
would be payable hereunder, and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

 

(D)           IF, AFTER THE RECEIPT BY THE EXECUTIVE OF A GROSS-UP PAYMENT OR
PAYMENT BY THE COMPANY OF AN AMOUNT ON THE EXECUTIVE’S BEHALF PURSUANT TO
SECTION 8(C), THE EXECUTIVE BECOMES ENTITLED TO RECEIVE ANY REFUND WITH RESPECT
TO THE EXCISE TAX TO WHICH SUCH GROSS-UP PAYMENT RELATES OR WITH RESPECT TO SUCH
CLAIM, THE EXECUTIVE SHALL (SUBJECT TO THE COMPANY’S COMPLYING WITH THE
REQUIREMENTS OF SECTION 8(C), IF APPLICABLE) PROMPTLY PAY TO THE COMPANY THE
AMOUNT OF SUCH REFUND (TOGETHER WITH ANY INTEREST PAID OR CREDITED THEREON AFTER
TAXES APPLICABLE THERETO).  IF, AFTER PAYMENT BY THE COMPANY OF AN AMOUNT ON THE
EXECUTIVE’S BEHALF PURSUANT TO SECTION 8(C), A DETERMINATION IS MADE THAT THE
EXECUTIVE SHALL NOT BE ENTITLED TO ANY REFUND WITH RESPECT TO SUCH CLAIM AND THE
COMPANY DOES NOT NOTIFY THE EXECUTIVE IN WRITING OF ITS INTENT TO CONTEST SUCH
DENIAL OF REFUND PRIOR TO THE EXPIRATION OF 30 DAYS AFTER SUCH DETERMINATION,
THEN THE AMOUNT OF SUCH PAYMENT SHALL OFFSET, TO THE EXTENT THEREOF, THE AMOUNT
OF GROSS-UP PAYMENT REQUIRED TO BE PAID.

 

(E)           ANY GROSS-UP PAYMENT, AS DETERMINED PURSUANT TO THIS SECTION 8,
SHALL BE PAID BY THE COMPANY TO THE EXECUTIVE WITHIN FIVE DAYS OF THE RECEIPT OF
THE ACCOUNTING FIRM’S DETERMINATION; PROVIDED THAT, THE GROSS-UP PAYMENT SHALL
IN ALL EVENTS BE PAID NO LATER THAN THE END OF THE EXECUTIVE’S TAXABLE YEAR NEXT
FOLLOWING THE EXECUTIVE’S TAXABLE YEAR IN WHICH THE EXCISE TAX (AND ANY INCOME
OR OTHER RELATED TAXES OR INTEREST OR PENALTIES THEREON) ON A PAYMENT ARE
REMITTED TO THE INTERNAL REVENUE SERVICE OR ANY OTHER APPLICABLE TAXING
AUTHORITY OR, IN THE CASE OF AMOUNTS RELATING TO A CLAIM DESCRIBED IN
SECTION 8(C) THAT DOES NOT RESULT IN THE REMITTANCE OF ANY FEDERAL, STATE, LOCAL
AND FOREIGN INCOME, EXCISE, SOCIAL SECURITY AND OTHER TAXES, THE CALENDAR YEAR
IN WHICH THE CLAIM IS FINALLY SETTLED OR OTHERWISE RESOLVED.  NOTWITHSTANDING
ANY OTHER PROVISION OF THIS SECTION 8, THE COMPANY MAY, IN ITS SOLE DISCRETION,
WITHHOLD AND PAY OVER TO THE INTERNAL REVENUE SERVICE OR ANY OTHER APPLICABLE
TAXING AUTHORITY, FOR THE BENEFIT OF THE EXECUTIVE, ALL OR ANY PORTION OF ANY
GROSS-UP PAYMENT, AND THE EXECUTIVE HEREBY CONSENTS TO SUCH WITHHOLDING.

 

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

 

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(i)            “Excise Tax” shall mean the excise tax imposed by Section 4999 of
the Code, together with any interest or penalties imposed with respect to such
excise tax.

 

(ii)           “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.

 

(iii)          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.

 

(iv)          The “Safe Harbor Amount” means 2.99 times the Executive’s “base
amount,” within the meaning of Section 280G(b)(3) of the Code.

 

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.

 

16

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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:

 

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

 

17

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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.

 

(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 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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