FIRSTMERIT CORPORATION AMENDED AND RESTATED CHANGE IN CONTROL TERMINATION AGREEMENT (GREIG)
Exhibit 10.28
THIS AGREEMENT (“Agreement”) originally was effective May 18, 2006 (“Effective Date”), by and
between FirstMerit Corporation, an Ohio corporation (the “Company”), and Xxxx Xxxxx, the executive
employee who has executed this Agreement (“Employee”). Effective as of this 8th day of January,
2009, the parties hereby amend and restate the Agreement (as previously amended and restated from
time to time) as set forth herein.
RECITALS:
A. The Employee serves as an executive and is considered a key corporate officer of the
Company or one of its affiliates.
B. The Board of Directors of the Company (“Board”) has determined that the interests of the
Company’s shareholders will be best served by ensuring that key corporate officers will adhere to
the policies of the Board and senior management with respect to any event by which another entity
would acquire effective control of the Company.
C. The Board has also determined that it is in the best interests of the shareholders to
promote stability among key officers and employees, particularly during the period leading up to
and after another entity acquires effective control of the Company.
D. Employee and the Company may have previously entered into a Change in Control Termination
Agreement, which agreement is being replaced in its entirety by this Agreement, and have also
entered into a Displacement Agreement which protects Employee in the circumstance of a displacement
of the Employee which occurred due to a merger or acquisition described in the Displacement
Agreement. If an event (or series of events) creates an entitlement under both the Displacement
Agreement and this Agreement, the Employee will not be entitled to be paid benefits under both this
Agreement and the Displacement Agreement but will be entitled to the benefit under this Agreement.
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 the Employee
agree as follows:
1. Duties of Employee. In exchange for the compensation and benefits described in
this Agreement, the Employee agrees to discharge the obligations described in paragraph 9 and,
consistent with his duties to shareholders and other legal obligations, the Employee shall support
the position of the Board and the Company’s senior management and shall take any action reasonably
requested by the Board and the Company’s senior management with respect to any event that may or
will constitute a Change in Control. The Employee agrees (on his own behalf and in behalf of his
heirs, assigns and beneficiaries) that the compensation and benefits described in this Agreement
are adequate consideration for the obligations assumed in this Agreement.
2. Change in Control. The term “Change in Control” shall mean the occurrence of the earliest
to occur of any one of the following events on or after the Effective Date and while the Employee
is in the employ of the Company or any Subsidiary (i.e., any entity related to the Company through
common ownership as determined under Sections 414 or 1563 of the Code) before a Change in Control
or, after a Change in Control, the Change Entity (as defined below) or any Related Entity (i.e.,
any entity related to the Change Entity through common ownership as determined under Sections 414
or 1563 of the Code):
(a) Individuals who, on April 19, 2000, constituted the Board (the “Incumbent Directors”)
cease for any reason to constitute at least a majority of the Board, provided that any person
becoming a director subsequent to April 19, 2000 whose election or nomination for election was
approved by a vote of at least 2/3rds of the then Incumbent Directors (either by a specific vote or
by approval of the proxy statement of the Company in which such person is named as a nominee for
director, without written objection to such nomination) shall be an Incumbent Director; provided,
however, that no individual elected or nominated as a director of the Company initially as a result
of an actual or threatened election contest with respect to directors or any other actual or
threatened solicitation of proxies or consents by or on behalf of any person other than the Board
shall ever be deemed to be an Incumbent Director;
(b) Any “person” (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of
1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act)
becomes through any means (including those described in paragraph (c)(i) through (v)) a “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 50% or more of the combined voting power of the Company’s then outstanding
securities eligible to vote for the election of the Board (the “Company Voting Securities”);
(c) Any “person” (as such term is defined in Section 3(a)(9) of the Exchange Act and as used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) becomes a “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of Company Voting Securities
representing 25% or more (but less than 50%) of the Company Voting Securities; provided, however,
that the event described in this paragraph (c) shall not be deemed to be a Change in Control for
purposes of this paragraph (c) by virtue of any of the following acquisitions:
(i) by the Company or any Subsidiary;
(ii) by or through any employee benefit plan sponsored or maintained by the Company or any
Subsidiary and described (or intended to be described) in Section 401(a) of the Code;
(iii) directly through an equity compensation plan maintained by the Company or any
Subsidiary, including a program described in Section 423 of the Code;
(iv) by any underwriter temporarily holding securities pursuant to an offering of such
securities;
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(v) by any entity or “person” (including a “group” as contemplated by Sections 13(d)(3) and
14(d)(2) of the Exchange Act) with respect to which that acquirer has filed SEC Schedule 13G
indicating that the securities were not acquired and are not held for the purpose of or with the
effect of changing or influencing, directly or indirectly, the Company’s management or policies
(regardless of whether such acquisition of securities is considered to constitute the acquisition
of control under the Bank Holding Company Act of 1956 pursuant to Regulation Y promulgated
thereunder), unless and until that entity or person files SEC Schedule 13D, at which point this
exception will not apply to such Company Voting Securities, including those previously subject to
an SEC Schedule 13G filing; or
(vi) pursuant to a Non-Control Transaction (as defined in paragraph (d)).
(d) The consummation of a merger, consolidation, statutory share exchange or similar form of
corporate transaction involving the Company or any of its Subsidiaries that requires the approval
of the Company’s shareholders, whether with respect to such transaction or the issuance of
securities in connection with the transaction (a “Business Combination”), unless immediately
following such Business Combination:
(i) more than 50% of the total voting power of (y) the corporation resulting from such
Business Combination (the “Surviving Entity”), or (z) if applicable, the ultimate parent
corporation that directly or indirectly has beneficial ownership of 100% of the voting securities
eligible to elect directors (“Total Voting Power”) of the Surviving Entity (the “Parent Entity”),
is represented by Company Voting Securities that were outstanding immediately prior to such
Business Combination (or, if applicable, shares into which such Company Voting Securities were
converted pursuant to such Business Combination), and such voting power among the holders thereof
is in substantially the same proportion as the voting power of such Company Voting Securities among
the holders thereof immediately prior to the Business Combination; and
(ii) at least a majority of the members of the board of directors of the Parent Entity (or, if
there is no Parent Entity, the Surviving Entity) following the consummation of the Business
Combination were Incumbent Directors at the time of the Board’s approval of the execution of the
initial agreement providing for such Business Combination
Any Business Combination which satisfies all of the criteria specified in (d)(i) and (d)(ii)
shall be deemed to be a “Non-Control Transaction”);
(e) The shareholders of the Company approve a plan of complete liquidation or dissolution of
the Company; or
(f) Any other event that constitutes a “change in control event” as defined in Section
Treasury Regulation §1.409A-3(i)(5) (a “Section 409A Change in Control”).
Notwithstanding the foregoing, a Change in Control of the Company shall not be deemed to occur
solely because any person acquires beneficial ownership of more than 25% of the Company Voting
Securities as a result of the acquisition of Company Voting Securities by the Company which reduces
the number of Company Voting Securities outstanding; provided, that if
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after such acquisition by the Company such person becomes the beneficial owner of additional
Company Voting Securities that increases the percentage of outstanding Company Voting Securities
beneficially owned by such person by more than one percent, a Change in Control of the Company
shall then occur.
For purposes of this Agreement, the entity resulting from a Change in Control (including, if
appropriate, the Company) or succeeding to the Company’s interest in connection with a Change in
Control is referred to as the “Change Entity.”
If more than one event that constitutes a Change in Control occurs during a Protection Period
(as defined below), the Employee shall be entitled to the amount that equals the largest after-tax
amount generated by any of the Changes in Control.
If one or more events generate a payment under both this Agreement and the Displacement
Agreement, the Employee will be entitled only to the benefit described in this Agreement.
Notwithstanding any other provision of this Agreement, the Employee will not be entitled to
any amount under this Agreement if he acted in concert with any person or group (as defined above)
to effect a Change in Control, other than at the specific direction of the Board and in his
capacity as an employee of the Company or any Subsidiary.
2A. Benefits Upon Certain Changes in Control.
(a) On the occurrence of any Change in Control during Employee’s employment with the Company
or any Subsidiary, the Employee shall be entitled to (and each of the Change Entity and all Related
Entities shall be jointly liable for) the benefits provided in subparagraphs (b) and (c) below;
provided that such benefits shall not apply if such Employee’s employment with the Company or any
Subsidiary is subsequently terminated for Cause (as used for purposes of this Agreement). For the
avoidance of doubt, nothing in this paragraph 2A shall operate to accelerate the payment or
settlement of any amount or benefit in a manner that would violate Section 409A of the Internal
Revenue Code of 1986, as amended (“Code”).
(b) Except as provided in subparagraph (a) above, upon a Change in Control during Employee’s
employment with the Company or any Subsidiary (i) the Employee’s outstanding stock options,
restricted stock and other stock, phantom stock, stock appreciation rights or similar arrangements
in which he participates, whether issued before, in connection with or after the Change in Control
will be fully vested and exercisable and settled as described in the applicable plan or plans and
(ii) notwithstanding any provisions to the effect that rights terminate upon termination of
employment, the Employee (or his beneficiary) shall be given the remaining period provided in the
grant (determined without regard to any termination of employment by the Employee following the
Change in Control), to realize or exercise all rights or options provided under such plans with
respect to any stock option, and other stock, phantom stock, stock appreciation rights or similar
grants.
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(c) Except as provided in subparagraph (a) above, upon a Change in Control during Employee’s
employment with the Company or any Subsidiary, the following shall apply for purposes of
calculating the Employee’s benefits, if applicable, under the FirstMerit Corporation Amended and
Restated Supplemental Executive Retirement Plan, originally effective on February 13, 1987 and
amended and restated effective of as November 20, 2008, and as maybe amended from time to time,
and/or any other nonqualified plan of deferred compensation in effect during the Protection Period
(the “SERP”):
(i) The Employee’s Average Monthly Earnings for purposes of the SERP shall be deemed to
be equal to the higher of (x) the Employee’s Average Monthly Earnings under the SERP as then
in effect and (y) the total of the highest monthly base salary earned by the Employee during
the 24 months immediately preceding the Employee’s termination of employment and the value
of the incentive compensation payment the Employee would receive if payout was made at the
“target” percentage for the Employee under the Company’s Executive Incentive Plan (and/or
any analogous plan adopted after the date of this Agreement) in the year of the Employee’s
termination of employment (or any higher percentage based on objective criteria specified in
the Incentive Compensation Plan for the year in which the date of termination occurs and/or
any analogous plan adopted after the date of this Agreement) that the Employee has achieved
before the date of termination) in the year of Employee’s termination of employment divided
by 12.
(ii) The terms of this paragraph 2A(c) shall apply only if the Employee is a
participant in the SERP, and 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, unless expressly provided otherwise in such membership
agreement. The Employee’s SERP benefit, calculated using the provisions of this paragraph
2A(c), is assumed to commence on the earliest date upon which the Employee is eligible to
retire under the SERP for purposes of determining the Actuarial Equivalent (as defined in
the SERP) of such benefit.
3. Company’s Right to Terminate. The entity with which the Employee has a direct
employment relationship (“Employer”) may terminate the Employee’s employment at any time during the
term of this Agreement, subject to the terms of this Agreement and the obligation to provide the
amounts stated herein if due. For purposes of this Agreement, any reference to the Employee’s
“termination” or “termination of employment” (or any form thereof) shall mean the Employee’s
“separation from service”, within the meaning of Section 409A of the Code, from the Employer and
all entities that, along with the Employer would be treated as a single employer under Sections
414(b) and (c) of the Code.
4. Termination in Connection With a Change in Control. In the event of termination of
employment from the Company or any Subsidiary before a Change in Control or, after a Change in
Control, the Change Entity or any Related Entity (including an involuntary termination while the
employee is absent from active employment pending determination of Disability under the procedures
described in paragraph 4(a)) within the “Protection Period” (i.e., the period beginning on the date
the Board first learns of an act or event that results in a Change
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in Control, even if that period begins before the Effective Date, and ending on the last day
of the number of calendar months specified in Item 10 on Exhibit A beginning coincident with or
immediately after a Change in Control), the Employee shall be entitled to the benefits provided in
paragraph 6 unless such termination is because of the Employee’s death or determination of
Disability (as described in paragraph 4(a)), for Cause, or by the Employee other than for Good
Reason.
(a) Disability. The term “Disability” shall mean termination because of Total and
Permanent Disability as defined in the Long-Term Disability Plan in effect at any time during the
Protection Period in which the Employee is or was participating when the condition began (or, if
the Employee is or was not participating in a Long-Term Disability Plan when the condition begins,
as defined under any long-term disability program in effect at any time during the Protection
Period). If the Employee is deemed Disabled, his date of termination will be the end of any period
prescribed under the long-term disability plan for determining eligibility for long term disability
benefits and any termination occurring before that date will not be a termination for Disability.
Also, any adjustment to the Employee’s compensation, job duties or other circumstances of
employment during the period his Disability is being established will not constitute a basis for
“Good Reason” under paragraph 4(c).
(b) Cause. The term “Cause” shall mean one or more of the following acts of the
Employee:
(i) any act of fraud, intentional misrepresentation, embezzlement, misappropriation or
conversion by the Employee of the assets or business opportunities of the Company or any
Subsidiary before a Change in Control or, after a Change in Control, the Change Entity or
any Related Entity;
(ii) conviction of the Employee of (or plea by the Employee of guilty to) a felony (or
a misdemeanor that originally was charged as a felony but was reduced to a misdemeanor as
part of a plea bargain) or intentional and repeated violations by the Employee of the
Employer’s written policies or procedures;
(iii) disclosure, other than through mere inadvertence, to unauthorized persons of any
Confidential Information (as defined below);
(iv) intentional breach of any contract with or violation of any legal obligation owed
to the Company or any Subsidiary before a Change in Control or, after a Change in Control,
the Change Entity or any Related Entity;
(v) dishonesty relating to the duties owed by the Employee to the Company or any
Subsidiary before a Change in Control or, after a Change in Control, the Change Entity or
any Related Entity;
(vi) the Employee’s (x) willful and continued refusal to substantially perform assigned
duties (other than any refusal attributable to an event that constitutes Good Reason, as
defined in paragraph (c)), (y) willful engagement in gross misconduct
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materially and demonstrably injurious to the Company or any Subsidiary before a Change
in Control or, after a Change in Control, the Change Entity or any Related Entity or (z)
breach of any term of this Agreement; or
(vii) any intentional cooperation with any party attempting to effect a Change in
Control unless (y) the Board has approved or ratified that action before the Change in
Control or (z) that cooperation is required by law.
However, Cause will not arise solely because the Employee is absent from active employment
during periods of vacation, consistent with the Employer’s applicable vacation policy, sickness or
illness or while suffering from an incapacity due to physical or mental illness, including a
condition that does or may result in a Disability or other period of absence initiated by the
Employee and approved by the Employer.
The term “Confidential Information” shall mean any and all information (other than information
in the public domain) related to the Company’s, any Subsidiary’s, the Change Entity’s or any
Related Entity’s business, including all processes, inventions, trade secrets, computer programs,
technical data, drawings or designs, information concerning pricing and pricing policies, marketing
techniques, plans and forecasts, new product information, information concerning methods and manner
of operations and information relating to the identity and location of all past, present and
prospective customers and suppliers.
(c) Good Reason. The term “Good Reason” shall mean any of the following to which the
Employee has not specifically consented in writing:
(i) at any time during the Protection Period, any breach of this Agreement (including
breach of the commitments undertaken under paragraph 9(d) of any nature whatsoever) by or on
behalf of the Company or any Subsidiary before a Change in Control or, after a Change in
Control, the Change Entity or any Related Entity;
(ii) at any time during the Protection Period, a reduction in the Employee’s title,
duties, responsibilities or status, as compared to either (y) the Employee’s title, duties,
responsibilities or status immediately before the beginning of the Protection Period or (z)
any enhanced or increased title, duties, responsibilities or status assigned to the Employee
during the Protection Period;
(iii) at any time during the Protection Period, the permanent assignment to the
Employee of duties that are inconsistent with (y) the Employee’s office immediately before
the beginning of the Protection Period or (z) any more senior office to which the Employee
is promoted during the Protection Period;
(iv) during any calendar year ending during the Protection Period (or any fractional
calendar year ending within the Protection Period), a 15 percent (or larger) reduction
(other than a reduction that is attributable to any termination for death, after reaching
age 65 (but only if the Employee is then entitled to an immediate, unreduced benefit under a
deferred compensation plan described in Section 401(a) of the Code),
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Disability or Cause, voluntary termination by the Employee other than for Good Reason
or for any period of temporary absence protected by law or initiated by the Employee and
approved by the Employer) in the aggregate value of the highest of the Employee’s total
compensation for the calendar year ending before the Date of Termination, as determined
under paragraph 5 (including base salary, cash bonus potential, the value of employee
benefits, other than value associated solely with the performance of investments the
Employee controls, and fringe benefits but excluding compensation attributable to the
exercise or liquidation of stock options) or, if higher, the Employee’s total compensation
for the last calendar year ending before the beginning of the Protection Period (including
base salary, cash bonus potential (as distinguished from the cash bonus earned), the value
of employee benefits, other than value associated solely with the performance of investments
the Employee controls, and fringe benefits) but, in both cases, determined without regard to
any amounts, paid or payable, under paragraphs 6, 7, 8 and 11;
(v) at any time during the Protection Period, a requirement that the Employee relocate
to a principal office or worksite (or accept indefinite assignment) to a location more than
50 miles distant from (y) the principal office or worksite to which the Employee was
assigned immediately before the beginning of the Protection Period or (z) any location to
which the Employee agreed, in writing, to be assigned after a Change in Control;
(vi) at any time during the Protection Period, the imposition on the Employee of
business travel obligations substantially greater than the Employee’s business travel
obligations during the 12-consecutive-calendar-month period ending immediately before the
beginning of the Protection Period but determined without regard to any special business
travel obligations associated with activities relating to the Change in Control;
(vii) at any time during the Protection Period, the Employer’s (u) failure to continue
in effect any material fringe benefit or compensation plan, retirement or deferred
compensation plan, life insurance plan, health and accident plan, sick pay plan or
disability plan in which the Employee is participating (or was eligible to participate)
immediately before the beginning of the Protection Period, (v) modification of any of the
plans or programs just described that adversely affects the potential value of the
Employee’s benefits under those plans (other than value associated solely with the
performance of investments the Employee controls) or (w) failure to provide the Employee,
after a Change in Control, with the same number of paid vacation days to which the Employee
is or becomes entitled at or anytime during the Protection Period under the terms of the
Employer’s vacation policy or program. However, Good Reason will not arise under this
subsection solely because (x) the Company or any Subsidiary before a Change in Control or,
after a Change in Control, the Change Entity or any Related Entity terminates or modifies
any such program during the Protection Period solely to comply with applicable law but only
to the extent required to meet applicable legal standards, (y) a plan or benefit program
expires under self-executing terms contained in that plan or benefit program before the
Change in Control or (z) the Company or any Subsidiary before a Change in Control or, after
a Change in Control, the
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Change Entity or any Related Entity replaces a plan or program with a successor plan or
program of equal or equivalent value to the Employee;
(viii) for the duration of any period of any absence from active employment that begins
or continues at any time during the Protection Period, failure to provide or continue for
the Employee any benefits (including disability benefits) available to employees who are
absent from active employment (including because of disability) under programs maintained by
the Company, a Subsidiary, the Change Entity or any Related Entity on the date the absence
(including disability) begins;
(ix) during the Protection Period, the Employee is unable to perform normally assigned
duties because of a physical or mental condition and before his Disability is established
under paragraph 4(a), the Company or any Subsidiary before a Change in Control or, after a
Change in Control, the Change Entity or any Related Entity terminates the Employee before
the end of the Disability determination period described in paragraph 4(a);
(x) during the Protection Period, the Company or any Subsidiary before a Change in
Control or, after a Change in Control, the Change Entity or any Related Entity
unsuccessfully attempts to terminate the Employee for Cause, in which case the Effective
Period will not end earlier than 60 days after the conclusion of the Employer’s unsuccessful
attempt to terminate the Employee for Cause;
(xi) during the Protection Period, the Employer attempts to amend or terminate this
Agreement without regard to the procedures described in paragraphs 10 or 13;
(xii) failure at any time to obtain an assumption of the Company’s or any Subsidiary’s,
before a Change in Control, or, after a Change in Control, the Change Entity’s or any
Related Entity’s obligations under this Agreement by any successor to any of them,
regardless of whether such entity becomes a successor to the Company or any Subsidiary,
before a Change in Control, or, after a Change in Control, the Change Entity or any Related
Entity as a result of a merger, consolidation, sale of assets or any other form of
reorganization; or
(xiii) 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
shall be communicated by a written Notice of Termination to the other party delivered no later than
60 days after the Employee, in the case of Good Reason, or, in other cases, the Company or any
Subsidiary, before a Change in Control, or, after a Change in Control, the Change Entity and any
Related Entity, knows or with reasonable diligence should have known of the event constituting Good
Reason, Cause or Disability. For purposes of this Agreement, a “Notice of Termination” shall mean
a notice which shall indicate the specific termination provisions in this Agreement relied upon,
shall set forth in reasonable detail the facts
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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”. However, the Date of
Termination specified in the notice:
(a) In the case of a termination because of Disability, will be no earlier than the end of the
disability determination period described in paragraph 4(a);
(b) In the case of a termination for Cause, on the Date of Termination specified in the Notice
of Termination (which may not be earlier than the date on which the condition constituting Cause
occurred, unless, within 30 days after the date the Notice of Termination for Cause is delivered to
the Employee, the Employee corrects to the reasonable satisfaction of the Employer the condition
specified in the Notice of Termination for Cause as the basis for the termination, in which case
the Notice of Termination will be deemed to have been withdrawn and will be of no effect;
(c) In the case of a termination for Good Reason, on the Date of Termination specified in the
Notice of Termination (which may not be earlier than the day before the event constituting Good
Reason occurred), unless, within 30 days after the date the Notice of Termination for Good Reason
is delivered (even if this 30 day period extends beyond the term as defined in paragraph 10), the
Employer corrects to the reasonable satisfaction of the Employee the condition specified in the
Notice of Termination for Good Reason as the basis for the termination, in which case the Notice of
Termination will be deemed to have been withdrawn and will be of no effect; and
(d) in all other cases, the date the Notice of Termination is delivered.
Notwithstanding the foregoing, the Date of Termination shall be date of the Employee’s
termination of employment, if earlier than the Date of Termination specified above.
6. Compensation and Benefits Upon Termination.
(a) If a Change in Control has occurred and during the Protection Period the Employee’s
employment is terminated (i) by the Employer other than for Cause, Disability or death or (ii) by
the Employee for Good Reason, the Employee shall be entitled to (and each of the Change Entity and
all Related Entities shall be jointly liable for) the compensation and benefits provided in
subparagraph (c) below.
(b)(i) If a termination described in paragraph 6(a) occurs more than 24 months following a
Change in Control, or if such termination occurs within 24 months following a Change in Control
which does not constitute a Section 409A Change in Control, the compensation described in
subparagraphs (c)(i), (c)(ii) and (c)(iii) shall be paid by the Change Entity or the Employer (or
jointly by them) to the Employee as follows: (A) if the termination is described in paragraph
6(a)(i), as described in Sections 5.03[2][a], [c] and [d] of the Amended and Restated Employment
Agreement by and between FirstMerit Corporation and Xxxx Xxxxx effective January 17, 2008
(“Employment Agreement”), as applicable; and (B) if the termination is described in paragraph
6(a)(ii), as described in Sections 5.05[2][a], [c] and [d] of the
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Employment Agreement, as applicable. The compensation and benefits described in subparagraphs
(c)(iv), (c)(v), (c)(vi) and (c)(vii) will be paid as provided in those subparagraphs.
(ii) If a termination described in paragraph 6(a) occurs prior to or on or before the 24th
month following a Change in Control that also constitutes a Section 409A Change in Control, the
compensation and benefits described in subparagraphs (c)(i), (c)(ii) and (c)(iii) shall be paid by
the Change Entity or the Employer (or jointly by them) in a single lump sum cash payment on or
before the fifth business day following the effective Date of Termination (or, in the case of a
termination occurring prior to a Section 409A Change in Control, on or before the fifth business
day following the Section 409A Change in Control). The compensation and benefits described in
subparagraphs (c)(iv), (c)(v), (c)(vi) and (c)(vii) will be paid as provided in those
subparagraphs.
(iii) If a termination described in paragraph 6(a) occurs prior to a Change in Control, and
such Change in Control does not also constitute a Section 409A Change in Control, the Employee
shall not be entitled to any compensation or benefits under this Agreement, except that Employee’s
outstanding equity grants will be fully vested and exercisable as described in subparagraph (c)(iv)
immediately upon such Change in Control, and that Employee shall be entitled to the additional SERP
benefits described in subparagraph (c)(vi) in a lump sum on or before the fifth business day
following the date of the Change in Control.
(c) The compensation and benefits payable to an Employee pursuant to this paragraph 6 shall be
as follows:
(i) Base Salary to Date of Termination. The Employee’s full base salary through the
Date of Termination.
(ii) Base Salary. An amount equal to the Employee’s annual base salary (at the highest
annualized rate in effect at any time during the Protection Period) multiplied by the number
indicated in Item 6(c)(ii) on Exhibit A, which Exhibit is attached hereto and incorporated
by reference herein.
(iii) Incentive Compensation. An amount equal to (y) the value of the incentive
compensation payment the Employee would receive if payout was made at the “target”
percentage for the Employee under the Company’s Executive Incentive Plan (and/or any
analogous plan adopted after the date of this Agreement) for the year of the Employee’s Date
of Termination (or any higher percentage based on objective criteria specified in the
Executive Incentive Compensation Plan for the year in which the Date of Termination occurs
and/or any analogous plan adopted after the date of this Agreement that the Employee has
achieved before the Date of Termination) or, if higher, the value of any incentive
compensation payment received by the Employee under the Company’s Executive Incentive Plan
(and/or any analogous plan adopted after the date of this Agreement) at any time during the
Protection Period multiplied by (z) the number indicated in Item 6(c)(iii) on Exhibit A.
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(iv) Stock Plans. To the extent not otherwise vested pursuant to paragraph 2A(a)
above, the Employee’s outstanding stock options, restricted stock and other stock, phantom
stock, stock appreciation rights or similar arrangements in which he participates, whether
issued before, in connection with or after the Change in Control will be fully vested and
exercisable and settled as described in the applicable plan or plans. Notwithstanding any
provisions to the effect that rights terminate upon termination of employment, the Employee
(or his beneficiary) shall be given the longer of 90 days after the Date of Termination, or
the remaining period provided in the grant (determined without regard to the Employee’s
termination), to realize or exercise all rights or options provided under such plans with
respect to any stock option, and other stock, phantom stock, stock appreciation rights or
similar grants.
(v) Medical Benefits and Life Insurance. The Employer or the Change Entity shall
maintain in full force and effect for the Employee’s (and for his family if family coverage
is then in effect) continued benefit until the earlier of the number of months listed in
Item 6(c)(v) on Exhibit A after the Date of Termination, or the end of the calendar month in
which the Employee reaches the age of 67, all medical insurance (including health care,
dental and prescription drug insurance), life insurance, and accidental death and
dismemberment insurance including conversion rights (collectively, “Welfare Benefits”), with
coverage and limits, separately for each Welfare Benefit and in the aggregate, identical to
those in effect with respect to the Employee (including family coverage if family coverage
is then in effect), immediately before the Date of Termination or, if higher (both
separately and in the aggregate) at any time during the Protection Period. If the Employer
or the Change Entity is unable to provide some or all of the Welfare Benefits through its
insured program for the duration of the period described in the first sentence of this
paragraph, the Employer or the Change Entity will distribute to the Employee a lump sum cash
amount equal to the highest aggregate premium amount paid during the Protection Period with
respect to the Welfare Benefit it is unable to provide through its insured programs
multiplied by the number of whole and fractional premium periods for which it is unable to
provide this coverage through its insured program, plus an additional amount equal to the
Premium Tax Obligation (as defined below)(“Benefit Cashout”). If the Employee is a
participant in the Company’s Executive Life Insurance Program (and/or any analogous plan
adopted after the date of this Agreement) on the Date of Termination, the Change Entity
and/or the Employer shall pay the premium for the Employee on such insurance for a period
ending the earlier of the number of months listed in Item 6(c)(v) on Exhibit A after the
Date of Termination, or the calendar month in which the Employee reaches the age of 67, plus
an additional amount to the Employee equal to the Premium Tax Obligation. For the sole
purpose of determining the Employee’s eligibility to participate in the Company’s Welfare
Benefit programs, the Employee shall be considered to be on a paid leave of absence as long
as he is receiving benefits under this Agreement.
The term “Premium Tax Obligation” shall mean an additional cash amount equal to all
applicable federal, state and local, income, wage, employment and excise taxes (including
those imposable under Code §4999) so that, after payment of all taxes due on the cash
payments described in this subparagraph (c)(v) (i.e., the cash
-12-
equivalent of the premiums needed to provide the Welfare Benefits the Change Entity
and/or the Company are unable to provide through their insured programs), the Employee will
retain cash equal to the highest aggregate premium amount paid during the Protection Period
with respect to the Welfare Benefit it is unable to provide through its insured programs
multiplied by the number of whole and fractional premium periods for which it is unable to
provide this coverage through its insured program.
Notwithstanding the foregoing, (A) any amounts or benefits that will be paid or
provided under this subparagraph with respect to health or dental coverage after completion
of the time period described in Treasury Regulation §1.409A-1(b)(9)(v)(B) and (B) any other
amounts or benefits that will be paid or provided under this subparagraph shall be subject
to the following requirements: (1) the amount of expenses eligible for reimbursement or
benefits provided during any taxable year of the Employee may not affect the expenses
eligible for reimbursement or benefits to be provided in any other taxable year of the
Employee; (2) any reimbursement of an eligible expense shall be made on or before the last
day of the taxable year of the Employee following the taxable year of the Employee in which
the expense was incurred; and (3) the right to such reimbursement or benefit may not be
subject to liquidation or exchange for another benefit; provided, however, that the Benefit
Cashout shall be made within five days following the date of the Employee’s termination.
(vi) Supplemental Executive Retirement Plan. To the extent not otherwise provided
pursuant to paragraph 2A(b) above, the following shall apply for purposes of calculating the
Employee’s benefits, if applicable, under SERP: the Employee’s Average Monthly Earnings for
purposes of the SERP shall be deemed to be equal to the total of the highest monthly base
salary earned by the Employee during the 24 months immediately preceding the Change in
Control and the value of the incentive compensation payment the Employee would receive if
payout was made at the “target” percentage for the Employee under the Company’s Executive
Incentive Plan (and/or any analogous plan adopted after the date of this Agreement) in the
year of the Employee’s Date of Termination (or any higher percentage based on objective
criteria specified in the Incentive Compensation Plan for the year in which the Date of
Termination occurs and/or any analogous plan adopted after the date of this Agreement) that
the Employee has achieved before the Date of Termination) in the year of Employee’s Date of
Termination divided by 12.
The terms of this subparagraph (vi) shall apply only if the Employee is a participant
in the SERP, and 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, unless expressly provided otherwise in such membership agreement.
The Employee’s SERP benefit, calculated using the provisions of subparagraph (vi) above, is
assumed to commence on the earliest date upon which the Employee is eligible to retire under
the SERP for purposes of determining the Actuarial Equivalent (as defined in the SERP) of
such benefit.
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If the SERP is terminated and the Employee cites that termination as a basis for Good
Reason termination, the benefits due under this subparagraph will be calculated as if the
SERP had not been terminated.
(vii) Outplacement Fees. For a period not to exceed one year after the Date of
Termination, the Change Entity, the Employer or any Related Entity will pay directly to the
provider the reasonable expenses associated with outplacement training of the Employee by a
professional placement firm and in an amount not to exceed that listed as Item 6(c)(vii) on
Exhibit A.
(viii) The additional consideration described in Section 5.03[2][e] and [f] or Section
5.05[2][e] and [f] of the Employment Agreement (or any successor agreement) in exchange for
a continuation of the obligations described in Article 6 (or any successor section of
similar effect) therein; provided, however, if the Change in Control is a Section 409A
Change in Control and the Date of Termination is within two years thereafter, then the
foregoing amounts shall be paid in a single lump sum cash payment on or before the fifth
business day following the effective Date of Termination.
(d) Notwithstanding anything in this Agreement to the contrary, if the Employee is a
“specified employee” (within the meaning of Section 409A of the Code and as determined under the
relevant entity’s policy for determining specified employees), on the Employee’s date of
termination and the Employee is entitled to a payment and/or a benefit under this Agreement that is
required to be delayed pursuant to Section 409A(a)(2)(B)(i) of the Code, then such payment or
benefit, as the case may be, shall not be paid or provided (or begin to be paid or provided) until
the first business day of the seventh month following the date of the Employee’s termination of
employment (or, if earlier, the date of the Employee’s death). The first payment that can be made
to the Employee following such postponement period shall include the cumulative amount of any
payments or benefits that could not be paid or provided during such postponement period due to the
application of Section 409A(a)(2)(B)(i) of the Code.
7. Overall Limitation on Benefits. Notwithstanding any provision in this Agreement to
the contrary (other than paragraphs 6(c)(v), 8 and 11 which will apply under the circumstances
described in those paragraphs and below), if, as of the date of the Change in Control, the Change
Entity (after consulting with an independent accounting or compensation consulting company)
ascertains that the compensation and benefits provided to the Employee pursuant to or under this
Agreement, either alone or when combined with other compensation and benefits received by the
Employee, would constitute “parachute payments” within the meaning of Section 280G of the Code, or
the regulations adopted thereunder, then the Employee will be entitled to a “full gross up” in an
amount sufficient to ensure that, after payment of the taxes (including those attributable to the
gross up) the Employee will retain an after tax amount equal to the amount he would have retained
had no tax arisen under Section 4999 of the Code. Any gross up pursuant to this paragraph 7 shall
be paid no later than the end of the taxable year following the year in which the Employee remits
the taxes being grossed-up.
8. Legal, Etc., Fees. The Change Entity shall pay all reasonable legal, accounting
and actuarial fees and expenses incurred by the Employee or the Employee’s estate in enforcing
-14-
any right or benefit provided by this Agreement. If it is subsequently determined that
payment of these fees are parachute payments, the Change Entity or the Employer will fully gross-up
the Employee or the Employee’s estate for the income, wage, employment and excise taxes associated
with that payment so that, after all applicable federal, state and local, income, wage, employment
and excise taxes (plus any assessed interest and penalties), the Employee or the Employee’s estate
will have incurred no liability (either for these fees or the taxes just listed) with respect to
the matters encompassed in this paragraph. Any legal, accounting and actuarial fees and expenses
being reimbursed must relate to a claim brought during the lifetime of the Employee or the
existence of the Employee’s estate arising from the alleged breach of any obligation of Employer
under this Agreement and the reimbursement or payment is subject to the following: (a) the amount
eligible for reimbursement during any taxable year of the Employee of the Employee’s estate may not
affect the amount eligible for reimbursement in any other taxable year of the Employee or the
Employee’s estate; (b) any reimbursement must be made on or before the last day of the Employee’s
or the Employee’s estate’s taxable year following the taxable year in which the cost was incurred;
and (c) the right to reimbursement for such costs may not be subject to liquidation or exchange for
another benefit. Any gross-up payment of taxes shall be made by the end of the taxable year
following the year in which the Employee or the Employee’s estate remits the taxes being
grossed-up.
9. Obligations. By signing this Agreement, the Employee agrees to be bound by and to
comply with the following restrictions, whether or not the Employee also receives the compensation
and benefits described in paragraph 6.
(a) If any “person” (as used in paragraphs 2(b) and 2(c)) initiates a tender or exchange
offer, distributes proxy materials to the Company’s shareholders or takes other steps to effect, or
that may result in, a Change in Control, the Employee agrees not to terminate employment
voluntarily during the pendency of that activity (other than by reason of termination after
reaching retirement age or Disability or for Good Reason) and to continue to serve as a full-time
employee until those efforts are abandoned, that activity is terminated or until a Change in
Control has occurred.
(b) Except as otherwise required by applicable law, the Employee expressly agrees to keep and
maintain Confidential Information (as defined in paragraph 4(b)) confidential and not, at any time
during or subsequent to the Employee’s employment, to use any Confidential Information for the
Employee’s own benefit or to divulge, disclose or communicate any Confidential Information to any
person or entity in any manner except (i) to employees or agents of the Company, any Subsidiary,
the Change Entity and any Related Entity that need the Confidential Information to perform their
duties on behalf of the Company, any Subsidiary, the Change Entity and any Related Entity, (ii) in
the performance of Employee’s duties, (iii) as a necessary (and only to the extent necessary) part
of any undertaking by the Employee to enforce the Employee’s rights under this Agreement or (iv)
pursuant to a subpoena. The Employee also agrees to notify the Company, before a Change in Control
and, after a Change in Control, the Change Entity promptly of any circumstance the Employee
believes may legally compel the disclosure of Confidential Information and to give this notice
before disclosing any Confidential Information.
-15-
(c) The Employee agrees that during and after employment and without additional compensation
(other than reimbursement for reasonable associated expenses, which shall be made consistent with
the Employer’s normal policy relating to the reimbursement of expenses) to cooperate with the
Company, any Subsidiary, the Change Entity and any Related Entity in the following areas:
(i) the Employee agrees (w) to be reasonably available to answer questions for the
Company’s, any Subsidiary’s, the Change Entity’s and any Related Entity’s officers regarding
any matter, project, initiative or effort for which the Employee was responsible while
employed by the Employer and (x) to cooperate with the Company, any Subsidiary, the Change
Entity and any Related Entity during the course of all third-party proceedings arising out
of the Company’s, any Subsidiary’s, the Change Entity’s or any Related Entity’s business
about which the Employee has knowledge or information. For purposes of this Agreement, (y)
“proceedings” includes internal investigations, administrative investigations or proceedings
and lawsuits (including pre-trial discovery and trial testimony) and (z) “cooperation”
includes the Employee’s being reasonably available for interviews, meetings, depositions,
hearings and/or trials without the need for subpoena or assurances by the Company, any
Subsidiary, the Change Entity or any Related Entity providing any and all documents in the
Employee’s possession that relate to the proceeding and providing assistance in locating any
and all relevant notes and/or documents.
(ii) unless compelled to do so by lawfully-served subpoena or court order, the Employee
agrees not to communicate with, or give statements or testimony to, any attorney
representing an interest opposed to the Company’s, any Subsidiary’s, the Change Entity’s or
any Related Entity’s interest (“Opposing Attorney”), Opposing Attorney’s representative
(including private investigators) or current or former employee relating to any matter
(including pending or threatened lawsuits or administrative investigations) about which the
Employee has knowledge or information (other than knowledge or information that is not
Confidential Information as defined in paragraph 4(b)) as a result of employment with the
Company, any Subsidiary, the Change Entity or any Related Entity. The Employee also agrees
to notify the Employer after being contacted by a third party or receiving a subpoena or
court order to appear and testify with respect to any matter that may include a claim
opposed to the Company’s, any Subsidiary’s, the Change Entity’s or any Related Entity’s
interest. However, this subsection will not apply to any effort undertaken by the Employee
to enforce the Employee’s rights under this Agreement but only to the extent necessary for
that purpose.
(iii) the Employee agrees not to communicate with, or give statements to, any member of
the media (including print, television or radio media) relating to any matter (including
pending or threatened lawsuits or administrative investigations) about which the Employee
has knowledge or information (other than knowledge or information that is not Confidential
Information as defined in paragraph 4(b)) as a result of employment with the Company or a
Subsidiary, before a Change in Control, or, after a Change in Control, the Change Entity or
a Related Entity immediately after being contacted by any member of the media with respect
to any matter affected by this section.
-16-
(d) The Employee, the Company, any Subsidiary, the Change Entity and any Related Entity agree
that none will make any disparaging remarks about the others. However, this restriction will not
preclude (i) remarks by any employee made in the normal course of business, (ii) remarks by the
Employee that are required to discharge the Employee’s regular duties or other duties described in
this Agreement, (iii) the Company, any Subsidiary, the Change Entity or any Related Entity from
making (or eliciting from any person) disparaging remarks about the Employee concerning any conduct
that may lead to a termination for Cause (including initiating an inquiry or investigation that may
result in a termination for Cause), but only to the extent reasonably necessary to investigate the
Employee’s conduct and to protect the Company’s, any Subsidiary’s, the Change Entity’s and any
Related Entity’s interests or (iv) any remarks made by any party that are necessary (but only to
the extent necessary) to resolve any dispute arising under this Agreement and that are made solely
in the context of proceeding undertaken pursuant to paragraph 11.
(e) If the Employee breaches any obligation described in this Agreement:
(i) If that breach occurs before a Change in Control, this Agreement will terminate as
of the date of the breach, even if the fact of the breach becomes apparent at a later date
and no amounts will be due under this Agreement;
(ii) If that breach occurs after a Change in Control but before the Employee has
terminated, this Agreement will terminate as of the date of the breach, even if the fact of
the breach becomes apparent at a later date, and no amounts will be due under this
Agreement; or
(iii) If that breach occurs after a Change in Control and after the Employee terminates
employment, (y) the Change Entity will be entitled to treat the Employee as having
terminated for Cause and (z) the Employee will repay the amounts already received in
paragraph 6 plus interest calculated with reference to the mid-term applicable federal rate
[as defined in Section 1274(d) of the Code] for January 1 of each calendar year, compounded
annually until paid and will be entitled to no further amounts under this Agreement.
10. Term of Agreement. The Term of this Agreement shall be from the Effective Date
through the last day of the calendar month which is the number of months listed in Item 10 on
Exhibit A beginning after a Change in Control (“Termination Date”). Nevertheless, this Agreement
will terminate on the earliest of the following to occur:
(a) Except as provided in paragraph 6, the Employee’s employment with the Company or any
Subsidiary, before a Change in Control, or, after a Change in Control, the Change Entity or any
Related Entity terminates before the beginning of the Protection Period;
(b) Before the beginning of a Protection Period, the Employee is reassigned to a more junior
position than that held on the date of this Agreement; however, if the more junior position is in
an employee classification, the majority of whose members have change in control termination
agreements (or analogous agreements, other than a Displacement Agreement), this
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Agreement will remain in effect, although benefit levels will automatically be adjusted to the
level established under those agreements;
(c) The Employee mutually agrees, in writing, to terminate this Agreement, whether or not it
is replaced with a similar agreement;
(d) The Company notifies the Employee, in writing, that the Agreement is to terminate at the
end of its then current term. To be effective, however, this written notice (i) must be given no
later than 60 consecutive calendar days before the end of the then current term but (ii) may never
be effective during a Protection Period, although a notice of termination of this Agreement given
during the portion of the Protection Period before a Change in Control may be effective if a Change
in Control does not occur; or
(e) All payments due under this Agreement have been fully paid.
However this Agreement will not terminate if, before the beginning of or during a Protection
Period, the Employee is reassigned to a more senior position than that held on the date of this
Agreement. In this case, the Agreement will remain in effect, although the benefit levels will
automatically be adjusted to the level established for other employees assigned to that
classification or, if there is no other employee in that classification, to the highest level in
effect under this Agreement.
11. Dispute Resolution. Any disagreement concerning the calculation of any payment
due under this Agreement that is not resolved by agreement between the parties (or by the
independent accounting or compensation consulting company described in paragraph 7 with reference
to matters described in that paragraph) or other dispute or controversy arising out of or relating
to this Agreement that is not resolved by agreement between the parties, including the basis on
which the Employee’s employment is terminated, will be resolved by arbitration in accordance with
the rules of the American Arbitration Association. The award of the arbitrator will be final,
conclusive and nonappealable and judgment upon the award rendered by the arbitrator may be entered
in any court having competent jurisdiction. The arbitrator must be an arbitrator qualified to
serve in accordance with the rules of the American Arbitration Association and one who is approved
by the Company, before a Change in Control, or, after a Change in Control, the Change Entity and
the Employee. If the Employee and the Company, before a Change in Control, or, after a Change in
Control, the Change Entity fail to agree on an arbitrator, each must designate a person qualified
to serve as an arbitrator in accordance with the rules of the American Arbitration Association and
these persons will select the arbitrator from among those persons qualified to serve in accordance
with the rules of the American Arbitration Association. Any arbitration relating to this Agreement
will be held in Summit County, Ohio (or other geographical area acceptable to the parties).
The Company, before a Change in Control, or, after a Change in Control, the Change Entity will
bear all reasonable costs associated with any dispute arising under this Agreement, including
reasonable accounting and legal fees incurred by the Employee in connection with the arbitration
proceedings just described. If it is subsequently determined that payment of these costs are
parachute payments, the Company, before a Change in Control, or, after a Change in
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Control, the Change Entity will fully gross-up the Employee for the income, wage, employment
and excise taxes associated with that payment so that, after all applicable federal, state and
local, income, wage, employment and excise taxes (plus any assessed interest and penalties), the
Employee will have incurred no liability (either for these fees or the taxes just listed) with
respect to the matters encompassed in this paragraph. The treatment of payments or reimbursements
and gross-ups pursuant to this paragraph are described in paragraph 8.
If otherwise due, payments not being contested under the procedures described in this
paragraph will not be deferred during the pendency of procedures described in this paragraph.
If the arbitrator decides, at the conclusion of the arbitration proceedings described in this
paragraph, that the Company, before a Change in Control, or, after a Change in Control, the Change
Entity has understated the amount due under this Agreement, the Company, before a Change in
Control, or, after a Change in Control, the Change Entity will, subject to application of paragraph
7 to the aggregate of the amount initially paid under paragraph 6 and the additional award, pay the
additional amount, if any, to the Employee within 30 days after the date of the award along with
interest calculated at the interest rate prescribed by the arbitrator. However, if, after
application of paragraph 7 to the arbitrator’s award, the net amount due to the Employee would not
increase, no amounts will be paid under this subsection, regardless of the arbitrator’s award.
12. 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 or any Subsidiary, before a Change in Control, or, after a
Change in Control, the Change Entity, the Employer or any Related Entity shall be directed to the
attention of the President of the Company with a copy to the Secretary of the Company, before a
Change in Control or, after a Change in Control, to the President of the Change Entity with a copy
to the Secretary of the Change Entity (or, in the case of the President, directed to the notice of
the Chairman of the Board of the Company, before a Change in Control, or, after a Change in
Control, to the Chairman of the board of directors of the Change Entity with a copy to the
Secretary of the Change Entity), 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. If the last address given by the Employee is not current, the Employer will use
reasonable means to locate the Employee.
13. Miscellaneous.
(a) 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 or the board of directors of the Change Entity. 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.
-19-
(b) This Agreement is intended to replace and supersede the existing Change in Control
Termination Agreement between the Company and the Employee, which prior agreement shall become
invalid as of the date of signing of this Agreement; provided, however, that nothing in the
foregoing is intended to replace or supersede any provision of the Employment Agreement or any
other agreement between the Employee and the Company to the extent not inconsistent herewith. 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
or obligations the Employee may have under any other written agreement with the Company or any
Subsidiary, the Change Entity, the Employer or any Related Entity that are not inconsistent with
the terms of this Agreement.
(c) Except as expressly provided in this Agreement, the Employee’s right to receive the
payments described in this Agreement will not decrease the amount of, or otherwise adversely
affect, any other benefits payable to the Employee under any other plan, agreement or arrangement.
(d) The Employee is not required to mitigate the amount of any payment described in this
Agreement by seeking other employment or otherwise, nor will the amount of any payment or benefit
provided for in this Agreement be reduced by any compensation or benefits the Employee earns, or is
entitled to receive, in any capacity after termination or by reason of the Employee’s receipt of or
right to receive any retirement or other benefits attributable to employment.
(e) Except as expressly provided elsewhere in this Agreement, the amount of any payment made
under this Agreement will be reduced by amounts the Employer is required to withhold in payment (or
in anticipation of payment) of any income, wage or employment taxes imposed on the payment.
(f) The right of an Employee or any other person to receive any amount under this Agreement
may not be assigned, transferred, pledged or encumbered except by will or by applicable laws of
descent and distribution. Any attempt to assign, transfer, pledge or encumber any amount that is
or may be receivable under this Agreement will be null and void and of no legal effect. However,
this paragraph will not preclude payment under paragraph 13(g) of any benefit to which a deceased
Employee is entitled.
(g) Subject to the preceding subparagraph (f), this Agreement inures to the benefit of and may
be enforced by the Employee’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
(h) If:
(i) the Employee’s employment relationship shifts between the Company and any
Subsidiary before a Change in Control or after a Change in Control, between the Change
Entity and any Related Entity and there has been no intervening termination, this Agreement
will remain in full force and effect and for all purposes of
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this Agreement, the Employee’s new employer will be substituted for the Employee’s
prior employer.
(ii) the Employee’s employer is no longer a Subsidiary, whether or not as part of a
transaction that constitutes a Change in Control, this Agreement will remain in full force
and effect. However, the Employee will not be entitled to any amount under this Agreement
on account of a Change in Control that solely affects the Company after that transfer and is
not part of the same transaction through which the employer stopped being a Subsidiary.
14. 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. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws (other than the laws of conflict of laws) of the
State of Ohio.
15. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original by all of which together will constitute one and the same
instrument.
16. Section 409A of the Code. This Agreement is intended to comply with the
requirements of Section 409A of the Code, and, to the maximum extent permitted by law, shall be
interpreted, construed and administered consistent with this intent. None of the Company, the
Employer, any Related Entity, the Change Entity, the Board or any other person shall have liability
in the event this Agreement fails to comply with the requirements of Section 409A of the Code.
Nothing in this Agreement shall be construed as the guarantee of any particular tax treatment to
the Employee.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date above first
written.
| FirstMerit Corporation | ||||||
| By: | /s/ Xxxxxxxxxxx X. Xxxxxx
|
|||||
| Executive Vice President — Human Resources | ||||||
| Employee: | ||||||
| /s/ Xxxx X. Xxxxx | ||||||
| (Signature) | ||||||
| Xxxx X. Xxxxx | ||||||
| (Printed Name) | ||||||
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Exhibit A
| Name of Executive: | Xxxx X. Xxxxx | |||
Item 6(c)(ii): Multiplied By: |
1.0 | |||
Item 6(c)(iii): Multiplied By: |
1.0 | |||
Item 6(c)(v): |
36 | |||
Item 6(c)(vii): Outplacement Fee: |
$ | 35,000 | ||
Item 10: |
36 | |||
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