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Exhibit 10.25
FIRSTMERIT CORPORATION TERMINATION AGREEMENT
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(As Amended and Restated Effective as of September 1, 1998)
Agreement made this 1st day of ____, 1999, by and between FirstMerit
Corporation, an Ohio corporation, (the "Company") and ____________ ("Employee").
R E C I T A L S:
A. The Employee is a key officer of the Company or one of its
subsidiaries.
B. The Board of Directors of the Company has determined that the
interests of FirstMerit Corporation stockholders will be best served by assuring
that its key corporate officers will adhere to the policy of the Board of
Directors with respect to any event by which another entity would acquire
effective control of the Company, including but not limited to a tender offer.
C. The Board of Directors has also determined that it is in the best
interest of the shareholders to promote stability among key officers and
employees.
D. The Company and the Employee previously entered into a FirstMerit
Corporation Termination Agreement, dated ______________ (the "Prior Agreement").
E. The Company and the Employee desire to amend and restate the Prior
Agreement as hereinafter provided.
IN CONSIDERATION OF THE FOREGOING, the mutual covenants hereinafter
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the Company and Employee agree as follows:
1. DUTIES OF EMPLOYEE. Employee shall support the position of the Board
of Directors and shall take any action reasonably requested by the Board of
Directors with respect to any event by which another entity would acquire
effective control of the Company, including but not limited to a tender offer.
2. CHANGE IN CONTROL. The term "Change in Control" shall mean a change
in control of a nature that would be required to be reported by persons or
entities subject to the reporting require ments of Section 14(a) of the
Securities Exchange Act of 1934 in response to item 5(f) of Schedule 14A of
Regulation 14(A) as in effect on the date hereof, or successor provisions
thereto, provided that, without limitation, such a change in control shall be
deemed to have occurred if (1) any unaffiliated "person," "entity," or "group"
(as defined in Rule 13(d)-3 issued under the Securities Exchange Act of 1934)
directly or indirectly becomes the owner of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities or (2) at any time during any period of two consecutive
calendar years individuals, who at the beginning of such period constitute the
Board of Directors of the Company, cease for any reason to constitute at least
the majority of such Board unless the election, or the nomination for election,
by
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the Company's shareholders of each new director was approved by a vote of at
least two-thirds of the directors still in office who were directors of the
Company at the beginning of such two-year period.
3. COMPANY'S RIGHT TO TERMINATE. The Company may terminate the
Employee's employment at any time during the term of this Agreement, subject to
providing the benefits hereinafter specified.
4. TERMINATION FOLLOWING CHANGE IN CONTROL. In the event of termination
of employment subsequent to a Change in Control and prior to the expiration of
the term of this Agreement, the Employee shall be entitled to the benefits
provided in paragraph 6 unless such termination is (i) because of the Employee's
death, Retirement or Disability, (ii) by the Company for Cause or (iii) by the
Employee other than for Good Reason.
(1) DISABILITY OR RETIREMENT. Termination of employment by the Company
based on "Dis ability" shall mean termination because of Total and Permanent
Disability as defined in the Long- Term Disability Plan of the Company in effect
from time to time, in which the Employee is participating. Termination of
employment based on "Retirement" shall mean termination of employment by the
Employee in accordance with the retirement policy (including early retirement
policy) which is in effect from time to time and is generally applicable to the
Company's salaried employees.
(2) CAUSE. The term "Cause" shall mean termination upon one or more of
the following acts of the Employee:
(A) Felonious criminal activity whether or not affecting the Company;
(B) Disclosure to unauthorized persons of Company information which
is believed by the Board of Directors of the Company to be
confidential;
(C) Breach of any contract with, or violation of any legal obligation
to, the Company or dishonesty; or
(D) Gross negligence or insubordination in the performance of duties
of the position held by the Employee.
(3) GOOD REASON. The term "Good Reason" shall mean voluntary
termination of employment by the Employee based on any of the following:
(A) Involuntary reduction in the Employee's base salary, as in effect
immediately prior to a Change in Control unless such reduction
occurs simultaneously with a Company-wide reduction in officers'
salaries;
(B) Involuntary discontinuance or reduction in the Employee's
incentive compensation award opportunities under plans applicable
to the Employee and in existence at the time of a Change in
Control, unless a Company-wide reduction of all officers'
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incentive award opportunities occurs simultaneously with such
discontinuance or reduction;
(C) Involuntary relocation to another office located more than 50
miles from the Employee's office location at the time the Change
in Control occurs;
(D) Significant reduction in the Employee's responsibilities and
status within the Company's organization or change in the
Employee's title or office without prior written consent of the
Employee;
(E) Involuntary discontinuance of the Employee's participation in any
employee benefit plans maintained by the Company unless such
plans are discontinued by reason of law or loss of tax
deductibility to the Company with respect to contributions to
such plans, or are discontinued as a matter of the Company's
policy applied equally to all partici pants in such plans;
(F) Involuntary reduction of the Employee's paid vacation to less
than twenty (20) working days per calendar year;
(G) Failure to obtain an assumption of the Company's obligations
under this Agreement by any successor to the Company, regardless
of whether such entity becomes a successor to the Company as a
result of a merger, consolidation, sale of the assets of the
Company, or other form of reorganization; or
(H) Termination of employment which is not effected pursuant to a
Notice of Termination satisfying the requirements of paragraph 5
herein.
5. NOTICE OF TERMINATION. Any purported termination of the Employee's
employment by the Company or by the Employee shall be communicated by written
Notice of Termination to the other party. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon, shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee's employment under the provisions so indicated and
shall specify a "Date of Termination."
6. COMPENSATION AND BENEFITS UPON TERMINATION.
(1) If, after a Change in Control has occurred and prior to the
expiration of the term of this Agreement, the Employee's employment by the
Company shall be terminated: (A) by the Company other than for Cause,
Disability, Retirement, or death or (B) by the Employee for Good Reason, then
the Employee shall be entitled to the compensation and benefits provided in
subparagraph (3) below.
(2) The compensation described in subparagraphs 3(A), 3(B) and 3(C)
shall be paid by the Company to the Employee in a lump sum on or before the
fifth (5th) day following the Date of Termination.
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(3) The compensation and benefits payable to an Employee pursuant to this
paragraph 6 shall be as follows:
(A) BASE SALARY TO DATE OF TERMINATION. The Company shall pay to the
Employee his/her full base salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given or immediately preceding a
Change in Control, whichever is higher.
(B) BASE SALARY. The Company shall pay to the Employee an amount equal
to (i) the Employee's annual base salary (at the rate in effect at the time
Notice of Termination is given or immediately preceding a Change in Control,
whichever is higher) multiplied by (ii) the lesser of the number two (2) or a
fraction the numerator of which is the number of months from and including the
month in which the Date of Termination occurs to and including the month in
which the Employee would attain the age of sixty-five (65) and the denominator
of which is twelve (12).
(C) INCENTIVE COMPENSATION. The Company shall pay to the Employee an
incentive award in an amount equal to (i) the average of the incentive
compensation paid to the Employee in the two (2) years immediately preceding the
Date of Termination multiplied by (ii) the lesser of the number two (2) or a
fraction the numerator of which is the number of months from and including the
month in which the Date of Termination occurs to and including the month in
which the Employee would attain age sixty-five (65) and the denominator of which
is twelve (12). If the Employee was not employed by the Company during each of
the two years immediately preceding the Date of Termination, the Employee's
target award under the Company's Annual Incentive Compensation Plan for the year
in which the Date of Termination occurs shall be substituted for the amount that
would otherwise be applicable under subparagraph (i) above.
(D) STOCK PLANS. The Employee shall be entitled to immediate vesting of
all stock options and other stock, phantom stock, stock appreciation rights or
similar arrangements in which he participates. Notwithstanding any plan
provisions to the effect that rights under any such plan terminate upon
termination of employment, the Employee shall be given ninety (90) days after
the Date of Termination to realize or exercise all rights or options provided
under such plans.
(E) MEDICAL AND LIFE INSURANCE. The Company shall maintain in full
force and effect for the Employee's continued benefit until the earlier of the
second (2nd) anniversary of the Date of Termination or the calendar month in
which the Employee attains the age of sixty-five (65), all medical, life and
accidental death and dismemberment insurance (including conversion rights), with
coverage and limits identical to those in effect with respect to the Employee
immediately prior to the Change in Control. If the Employee is a participant in
the Company's Executive Committee Life Insurance Program, the Company shall pay
the premium for the Employee on such insurance for a period ending on the
earlier of the second (2nd) anniversary of the Date of Termination or the last
day of the calendar month in which the Employee attains the age of sixty-five
(65), plus an additional amount to the Employee equal to the Employee's
projected federal, state, county and municipal income taxes on the premiums so
paid, which projected taxes shall be calculated at the highest marginal tax
rates. For the sole purpose of determining the Employee's eligibility to
participate in the Company's medical, life, and accidental death and
dismemberment insurance plans, the
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Employee shall be considered to be on a paid leave of absence as long as he/she
is receiving compensation or benefits under this Agreement.
(F) EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN. The following shall apply
for purposes of calculating the Employee's benefits under the FirstMerit
Corporation Executive Supplemental Retirement Plan (the "Plan"):
(i) for purposes of calculating the Employee's
Monthly Retirement Income (as defined in the SERP) under Sections 4.01
and 4.02 of the SERP and for purposes of determining the Employee's
vested Monthly Retirement Income under Section 4.05 of the SERP, the
Employee's Years of Service (as defined in the SERP) shall be increased
by the Employee's Protection Period (as hereinafter defined);
(ii) for purposes of calculating the Employee's
Monthly Retirement Income under Section 4.02 of the SERP, the
Employee's Attained Age (as defined in the SERP) shall be increased by
the Employee's Protection Period (as hereinafter defined); and
(iii) the Employee's Average Monthly Earnings for
purposes of the SERP shall be deemed to be equal to the highest,
monthly base salary earned by the Employee during the twenty-four (24)
months immediately preceding the Change in Control.
The terms of this subparagraph 6(F) shall supersede any contrary provisions of
the SERP and any membership agreement executed between the Company and the
Employee in connection with the Employee's participation in the SERP. For
purposes of this subparagraph 6(F), the Employee's Protection Period is
twenty-four (24) months.
(G) OUTPLACEMENT FEES. For a period not to exceed one (1) year after
the Date of Termination, the Company will pay the reasonable expenses associated
with outplacement training of the Employee by a professional placement firm and
in an amount not to exceed Twenty Five Thousand Dollars ($25,000.00).
7. OVERALL LIMITATION ON BENEFITS. Notwithstanding any provision in
this Agreement to the contrary, if the compensation and benefits provided to the
Employee pursuant to or under this Agreement, either alone or with other
compensation and benefits received by the Employee, would constitute "parachute
payments" within the meaning of Section 280G of the Internal Revenue Code (the
"Code"), or the regulations adopted or proposed thereunder, then the
compensation and benefits payable pursuant to or under this Agreement shall be
reduced to the extent necessary so that no portion thereof shall be subject to
the excise tax imposed by Section 4999 of the Code. The Employee or any other
party entitled to receive the compensation or benefits hereunder may request a
determination as to whether the compensation or benefits would constitute a
parachute payment and, if requested, such determination shall be made by
independent tax counsel selected by the Company and approved by the party
requesting such determination. In the event that any reduction is required under
this paragraph 7, the Company shall consult with the Employee in determining the
order in which compensation and benefits shall be reduced.
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8. LEGAL FEES. The Company shall pay all legal fees and expenses
incurred by the Employee in enforcing any right or benefit provided by this
Agreement.
9. TERM OF AGREEMENT. This Agreement shall continue in effect until
the earliest to occur of the following:
(1) the last day of the twenty-fourth (24th) calendar month after the
calendar month in which a Change in Control occurs; or
(2) the date as of which the Employee is removed or resigns from
his/her position as a Senior Officer of the Company unless such removal or
resignation occurs after a Change in Control and is for other than Cause,
Disability, Retirement or death, in the case of removal by the Company, or for
Good Reason, in the case of resignation by the Employee.
In the event that the Employee becomes entitled to the compensation or benefits
provided in paragraph 6 of this Agreement before an event of termination occurs
as provided in this paragraph 9, such compensation and benefits shall continue
for the period provided in paragraph 6 notwithstanding the occurrence of such
event of termination.
10. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, provided that all
notices to the Company shall be directed to the attention of the President of
the Company with a copy to the Secretary of the Company, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
11. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived, or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Employee and such officer as may be specifically
designated by the Board of Directors of the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar provisions or conditions at the same
or at any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement;
provided, however, that this Agreement shall not supersede or in any way limit
the rights, duties of obligations that the Employee may have under any other
written agreement with the Company. Notwithstanding the foregoing, the parties
agree that this Agreement shall supersede the Prior Agreement and that the Prior
Agreement is hereby rendered null and void in all respects. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Ohio.
12. VALIDITY. The validity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
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13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement on the date above first written.
FIRSTMERIT CORPORATION
Attest: BY:
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Name: Xxxx X. Xxxxxxx
Title: Chairman
COMPANY
Witness:
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Name:
EMPLOYEE
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