Exhibit 10(e)-1
TCF CHIEF EXECUTIVE
OFFICER
EMPLOYMENT
AGREEMENT
THIS AGREEMENT, made and entered
into as of January 1, 2006 between TCF FINANCIAL CORPORATION,
a Delaware corporation (the “Company”), and Lynn A.
Nagorske (the “Executive”).
R E C I T A
L S :
WHEREAS, the Executive has been
elected to the position of Chief Executive Officer of the Company
effective as of the date first set forth above;
WHEREAS, the Executive is currently
employed by the Company as President and Chief Operating Officer
and by TCF National Bank (“TCF Bank”), a subsidiary of
the Company, as its Chairman, and Company and Executive are
currently parties to a “Change in Control Agreement”
and a “Non-Solicitation and Confidentiality Agreement”,
both entered into as of September 12, 2000 and expiring
January 1, 2008 or sooner, (the “Prior
Agreements”);
WHEREAS, the Executive and the
Company wish to enter into this Agreement to provide for the
continued employment of Executive by Company, but in his new
position, and to supersede and replace the Prior
Agreements;
WHEREAS, the Executive and the
Company are willing to enter into this Agreement upon the terms and
conditions set forth herein; and
WHEREAS, the Executive and the
Company are contemporaneously with the execution and delivery of
this Agreement entering into the Change in Control Agreement (the
“CIC Agreement”) and the CIC Agreement is material
consideration for the Executive to enter into this
Agreement,
NOW, THEREFORE, in consideration of
the mutual promises and agreements set forth herein and in the CIC
Agreement, the parties hereby agree as follows:
1.
Employment and Duties
. The parties hereby
agree that, during the term of this Agreement as set forth in
paragraph 2 below, the Executive shall be employed as Chief
Executive Officer of the Company with overall charge and
responsibility for the business and affairs of the Company and the
Executive’s powers and authority shall be superior to those
of any other officer or employee of the Company or its
subsidiaries. If elected, Executive also agrees to serve as
Chairman of the Board of Directors of the Company. In
discharging such duties and responsibilities, the Executive may
also serve as an executive officer and/or director of any direct or
indirect subsidiary of the Company (collectively the “TCF
Subsidiaries”). During the term of this Agreement, the
Executive shall apply on a full-time basis (allowing for usual
vacations and
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sick leave) all of his skill and experience to
the performance of his duties in his positions with the Company and
the TCF Subsidiaries. It is understood that the Executive may have
other business investments and participate in other business
ventures which may, from time to time, require minor portions of
his time, but which shall not interfere or be inconsistent with his
duties under this Agreement. The Executive shall perform his duties
at the Company’s principal executive offices in Wayzata,
Minnesota or at such other location as may be mutually agreed upon
by the Executive and the Company; provided that the Executive shall
travel to other locations at such times as may be necessary for the
performance of his duties under this Agreement.
2.
Term of Employment . Unless sooner terminated as provided in
paragraph 4 below, the term of this Agreement shall commence on the
date hereof and shall continue through December 31, 2008;
provided that the term shall be automatically extended for one year
on each January 1st commencing January 1, 2009 unless
either party gives written notice of non-renewal to the other six
months prior to the date on which the automatic extension would be
effective.
3.
Compensation and Benefits . During the term of this
Agreement, the Executive shall be entitled to the following
compensation and benefits:
(a)
Base Salary . As compensation for the Executive’s
services, the Executive shall be paid a base salary at a minimum
annual rate of $700,000 payable in accordance with the
Company’s customary payroll policy, which salary shall be
reviewed and may be increased from time to time at the discretion
of the Board of Directors (the “Base Salary”); provided
that the amount of the Base Salary shall not be reduced after it
has been increased by the Board of Directors without the
Executive’s written consent.
(b)
Bonus . The Executive shall, in addition to the Base Salary,
also be entitled to an annual bonus opportunity (the “Annual
Bonus”) based on the achievement by the Company of
performance goals established by the Compensation Committee of the
Company’s Board of Directors.
(c)
Stock Incentives . The Executive shall be eligible to
receive stock options, restricted stock and stock appreciation
rights under any stock based plan from time to time adopted by the
Company (the “Stock Plans”), at least on the same basis
as other executive officers of the Company as from time to time
determined by the Board of Directors or Compensation Committee of
the Company.
(d)
Reimbursement of Expenses . The Company shall reimburse the
Executive for all business expenses properly documented, including
without limitation, the Executive’s legal fees incurred in
the preparation of this Agreement.
(e)
Automobile . The Company shall provide to Executive, in
accordance with the Company’s practice from time to time for
senior executives, with the use of a full-size automobile and all
related expenses associated therewith.
(f)
Other Benefits . The Executive shall be entitled to
participate and shall be included in any employee benefit plan,
pension plan, supplemental employee retirement plan,
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fringe benefit programs or similar plan of the
Company now existing or established hereafter to the extent that he
is eligible under the general provisions thereof.
(g)
Perquisites . The Executive shall be entitled to such
perquisites as are approved annually by the Compensation Committee
of the Board of Directors.
(h)
Return of Compensation under Section 304 of the
Sarbanes-Oxley Act . Notwithstanding anything in this Agreement
to the contrary, in the event of a restatement of financial results
by the Company, the Audit Committee of the Board of Directors shall
determine (after reasonable notice to the Executive and an
opportunity for the Executive, together with his legal counsel, to
be heard before the Audit Committee) whether or not repayment of
any compensation is required under Section 304 of the
Sarbanes-Oxley Act. If the Audit Committee determines that such
repayment is required, the Committee shall make a demand for
repayment by Executive of any bonus or other incentive-based or
equity-based compensation, and any profits realized from the sale
of TCF stock or other TCF securities, which are required to be
returned to the Company as a result of Section 304 of the
Sarbanes-Oxley Act. Executive shall promptly tender such repayment
unless he disputes the findings of the Audit Committee, in which
case the parties shall submit the dispute to arbitration as
provided in paragraph 7 of this Agreement.
4.
Termination of Employment .
(a)
Death, or Disability, Retirement or Voluntary Resignation .
In the event of the Executive’s death, or disability as
defined in the Company’s long term disability plan then in
effect, or retirement (termination by Executive which the
Compensation Committee determines is a retirement) the employment
of the Executive hereunder shall terminate and the Company’s
obligation to make further Base Salary and Annual Bonus (to the
extent not yet earned) payments hereunder shall thereupon terminate
as of the end of the month in which such death or disability
occurs. In the event of Executive’s termination of employment
without Good Reason other than a retirement (“Voluntary
Resignation”) the Company shall have no obligation to pay
Base Salary (other than through Executive’s last day of
employment) and no obligation to pay any Annual Bonus after the
Executive’s employment termination date. The
Executive’s (and his beneficiaries’) rights to other
compensation and benefits shall be determined under the
Company’s benefit plans and policies applicable to Company
executives then in effect.
(b)
Termination for Cause by the Company . By following the
procedure set forth in paragraph 4(e), the Company shall have the
right to terminate the employment of the Executive for
“Cause” 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; (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. If
the employment of the Executive is terminated by the Company for
Cause, the Company’s obligation to make further Base Salary
and Annual Bonus (to the extent not yet earned) payments hereunder
shall thereupon terminate, except the Executive shall receive the
Base Salary through the end of the month during which such a
termination occurs. The
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Executive’s rights to other compensation
and benefits shall be determined under the Company’s benefit
plans and policies applicable to executives of the Company then in
effect.
(c)
Termination for Good Reason by the Executive . By
following the procedure set forth in paragraph 4(e), the Executive
shall have the right to terminate the Executive’s employment
with the Company for “Good Reason” in the event
(i) the Executive is not at all times the duly elected Chief
Executive Officer of the Company or such other officer position to
which the Board of Directors may elect him and which Executive
agrees to assume; (ii) there is any material reduction 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); (iii) there is a reduction in the
Executive’s Base Salary, an amendment to any stock incentive
plan, pension plan or supplemental employee retirement plan
applicable to the Executive which is materially adverse to the
Executive, or a material reduction in the other benefits to which
the Executive is entitled under paragraph 3(f) above (other
than a reduction applied to executives or employees generally); or
(iv) the Company requires the Executive’s principal
place of employment to be anywhere other than the Company’s
principal executive offices, or there is a relocation of the
Company’s principal executive offices outside of Wayzata,
Minnesota; or (v) the Company otherwise fails to perform its
obligations under this Agreement. If the employment of the
Executive is terminated by the Executive for Good Reason before a
change in control as defined in the CIC Agreement (“Change in
Control”), the Executive shall be entitled to the severance
benefits set forth in paragraph 4(f) below.
(d)
Termination without Cause . The Company may terminate the
Executive’s employment without Cause prior to the expiration
of the term of this Agreement. If the employment of the Executive
is terminated by the Company without Cause prior to the expiration
of this Agreement, before a Change in Control, the Executive shall
be entitled to the severance benefits set forth in paragraph
4(f) below.
(e)
Notice of Right to Cure .
(i) Termination by Company for
Cause . If the Company proposes to terminate the employment of
the Executive for Cause under paragraph 4(b), 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 4(b)(i) (including any
breach of the provisions of paragraph 5 below), (iii) or (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
