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Exhibit 10.2 FIRSTMERIT CORPORATION
AMENDED AND RESTATED
CHANGE IN CONTROL TERMINATION AGREEMENT
(TIER I) THIS AGREEMENT
("Agreement") originally was effective the [insert date]
("Effective Date"), by and between FirstMerit Corporation, an Ohio
corporation (the "Company"), and [insert executive name] ,
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 a benefit under this Agreement or
under the Displacement Agreement, whichever produces the largest
after-tax benefit to the Employee. IN
CONSIDERATION OF THE FOREGOING, the mutual covenants hereinafter
contained and other good and valuable consideration, receipt of
which is hereby acknowledged, the Company and Employee agree as
follows: 1. Duties of
Employee . 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 or
her duties to shareholders and other legal obligations, 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/her own behalf and in behalf of his/her
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 in the employ of the Company or any
Subsidiary (as defined below) before a Change in Control or, after
a Change in Control, the Change Entity or any Related Entity (each
as defined below), and shall occur on the date that:
(a) The
individuals who, on April 19, 2000, constituted the Board (the
"Incumbent Directors") are replaced during any 12-month period by
directors whose appointment or election was not endorsed by a
majority of the members of the Incumbent Board before the date of
appointment or election;
(b) Any
"person" (as such term is defined in Section 409A of the
Internal Revenue Code of 1986, as amended ("Code") or more than one
person acting as a "group" (as such term is defined in
Section 409A of the Code) acquires ownership of stock of the
Company that, together with stock held by such person or group,
constitutes more than 50% of the total fair market value or total
voting power of the stock of the Company;
(c) Any
"person" (as such term is defined in Section 409A of the Code)
or more than one person acting as a "group" (as such term is
defined in Section 409A of the Code) acquires (or has acquired
during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the
Company possessing 30% or more of the total voting power of the
stock of the Company; 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 ( i.e. , any entity related to
the Company through common ownership as determined under
Sections 414 or 1563 of the Code);
(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;
(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
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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 outstanding securities eligible to vote for the election
of the Board ("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
date of 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") that results in an event
described in subparagraphs (a), (b) or (c) or (f), unless
immediately following such Business Combination:
(i)
more than 50% of the total voting power of (A) the corporation
resulting from such Business Combination (the "Surviving Entity"),
or (B) 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
date that the shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company resulting in any
of the events described in subparagraphs (a), (b) or
(c) or (f); or
(f) The
date that any one person (as defined in Section 409A of the
Code) or more than one person acting as a group (as defined in
Section 409A of the Code), acquires (or has acquired during
the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that
have a total gross fair market value equal to or more than 40% of
the total gross fair market value of all assets of the Company
immediately before such acquisition or acquisitions; provided,
however, that for purposes of
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determining whether a Change in Control has occurred pursuant to
this subparagraph (f), any transfer described in Treasury
Regulation §1.409A-3(i)(5)(vii)(B) shall be disregarded.
The foregoing definition of Change in
Control shall be construed consistent with the definition of
"change in control event" in Section 409A of the Code.
Notwithstanding the foregoing, a
Change in Control of the Company shall not be deemed to occur
solely because any person or group acquires beneficial ownership of
more than 30% 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 within the 12-month period after such acquisition
by the Company such person or persons becomes the beneficial owner
of additional Company Voting Securities that increases the
percentage of outstanding Company Voting Securities beneficially
owned by such person or persons 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, 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 or in the Displacement
Agreement, whichever provides the highest after-tax value to the
Employee, but will not be entitled to amounts under both
agreements. Notwithstanding any other
provision of this Agreement, the Employee will not be entitled to
any amount under this Agreement if he/she 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/her
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
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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.
(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)
(x) for purposes of calculating the Employee’s Monthly
Retirement Income (as defined in the SERP) under Sections 4.01
and 4.02 (or successor section) of the SERP and for purposes of
determining the Employee’s vested Monthly Retirement Income
under Section 4.05 (or successor section) of the SERP, the
Employee’s Years of Service (as defined in the SERP) shall be
increased by 24 months; (y) for purposes of calculating
the Employee’s Monthly Retirement Income under
Section 4.02 of the SERP, the Employee’s Attained Age
(as defined in the SERP) shall be increased by 24 months; and
(z) the Employee’s Average Monthly Earnings for purposes
of the SERP shall be deemed to be equal to the higher of
(A) the Employee’s Average Monthly Earnings under the
SERP as then in effect and (B) 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.
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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 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 entity related through common ownership (as determined under
Sections 414 and 1563 of the Code) to the Change Entity
("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
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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 inadvertance, 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
resulting from 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 attributable to an
event that constitutes Good Reason, as defined in paragraph (c)),
(y) willful engagement in gross misconduct 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;
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(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), 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 (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, 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)
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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 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, 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/her 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);
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