Exhibit 10(e)-2


 


SUPPLEMENT
TO CHAIRMAN’S AGREEMENT


 


This SUPPLEMENT to that
certain AGREEMENT made and entered into as of January 25, 2005 (the “Chairman’s
Agreement”) between TCF FINANCIAL CORPORATION, a Delaware corporation (“TCF
Financial” or the “Company”), TCF NATIONAL BANK, a national banking association
(“TCF Bank”) (jointly and severally TCF Bank and TCF Financial are referred to
as the “Company”) and WILLIAM A. COOPER (“Executive” or “Cooper”).


 


R
E  C  I  T  A  L  S:


 


WHEREAS, Executive and
TCF Financial are currently parties to a Change in Control Agreement (the “CIC
Agreement”) which includes an “excise tax gross-up” provision which applies in
the event TCF Financial undergoes a change in control and payments made
thereafter to Executive result in an excise tax under section 4999 of the
Internal Revenue Code; and


 


WHEREAS, the CIC
Agreement expires December 31, 2005 upon Executive’s retirement as Chief
Executive Officer of TCF Financial, however on and after December 31, 2005
Executive will continue with TCF Financial as its Chairman under the terms of
the Chairman’s Agreement; and


 


WHEREAS, TCF Financial
intends that Executive will enjoy the same CIC excise tax gross-up provision in
his ongoing position of Chairman as he has currently as Chairman and Chief
Executive Officer of TCF Financial;


 


  NOW, THEREFORE, the parties agree to and
hereby do amend the Chairman’s Agreement to include this Supplement at the end
thereof, providing Executive with the same excise tax gross-up provision,
effective January 1, 2006 and for the remainder of the term of the
Chairman’s Agreement, as he currently enjoys under the CIC Agreement:


 


CERTAIN ADDITIONAL
PAYMENTS BY THE COMPANY; 


INTERNAL REVENUE
CODE § 409A


 


(a)           Gross-Up Payment.  Anything to the contrary notwithstanding, in
the event it shall be determined that any payment, distribution or benefit made
or provided by the Company (or any successor thereto) to or for the benefit of
Cooper (whether pursuant to this Agreement or otherwise) (a “Payment”), would
be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended, (the “Code”) or any interest or penalties
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are collectively referred to as the “Excise Tax”), then
the Company shall pay Cooper in cash an amount (the “Gross-Up Payment”) such
that after payment by Cooper of all taxes (including any interest or penalties
imposed with respect to such taxes), including but not limited to income taxes
(and any interest and penalties imposed with respect thereto) and any
additional Excise Tax, imposed upon the Gross-Up Payment, Cooper retains (after
payment of such taxes, interest and penalties) an amount of the Gross-Up 


 


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Payment equal to the
Excise Tax imposed on the Payments.


 


(b)           Determination of Gross-Up Payment.  Subject to paragraph (c) below, all
determinations required to be made under this Supplement, including whether a
Gross-Up Payment is required and the amount of the Gross-Up Payment, shall be
made by the firm of independent public accountants selected by the Company to
audit its financial statements for the year immediately preceding the Change in
Control (the “Accounting Firm”) which shall provide detailed supporting
calculations to the Company and Cooper within thirty (30) days after a Payment
is made.  In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change in Control, Cooper shall appoint another
nationally recognized accounting firm to make the determinations required under
this paragraph (which accounting firm shall then be referred to as the “Accounting
Firm”).  All fees and expenses of the
Accounting Firm in connection with the work it performs pursuant to this
paragraph shall be promptly paid by the Company.  A Gross-Up Payment (as determined pursuant to
this paragraph) shall be paid by the Company to Cooper within five (5) days
of the receipt of the Accounting Firm’s determination.  If the Accounting Firm determines that no
Excise Tax is payable by Cooper, it shall furnish Cooper with a written opinion
that failure to report the Excise Tax on Cooper’s applicable federal income tax
return would not result in the imposition of a negligence or a similar
penalty.  Any determination by the
Accounting Firm shall be binding upon the Company and Cooper.  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, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made (“Underpayment”).  In the event that the Company exhausts its
remedies pursuant to paragraph (c) below, and Cooper is thereafter
required to make a payment of Excise Tax, the Accounting Firm shall promptly
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be paid by the Company to Cooper within five (5) days
after such determination.


 


(c)           Contest.  Cooper shall notify the Company in writing of
any claim made by the Internal Revenue Service that, if successful, would
require the Company to pay a Gross-Up Payment. 
Such notification shall be given as soon as practicable but no later than
ten (10) business days after Cooper knows of such claim and shall apprise
the Company of the nature of such claim and the date on which such claim is
requested to be paid.  Cooper shall not
pay such claim prior to the expiration of the thirty (30) day period following
the date on which it 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 Cooper in
writing prior to the expiration of such period that it desires to contest such
claim, Cooper shall:


 


(i)            give the Company any information
reasonably requested by the Company relating to such claim;


 


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


 


(iii)          cooperate with the Company in good
faith in order effectively to contest 


 


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such claim;


 


(iv)          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 Cooper harmless, on an after-tax basis, for any Excise Tax
or income tax, including interest and penalties with respect thereto, imposed
as a result of such representation and payment of costs and expenses.  Without limitation on the foregoing
provisions of this paragraph (c), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Cooper to pay the tax, interest and penalties
claimed and sue for a refund or contest the claim in any permissible manner,
and Cooper 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 directs Cooper to pay such claim and sue for a refund, the Company
shall advance, on an interest-free basis, the amount of such payment to Cooper
together with any Excise Tax and income taxes imposed with respect to such
advance or with respect to any imputed income with respect to such advance; and
further provided that any extension of the statute of limitations relating to
payment of taxes for the taxable year of Cooper 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 a
Gross-Up Payment would be payable hereunder and Cooper 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 Cooper of an
amount advanced by the Company pursuant to paragraph (c), Cooper becomes
entitled to receive any refund with respect to such claim, Cooper shall
(subject to the Company’s complying with the requirements of paragraph (c))
promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after any income or other taxes applicable
thereto and assessed on Cooper have been paid by Cooper from such refund).  If, after the receipt by Cooper of an amount
advanced by the Company pursuant to paragraph (c), a determination is made that
Cooper shall not be entitled to any refund with respect to such claim and the
Company does not notify Cooper in writing of its intent to contest such denial
of refund prior to the expiration of thirty (30) days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.


 


(e)           Section 409A of the Internal
Revenue Code.  The arrangements
described in this Agreement are intended to comply with Section 409A of
the Internal Revenue Code to the extent such arrangements are subject to that
law.  The parties agree that they will
negotiate in good faith regarding amendments necessary to bring this Agreement
into compliance with the terms of that Section or an exemption therefrom
as interpreted by guidance issued by the Internal Revenue Service.  The parties further agree that to the extent
any part of this Agreement fails to qualify for exemption from or satisfy the
requirements of Section 409A, the affected arrangement may be 


 


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operated in compliance
with Section 409A pending amendment to the extent authorized by the
Internal Revenue Service.  In such
circumstances Company will administer this Agreement in a manner which adheres
as closely as possible to the existing terms and intent of the Agreement while
complying with Section 409A.  This
paragraph does not restrict Company’s rights (including, without limitation,
the right to amend or terminate) with respect to this Agreement to the extent
such rights are reserved under the terms of this Agreement.


 


IN WITNESS WHEREOF, the
Parties have executed this Supplement to be effective as of the date set forth
above.


 


	
  TCF FINANCIAL
  CORPORATION

  	
  TCF NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  By 

  	
  /s/ Lynn A. Nagorske

  	
   

  	
  By:

  	
  /s/  Barry N. Winslow

  	
   

  
	
   

  	
  Lynn A. Nagorske

  	
   

  	
   

  	
  Barry N. Winslow

  
	
   

  	
   

  
	
  Its: President and
  Chief Operating Officer

  	
  Its: President

  
	
   

  	
   

  
	
   

  	
   

  
	
  WITNESS:

  	
   

  
	
   

  	
   

  
	
  /s/ Diane O. Stockman

  	
   

  	
  /s/ William A. Cooper

  	
   

  
	
   

  	
  William A. Cooper

  
								



 


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