AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT
EXHIBIT 10.62
AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT
This Amended and Restated Change in Control Agreement (“Agreement”) is made by and
between Citizens Republic Bancorp, Inc., a Michigan corporation (“Corporation”), and
_________________________ (“Executive”). The effective date of this Agreement shall be
_________________.
The Executive and the Corporation are parties to that certain Amended and Restated Change in
Control Agreement, dated as of _____________________ (the “Prior Agreement”). The Corporation now
desires to restate the Prior Agreement to reflect changes promulgated by the compensation and human
resources committee of the board of directors of the Corporation designed to place structure around
the overall change in control program of the Corporation and to provide consistency in terms of the
level of benefits offered in accordance with the level of positions within the Corporation that are
eligible to participate in the program.
The Executive agrees to such changes and reduction in benefits including, but not limited to,
any reduction in the Severance Payment as provided for in the Prior Agreement in consideration of,
as the case may be (i) the agreement of the Corporation to increase Executive’s base salary, (ii)
the granting of a short term or long term incentive award to Executive, or (iii) the continuance of
Executive’s employment with the Corporation (or a subsidiary thereof) following the termination of
Executive’s employment from his or her previous position with the Corporation.
The Corporation anticipates the valuable services that the Executive will render on behalf of
the Corporation and its subsidiary banks throughout this Agreement and is desirous of having some
assurance that the Executive will continue as an employee and that, in the event of a possible
Change in Control of the Corporation, the Executive will be able to perform the Executive’s duties
without undue concern for the Executive’s personal financial well-being; and
The Executive is willing to serve as an employee of the Corporation under such circumstances.
Accordingly, the Corporation and the Executive agree as follows:
1. In order to protect the Executive against the possible consequences of a Change in
Control of the Corporation, as defined in paragraph 2 of this Agreement, and thereby to induce
the Executive to serve as an officer of the Corporation or a subsidiary bank the Corporation
agrees that if (a) there is such a Change in Control of the Corporation and (b) the Executive
experiences a “separation from service” from the Corporation or a subsidiary thereof within the
meaning of Code Section 409A (a “Separation from Service”) under the circumstances described in
paragraph 3 of this Agreement, then:
A. (1) The Corporation shall pay the Executive a lump sum amount in cash equal
to the sum of (a) _____ times the Executive’s annual base salary immediately prior to the
Change in Control (or if higher, the annual base salary on the date the Executive’s employment
is terminated) and (b) _____ times the average of the annual bonuses paid to the Executive in
the last three full calendar years of employment under the Citizens Republic Bancorp, Inc.
Management Incentive Plan (“MIP”) or such comparable plan in which Executive may have
participated (such amount, the “Severance Payment”). In the event that Executive has not
participated in the MIP or comparable plan (either because he or she was not employed by the
Corporation or otherwise) for 3 full calendar years, then the above referenced bonus amount
shall be determined by averaging the annual bonuses paid to the Executive for the actual
number of full calendar years worked during such 3 calendar year period and for such calendar
year(s) where the Executive did not complete the full calendar year of employment with the
Corporation, then the average percent paid out to participants in the MIP or comparable plan
multiplied by the Executive’s individual participation rate shall be utilized to determine the
amount for such year(s).
(2) The Severance Payment shall be payable within 60 days following the date of the
Executive’s Separation from Service, provided that, except as provided with respect to an
Anticipatory Termination (as defined in paragraph 3 below), in the event that the Executive is
a “specified employee” within the meaning of Code Section 409A (with such classification to be
determined in accordance with the methodology established by the applicable employer) (a
“Specified Employee”) as of the date of the Executive’s Separation from Service, the Severance
Payment shall instead be paid, with interest on any delayed payment at the applicable federal
rate provided for in Code Section 7872(f)(2)(A) (“Interest”), on the
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earlier of the first business day (a) of the seventh month following the Executive’s
Separation from Service, or (b) the Executive’s death following Separation from Service (the
“409A Payment Date”).
(3) Notwithstanding the foregoing, in the event of an Anticipatory Termination, the
Severance Payment shall be paid as follows: (i) if such Change in Control is a “change in
control event” within the meaning of Code Section 409A, (A) except as provided in clause
(i)(B), on the date of such Change in Control, or (B) if the Executive is a Specified Employee
as of the date of the Executive’s Separation from Service, on the 409A Payment Date, and (ii)
if such Change in Control is not a “change in control event” within the meaning of Code
Section 409A, (A) except as provided in clause (ii)(B), on the first business day following
the three-month anniversary of the date of such Anticipatory Termination, or (B) if the
Executive is a Specified Employee as of the date of the Executive’s Separation from Service,
on the 409A Payment Date. Interest with respect to the period, if any, from the date of the
Change in Control until the actual date of payment shall be paid on the Severance Payment made
in connection with an Anticipatory Termination.
(4) Notwithstanding the foregoing, on the first anniversary of the effective date of this
Agreement, the Severance Payment provided for in paragraph 1.A(1) shall be reduced from two
times base salary plus two times bonus to one times base salary and one times bonus.
B. The Executive shall continue to be covered, at the Corporation’s cost, by the medical and
dental benefit plans that are in effect on the date of the Executive’s Separation from Service
and that cover executive employees, for a period of _________ (___) months (the “Benefit
Continuation Period”) after the Executive’s Separation from Service; provided, however, that such
medical and dental benefits provided during the Benefit Continuation Period shall be provided in
such a manner that such benefits (and the costs and premiums thereof) are excluded from the
Executive’s income for federal income tax purposes and, if the Corporation reasonably determines
that providing continued coverage under one or more of its health care benefit plans contemplated
herein could be taxable to the Executive, the Corporation shall provide such benefits at the
level required hereby through the purchase of individual insurance coverage; provided, however,
that if during such time period the Executive should enter into other employment providing
comparable benefits, the Executive’s participation in such plans of the Corporation shall cease.
C. If the Executive was furnished with a club membership, that membership (as it relates to
the Executive) shall terminate as of the Executive’s Separation from Service, and the Corporation
either shall transfer or terminate the membership in accordance with the by-laws and/or rules and
procedures of the applicable club; provided, however, that the Executive shall incur no new club
fees following Separation from Service and also shall have no further financial liability for new
obligations thereunder.
D. All stock options and restricted stock previously granted by the Corporation to the
Executive, whether or not then exercisable, shall become immediately vested and exercisable.
E. For a period of one year following Executive’s Separation from Service, the Executive
shall be entitled to outplacement services provided by an outplacement service provider
designated by the Corporation. The cost of providing the outplacement services shall be borne
solely by the Corporation, and shall be equal to the lesser of (i) 10% of the Executive’s annual
base salary immediately prior to the Change in Control (or, if higher, the Executive’s annual
base salary as of the date of the Executive’s Separation from Service) and (ii) $20,000.
F. If the payment of any of the foregoing amounts or benefits (when added to any other
payments or benefits provided to the Executive in the nature of compensation) will result in the
payment of an excess parachute payment as that term is defined in Code Section 280G, then in such
event, the amount of the payment shall be decreased to the maximum amount that could be paid
without the payment being deemed an excess parachute payment.
2. For purposes of this Agreement, a “Change in Control” shall mean:
A. The acquisition by 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”) of beneficial ownership (within the meaning of Rule l3d-3 promulgated under the
Exchange Act) of 20% or more of either (1) the then outstanding shares of common stock of the
Corporation (the “Outstanding Corporation Common Stock”) or (2) the combined voting power of the
then outstanding voting securities of the Corporation entitled to vote generally in the election
of directors (the “Outstanding Corporation Voting Securities”); provided,
however, that for purposes of
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this subparagraph A, the following acquisitions shall not constitute a Change in Control:
(i) any acquisition directly from the Corporation, (ii) any acquisition by the Corporation, (iii)
any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation, or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses (1), (2) and (3) of
subparagraph C of this paragraph 2; or
B. Individuals who, as of the date hereof, constitute the Board of Directors of the
Corporation (the “Incumbent Board”) cease for any reason to constitute at least a majority of the
Board of Directors; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the Corporation’s
shareholders, was approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (either by a specific vote or by approval of the proxy statement of the
Corporation in which such person is named as a nominee for director, without written objection to
such nomination) shall be considered as though such individual were 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 contests by or on
behalf of a person other than the Board of Directors of the Corporation; or
C. Consummation of a reorganization, merger, share exchange with another corporation
pursuant to Michigan Compiled Laws Section 450.1702, or consolidation, sale or other disposition
of all or substantially all of the assets of the Corporation (a “Business Combination”), in each
case, unless, following such Business Combination: (1) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 65% of, respectively,
the then outstanding shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Corporation or all or substantially
all of the Corporation’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 Corporation Common Stock and Outstanding Corporation Voting
Securities, as the case may be; (2) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related trust) of the Corporation or such
corporation resulting from the 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 (3) at least a majority of the members of the board of directors of
the corporation resulting from such Business Combination were members of the Incumbent Board
immediately prior to the time of the execution of the initial agreement, or of the action of the
Board of Directors of the Corporation, providing for such Business Combination; or
D. Approval by the stockholders of the Corporation of a complete liquidation or dissolution
of the Corporation.
3. Executive’s Separation from Service shall be as described in this paragraph 3 if
the Separation from Service results from the Executive’s termination of employment at any time
within 3 months prior to (such termination of employment, an “Anticipatory Termination”), on the
date of, or within 24 months after a Change in Control of the Corporation as defined in
paragraph 2 of this Agreement either by (a) involuntary dismissal by the Corporation; or (b) the
Executive’s constructive termination as described in the following sentences of this paragraph
3. If (i) there is a significant reduction in the scope of the Executive’s authority or in the
extent of the Executive’s powers, functions, duties or responsibilities, or (ii) the Executive’s
annual rate of compensation is reduced or fringe benefits, including relocation benefits, are
not provided to the Executive on a basis commensurate with other executives of the Corporation
and its subsidiary banks, or (iii) there are changes in the Executive’s responsibilities for the
Corporation which require moving the Executive’s job location to a location outside of the lower
peninsula of the State of Michigan, then the Executive shall be entitled to give written notice
thereof to the Board of Directors of the Corporation. If within 60 days following such notice,
the Executive and the Board of Directors of the Corporation do not resolve the Executive’s
concerns to the satisfaction of the Executive (the Executive’s satisfaction or dissatisfaction
to be communicated to the Board of Directors of the Corporation in writing within such 60 days),
the Executive’s employment shall be deemed to be constructively terminated at the end of such
60-day period, provided that Executive in fact experiences a Separation from Service.
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4. The specific arrangements referred to above are not intended to exclude the
Executive’s participation in other benefits available to executive personnel of the Corporation
generally or to preclude other compensation or benefits as may be authorized by the
Corporation’s Board of Directors from time to time provided however, Executive shall not be
eligible to receive any benefits under the Corporation’s Severance Pay Plan if Executive
receives the severance amount and other benefits under this Agreement.
5. As partial consideration for the above, the Executive agrees not to disclose any
confidential information about the Corporation and its operation to which the Executive was
privy during the course of the Executive’s employment by the Corporation. Further, the
Executive agrees not to accept employment or consult for or otherwise assist any competitor of
the Corporation for a period of _____ months following the Executive’s Separation from Service.
For purposes of the foregoing, “competitor” means any financial institution that conducts
business from any location within 50 miles of any location at which the Corporation or any
subsidiary bank had an office on the day immediately prior to the day on which the Change in
Control of the Corporation occurred.
6. This Agreement shall be binding upon and shall inure to the benefit of the
respective successors, assigns, legal representatives and heirs to the parties.
7. Any payment or delivery required under this agreement shall be subject to all
requirements of the law with regard to withholding, filing, making of reports and the like, and
the Corporation shall use its best efforts to satisfy promptly all such requirements.
8. Notwithstanding anything contained herein to the contrary, this Agreement shall be
terminated and no benefits to the Executive shall be payable if, subsequent to the effective
date of this Agreement, the Executive accepts a new position within the Corporation that is not
eligible to participate in the Corporation’s change in control program at the time Executive
accepts such position or if, at any time, the Executive shall resign voluntarily (other than as
provided in paragraph 3), become incapacitated, voluntarily take another position requiring a
substantial portion of the Executive’s time, or die. This Agreement also shall terminate upon
termination for cause of the Executive’s employment as an officer of the Corporation or any
subsidiary bank by the Incumbent Board. For purposes of the foregoing, “termination for cause”
means termination due to the Executive’s conviction of a felony, a determination that the
Executive is guilty of sexual harassment of another employee, the Executive’s proven
embezzlement from the Corporation or a subsidiary bank, the Executive’s gross misconduct or
incompetence, the Executive’s disclosure of confidential information of the Corporation or
intentional assistance of a competitor of the Corporation (as defined in paragraph 5), or any
other activity of the Executive which has or may have a material adverse effect on the finances
or business reputation of the Corporation or a subsidiary bank.
9. Any and all disputes, controversies or claims arising out of or in connection with
or relating to this Agreement or any breach or alleged breach thereof shall, upon the request of
either party, be submitted to and settled by arbitration in the State of Michigan pursuant to
the Voluntary Labor Arbitration Rules, then in effect, of the American Arbitration Association
(or at any other place or under any other form of arbitration mutually acceptable to the parties
involved). The parties hereto specifically agree to arbitrate with the other party in a
proceeding with regard to all issues and disputes, and to permit pre-hearing discovery in the
time and manner provided by the then applicable Federal Rules of Civil Procedure. This
agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law.
Notice of the demand for arbitration shall be filed, in writing, with the other party to this
Agreement and with the American Arbitration Association. The demand for arbitration shall be
made within a reasonable time after the claim, dispute, or other matter in question arose where
the party asserting the claim should reasonably have been aware of the same, but in no event
later than the applicable Michigan or federal statute of limitations. The arbitrator shall have
no power to add to, subtract from, or alter the terms of this Agreement, and shall render a
written decision setting forth findings and conclusions only as to the claims or disputes at
issue. Any award by the arbitrator shall be final and conclusive upon the parties, and a
judgement thereon may be entered in the highest court for the forum, state or federal, having
jurisdiction. All expenses of the arbitration process shall be borne by the Corporation. The
Corporation shall reimburse the Executive for the reasonable fees of legal counsel as incurred
(within ten days following the Corporation’s receipt of an invoice from the Executive), at any
time from the effective date of this Agreement through the Executive’s remaining lifetime (or,
if longer, through the 20th anniversary of the effective date of this Agreement) in
connection with arbitrating the enforcement of any of the Executive’s rights under this
Agreement. However, in no event shall the Executive be entitled to retain any fees so
reimbursed if the claim brought by the Executive against the Corporation is in the arbitrator’s
sole determination frivolous or was brought in bad faith, and the Corporation will
be entitled to seek repayment from the Executive for such fees after such determination by the
arbitrator. In order
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to comply with Code Section 409A, in no event shall the payments by the
Corporation under this paragraph 9 be made later than the end of the calendar year next
following the calendar year in which such fees and expenses were incurred, provided, that the
Executive shall have submitted an invoice for such fees and expenses at least ten days before
the end of the calendar year next following the calendar year in which such fees and expenses
were incurred. The amount of such legal fees and expenses that the Corporation is obligated to
pay in any given calendar year shall not affect the legal fees and expenses that the Corporation
is obligated to pay in any other calendar year, and the Executive’s right to have the
Corporation pay such legal fees and expenses may not be liquidated or exchanged for any other
benefit.
10. The Corporation 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 or be exempt
from the requirements of Code Section 409A, so as to avoid the imposition of taxes and penalties
on the Executive pursuant to Code Section 409A. If benefits or payments under this Agreement
must be delayed or reduced to comply with the Emerging Economic Stabilization Act of 2008, as
amended (the “Act”), the Corporation, in consultation with the Executive, shall modify the
Agreement in the least restrictive manner necessary to comply with the Act.
11. The invalidity or unenforceability of any provision of this Agreement shall not
affect the enforceability or validity of any other provision hereof.
12. This Agreement constitutes the entire agreement of the parties with respect to the
subject matter addressed in this Agreement. This Agreement replaces and supercedes in the
entirety any previous change in control agreement between Executive and the Corporation,
including the Prior Agreement. This Agreement may be amended only in a written document signed
by both the Corporation and the Executive.
13. This Agreement shall be governed by the laws of the State of Michigan.
CITIZENS REPUBLIC BANCORP, INC. | EXECUTIVE | |||||
By: |
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