exv10w71



 





Exhibit 10-71




CHANGE-IN-CONTROL SEVERANCE AGREEMENT



This CHANGE-IN-CONTROL SEVERANCE AGREEMENT (the “Agreement”) is entered into as of
 November  8,  2007 (the “Effective Date”) between DTE Energy Company, a Michigan
corporation (the “Company”), and                                          (the “Executive”).




RECITALS



A. The Executive is an executive or a key employee of the Company or one or more of its
Subsidiaries and has made and is expected to continue to make major contributions to the short- and
long-term profitability, growth and financial strength of the Company.



B. The Company recognizes that, as is the case for most publicly held companies, the possibility of
a Change-in-Control exists and that potential employment uncertainty resulting from a
Change-in-Control may distract management from conducting the Company’s business or cause
management employees to leave the Company’s employ.



C. The Company wants to provide security to its senior executives and key employees to enable them
to discharge their duties during the consideration and consummation of a Change-in-Control in order
to preserve the value of the Company for its shareholders.



In consideration of these objectives, the Company and the Executive agree as follows:



1. Term of Agreement. The term of this Agreement (the “Term”) begins on the Effective Date and
ends on the earlier of:





(a) the later of:




(1) the Agreement Expiration Date; or




(2) the last day of the Severance Period.




or




(b) the date prior to a Change-in-Control on which the Executive ceases for any reason to be
an employee of the Company and any Subsidiary. For purposes of this Section 1(b), the
Executive does not cease to be an employee of the Company and any Subsidiary if the
Executive’s employment is transferred between the Company and any Subsidiary, or among any
Subsidiaries.


2. Right to Receive Severance Benefits and Other Consideration. The Executive will become entitled
to the severance benefits and other consideration provided under this Agreement if the Executive’s
employment is terminated because of a Qualifying Termination.



3. Severance Benefits and Other Consideration.





(a) Severance Benefits. The Severance Benefits payable under this Agreement are all
of the following:





 









 






(1) A lump sum payment equal to the sum of:




(A) Base Pay; plus




(B) the greater of:




(i) the Annual Bonus for the year in which the Change-in-Control
occurs; or




(ii) the Annual Bonus for the year in which the Termination Date
occurs,




in either case based on the assumption that target performance goals
for the applicable year would be met and the Executive was employed
for the entire year or until any later date required to receive the
payment;




multiplied by:




(C) the lesser of:




(i) 200%; or




(ii) 200% multiplied by a fraction, the numerator of which is the
number of full calendar months from the Executive’s Termination Date
to the Executive’s 65th birthday, and the denominator of
which is 36.




(2) A lump sum payment equal to:




(A) the greater of:




(i) the Annual Bonus for the year in which the Change-in-Control
occurs; or




(ii) the Annual Bonus for the year in which the Termination Date
occurs,




in either case calculated based on the assumption that target
performance goals for the applicable year would be met and the
Executive was employed for the entire year or until any later date
required to receive such payment,




(B) multiplied by the following fraction:



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(i) the numerator is the number of days prior to the Executive’s
Termination Date during the calendar year in which the Termination
Date occurs; and




(ii) the denominator is 365,




(C) then reduced by the Annual Bonus for the year in which the Termination
Date occurs that is payable to the Executive under the terms of the Annual
Plan because the Executive has attained age 55 and completed 10 years of
service with the Company and all Subsidiaries.




(3) For Welfare Benefits provided to the Executive immediately prior to the
Executive’s Termination Date (or, if greater, immediately prior to reduction,
termination, or denial), a lump sum payment equal to the present value of the cost
of coverage for the Benefit Continuation Period. The cost of coverage will be
determined at rates in effect as of the Termination Date. The present value of the
cost will be determined using an interest rate equal to the composite prime rate in
effect as of the Termination Date in the Northeast Edition of The Wall Street
Journal.




(4) Additional age, service, and compensation credit for the length of the Benefit
Continuation Period for determining the Executive’s benefits under the following
plans (or any successors to these plans):




(A) DTE Energy Company Supplemental Retirement Plan; and




(B) DTE Energy Company Executive Supplemental Retirement Plan (including the
Management Supplemental Benefit Plan, if applicable to the Executive).




If the Executive’s Qualifying Termination was for Good Reason as described in
Section 18(m)(4), the Executive’s benefits under the above plans will be the greater
of the Executive benefits under the terms of the plans as of the Executive’s
Termination Date or before the termination, denial, or material reduction.




(5) Outplacement services by a firm selected by the Executive, at a cost to the
Company in an amount up to 15% of the Executive’s Base Pay. No payments by the
Company for outplacement services will be made after December 31st of the
calendar year following the calendar year including the Termination Date.




(6) An excise tax gross-up payment as determined under Section 19.




(b) Other Consideration. The consideration for the restrictive covenant in Section
9(d) (Competitive Activity) is a lump sum payment equal to:




(1) the sum of:



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(A) Base Pay; plus




(B) the greater of:




(i) the Annual Bonus for the year in which the Change-in-Control
occurs; or




(ii) the Annual Bonus for the year in which the Termination Date
occurs,




in either case based on the assumption that target performance goals
for the applicable year would be met and the Executive was employed
for the entire year or until any later date required to receive the
payment;




multiplied by




(C) the lesser of:




(i) 100%; or




(ii) 100% multiplied by a fraction, the numerator of which is the
number of full calendar months from the Executive’s Termination Date
to the Executive’s 65th birthday, and the denominator of
which is 36.


4. Timing of Payments.





(a) Payments under the following Sections will be paid on the later of 60 days after the
Executive’s Termination Date or any later date required by Code Section 409A or any other
law:




(1) Section 3(a)(1);




(2) Section 3(a)(2);




(3) Section 3(a)(3);




(4) Section 3(a)(6); and




(5) Section 3(b).




(b) Withholding of Taxes. The Company will withhold from any amounts payable under
this Agreement all federal, state, city or other taxes that the Company is required to
withhold under any law or government regulation or ruling.



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(c) Interest. If the Company fails to make any payment or provide any benefit
required to be made or provided under this Agreement on a timely basis, the Company will pay
interest on the amount or value at an annualized rate of interest equal to the composite
prime rate as quoted from time to time during the relevant period in the Northeast Edition
of The Wall Street Journal. The interest is payable as it accrues on demand, but
the Company is not required to pay interest more frequently than monthly. Any change in the
prime rate will be effective on and as of the date of the change.


5. Non-Duplication of Severance Benefits and Other Consideration.





(a) Qualifying Termination During Concurrent Severance Periods. If the Executive
experiences a Qualifying Termination when two or more Severance Periods are running
concurrently (because two or more Changes-in-Control have occurred), the Executive will have
a Qualifying Termination with respect to each Severance Period. A determination of the
payments and benefits to be provided under the Agreement will be made for each Qualifying
Termination. However, the Executive will receive only:




(1) the greatest lump sum payment under Section 3(a)(1) payable for any Qualifying
Termination;




(2) the greatest lump sum payment under Section 3(a)(2) for any Qualifying
Termination;




(3) the greatest lump sum payment under Section 3(a)(3) for any Qualifying
Termination;




(4) the greatest benefits under Section 3(a)(4) for any Qualifying Termination; and




(5) the greatest lump sum payment under Section 3(b) for any Qualifying Termination.




(b) Effect on Other Employee Benefits. The Executive’s Qualifying Termination will
not affect any rights the Executive may have under any agreement, policy, plan, program or
arrangement of the Company or Subsidiary providing Employee Benefits (other than Severance
Pay), which rights are governed by the terms of the agreement, policy, plan, program or
arrangement. The benefits received by an Executive under this Agreement because of a
Qualifying Termination supersede and are in lieu of any other Severance Pay to which the
Executive may be entitled.


6. Mitigation. The Company acknowledges that it will be difficult and may be impossible for the
Executive to find reasonably comparable employment following the Termination Date. Accordingly,
the Company acknowledges that payment of the severance compensation by the Company to the Executive
under this Agreement is reasonable. The Executive is not required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise. No profits,
income, earnings or other benefits from any source will create any mitigation, offset, reduction or
other obligation on the part of the Executive, except as







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may have been otherwise paid to the
Executive by the Company or a Subsidiary in connection with or in consideration of Executive’s
release and settlement of any claims arising out of the Executive’s employment or the termination
of the Executive’s employment.



7. Arbitration; Legal Fees and Expenses.





(a) Except for legal proceedings brought by the Executive or the Company for injunctive
relief, any dispute or claim involving this Agreement will be submitted to final and binding
arbitration. The arbitration will take place in Oakland County, Michigan before a single
neutral arbitrator under the then-current National Rules for the Resolution of Employment
Disputes of the American Arbitration Association. The arbitrator will issue a written
opinion and will not have authority to render an award beyond the scope and specific terms
of this Agreement. Judgment upon the arbitrator’s award may be entered in any court of
competent jurisdiction. Any demand for arbitration must be made within 30 days of when the
party knew or should have known of the alleged dispute or claim. Failure to timely demand
arbitration makes the dispute or claim non-arbitrable. The Executive and the Company
expressly waive their rights to institute or prosecute any lawsuits or other court
proceedings and waive their right to a jury trial, except for the legal proceedings excluded
above.




(b) It is the intent of the Company that the Executive not be required to incur legal fees
and the related expenses associated with the interpretation, enforcement or defense of
Executive’s rights under this Agreement because the legal fees and related expenses would
substantially detract from the benefits intended to be extended to the Executive under this
Agreement.




(c) If it appears to the Executive that the Company has failed to comply with any of its
obligations under this Agreement or if the Company or any other person takes or threatens to
take any action to declare this Agreement void or unenforceable, or institutes any action or
proceeding designed to deny, or to recover from, the Executive the benefits provided or
intended to be provided to the Executive under this Agreement, the Company irrevocably
authorizes the Executive to retain counsel of Executive’s choice, at the expense of the
Company as provided in this Section 7, to advise and represent the Executive in connection
with any interpretation, enforcement or defense of the Executive’s rights under this
Agreement.




(d) The Executive may pursue any legal defense of the Executive’s rights under this
Agreement whether by or against the Company or any Director, officer, stockholder or other
person affiliated with the Company, in any jurisdiction.




(e) Whether or not the Executive prevails in connection with any defense of the Executive’s
rights under this Agreement, the Company will pay and be solely financially responsible for
reasonable hourly attorneys’ fees and related fees and expenses incurred by the Executive
under this Section 7, but only if the arbitrator determines the Executive’s claim was
brought in good faith and was not frivolous. If the Executive’s request for injunctive



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relief is denied and the Executive does not timely demand arbitration for the dispute or
claim underlying the Executive’s request for injunctive relief, the Executive’s request for
injunctive relief is deemed to be frivolous and not brought in good faith for purposes of
this Section 7(e).




(f) The Company’s payment of the Executive’s legal fees and expenses under this Section 7
following termination of the Executive’s employment (whether or not in a Qualifying
Termination) will be made during the first calendar year beginning after the date the
Executive’s employment terminated.


8. Survival of Rights and Obligations. The rights and obligations of the Executive and the Company
under the following Sections will survive the termination or expiration of this Agreement and the
termination of the Executive’s employment after a Change-in-Control for any reason:





(a) Section 3 (Severance Benefits and Other Consideration);




(b) Section 4 (Timing of Payments);




(c) Section 5 (Non-Duplication of Severance Benefits and Other Consideration);




(d) Section 6 (Mitigation); and




(e) Section 7 (Legal Fees).


9. Confidential Information; Non-Disparagement; Non-Solicitation; Competitive Activity.





(a) Confidential Information. At all times following the Termination Date, the
Executive will not, without the prior written consent of the Company, either directly or
indirectly use, appropriate, or disseminate, disclose, or communicate to any person or
entity any confidential information of the Company or any Subsidiary that is now known or
later becomes known to the Executive because of the Executive’s employment with the Company
or any Subsidiary, unless the disclosure is required by a valid subpoena or order issued by
a court or governmental body.




(1) For purposes of this Section 9(a), “confidential information” is any
confidential, proprietary, or trade secret information, including concepts, ideas,
information, and materials related to the Company or any Subsidiary, customer
records, customer lists, economic and financial analyses, financial data, customer
contracts, marketing plans, notes, memoranda, lists, books, correspondence, manuals,
reports or research, whether developed by the Company or a Subsidiary or developed
by the Executive while employed by the Company or a Subsidiary.




(2) This Section 9(a) does not apply to any confidential information that becomes
publicly disseminated by means other than a breach of this provision.




(b) Non-Disparagement. The Executive will not make any verbal or written comments
to any third party that are defamatory, disparaging, or critical of the Company



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or any
Subsidiary or its products, management, employees, officers or operations or that would
otherwise adversely affect the finances or business reputation of the Company or any
Subsidiary.




(c) Non-Solicitation.




(1) For a period of two years after the Termination Date, the Executive will not
solicit, divert, take away, or attempt to take away any customer of the Company or
any Subsidiary or the business of any customer of the Company or any Subsidiary.




(A) A “customer” of the Company or any Subsidiary is any person or other
entity to which the Company or any Subsidiary has sold services or products
during the 24-month period immediately preceding the Termination Date, any
person or other entity that the Company or any Subsidiary is in the process
of selling services or products, or any person or other entity to which the
Company or any Subsidiary has submitted or is in the process of submitting a
bid to sell services or products.




(2) For a period of two years after the Termination Date, the Executive will not
solicit, attempt to employ, or employ any individual who is an employee, consultant,
or agent of the Company or any Subsidiary.




(d) Competitive Activity. For a period of one year following the Termination Date,
the Executive will not engage in any Competitive Activity. If the Executive engages in any
Competitive Activity earlier than one year following the Termination Date, the Executive
must repay to the Company the consideration paid to the Executive under Section 3(b).


10. Employment Rights. Nothing in this Agreement creates any right or duty on the part of the
Company or the Executive to have the Executive remain in the employment of the Company or any
Subsidiary prior to or following any Change-in-Control.



11. Successors and Binding Agreement.





(a) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the
business or assets of the Company, by agreement in form and substance satisfactory to the
Executive, to expressly assume and agree to perform this Agreement in the same manner and to
the same extent the Company would be required to perform it if the succession had not taken
place. This Agreement will be binding upon and inure to the benefit of the Company and any
successor to the Company, including without limitation any person acquiring directly or
indirectly all or substantially all of the business or assets of the Company by purchase,
merger, consolidation, reorganization or otherwise, with the successor thereafter deemed to
be the “Company” for the purposes of this Agreement. Other than as permitted under this
Section 11(a), this Agreement is not assignable, transferable or delegable by the Company.



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(b) This Agreement will inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees and legatees.




(c) This Agreement is personal in nature and neither of the parties may, without the consent
of the other, assign, transfer or delegate this Agreement or any rights or obligations
hereunder except as expressly provided in Sections 11(a) and 11(b). The Executive’s right
to receive payments under the Agreement is not assignable, transferable or delegable,
including by pledge, creation of a security interest, or otherwise, other than by a transfer
by Executive’s will or by the laws of descent and distribution. If any assignment or
transfer not permitted by this Section 11(c) is attempted, the Company will have no
liability to pay any amount attempted to be assigned, transferred or delegated.


12. Notices.





(a) All communications, including notices, consents, requests or approvals, required or
permitted to be given under this Agreement must be in writing.




(b) All notices must be provided by:




(1) hand delivery (deemed provided when delivered);




(2) electronic facsimile transmission, with verbal confirmation of receipt (deemed
provided when transmitted);




(3) United States registered or certified mail, return receipt requested, postage
prepaid (deemed provided five business days after mailing); or




(4) a nationally recognized overnight courier service such as Federal Express or UPS
(deemed provided three business days after deposit with courier service).




(c) Notices to the Company must be addressed to the attention of the Vice President – Human
Resources of the Company at the Company’s principal executive office.




(d) Notices to the Executive must be addressed to the Executive at the Executive’s principal
residence.




(e) The Company or the Executive can change the address to which notices to that party are
to be addressed by providing notice to the other party as required under this Section 12,
except that notices of changes of address are effective only upon actual receipt.


13. Governing Law. The validity, interpretation, construction and performance of this Agreement
will be governed by and construed in accordance with the substantive laws of the State of Michigan,
without giving effect to its principles of conflict of laws.





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14. Validity. If any provision of this Agreement or the application of any provision to any person
or circumstances is held invalid, unenforceable or otherwise illegal by a court of competent
jurisdiction, the remainder of this Agreement and the application of the provision to any other
person or circumstances will not be affected. The provision held to be invalid, unenforceable or
otherwise illegal will be amended to the minimum extent necessary to make it enforceable, valid or
legal.



15. Miscellaneous.





(a) No provision of this Agreement may be modified, waived or discharged unless the waiver,
modification or discharge is agreed to in writing signed by the Executive and the Company.




(b) No waiver by either party at the time of any breach by the other party or compliance
with any condition or provision of this Agreement to be performed by the other party will be
a waiver of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.




(c) No agreements or representations, oral or otherwise, expressed or implied, with respect
to the subject matter of this Agreement have been made by either party which are not set
forth expressly in this Agreement.




(d) References to Sections are to references to Sections of this Agreement.


16. Prior Agreements. As of the Effective Date, this Agreement supersedes and replaces all prior
change-in-control severance agreements and similar agreements between the Executive and the Company
or any of its Subsidiaries (“Prior Agreements”). All Prior Agreements cease to be of force and
effect as of the Effective Date.



17. Counterparts. This Agreement may be executed in one or more counterparts, each of which is
deemed an original but all of which together will constitute one agreement.



18. Definitions. For purposes of this Agreement, the following definitions apply:





(a) Agreement Expiration Date is the later of:




(1) the day before the third anniversary of the Effective Date; or




(2) the last day of any extension of the Agreement under this Section 18(a).




Beginning on the first anniversary of the Effective Date and on each subsequent anniversary
of the Effective Date, this Agreement will automatically be extended for an additional year
unless, not later than 90 days preceding any anniversary of the Effective Date:




(3) the Company gives notice that it does not wish to have the Term extended; or



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(4) the Company gives notice that it wishes the Term to be extended for a period of
less than one year, in which case the term of the Agreement will automatically be
extended for the shorter period and will then terminate if not further extended by
written agreement between the Company and the Executive.




(b) Annual Bonus is the aggregate annual bonus to which the Executive would have
been entitled under the DTE Energy Company Annual Incentive Plan, a Subsidiary’s annual
incentive plan, or any successor annual incentive plan (an “Annual Plan”) in the applicable
year, presuming that the Executive’s individual performance multiplier is 100%. If the
Executive participates in an Annual Plan without a specified target, the Executive’s Annual
Bonus is 1/3 of the sum of the Executive’s payments under the Annual Plan for the three
years preceding the applicable year (even if the Executive has not participated in the plan
for three years).




(c) Base Pay is the Executive’s annual base salary (prior to any pre-tax deferrals
made under any employee benefit plans of the Company) in effect immediately prior to the
Change-in-Control or immediately prior to the Executive’s Termination Date, if higher.




(d) Benefit Continuation Period is the shorter of:




(1) the two-year period beginning on the Executive’s Termination Date; or




(2) the period beginning on the Executive’s Termination Date and ending on the date
the Executive attains age 65.




(e) Board is the Board of Directors of the Company.




(f) Cause. The Executive’s employment will be considered terminated for Cause if
prior to termination of the Executive’s employment, the Board reasonably determines, based
on a preponderance of the evidence reasonably available to the Board as of the date
the Board adopts the resolution described below, that the Executive committed or engaged in:




(1) an intentional act of fraud, embezzlement or theft at a level that constitutes a
felony in connection with the Executive’s duties or in the course of the Executive’s
employment with the Company or a Subsidiary, whether or not the Executive is
convicted or pleads guilty or nolo contender (no contest) to any related criminal
charges;




(2) intentional wrongful damage to property of the Company or a Subsidiary;




(3) intentional wrongful disclosure of secret processes or confidential information
of the Company or a Subsidiary;




(4) intentional wrongful engagement in any Competitive Activity;



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(5) willful and continued failure by the Executive to substantially perform the
Executive’s duties with the Company that is not cured within 30 days after the Board
delivers to the Executive a written demand for substantial performance specifically
identifying the Executive’s failure to perform; or




(6) other intentional activity, including but not limited to a breach of the
Executive’s fiduciary duties with respect to the Company, a Subsidiary, or any
welfare plan or pension plan sponsored by the Company or a Subsidiary;




which, in the reasonable judgment of the Board and based on a preponderance of the evidence
available to the Board is significantly detrimental to the reputation, goodwill or business
of the Company or significantly disrupts the workplace environment or operation of the
Company’s business or administrative activities.




For purposes of this Agreement, no act or failure to act on the part of the Executive will
be deemed “intentional” if it was due primarily to an error in the Executive’s judgment or
the Executive’s negligence. An act will be deemed “intentional” only if done or omitted to
be done by the Executive not in good faith and without reasonable belief that the
Executive’s action or omission was in the best interest of the Company.




For purposes of this Agreement, the Executive has not been terminated for Cause unless and
until:




(7) a meeting of the Board is called and held for the purpose of determining if the
Executive is to be terminated for Cause; and




(8) the Executive is given reasonable notice of the meeting and an opportunity to be
heard before the Board, with Executive’s counsel if Executive so chooses; and




(9) at that meeting the Board finds, in the good faith opinion of the Board, that
the Executive has committed an act entitling the Board to terminate the Executive’s
employment for Cause; and




(10) the Executive has been provided a copy of the resolution duly adopted at that
meeting by the affirmative vote of not less than three-quarters of the Board then in
office and specifying in detail the particulars of the Board’s finding.




The Executive and the Executive’s beneficiaries retain the right to contest the validity or
propriety of the Board’s determination that the Executive’s employment has been terminated
for Cause.




(g) Change-in-Control occurs if any of the following events occurs during the Term
of this Agreement:



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(1) The Company is merged, consolidated or reorganized into or with another
corporation or other legal person, and as a result of the merger, consolidation or
reorganization less than 55% of the combined voting power of the then-outstanding
Voting Stock of the other corporation or person immediately after the transaction is
held in the aggregate by the holders of Voting Stock of the Company immediately
prior to the transaction;




(2) The Company sells or otherwise transfers all or substantially all of its assets
to another corporation or other legal person, and as a result of the sale or
transfer less than 55% of the combined voting power of the then-outstanding Voting
Stock of the acquiring corporation or person immediately after the sale or transfer
is held in the aggregate (directly or through ownership of Voting Stock of the
Company or a Subsidiary) by the holders of Voting Stock of the Company immediately
prior to the sale or transfer;




(3) A report is filed on Schedule 13D or Schedule 14D-1 (or any successor schedule,
form or report) under the Exchange Act disclosing that any person (as the term
“person” is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has
become the beneficial owner (as the term “beneficial owner” is defined under Rule
13d-3 or any successor rule or regulation promulgated under the Exchange Act) of
securities representing 20% or more of the combined voting power of the
then-outstanding Voting Stock of the Company. However, unless otherwise determined
by majority vote of the Board, a Change-in-Control does not occur solely because (A)
the Company, (B) a Subsidiary, or (C) any Company-sponsored employee stock ownership
plan or any other employee benefit plan of the Company or a Subsidiary either files
or becomes obligated to file a report or a proxy statement under or in response to
Schedule 13D or Schedule 14D-l disclosing beneficial ownership by it of shares of
Voting Stock, whether in excess of 20% or otherwise;




(4) During a period of two consecutive years, individuals who at the beginning of
the period constitute the Directors of the Company cease for any reason to
constitute at least a majority of the Directors of the Company. However, for
purposes of this clause, each Director who is first elected, or first nominated for
election by the Company’s stockholders, by a vote of at least two-thirds of the
Directors of the Company (or of a committee of the Board) then still in office who
were Directors of the Company at the beginning of the period will be deemed to have
been a Director of the Company at the beginning of the period;




(5) Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company; or




(6) Execution by the Company, at the direction of the Board, of one or more
definitive agreements with another corporation or other legal person to engage in a
transaction that will result in a Change-in-Control described in paragraphs (1)
through (5) of this Section 18(g).



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(h) Code is the Internal Revenue Code of 1986, as amended.




(i) Competitive Activity is the Executive’s direct employment, without the written
consent of the Board (or any Committee of the Board to which the Board delegates its
authority under this Section 18(i) in writing), in any business or enterprise (including the
Executive’s own business or enterprise) if:




(1) the business or enterprise engages in substantial and direct competition with
the Company or any of its Subsidiaries in any state in which the Company or
Subsidiary was engaged in business or actively negotiating to enter business on the
Termination Date; and




(2) the business’s or enterprise’s sales of any product or service competitive with
any product or service of the Company or any of its Subsidiaries amounted to 10% of
the business’s or enterprise’s net sales for its most recently completed fiscal
year; and




(3) the Company’s or Subsidiary’s net sales of the competitive product or service
amounted to 10% of the Company’s or Subsidiary’s net sales for its most recently
completed fiscal year; and




(4) the Board determines the Executive’s employment in the business or enterprise is
detrimental to the Company or any of its Subsidiaries.




“Competitive Activity” does not include the mere ownership of not more than 10% of the total
combined voting power or aggregate value of all classes of stock or other securities in the
enterprise and the Executive’s exercise of rights resulting from ownership of the stock.




The Board (or its delegate) has sole discretion and authority to determine if the Executive
is engaging in Competitive Activity for purposes of this Agreement.




It is the Executive’s responsibility to provide information sufficient for the Board (or its
delegate) to make these determinations.




(j) Employee Benefits are the perquisites, benefits and service credit for benefits
provided under all employee retirement income and welfare benefit policies, plans, programs
or arrangements in which Executive is entitled to participate, including without limitation
any stock option, stock purchase, stock appreciation, savings, pension, supplemental
executive retirement, or other retirement income or welfare benefit, deferred compensation,
incentive compensation, group or other life, health, medical/hospital or other insurance
(whether funded by actual insurance or self-insured by the Company or a Subsidiary),
disability, salary continuation, expense reimbursement and other employee benefit policies,
plans, programs or arrangements that may now exist or any equivalent successor policies,
plans, programs or arrangements that may be adopted hereafter by the Company or a
Subsidiary, providing perquisites, benefits and



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service credit for benefits at least as
great in the aggregate as are payable prior to a Change-in-Control.




(k) ERISA is the Employee Retirement Income Security Act of 1974, as amended.




(l) Exchange Act is the Securities Exchange Act of 1934, as amended.




(m) Good Reason. An Executive terminates employment for Good Reason if the
Executive terminates his or her employment during the Severance Period following the
occurrence of any of the following events during the Severance Period:




(1) failure to elect or reelect to the office, or otherwise maintain the Executive
in a position within the same or higher Executive Grouping Level (as in existence
prior to the Change-in-Control) with the Company and/or a Subsidiary, as applicable,
which the Executive held immediately prior to the Change-in-Control, or the removal
of the Executive as Chairman of the Company (or any successor to the Company) if the
Executive was Chairman of the Company immediately prior to the Change-in-Control;




(2) a significant adverse change in the nature or scope of the authorities, powers,
functions, responsibilities or duties attached to the position with the Company and
its Subsidiaries as compared to other executives in the same Executive Grouping
Level within the Company or the Subsidiary which the Executive held immediately
prior to the Change-in-Control;




(3) a reduction in the Executive’s Base Pay or the opportunity to earn Incentive Pay
from the Company, its Subsidiaries or the failure to pay the Executive Base Pay or
Incentive Pay earned when due;




(4) the termination or denial of the Executive’s rights to Employee Benefits or a
material reduction in the aggregate scope or value of Employee Benefits (unless, in
the case of Welfare Benefits or Pension Benefits the termination, denial or
reduction applies to all similarly situated employees of the Company and its
Subsidiaries), any of which is not remedied by the Company within 10 calendar days
after the Company receives written notice from the Executive of the change,
reduction or termination;




(5) the liquidation, dissolution, merger, consolidation or legal reorganization of
the Company or transfer of all or substantially all of its business or assets, or
both, unless the successor or successors (by liquidation, merger, consolidation,
reorganization, transfer or otherwise) to which all or substantially all of its
business or assets, or both, have been transferred (directly or by operation of law)
assumes all duties and obligations of the Company under this Agreement under Section
1l(a);



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(6) without the Executive’s prior written consent, the Company:




(A) requires the Executive to change the Executive’s principal location of
work to any location that is in excess of 300 miles from the location
immediately prior to the Change-in-Control, but only if the Executive’s
principal location of work is not in the Company’s principal executive
offices;




or




(B) requires the Executive to travel away from the Executive’s office in the
course of discharging the Executive’s responsibilities or duties at least
40% more (in terms of aggregate days in any calendar year or in any calendar
quarter when annualized for purposes of comparison to any prior year) than
the average number of travel days per calendar year that was required of
Executive in the three full calendar years immediately prior to the
Change-in-Control; or




(7) any material breach of this Agreement by the Company or its successor.




(n) Incentive Pay is the aggregate annual payments of cash or equity compensation
(determined without regard to any deferral election) and annual vesting of equity
compensation, in addition to Base Pay, under any bonus, incentive, profit-sharing,
performance, discretionary pay or similar agreement, policy, plan, program or arrangement
(whether or not funded) of the Company or a Subsidiary, or any successor, providing economic
value on an aggregate basis at least as favorable to the Executive, in terms of the amount
of benefits, levels of coverage and performance measures and levels of required performance,
as the benefits payable prior to the Change-in-Control.




(o) Qualifying Termination means:




(1) Termination of the Executive’s employment by the Company or a Subsidiary during
the Severance Period other than a termination:




(A) because of the Executive’s death;




(B) because the Executive became permanently disabled within the meaning of,
and began receiving disability benefits under, the Company or Subsidiary
sponsored long-term disability plan in effect for, or applicable to, the
Executive immediately prior to the Change-in-Control;




(C) under any mandatory retirement policy of the Company or a Subsidiary; or




(D) for Cause;




or



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(2) Termination of the Executive’s employment by the Executive during the Severance
Period for Good Reason, regardless of whether any other reason, other than Cause,
for the Executive’s termination exists or has occurred, including other employment.




(p) Pension Benefits are benefits provided under employee pension benefit plans as
defined in Section 3(2)(A) of ERISA, but excluding employee pension benefit plans described
in Section 201(2) of ERISA.




(q) Severance Pay is the collective benefits provided under any agreement, policy,
plan, program, or arrangement of the Company or a Subsidiary or any provision of any
individual severance, employment, or other agreement between the Executive and the Company
or a Subsidiary that are paid to the Executive solely because of the termination of the
Executive’s employment.




(r) Severance Period resulting from a Change-in-Control described in Sections
18(g)(1) through (5) is the period beginning on the date a Change-in-Control occurs and
ending on the earliest of:




(1) the second anniversary of the Change-in-Control;




(2) the Executive’s 65th birthday; or




(3) the Executive’s death.




The Severance Period resulting from a Change-in-Control described in Section 18(g)(6) is the
period beginning on the date the Change-in-Control occurs and ending on the earliest of:




(4) the second anniversary of the Change-in-Control;




(5) the Executive’s 65th birthday;




(6) the Executive’s death; or




(7) the date the transaction is abandoned, as determined by the Board in a
resolution adopted in good faith.




(s) Subsidiary is an entity in which the Company directly or indirectly beneficially
owns 50% or more of the outstanding Voting Stock.




(t) Termination Date is the date on which the Executive’s employment is terminated
by a Qualifying Termination.



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(u) Welfare Benefits are benefits provided under employee welfare benefit plans, as
defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended.




(v) Voting Stock is securities entitled to vote generally in the election of
Directors.


19. Excise Tax Gross-Up Payment.





(a) If it is determined under this Section 19 that any Payment would be subject to the
Excise Tax, the Executive will be entitled to a Gross-Up Payment determined under this
Section 19.




(1) For purposes of this Section 19, a “Payment” is any payment or distribution by
the Company or any of its affiliates to or for the benefit of the Executive, whether
paid or payable or distributed or distributable under this Agreement or under any
other agreement, policy, plan, program or arrangement, including without limitation
any stock option, stock appreciation right or similar right, or the lapse or
termination of any restriction on or the vesting or exercisability of any of the
foregoing.




(2) For purposes of this Section 19, the “Excise Tax” is the excise tax imposed by
Code Section 4999 (or any successor provision) as a payment “contingent on a change
in ownership or control” of the Company (under Code Section 280G or any successor
provision), any similar tax imposed by state or local law, and any related interest
or penalties.




(b) The Gross-Up Payment will be an amount that, after payment by the Executive of all taxes
(including any related interest or penalties), including any Excise Tax on the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed on the Payment.




(c) Subject to Section 19(k), all determinations required to be made under this Section 19,
including:




(1) whether an Excise Tax is payable by the Executive;




(2) the amount of the Excise Tax;




(3) whether a Gross-Up Payment is required to be paid by the Company to the
Executive; and




(4) the amount of the Gross-Up Payment, if any,




will be made by a nationally recognized accounting firm (the “Accounting Firm”) selected by
the Company in the Company’s sole discretion. The Executive will direct the Accounting Firm
to submit its determination and detailed supporting calculations to both



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the Company and the
Executive within 30 calendar days after the Termination Date and any such other time or
times as may be requested by the Company or the Executive.




(d) If the Accounting Firm determines that any Excise Tax is payable by the Executive, the
Company will pay the required Gross-Up Payment to the Executive as required under Section
4(a).




(e) If the Accounting Firm determines that no Excise Tax is payable by the Executive, it
will, at the same time as it makes its determination, furnish the Company and the Executive
an opinion that the Executive has substantial authority not to report any Excise Tax on the
Executive’s federal, state or local income or other tax return.




(f) Because of the uncertainty in the application of Code Section 4999 (or any successor
provision) and the possibility of similar uncertainty regarding applicable state or local
tax law at the time of any determination by the Accounting Firm under this Section 19, it is
possible that Gross-Up Payments which will not have been made by the Company should have
been made (an “Underpayment”). If the Company exhausts or fails to pursue its remedies
under Section 19(k) and the Executive is subsequently required to make a payment of any
Excise Tax, the Executive will direct the Accounting Firm to determine the amount of the
Underpayment that has occurred and to promptly submit its determination and detailed
supporting calculations to both the Company and the Executive. The Company will pay any
Underpayment to, or for the benefit of, the Executive as required under Section 4(a).




(g) The Company and the Executive will each provide the Accounting Firm access to and copies
of any books, records and documents in the possession of the Company or the
Executive, as applicable, reasonably requested by the Accounting Firm, and otherwise
cooperate with the Accounting Firm in connection with the preparation and issuance of the
determinations and calculations required under this Section 19. The Executive will
cooperate with reasonable requests made by the Company, whether directly or through the
Accounting Firm, to assist in appropriate tax planning to minimize the Excise Tax payable.
Any determination by the Accounting Firm as to the amount of the Gross-Up Payment is binding
on the Company and the Executive.




(h) The Executive will prepare and file the Executive’s federal, state and local income or
other tax returns on a consistent basis with the determination of the Accounting Firm with
respect to the Excise Tax payable by the Executive. The Executive will make timely payment
of the amount of any Excise Tax. At the request of the Company, the Executive will provide
to the Company true and correct copies (with any amendments) of the Executive’s federal
income tax return as filed with the Internal Revenue Service, corresponding state and local
tax returns, if relevant, as filed with the applicable taxing authority, and any other
documents reasonably requested by the Company evidencing the Executive’s payment.




(i) If prior to the filing of the Executive’s federal income tax return or corresponding
state or local tax return, the Accounting Firm determines that the amount of the Gross-Up
Payment should be reduced, the Executive will pay the Company the amount of the



19









 






reduction within five business days if the Company has already paid the Gross-Up Payment to the
Executive. If the Company has not yet paid the Gross-Up Payment to the Executive, the
Company will reduce the amount of the Gross-Up Payment paid to the Executive by the amount
of the reduction.




(j) The fees and expenses of the Accounting Firm for its services in connection with the
determinations and calculations under this Section 19 will be paid by the Company. If the
fees and expenses are initially paid by the Executive, the Company will reimburse the
Executive the full amount of the fees and expenses within five business days after the
Company receives the Executive’s written request for payment and reasonable evidence of the
Executive’s payment of the fees and expenses.




(k) The Executive will notify the Company in writing of any claim by the Internal Revenue
Service or any other taxing authority that, if successful, would require the payment by the
Company of a Gross-Up Payment. The Executive must give this notice as promptly as
practicable but no later than 10 business days after the Executive actually receives notice
of the claim. The Executive will also notify the Company of the nature of the claim and the
date on which the claim is requested to be paid, to the extent known by the Executive. The
Executive will not pay the claim prior to the earlier of the expiration of the
30-calendar-day period following the date on which the Executive gives the notice to the
Company and the date that any payment with respect to the claim is due. If the Company
notifies the Executive in writing prior to the expiration of this period that the Company
wishes to contest the claim, the Executive will:




(1) provide the Company with any written records or documents in the Executive’s
possession relating to the claim that are reasonably requested by the Company;




(2) take any action in connection with contesting the claim as the Company
reasonably requests in writing, including accepting legal representation with
respect to the claim by an attorney competent in the subject matter and reasonably
selected by the Company;




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




(4) authorize the Company to participate in any proceedings relating to the claim.




The Company will bear and pay directly all costs and expenses (including interest and
penalties) incurred in connection with contesting the claim and will indemnify and hold
harmless the Executive, on an after-tax basis, for and against any Excise Tax or income tax,
including interest and penalties, imposed as a result of the Company’s representation and
payment of costs and expenses.




The Company will control all proceedings taken in connection with the contest of any claim
under this Section 19. At its sole option, the Company may pursue or forego any



20









 






and all
administrative appeals, proceedings, hearings and conferences with the taxing authority in
respect of the claim. The Executive may participate in any appeals, proceedings, hearings,
or conferences at the Executive’s own cost and expense. The Company’s control of the
contested claim will be limited to issues with respect to which a Gross-Up Payment would be
payable under this Section 19. Any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect to which the contested
amount is claimed to be due is limited solely to the contested amount. The Executive will
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.




The Company may, at its option, either direct the Executive to pay the tax claimed and sue
for a refund or contest the claim in any permissible manner. The Executive agrees to
prosecute the contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company determines. If the
Company directs the Executive to pay the tax claimed and sue for a refund, the Company will
advance the amount of the payment to the Executive on an interest-free basis and indemnify
and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income or
other tax, including interest or penalties, imposed with respect to the advance.




(l) If after receiving an amount advanced by the Company under Section 19(k) the Executive
receives any refund with respect to the claim, the Executive will (subject to the Company’s
complying with the requirements of Section 19(k)) promptly pay to the
Company the amount of the refund (together with any interest paid or credited on the refund
less any income taxes applicable to the interest).




If the Executive receives an amount advanced by the Company under Section 19(k) and a
determination is subsequently made that the Executive is not entitled to a refund with
respect to the claim and the Company does not notify the Executive in writing within 30
calendar days after the determination of the Company’s intent to contest the denial or
refund, the advance will be forgiven. The Executive will not be required to repay the
advance. The amount of the advance will offset the amount of Gross-Up Payment required to
be paid by the Company to the Executive under this Section 19.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




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In witness whereof, this Agreement has been entered into by the Company and the Executive as of the
Effective Date.




	 	 	 
	 

[Executive’s Name]

	 	 
	 
	 	 
	DTE ENERGY COMPANY
	 	 
	 
	 	 
	 

Larry E. Steward

	 	 
	Vice President, Human Resources
	 	 







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