Employment Agreement with former CEO

Separation Agreement with former CEO



EX-10.(E)-11 4 a08-21058_1ex10de11.htm EX-10.(E)-11

 

Exhibit 10(e).11

 

AMENDED AND RESTATED AGREEMENT
WITH WILLIAM A. COOPER

 

 

                THIS AGREEMENT is made and entered into as of July 31, 2008 between TCF FINANCIAL CORPORATION, a Delaware corporation (the “Company”) and WILLIAM A. COOPER (“Cooper”).

 

R E C I T A L S:

 

                WHEREAS, the Company is a bank holding company and Cooper is now and has been Chairman of the Board of the Company; and

 

                WHEREAS, Cooper has been elected Chief Executive Officer of the Company effective July 26, 2008; and

 

                WHEREAS, Cooper and the Company are parties to an agreement dated as of January 25, 2005 (the “Chairman’s Agreement”) and the Supplement to Chairman’s Agreement dated as of January 25, 2005 (the “Supplement”);

 

                WHEREAS, Cooper and the Company wish to enter into this Agreement to provide for the amendment and restatement of the Chairman’s Agreement and the Supplement effective as of the date hereof;

 

                NOW, THEREFORE, in consideration of the mutual premises and agreements set forth herein, the parties agree as follows:

 

                1.             Employment   and   Duties.      During   the   term  of  this  Agreement  as  set  forth  in  paragraph  2  below,   Cooper shall  be  employed  as  Chief  Executive  Officer  of  the Company  with  overall  responsibility  for  the  business  and  affairs  of  the  Company  and  Cooper’s powers and  authority  shall  be  superior  to  those  of  any  other  officer  or  employee of  the  Company  or  its  subsidiaries.    If  elected,  Cooper also  agrees  to  continue to serve  as Chairman  of the  Board  of  Directors  of  the  Company.    In  discharging  such  duties  and  responsibilities, Cooper 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, Cooper shall apply on a substantially full-time basis (allowing for usual vacations and 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 Cooper may have other business investments and participate in other business ventures which shall not interfere or be inconsistent with his duties under this Agreement.  Cooper 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 Cooper and the Company; provided that Cooper 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.  This Agreement shall commence on the date hereof and shall continue through January 1, 2012; provided that the term shall be automatically extended for one year on each January 1st commencing January 1, 2012 unless either party gives written notice of non-renewal to the other three months prior to the date on which the automatic extension would be effective.

 

                3.             Compensation and Benefits.  During the term of this Agreement, Cooper shall be entitled to the following compensation and benefits:

 

                (a)           Base Salary, Bonus.  Cooper shall not receive any cash compensation, salary or bonus.

 

                (b)           Stock Incentives.  Cooper shall receive stock options and restricted stock under the terms and conditions set forth in a Restricted Stock Agreement dated July 31, 2008 between the Company and Cooper (the “Restricted Stock Agreement”) and a Non-Qualified Stock Option Agreement dated July 31, 2008 between the Company and Cooper (the “Option Agreement”) (the Option Agreement collectively with the Restricted Stock Agreement are referred to as the “Award Agreements”) pursuant to the TCF Financial Incentive Stock Program, as amended and restated January 21, 2008 (the “TCF Incentive Stock Program”).  Additional awards, if any, of stock options, restricted stock and stock appreciation rights would be made under any stock based plan from time to time adopted by the Company (the “Stock Plans”) as from time to time determined by the Board of Directors or Compensation Committee of the Company.

 

                (c)           Reimbursement of Expenses.  The Company shall reimburse Cooper for all business expenses properly documented, including without limitation, Cooper’s legal fees incurred in the preparation of this Agreement.  Any such payments shall be made no later than 2 ½ months after the end of the calendar year in which the expense was incurred.

 

                (d)           Aircraft.  Cooper shall be entitled to use of the Company’s corporate aircraft at the Company’s expense, provided that Cooper shall be responsible for all individual income taxes resulting from his use of the aircraft for non-business travel.

 

                (e)           Other Benefits.  Cooper shall be entitled to participate in and shall be included in any employee benefit plan, pension plan, supplemental employee retirement plan, 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.

 

                (f)            Perquisites.  Cooper shall be entitled to other perquisites provided to executive officers, subject to annual review by the Compensation Committee of the Board of Directors.  Payment of perquisites, if any, shall be made no later than 2 ½ months after the end of the calendar year in which Cooper was entitled to such payments.

 

                (g)           Chairman’s Compensation and Benefits.  Cooper shall retain two-thirds of the restricted stock grant described in the Chairman’s Agreement that has already been earned and he shall be eligible for earning the remaining portion of that award in accordance with the terms of a Restricted Stock Agreement between the Company and Cooper dated January 25, 2005.  He shall no longer receive director’s fees paid to non-employee directors or an annual fee for serving as

 

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Chairman.

 

                (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 Cooper and an opportunity for Cooper, 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 Cooper 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.  Cooper shall promptly tender such repayment unless he disputes the findings of the Audit Committee.

 

                4.             Termination of Employment.

 

                                Upon termination of employment for whatever reason, Cooper shall be entitled to compensation and benefits determined under the Company’s benefit plans and policies applicable to Company executives then in effect and as provided in the Award Agreements.

 

                5.             Covenant Not to Compete; Non-Solicitation Covenant.

 

                                (a)           Covenant Not to Compete.  During the term of this Agreement, Cooper agrees that he will not directly or indirectly substantially compete with TCF Financial, TCF National Bank, TCF National Bank Arizona or their respective subsidiaries in the Relevant Market.  The “Relevant Market” is financial businesses located in the States of Arizona, Michigan, Minnesota, Iowa, North Dakota, South Dakota, Colorado and Wisconsin, and the Chicago metropolitan area.

 

                                (b)           Non-Solicitation Covenant.  During the term of this Agreement, Cooper agrees that, except with the prior written permission of the Board of Directors of TCF Financial, he will not offer to hire, entice away, or in any manner attempt to persuade any officer, employee, or agent of TCF Financial, TCF National Bank or TCF National Bank Arizona or any of their subsidiaries to discontinue his or her relationship with TCF Financial, TCF National Bank, TCF National Bank Arizona or any of their subsidiaries nor will he directly or indirectly solicit, divert, take away or attempt to solicit any business of the Company or any of its subsidiaries as to which Cooper has acquired any knowledge during the term of his employment with the Company or his service as a director of TCF Financial.

 

                                (c)           Extension of Terms of Covenant Not to Compete and Non-Solicitation Covenant.  In consideration for the acceleration of benefits under the Award Agreements upon a Change in Control as defined in the TCF Incentive Stock Program, Cooper’s obligations under paragraphs 5(a) and 5(b) shall be extended for three (3) years following any such Change in Control; provided, however, that during such extended period Cooper may be permitted to engage in activities  otherwise prohibited by paragraphs 5 (a) and 5 (b) with the prior written permission of the Board of Directors of the Company, which shall not be withheld if the nature and extent of such activity would be immaterial or inconsequential to the Company.

 

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                (d)           Remedies.  If Cooper commits a breach, or threatens to commit a breach, of any of the provisions of this paragraph 5, the Company shall have the right of specific performance in addition to any rights and remedies otherwise available at law or in equity.

 

                6.             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 Cooper (whether pursuant to this Agreement, the Award Agreements 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 penalties, are collectively referred to as the “Excise Tax”), then the Company shall pay Cooper in cash an amount (the “Gross-Up Payment”) such that after payment by Cooper of all taxes (including any interest or penalties imposed with respect to such taxes), including but not limited to income taxes (and any interest and penalties imposed with respect thereto) and any additional Excise Tax, imposed upon the Gross-Up Payment, Cooper retains (after payment of such taxes, interest and penalties) an amount of the Gross-Up Payment equal to the Excise Tax imposed on the Payments.

 

                (b)           Determination of Gross-Up Payment.  Subject to paragraph (c) below, all determinations required to be made under this Agreement or under the Award Agreements, including whether a Gross-Up Payment is required and the amount of the Gross-Up Payment, shall be made by the firm of independent public accountants selected by the Company to audit its financial statements for the year immediately preceding a Change in Control (the “Accounting Firm”) which shall provide detailed supporting calculations to the Company and Cooper within thirty (30) days after a Payment is made.  In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Cooper shall appoint another nationally recognized accounting firm to make the determinations required under this paragraph (which accounting firm shall then be referred to as the “Accounting Firm”).  All fees and expenses of the Accounting Firm in connection with the work it performs pursuant to this paragraph shall be promptly paid by the Company.  A Gross-Up Payment (as determined pursuant to this paragraph) shall be paid by the Company to Cooper within five (5) days of the receipt of the Accounting Firm’s determination.  If the Accounting Firm determines that no Excise Tax is payable by Cooper, it shall furnish Cooper with a written opinion that failure to report the Excise Tax on Cooper’s applicable federal income tax return would not result in the imposition of a negligence or a similar penalty.  Any determination by the Accounting Firm shall be binding upon the Company and Cooper.  As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”).  In the event that the Company exhausts its remedies pursuant to paragraph (c) below, and Cooper is thereafter required to make a payment of Excise Tax, the Accounting Firm shall promptly determine the amount of the Underpayment that has occurred and any such Underpayment shall be paid by the Company to Cooper within five (5) days after such determination.

 

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                (c)           Contest.  Cooper shall notify the Company in writing of any claim made by the Internal Revenue Service that, if successful, would require the Company to pay a Gross-Up Payment.  Such notification shall be given as soon as practicable but no later than ten (10) business days after Cooper knows of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid.  Cooper shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due).  If the Company notifies Cooper in writing prior to the expiration of such period that it desires to contest such claim, Cooper shall:

 

                                                                (i)            give the Company any information reasonably requested by the Company relating to such claim;

 

                                                                (ii)           take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, without limitation, accepting legal representation with respect to such claim by an attorney selected by the Company and reasonably acceptable to Cooper;

 

                                                                (iii)          cooperate with the Company in good faith in order effectively to contest such claim;

 

                                                                (iv)          permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Cooper harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses.  Without limitation on the foregoing provisions of this paragraph (c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Cooper to pay the tax, interest and penalties claimed and sue for a refund or contest the claim in any permissible manner, and Cooper agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs Cooper to pay such claim and sue for a refund, the Company shall advance, on an interest-free basis, the amount of such payment to Cooper together with any Excise Tax and income taxes imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of Cooper with respect to which such contested amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Cooper shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

 

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                (d)           If, after the receipt by Cooper of an amount advanced by the Company pursuant to paragraph (c), Cooper becomes entitled to receive any refund with respect to such claim, Cooper shall (subject to the Company’s complying with the requirements of paragraph (c)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after any income or other taxes applicable thereto and assessed on Cooper have been paid by Cooper from such refund).  If, after the receipt by Cooper of an amount advanced by the Company pursuant to paragraph (c), a determination is made that Cooper shall not be entitled to any refund with respect to such claim and the Company does not notify Cooper in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

 

                (e)           Section 409A of the Internal Revenue Code.  The arrangements described in this Agreement and the Award Agreements are intended to comply with Section 409A of the Internal Revenue Code to the extent such arrangements are subject to that law.  The parties agree that they will negotiate in good faith regarding amendments necessary to bring this Agreement into compliance with the terms of that Section or an exemption therefrom as interpreted by guidance issued by the Internal Revenue Service.  The parties further agree that to the extent any part of this Agreement fails to qualify for exemption from or satisfy the requirements of Section 409A, the affected arrangement may be operated in compliance with Section 409A pending amendment to the extent authorized by the Internal Revenue Service.  In such circumstances Company will administer this Agreement in a manner which adheres as closely as possible to the existing terms and intent of the Agreement while complying with Section 409A.  This paragraph does not restrict Company’s rights (including, without limitation, the right to amend or terminate) with respect to this Agreement to the extent such rights are reserved under the terms of this Agreement.

 

                7.             Attorney’s Fees.  In the event of a dispute between the Company and Cooper relating to the Cooper’s services hereunder or the terms or performance of this Agreement, the Company shall promptly pay Cooper’s reasonable expenses of attorney’s fees and expenses in connection with such dispute upon delivery of periodic billings for same, provided that (i) Cooper shall promptly repay all amounts paid under this paragraph 7 at the conclusion of such dispute if the resolution thereof includes a finding that Cooper did not act in good faith in the matter in dispute or in the dispute proceeding itself, and (ii) no claim for expenses of attorney’s fees and expenses shall be submitted by Cooper unless made in writing to the Board of Directors within one year of the performance of the services for which such claim is made.

 

                8.             Other Benefits.  The benefits provided under this Agreement shall, except to the extent otherwise specifically provided herein, be in addition to, and not in derogation or diminution of, any benefits that Cooper or his beneficiary may be entitled to receive under any other plan or program now or hereafter maintained by the Company or TCF Subsidiaries.

 

                9.             Successors.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business and/or assets of the Company, to expressly assume and agree to perform its obligations under this Agreement in the same manner and to the same extent that the Company would be required to

 

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perform them if no succession had taken place unless, in the opinion of legal counsel mutually acceptable to the Company and Cooper, such obligations have been assumed by the successor as a matter of law.  Cooper’s rights under this Agreement shall inure to the benefit of, and shall be enforceable by, Cooper’s legal representative or other successors in interest, but shall not otherwise be assignable or transferable.

 

                10.           Other Agreements.  This Agreement supersedes and replaces effective the date hereof all prior agreements or understandings relating to the terms of Cooper’s service with the Company, including the Chairman’s Agreement and the Supplement, except as set forth herein.  Except as specifically provided herein, this Agreement does not supersede or replace any agreement between the Company and Cooper pursuant to any plans or programs of the Company, including any stock option agreement, restricted stock agreement or supplemental retirement agreement.

 

                11.           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota.

 

                12.           Parties to this Amended and Restated Agreement.  TCF National Bank was a party to the Chairman’s Agreement and the Supplement but will not be a party to this Amended and Restated Agreement except to indicate by its signature below that it has consented to its removal as a party.

 

                IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first written above.

 

 

TCF FINANCIAL CORPORATION

 

 

 

WITNESS:

 

 

 

 

 

 

By:

/s/ Gregory J. Pulles

/s/ Pamela J. Gordley

Its:

Vice Chairman

 

 

 

 

 

 

WITNESS:

 

 

 

 

 

/s/ Pamela J. Gordley

 

/s/ William A. Cooper

 

 

William A. Cooper

 

 

 

 

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TCF National Bank acknowledges and agrees that as provided in paragraph 12 above, it will not be a party to this Amended and Restated Agreement.

 

 

TCF NATIONAL BANK

 

 

 

WITNESS:

 

 

 

 

 

 

By:

/s/ Joseph T. Green

/s/ Pamela J. Gordley

Its:

 Senior Vice President

 

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Exhibit 10(e)-6

 

TCF CHIEF EXECUTIVE OFFICER

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT, made and entered into as of January 1, 2008 between TCF FINANCIAL CORPORATION, a Delaware corporation (the “Company”), and Lynn A. Nagorske, Chief Executive Officer, (the “Executive”) as 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 Executive and the Company are contemporaneously with the execution and delivery of this Agreement entering into a new Change in Control Agreement (the “CIC Agreement”);

 

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 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 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

 

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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.  Payment of Annual Bonuses shall be made promptly but no later than 2 ½ months after the end of the calendar year which bonus was earned.

 

(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.  Any such payments shall be made no later than 2 ½ months after the end of the calendar year in which the expense was incurred.

 

(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, 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.

 

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(g)           Perquisites.  The Executive shall be entitled to such perquisites as are approved annually by the Compensation Committee of the Board of Directors.  Payment of perquisites, if any, shall be made no later than 2 ½ months after the end of the calendar year in which the Executive was entitled to such payments.

 

(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 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); (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; (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.  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, provided that the Executive’s termination results in a complete cessation of services for the Company.

 

(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, provided that the Executive’s termination results in a complete cessation of services for the Company.

 

(e)           Notice and 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 (15) days from the Executive’s receipt of the notice of proposed termination.  Notwithstanding the foregoing, the Executive’s employment 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

 

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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 for Cause.

 

(ii)  Termination by Executive for Good Reason.  In the event the Executive proposes to terminate his employment for Good Reason under paragraph (4)(c) above, the Executive shall first provide written notice to the Company of the existence of the condition described as Good Reason in paragraph 4(c) above 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.

 

(f)            Severance Benefits.  If the Executive is entitled to severance benefits under this paragraph 4(f) pursuant to paragraph 4(c) or (d), the Executive shall be provided with the following benefits:

 

(i)            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 three times the sum of (x) the Executive’s annual salary at the time of termination of employment; 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 of employment occurs.  In the event Executive’s termination 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 (i) promptly but no later than 2 ½ months after the end of the calendar year in which bonus was earned.

 

(ii)           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, 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.

 

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(iii)          Stock Incentives.  Executive shall be entitled to such vesting or other benefits as are provided by the award agreement pertaining thereto.

 

(g)           Benefits in Lieu of Severance Pay Policy.  The severance benefits provided for in this paragraph 4 are in lieu of any benefits that would otherwise be provided to the Executive under the Company’s severance pay policy and the Executive shall not be entitled to any benefits under the Company’s severance pay policy.

 

(h)           No Funding of Severance.  Nothing contained in this Agreement or otherwise shall require the Company to segregate, earmark or otherwise set aside any funds or other assets to provide for any payments required to be made under this paragraph 4 and the rights of the Executive to the severance benefits hereunder shall be solely those of a general, unsecured creditor of the Company.  However, the Company may, in its discretion, deposit cash or property, or a combination of both, equal in value to all or a portion of the amounts anticipated to be payable hereunder into a trust, the assets of which are to be distributed at such times as determined by the trustee of such trust; provided that such assets shall be subject at all times to the rights of the Company’s general creditors.

 

(i)            Termination after Change in Control.  Upon or within six months before or twenty-four months after a Change in Control, if the employment of the Executive ends under circumstances entitling Executive to benefits or payments under the CIC Agreement, the Executive shall be entitled to the greater of the benefits provided under the CIC Agreement and the benefits provided by this Agreement, but in no event shall there be double payment under the CIC Agreement and this Agreement.

 

(j)            Section 409A of the Internal Revenue Code.  The arrangements described in this Agreement are intended to be either exempt from or to constitute permissible payments under IRC § 409A and the regulations thereunder.

 

5.             Covenant Not to Compete; Non-Solicitation Covenant.

 

(a)           Covenant Not to Compete. While Executive is actively employed by the Company and, in the event of a termination of employment other than (i) a termination by the Company without Cause, (ii) a termination by the Executive for Good Reason or (iii) a termination for any reason within 6 months before or 24 months after a Change in Control, for a period of one year after such termination of the Executive’s employment, the Executive agrees that he will not directly or indirectly substantially compete with the Company or the TCF Subsidiaries.  The Executive shall be deemed to be substantially competing with the Company and the TCF Subsidiaries if, without the prior written approval of the Board of Directors of the Company, he becomes an officer, employee, agent, partner, director or owner of a ten (10) percent or greater equity interest of any company (or its affiliated companies) which engages in any types of business in which the Company or the TCF Subsidiaries are engaged at the time of employment termination and such competing entity operates within a 50 mile radius of any location operated by the Company or any TCF Subsidiary.

 

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(b)           Non-Solicitation Covenant.  While the Executive is actively employed with the Company and, in the event of a termination of employment by the Company or the Executive for any reason prior to a Change in Control, for a period of one year after the Executive’s termination of employment, the Executive agrees that, except with the prior written permission of the Board of Directors of the Company, he will not offer to hire, entice away, or in any manner attempt to persuade any officer, employee, or agent of the Company or any of the TCF subsidiaries to discontinue his or her relationship with the Company or any of the TCF Subsidiaries nor will he directly or indirectly solicit, divert, take away or attempt to solicit any business of the Company or any of its subsidiaries as to which Executive has acquired any knowledge during the term of his employment with the Company.

 

(c)           Remedies.  If the Executive commits a breach, or threatens to commit a breach, of any of the provisions of this paragraph 5, the Company shall have the following rights and remedies, in addition to any rights and remedies otherwise available at law or equity after the Company has notified the Executive of the specific conduct or threatened conflict which it deems in violation of this paragraph 5 and given the Executive a reasonable opportunity to cease and desist:

 

(i)            The right and remedy to have the provisions of this paragraph 5 specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed by the Executive that any such breach or threatened breach will cause irreparable injury to the Company and the TCF Subsidiaries and that money damages will not provide an adequate remedy to the Company and the TCF Subsidiaries; and

 

(ii)           The right and remedy to require the Executive to account for and pay over to the Company all compensation, profits, monies, accruals, increments, or other benefits, other than those payable under this Agreement, derived or received by the Executive or the enterprise in competition with the Company or any of the TCF Subsidiaries as the result of any transactions constituting a breach of any part of this paragraph 5, and Executive agrees to account for and pay over to the Company such amounts promptly upon demand therefore.

 

6.             Beneficiaries.  In the event of the Executive’s death after his termination of employment, any amount or benefit payable or distributable to him pursuant to this Agreement shall be paid to the beneficiary designated by the Executive for such purpose in the last written instrument received by the Company prior to the Executive’s death, if any, or, if no beneficiary has been designated, to the Executive’s estate, but such designation shall not be deemed to supersede any beneficiary designation under any benefit plan of the Company.  Whenever this Agreement provides for the written designation of a beneficiary or beneficiaries of the Executive, the Executive shall have the right to revoke such designation and to redesignate a beneficiary or beneficiaries by written notice to either the Company to such effect, except to the extent, if any restricted by law.

 

7.             Rights in the Event of Dispute.  In the event of a dispute between the Company and the Executive regarding his employment or this Agreement, it is the intention of this Agreement that the dispute shall be resolved as expeditiously as possible, consistent with fairness

 

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to both sides, and that during pendency of the dispute the Executive and the Company shall be on equal footing, as follows:

 

(a)           Arbitration.  Any claim or dispute relating to the Executive’s employment or terms and performance of this Agreement, shall be resolved by binding private arbitration before three arbitrators and any award rendered by any arbitration panel, or a majority thereof, may be filed and a judgment obtained in any court having jurisdiction over the parties unless the relief granted in the award is delivered within ten (10) days of the award.  Either party may request arbitration by written notice to the other party.  Within thirty (30) days of receipt of such notice by the opposing party, each party shall appoint a disinterested arbitrator and the two arbitrators selected thereby shall appoint a third neutral arbitrator; in the event the two arbitrators cannot agree upon the third arbitrator within ten (10) days after their appointment, then the neutral arbitrator shall be appointed by the Chief Judge of Hennepin County (Minnesota) District Court.  Any arbitration proceeding conducted hereunder shall be in the City of Minneapolis and shall follow the procedures set forth in the Rules of Commercial Arbitration of the American Arbitration Association, and both sides shall cooperate in as expeditious a resolution of the proceeding as is reasonable under the circumstances.  The arbitration panel shall have the power to enter any relief it deems fair and just on any claim, including interim and final equitable relief, along with any procedural order that is reasonable under the circumstances.

 

(b)           Expenses of Prosecution/Defense of Claim.  During the pendency of a dispute between the Company and the Executive relating to the Executive’s employment or the terms or performance under this Agreement, the Company shall promptly pay the Executive’s reasonable expenses of representation upon delivery of periodic billings for same, provided that (i) Executive (or a person claiming on his behalf) shall promptly repay all amounts paid hereunder at the conclusion of the dispute if the resolution thereof includes a finding that the Executive did not act in good faith in the matter in dispute or in the dispute proceeding itself, and (ii) no claim for expenses of representation shall be submitted by the Executive or any person acting on his behalf unless made in writing to the Board of Directors within 90 days after receipt of billing for such representation.  Any such payment shall be made promptly, and in any event no later than the end of the calendar year following the year in which the expense was incurred.

 

8.             No Obligation to Mitigate Damages.  In the event the Executive becomes eligible to receive compensation or benefits subsequent to the termination of his employment under this Agreement, the Executive shall have no obligation to seek other employment in an effort to mitigate damages.  To the extent the Executive shall accept other employment after his termination of employment, the compensation and benefits received from such employment shall not reduce the compensation and benefits otherwise due under this Agreement, except as provided in paragraph 4(f)(ii) above.

 

9.             Other Benefits.  The benefits provided under this Agreement shall, except to the extent otherwise specifically provided herein, be in addition to, and not in derogation or diminution of, any benefits that Executive or his beneficiary may be entitled to receive under any other plan or program now or hereafter maintained by the Company, or its subsidiaries.  The parties expressly agree that in the event of a Change in Control the Executive shall be entitled to the greater of the compensation and benefits as set forth in the CIC Agreement (in lieu of and not

 

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in addition to this Agreement) and the compensation and benefits payable under this Agreement, and in no event shall there be double payment under the CIC Agreement and this Agreement.

10.           Successors.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business and/or assets of the Company, to expressly assume and agree to perform its obligations under this Agreement in the same manner and to the same extent that the Company would be required to perform them if no succession had taken place unless, in the opinion of legal counsel mutually acceptable to the Company and the Executive, such obligations have been assumed by the successor as a matter of law.  The Executive’s rights under this Agreement shall inure to the benefit of, and shall be enforceable by, the Executive’s legal representative or other successors in interest, but shall not otherwise be assignable or transferable.

 

11.           Severability.  If any provision of this Agreement or the application thereof is held invalid or unenforceable, the invalidity or unenforceability thereof shall not affect any other provisions or applications of this Agreement which can be given effect without the invalid or unenforceable provision or application.

 

12.           Survival.  The rights and obligations of the parties pursuant to this Agreement shall survive the term of Executive’s employment to the extent that any performance is required hereunder after the expiration or termination of such term.

 

13.           Notices.  All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person (in the Company’s case, to its Secretary) or 48 hours after deposit thereof in the U.S. mails, postage prepaid, addressed, in the case of the Executive, to his last known address as carried on the personnel records of the Company and, in the case of the Company, to the corporate headquarters, attention of the Secretary, or to such other address as the party to be notified may specify by written notice to the other party.

 

14.           Other Agreements.  This Agreement supersedes and replaces all prior agreements or understandings of terms of the Executive’s employment with the Company, including the Prior Agreements.  Except as specifically provided herein, this Agreement does not supersede or replace the CIC Agreement or any agreement between the Company and Executive pursuant to any plans or programs of the Company, including any stock option agreement, restricted stock agreement or supplemental retirement agreement.

 

15.           Amendments and Constructions.  This Agreement may only be amended in a writing signed by the parties hereto.  This Agreement shall be construed under the laws of the State of Minnesota.  Paragraph headings are for convenience only and shall not be considered a part of the terms and provisions of the Agreement.

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first written above.

 

 

 

TCF FINANCIAL CORPORATION

 

 

 

ATTEST:

 

 

 

 

 

 

By:

/s/ Gregory J. Pulles

 

 

 

Gregory J. Pulles

/s/ Neil W. Brown

 

Its:

Vice Chairman, General Counsel

President and Chief Operating Officer

 

and Secretary

 

 

 

 

 

 

 

 

 

WITNESS:

 

 

 

 

 

/s/ Joseph T. Green

 

/s/ Lynn A. Nagorske

 

 

Lynn A. Nagorske

 

 

 

 

 

 

 

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EX-99.1 2 a08-21249_1ex99d1.htm EX-99.1

Exhibit 99.1

 

August 6, 2008

 

Mr. Lynn A. Nagorske

1040 Tonkawa Road

Orono, MN 55356

 

Re:  Terms of Separation/Benefits

 

Dear Lynn:

 

Following are the terms of our agreed-upon arrangements under which your employment with TCF will cease, and a description of the benefits that TCF will be providing to you under your employment agreement and TCF’s various compensation and benefit plans.  If you have any questions concerning these arrangements, please contact me.

 

1.             On July 26, 2008, the TCF Financial Corporation Board of Directors elected William A. Cooper to succeed you as TCF’s Chief Executive Officer.  This action constitutes “good reason” for your employment termination under section 4(c) of your Employment Agreement dated January 1, 2008 (the “Agreement”).  We acknowledge that your employment has been terminated for good reason under the Agreement.  This letter will satisfy the notice provisions under the Agreement, and we decline the opportunity to cure.

 

2.             Within thirty days of the date hereof, you will be paid, in a lump sum, an amount determined under paragraph 4(f) of the Agreement.  Your medical and other benefits will be continued as described in paragraph 4(f)(ii) of the Agreement.  If 2008 performance bonuses would be earned when 2008 results are reported, you will be paid a pro-rata (7/12ths) portion when the amount of such bonus, if any, is paid.  All payments made to you will be subject to appropriate withholding in a manner consistent with the Company’s customary practices.

 

3.             The Board’s Compensation Committee has approved treating your employment termination as a retirement for purposes of vesting restricted stock that has been earned as of your termination date.  You will retain the portion of restricted stock that was earned under the TCF Financial Incentive Stock Program and your Restricted Stock Agreement dated January 23, 2006.  No other stock will be earned under the terms of your restricted stock grants.  The restricted shares will continue to be non-transferable until January 31, 2011.

 


 

4.             The Board’s Compensation Committee has approved treating your employment termination as a retirement for purposes of partial vesting of stock option awards.  As a result, you will be allowed partial vesting of stock options granted under the TCF Incentive Stock Program and your Nonqualified Stock Option Agreement dated January 21, 2008.

 

5.             Your benefits for each of the following plans will be paid in accordance with the plan documents and the elections you have made:  Executive Deferred Compensation Plan, Employee Stock Purchase Plan (“ESPP”), ESPP SERP, Cash Balance Pension Plan and related SERP, and Nationwide Annuity in lieu of prior pension plan.

 

6.             Other personal benefits, perquisites, or property that has been provided to you, such as your company car, will be returned or relinquished, to the extent not done so prior to this date, in accordance with TCF’s normal policies.  You will also continue to receive reimbursement for the reasonable cost of tax preparation assistance for 2008.

 

7.             In connection with the termination of your employment, you are hereby resigning from the TCF Financial Corporation Board of Directors and from the boards and as an officer of other TCF companies effective the date hereof.  You hereby advise us that your resignation is not because of a disagreement with TCF.

 

8.             The Company acknowledges and agrees that the indemnification accorded to directors and officers of the Company under Articles 12 and 13 of the Company’s Restated Certificate of Incorporation will continue to be available to you notwithstanding the termination of your employment and your resignation as an officer and director of the Company and other TCF companies.

 

9.             TCF will reimburse you for reasonable legal and accounting fees incurred in reviewing these arrangements.

 

Please confirm your receipt of this letter and your acceptance of these terms by signing the enclosed copy of this letter and returning it to me.

 

 

 

Very truly yours,

 

 

 

 

 

 

 

 

/s/ Ralph Strangis

 

 

Ralph Strangis

 

 

Chairman, Compensation Committee

 

 

TCF Financial Corporation

 

 

Board of Directors

 

Accepted and Agreed:

/s/ Lynn A. Nagorske

 

 

Lynn A. Nagorske

 

 

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