Exhibit 10(g)-5
CHANGE IN CONTROL
AGREEMENT
THIS AGREEMENT made and entered into as of
January 1, 2008 between TCF FINANCIAL CORPORATION, a Delaware
Corporation (“TCF Financial” or the
“Company”) and Neil Brown, President and Chief
Operating Officer, (the “Executive”) as an amendment
and restatement of the prior agreement dated January 1,
2006.
R E C I
T A L S :
WHEREAS, the Company and Executive have
previously executed an agreement (the “Prior
Agreement”);
WHEREAS, the Board of Directors of the Company
believes it is imperative to diminish the inevitable distraction of
the Executive by virtue of the personal uncertainties and risks
created by any pending or threatened Change in Control (as defined
below) of the Company;
WHEREAS, as a
result of the enactment of Internal Revenue Code
(“IRC”) § 409A, the Company and the Executive
desire to amend the Agreement in order to insure that payments
under this Agreement qualify for the Short Term Deferral and/or the
Separation Pay Plan exception outlined in Treas. Reg. §
1.409A-1(b)(4) and § 1.409A-1(b)(9), respectively, or are
“permissible payments” under Treas. Reg. §
1.409A-3, and
NOW, THEREFORE, in consideration of the mutual
promises and agreements set forth herein, the parties hereby agree
as follows:
1.
Definitions . As used in this Agreement, the following
terms shall have the following meanings:
(a)
Change in Control . A “Change in Control”
shall be deemed to have occurred if, prior to the expiration of
this Agreement:
(i)
during any period of two (2)
consecutive years individuals who at the beginning of such period
constitute the Board of Directors of TCF Financial cease for any
reason to constitute a majority thereof, unless the election or
nomination for election of each new director was approved by a vote
of at least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved;
or
(ii)
any “person”, as
defined in sections 13(d) and 14(d) of the Securities Exchange Act
of 1934 (the “Exchange Act”) is or becomes the
“beneficial owner” as defined in Rule 13d-3 under the
Exchange Act, directly or indirectly, of securities of TCF
Financial representing fifty percent (50%) or more of the combined
voting power of TCF Financial’s then outstanding securities,
except for any securities purchased by a TCF employee benefit plan
or trust and any person who becomes a fifty percent (50%)
beneficial owner solely as a result of stock repurchases by TCF
Financial; or
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(iii)
the shareholders of TCF
Financial approve a merger or consolidation of TCF Financial with
any other corporation, other than a merger or consolidation which
would result in the voting securities of TCF Financial outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) more than fifty percent (50%) of the
combined voting power of the voting securities of TCF Financial or
such surviving entity outstanding immediately after such merger or
consolidation, or the shareholders of TCF Financial approve a plan
of complete liquidation of TCF Financial or an agreement for the
sale or disposition by TCF Financial of all or substantially all
TCF Financial’s assets; provided, however, that no Change in
Control will be deemed to have occurred if such merger,
consolidation, sale or disposition of assets, or liquidation is not
subsequently consummated.
The date of any Change in
Control shall be deemed to be the date on which it is
consummated.
(b)
Good Reason. By following the procedure set forth in
this paragraph, the Executive shall have the right to terminate the
Executive’s employment with the Company for “Good
Reason” in the event there is (i) any material diminution in
the scope of the Executive’s authority and responsibility
(provided, however, in the event of any illness or injury which
disables the Executive from performing the Executive’s
duties, the Company may reassign the Executive’s duties to
one or more other employees until the Executive is able to perform
such duties); (ii) a material diminution in the Executive’s
base compensation (salary, bonus opportunity, benefits or
perquisites as in effect before the Change in Control); (iii) a
material diminution in the authority, duties, responsibilities of
the supervisor to whom the Executive is required to report; (iv) a
material diminution in the budget over which the Executive
retains authority; (v) a material change in geographic location at
which the Executive must perform the services; or (vi) any other
action or inaction that constitutes a material breach by the
Company of the Executive’s employment agreement under
which the Executive provides services. In the event the Executive
proposes to terminate his employment for Good Reason under this
paragraph, the Executive shall first provide written notice to the
Company of the existence of the condition described as Good Reason
not less than 90 days after the initial existence of the condition.
The Company will have an opportunity to correct any curable
situation to the reasonable satisfaction of the Executive within
the period of time specified in the notice which shall not be less
than thirty (30) days. If such correction is not so made or the
circumstances or situation is such that it is not curable, the
Executive may, within thirty (30) days after the expiration of the
time so fixed within which to correct such situation (but not more
than two years after the initial existence of the Good Reason),
give written notice to the Company that his employment is
terminated for Good Reason effective forthwith.
(c)
Termination Date . “Termination Date”
means the date on which the Executive’s employment with the
Company is terminated.
2.
Termination of this Agreement for “Cause” by the
Company .
(a)
Termination of this Agreement for “Cause” applies in
the event the Executive: (i) has engaged in willful and
recurring misconduct in not following the legitimate directions of
the Board of Directors of the Company after fair warning or
breached any non-competition or non-
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solicitation
covenant to which Executive is subject; (ii) has been convicted of
a felony and all appeals from such conviction have been exhausted;
(iii) has engaged in habitual drunkenness; (iv) has been
excessively absent from work which absence is not related to
disability, illness, sick leave or vacations; or (v) has engaged in
continuous conflicts of interest between his personal interests and
the interests of the Company after fair warning.
(b)
Notice of Right to Cure . If the Company proposes to
terminate its obligations hereunder for Cause under paragraph 2(a),
the Company shall give written notice to the Executive specifying
the reasons for such proposed determination with particularity and
specifying a cure the Company deems appropriate, and, in the case
of a termination for Cause under paragraphs 2(a)(i), (iii), (iv),
or (v) the Executive shall have a reasonable opportunity to correct
any curable situation to the reasonable satisfaction of the Board
of Directors of the Company, which period shall be no less than
fifteen (15) days from the Executive’s receipt of the notice
of proposed termination. Notwithstanding the foregoing, this
Agreement shall not be terminated for Cause unless and until there
shall be delivered to the Executive a copy of the resolution duly
adopted by the affirmative vote of not less than the majority of
the members of the Board of Directors of the Company at a meeting
called and held for the purpose (after reasonable notice to the
Executive and an opportunity for the Executive, together with his
legal counsel, to be heard before the Board of Directors) finding
that, in the opinion of the Company’s Board of Directors, the
Executive has engaged in conduct justifying a termination of this
Agreement for Cause.
3.
Termination of Employment Upon Change in Control –
Severance Payments . In the event of a Change in Control,
if: (1) the Executive terminates his or her employment for any
reason by giving the Company notice within the 30-day period
immediately preceding the first anniversary of the closing date of
the Change in Control; or (2) within the six (6) months before or
twenty-four (24) months after the occurrence of such Change in
Control (i) the Executive terminates employment for Good Reason, or
(ii) the Executive’s employment is terminated by the
Company without Cause (as defined herein), provided that the
Executive’s termination results in a complete cessation of
services for the Company and that no payment is due in the event of
termination of employment by reason of death or disability; then
the Executive shall be entitled to the following severance benefits
(which benefits in either case are referred to as the
“Termination Payments”):
(a)
Base Salary and Annual Bonus . The Company shall pay
the Executive, no later than 30 days after Executive’s
termination of employment, in a single sum, an amount equal to two
times the sum of (x) the Executive’s annual salary at the
time of termination; and (y) the average Annual Bonus paid or
payable to Executive in respect of the three calendar years
immediately preceding the year in which termination occurs. In the
event Executive’s termination from employment occurs after
the end of a calendar year, but before a bonus earned in that
calendar year has been paid, the Company shall pay such bonus to
Executive in addition to the amount otherwise payable under this
paragraph (a) promptly but no later than 2 ½ months after
the end of the calendar year in which bonus was earned.
(b)
Medical and Other Benefits Continuation . Executive
shall be entitled to continuation of Company medical coverage for
the full period provided under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”) at Company
expense. If eligible,
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Executive
shall participate in retiree medical coverage of the Company on the
same terms and conditions as apply to TCF employees generally.
Executive shall also be entitled to continuation of all other
benefits after employment termination as provided by the benefit
plans or by law; provided that, if Executive obtains new employment
with comparable benefits during the applicable continuation period,
all entitlements under this paragraph shall cease. Nothing in this
paragraph shall be construed as providing Executive with coverage
under any plan of Employer to which Executive would not otherwise
be entitled and in the event any coverage is unavailable, e.g. if
Executive is uninsurable, Employer’s obligations under this
paragraph may be satisfied by paying to the Executive the cost of
such coverage if it were available, as determined in good faith by
the Company.
(c)
Stock Incentives . Executive shall be entitled to such
vesting or other benefits as are provided by the award agreement
pertaining thereto.
(d)
Section 409A of the Internal Revenue Code and the Regulations
Thereunder . The arrangements described in this
Agreement, are intended to be either exempt from, or permissible
payments under, IRC § 409A, and the regulations
thereunder.
4.
Certain Additional Payments by the Company .
(a)
Gross-Up Payment . Anything to the contrary
notwithstanding, in the event it shall be determined that any
payment, distribution or benefit made or provided by the Company
(or any successor thereto) to or for the benefit of the Executive
(whether pursuant to this Agreement or otherwise) (a
“Payment”), would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended,
(the “Code”) or any interest or penalties with respect
to such excise tax (such excise tax, together with any such
interest and pe
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