As filed with the Securities and Exchange Commission on July 28, 2011
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COMERICA INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware | 38-1998421 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
1717 Main Street, MC 6404
Dallas, Texas 75201
(Address of principal executive offices) (Zip Code)
Sterling Bancshares, Inc. Deferred Compensation Plan (as Amended and Restated)
Amended and Restated Sterling Bancshares, Inc. 2003 Stock Incentive and Compensation Plan
(Full title of the Plan)
JON W. BILSTROM
Executive Vice President, Governance, Regulatory
Relations and Legal Affairs, and Secretary
Comerica Incorporated
1717 Main Street, MC 6404
Dallas, Texas 75201
(Name and address of agent for service)
(214) 462-6831
(Telephone number, including area code, of agent for service)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
CALCULATION OF REGISTRATION FEE
Title of securities to be registered | Amount to be registered |
Proposed maximum offering price per share |
Proposed maximum aggregate offering price |
Amount of registration fee |
||||||||||||
Deferred Compensation Obligations (1) |
$ | 12,000,000 | N/A | $ | 12,000,000 | $ | 1,393.20 | |||||||||
Common Stock $5.00 par value |
500,000 | (2) | $ | 32.99 | (3) | $ | 16,495,000 | (3) | $ | 1,915.07 |
(1) | The Deferred Compensation Obligations being registered are unsecured obligations of Comerica Incorporated to pay deferred compensation in the future in accordance with the terms and conditions of the Sterling Bancshares, Inc. Deferred Compensation Plan (as Amended and Restated) (the Deferred Compensation Plan), as may be further amended from time to time. |
(2) | Pursuant to Rule 416(a) under the Securities Act of 1933 (the Securities Act), this registration statement shall also be deemed to cover any additional securities to be offered or issued in connection with the provisions of the above-referenced plans, which provide for adjustments in the amount of securities to be offered or issued to prevent dilution resulting from stock splits, stock dividends or similar transactions. |
(3) | Pursuant to Rule 457(h)(1) under the Securities Act, the per share and aggregate offering price are based upon the average of the high and low sales prices of the shares of common stock as reported on the New York Stock Exchange Composite Tape on July 27, 2011 ($32.99 per share). |
EXPLANATORY NOTE
On July 28, 2011, pursuant to an Agreement and Plan of Merger dated as of January 16, 2011, as amended, by and between Comerica Incorporated, a Delaware corporation (Comerica or the Registrant) and Sterling Bancshares, Inc., a Texas corporation (Sterling), Sterling merged with and into Comerica, with Comerica continuing as the surviving entity (the Merger). This Registration Statement on Form S-8 (the Registration Statement) is filed by Comerica for the purpose of registering (a) shares of common stock of Comerica, par value $5.00 per share (Common Stock) and Deferred Compensation Obligations (as defined below) issuable pursuant to the Deferred Compensation Plan, which has been assumed by Comerica in connection with the Merger and (b) shares of Common Stock issuable pursuant to the Sterling Bancshares, Inc. 2003 Stock Incentive and Compensation Plan, which has been assumed by Comerica in connection with the Merger.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I will be sent or given to employees as specified by Rule 428(b)(1) of the Securities Act. Such documents need not be filed with the Securities and Exchange Commission (the Commission) either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 of the Securities Act. These documents and the documents incorporated by reference in this Registration Statement pursuant to Item 3 of Part II hereof, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. | INCORPORATION OF DOCUMENTS BY REFERENCE. |
The following documents filed with the Commission by Comerica are incorporated in this Registration Statement by reference:
1. | Comericas Annual Report on Form 10-K for the fiscal year ended December 31, 2010; |
2. | Comericas Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2011; |
3. | Comericas Current Reports on Form 8-K filed with the Commission on July 27, 2011; July 14, 2011; May 2, 2011 (as amended on July 27, 2011); January 27, 2011; January 21, 2011 and January 18, 2011 (first filing); and |
4. | The description of Comericas common stock, par value $5.00 per share, set forth in Comericas Registration Statement on Form S-4 filed February 2, 2011 (Commission File Number 333-172211) and any amendments, reports or other filings filed with the Commission for the purpose of updating that description. |
To the extent that any information contained in any report on Form 8-K, or any exhibit thereto, was furnished to, rather than filed with, the Commission, such information or exhibit is specifically not incorporated by reference.
All documents subsequently filed by Comerica pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), prior to the filing of a post-effective amendment which indicates that all securities offered hereunder have been sold or which deregisters all of the securities offered then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing of such documents.
ITEM 4. | DESCRIPTION OF SECURITIES. |
The Common Stock to be offered is registered under Section 12(b) of the Exchange Act.
The deferred compensation obligations being registered under this Registration Statement (the Deferred Compensation Obligations) are issuable under the terms of the Deferred Compensation Plan, which has been assumed by Comerica in connection with the Merger. The Deferred Compensation Plan is intended to be an unfunded, unsecured plan maintained primarily for the purpose of providing additional income deferral and investment opportunities to a select group of management and other highly compensated employees.
Employee participants may elect to defer between 5% and 90% of base salary and between 5% and 90% of incentive compensation. Prior to the Merger, directors of Sterling could elect to defer between 5% and 100% of their director fees. The Deferred Compensation Plan provides that Comerica may make matching contributions for amounts that would have been made on behalf of an employee participant to Sterlings tax-qualified 401(k) plan, but were otherwise limited by the 401(k) plan or the Internal Revenue Code. In addition, the Deferred Compensation Plan provides that Comerica may make a discretionary contribution on behalf of an employee participant.
A participant is 100% vested in all deferrals made by a participant. The employee participant will be vested in each contribution by Comerica to the same extent as such participant is vested in his non-elective contribution account under Sterlings 401(k) plan. In addition, the contributions made by Comerica on behalf of an employee participant will become fully vested upon a change of control, with the exception of certain enumerated severance accounts with contributions made by Comerica on behalf of employee participants which shall be 100% vested at all times.
Amounts in a participants account under the Deferred Compensation Plan will be indexed to one or more hypothetical or deemed investments individually chosen by the participant from the hypothetical investment funds available under the Deferred Compensation Plan. However, such investment alternatives are merely measurement funds and amounts deferred under the Deferred Compensation Plan are not required to actually be invested in the investment alternatives, although Comerica may choose to do so. Accordingly, the participants may not have an actual investment in these investment alternatives which are used only for the purposes of crediting or debiting the accounts of each participant with deemed acquisitions, dispositions, earnings or losses as if the amounts in a participants account were actually invested in accordance with the participants investment elections. Participants may periodically reallocate their cash deferral account balances among available investment funds. There is no trading market for the Deferred Compensation Obligations.
Prior to May 1, 2011, one of the hypothetical investment options under the Deferred Compensation Plan was a fund comprised of Sterling common stock, par value $1.00 per share (the Company Stock Fund). Deferrals of the common stock portion of the directors fees credited to the director participants account under the Deferred Compensation Plan were indexed to the Company Stock Fund and may not be reallocated among other available investment funds. Effective May 1, 2011, the Company Stock Fund is not currently being offered as a hypothetical investment option for future deferrals or contributions, nor are participants permitted to reallocate investment funds into the Company Stock Fund; however, dividends earned on existing amounts in the Company Stock Fund will continue to be hypothetically invested in Common Stock.
The portion of a participants account balance under the Deferred Compensation Plan that is not credited to the Company Stock Fund is payable in cash following a separation from service or certain other specified events permitted in accordance with Internal Revenue Code Section 409A. The portion of a participants account balance that is credited to the Company Stock Fund is payable only in shares of Common Stock, with fractional shares paid in cash. Payments may be made in a lump sum or in annual installments over a period of up to 20 years, at the election of the participant, or pursuant to the Deferred Compensation Plan, as applicable.
The Deferred Compensation Obligations are Comericas unsecured and unsubordinated general obligations and rank pari passu with Comericas other unsecured and unsubordinated indebtedness. A participants or beneficiarys rights to the Deferred Compensation Obligations cannot be sold, transferred, assigned, pledged or otherwise alienated or encumbered except that a participant may make a written designation of a beneficiary to receive such deferred amounts upon his or her death pursuant to the terms of the Deferred Compensation Plan. Any
attempt to sell, transfer, assign, pledge or otherwise alienate or encumber the Deferred Compensation Obligations will be void. The Deferred Compensation Obligations are not convertible into any other security except that account balances treated as invested in the Company Stock Fund are distributed in shares of Common Stock.
In order to assist Comerica in satisfying its future obligations to participants under the Deferred Compensation Plan, Comerica has assumed a non-qualified trust agreement with Charles Schwab Trust Company and may periodically make contributions to the trust. Although the assets of the trust are intended to be used to pay the Deferred Compensation Obligations under the Deferred Compensation Plan, the assets remain subject to the claims of Comericas general creditors in the event of Comericas insolvency. Consequently, participants do not have any ownership interest in the assets of the trust and do not have any voting rights with respect to the securities associated with the measuring investment funds to which their accounts are attributed.
Comerica has the ability to amend the Deferred Compensation Plan at any time. It also has the ability to terminate the Deferred Compensation Plan under certain circumstances, including a change of control.
This summary is a brief description of the Deferred Compensation Obligations. The official provisions of the Deferred Compensation Plan are contained in the attached Deferred Compensation Plan document, which is filed as Exhibit 4.5 to this Registration Statement and is controlling in the event of a discrepancy.
ITEM 5. | INTERESTS OF NAMED EXPERTS AND COUNSEL. |
The validity of the securities offered hereby has been passed upon by Jon W. Bilstrom, Executive Vice President, Governance, Regulatory Relations and Legal Affairs, and Secretary of Comerica. As of July 27, 2011, Mr. Bilstrom beneficially owned less than 1% of the total outstanding shares of Common Stock.
ITEM 6. | INDEMNIFICATION OF DIRECTORS AND OFFICERS. |
As permitted by Section 102(b)(7) of the Delaware General Corporation Law, or DGCL, Comericas certificate of incorporation provides that a director of Comerica shall not be personally liable to Comerica or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (a) for any breach of the directors duty of loyalty to us or our stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) pursuant to Section 174 of the DGCL, or (d) for any transaction from which a director derived an improper personal benefit.
In general, Comericas bylaws provide that Comerica shall indemnify its directors and officers to the fullest extent permitted by law. As permitted by Section 145(a) of DGCL, Comericas bylaws provide that Comerica shall indemnify each of its directors and officers against expenses (including attorneys fees) incurred in connection with any proceeding (other than an action by or in the right of Comerica) involving such person by reason of having been an officer or director, to the extent such person acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interest of Comerica and, with respect to any criminal action or proceeding, had no reasonable cause to believe such persons conduct was unlawful. As permitted by Section 145(b) of DGCL, Comericas bylaws provide that Comerica shall indemnify each of its officers and directors against expenses (including attorneys fees) incurred in connection with any action brought by or in the right of Comerica, to the extent such person acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interest of Comerica, except that if the director or officer is adjudged to be liable to Comerica, no indemnification shall be made unless and to the extent that the Court of Chancery or any other court shall deem proper, notwithstanding the adjudication of liability.
Unless prohibited by applicable law or regulation, or otherwise required by Section 18(k) of the Federal Deposit Insurance Act, as amended, the determination of whether indemnification of an officer or director is proper under the circumstances (unless ordered by a court) generally shall be made by independent legal counsel chosen by a majority of Comericas disinterested directors (even if such disinterested directors constitute less than a quorum) in a written opinion to the board of directors. However, as required by Section 145(c) of DGCL, Comerica must indemnify a director or officer who was successful in defense of any suit. As permitted by Section 145(e) of DGCL, Comericas bylaws provide that Comerica may pay expenses incurred by a director or officer in advance, upon receipt of an undertaking that the advance will be repaid if it is ultimately determined that the director or officer is not entitled to indemnity.
As permitted by Section 145(g) of DGCL, Comericas bylaws provide that Comerica may purchase insurance on behalf of its directors and officers against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such persons status as such, whether or not Comerica would have the power to indemnify such person against such liability under its bylaws. Comerica maintains such insurance.
The foregoing is only a general summary of certain aspects of Delaware law and Comericas certificate of incorporation and bylaws dealing with indemnification of directors and officers, and does not purport to be complete. It is qualified in its entirety by reference to the detailed provisions of Section 145 of the DGCL and the certificate of incorporation and the bylaws of Comerica.
ITEM 7. | EXEMPTION FROM REGISTRATION CLAIMED. |
Not applicable.
ITEM 8. | EXHIBITS. |
Exhibit No. |
Description | |
4.1 | Restated Certificate of Incorporation of Comerica Incorporated, as in effect on the date hereof (incorporated by reference to Exhibit 3.2 to Comericas Current Report on Form 8-K filed August 9, 2010). | |
4.2 | Certificate of Amendment to Restated Certificate of Incorporation of Comerica Incorporated, as in effect on the date hereof (incorporated by reference to Exhibit 3.2 to Comericas Quarterly Report on Form 10-Q for the quarter ended March 31, 2011). | |
4.3 | Amended and Restated Bylaws of Comerica Incorporated, as in effect on the date hereof (amended and restated April 26, 2011) (incorporated by reference to Exhibit 3.3 to Comericas Quarterly Report on Form 10-Q for the quarter ended March 31, 2011). | |
4.4 | Sterling Bancshares, Inc. Deferred Compensation Plan (as Amended and Restated).* | |
4.5 | Amended and Restated Sterling Bancshares, Inc. 2003 Stock Incentive and Compensation Plan (incorporated by reference to Exhibit 10.1 of Sterling Bancshares, Inc.s Current Report on Form 8-K filed on August 14, 2007). | |
5.1 | Opinion and Consent of Jon W. Bilstrom as to the legality of the securities being registered.* | |
23.1 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.* | |
23.2 | Consent of Jon W. Bilstrom, legal counsel (contained in Exhibit 5.1).* | |
24.1 | Powers of Attorney.* |
* | Filed herewith. |
ITEM 9. | UNDERTAKINGS. |
(a) | The undersigned registrant hereby undertakes: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement; and |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrants annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plans annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(c) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities |
being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, State of Texas, on July 28, 2011.
COMERICA INCORPORATED | ||||
By: |
* |
|||
Ralph W. Babb, Jr. | ||||
Chairman, President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated as of July 28, 2011:
* |
Ralph W. Babb, Jr. Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) |
* |
Elizabeth S. Acton Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
* |
Muneera S. Carr Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) |
* |
Roger A. Cregg Director |
* |
T. Kevin DeNicola Director |
* |
Jacqueline P. Kane Director |
* |
Richard G. Lindner Director |
* |
Alfred A. Piergallini Director |
* |
Robert S. Taubman Director |
* |
Reginald M. Turner, Jr. Director |
* |
Nina G. Vaca Director |
*By: |
/s/ Jon W. Bilstrom | |
Jon W. Bilstrom | ||
Attorney-in-Fact July 28, 2011 |
EXHIBIT INDEX
Exhibit No. |
Description | |
4.1 | Restated Certificate of Incorporation of Comerica Incorporated, as in effect on the date hereof (incorporated by reference to Exhibit 3.2 to Comericas Current Report on Form 8-K filed August 9, 2010). | |
4.2 | Certificate of Amendment to Restated Certificate of Incorporation of Comerica Incorporated, as in effect on the date hereof (incorporated by reference to Exhibit 3.2 to Comericas Quarterly Report on Form 10-Q for the quarter ended March 31, 2011). | |
4.3 | Amended and Restated Bylaws of Comerica Incorporated, as in effect on the date hereof (amended and restated April 26, 2011) (incorporated by reference to Exhibit 3.3 to Comericas Quarterly Report on Form 10-Q for the quarter ended March 31, 2011). | |
4.4 | Sterling Bancshares, Inc. Deferred Compensation Plan (as Amended and Restated).* | |
4.5 | Amended and Restated Sterling Bancshares, Inc. 2003 Stock Incentive and Compensation Plan (incorporated by reference to Exhibit 10.1 of Sterling Bancshares, Inc.s Current Report on Form 8-K filed on August 14, 2007). | |
5.1 | Opinion and Consent of Jon W. Bilstrom as to the legality of the securities being registered.* | |
23.1 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.* | |
23.2 | Consent of Jon W. Bilstrom, legal counsel (contained in Exhibit 5.1).* | |
24.1 | Powers of Attorney.* |
* | Filed herewith. |
Exhibit 4.4
STERLING BANCSHARES, INC.
DEFERRED COMPENSATION PLAN
(as Amended and Restated Effective July 28, 2011)
ARTICLE |
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(i)
STERLING BANCSHARES, INC.
DEFERRED COMPENSATION PLAN
(As Amended and Restated Effective July 28, 2011)
W I T N E S S E T H :
WHEREAS, COMERICA INCORPORATED (the Parent), as successor to Sterling Bancshares, Inc., maintains the STERLING BANCSHARES, INC. DEFERRED COMPENSATION PLAN (the Plan) to provide certain of its employees with the ability to electively defer, on a before-tax basis, compensation and to receive certain Company deferrals;
WHEREAS, Parent assumed the Plan on July 28, 2011, in connection with the consummation of the transactions contemplated by the Agreement and Plan of Merger dated as of January 16, 2011, as amended, by and between Parent and Sterling;
WHEREAS, Parent has entered into Letter Agreements with certain key employees of Sterling that provide for the establishment of individual deferred compensation accounts for each such key employee; and
WHEREAS, Parent desires to amend and restate the Plan to reflect such assumption and the establishment under the Plan of the individual deferred compensation accounts required by the Letter Agreements and to make certain corresponding administrative amendments;
NOW, THEREFORE, Parent hereby amends and restates the Plan, effective as of July 28, 2011:
I.
1.1 Definitions. Where the following words and phrases appear in the Plan, they shall have the respective meanings set forth below, unless their context clearly indicates to the contrary.
Account(s): A Members Company Account, Deferral Account, Special Severance Account and/or Grandfathered Account, as the context requires.
Base Salary: The base pay and commissions payable by the Company to an Employee Member for services after his applicable Election Date; provided, however, the Committee may, in its sole discretion, limit the amount of commissions that are to be considered under the Plan for any Member for any Plan Year.
Code: The Internal Revenue Code of 1986, as amended.
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Company: Parent and any Subsidiary which adopts the Plan pursuant to the provisions of Section 2.3.
Company Account: An individual bookkeeping account for each Member which is credited with any Company Deferrals made on his behalf pursuant to Section 3.2. Such account shall be credited (or debited) with its share of net income (or net loss) as provided in Section 3.4.
Company Deferrals: Nonelective deferrals made by the Company on an Employee Members behalf pursuant to Section 3.2.
Compensation: With respect to an Employee Member, his Base Salary, Incentive Compensation and Eligible Bonus, as applicable, and with respect to a Director Member, his Directors Fees.
Deferral Account: An individual bookkeeping account maintained for each Member which is credited with his elective Compensation deferrals made pursuant to Section 3.1 with respect to Compensation payable after December 31, 2004. Such account shall be credited (or debited) with its share of net income (or net loss) as provided in Section 3.4.
Director: A former non-employee member of the Board of Directors of Sterling.
Directors Fees: A Directors annual retainer, meeting fees, committee fees and all other fees paid for his services as a Director for services rendered after his Election Date, whether paid in cash or in shares of Company stock.
Director Member: A Member who is a Director with an Account.
Election Date: The first day of each Plan Year; provided, however, with respect to an individual who first becomes a Director or an employee (whether by an acquisition or hire) (as used herein, Plan shall include any plan aggregated with the Plan under Section 409A of the Code) after the beginning of a Plan Year and prior to July 1 of that Plan Year (or, if an employee on January 1 is later promoted into the eligible class of employees after January 1 and prior to July 1), his initial Election Date under the Plan shall be July 1 of that Plan Year. With respect to any individual who is rehired and previously was a Member in the Plan or participated in a plan that is aggregated with the Plan for purposes of Section 409A, his first Election Date following his date of rehire shall be the first day of the Plan Year following his date of rehire, provided he is designated as eligible to participate that year (if not designated as eligible, it shall be the first day of the Plan Year following his designation as again being eligible).
Eligible Bonus: With respect to an Employee Member, bonus payments provided under any bonus plan or individual bonus agreement, not including Short-Term Incentive Plans, Central Department annual bonus plans, or Shared Services Executive Team bonus plans, which has been approved by the Committee or, to the extent authorized by the Committee, its delegate, provided that (i) the proceeds of such plan or agreement must be payable in cash and (ii) the
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actual amount of such bonus payments must be not less than $10,000 on the payment date. For purposes of this definition, amounts designated as signing bonuses and retention bonuses shall be treated as Eligible Bonuses and amounts designated by the Committee as Incentive Compensation shall not be treated as Eligible Bonuses.
Employee Member: A Member who is an employee or former employee of the Company (or its predecessors) with an Account other than a Special Severance Account.
ESP: The Sterling Bancshares, Inc. Employee Savings Plan.
Funds: The investment funds designated from time to time for the deemed investment of Accounts pursuant to Article IV.
Grandfathered Account: An individual bookkeeping account for an Employee Member that is credited with his Compensation deferrals made pursuant to Section 3.1 with respect to Compensation otherwise payable prior to January 1, 2005, if any. Such account shall be credited (or debited) with its share of net income (or net loss) as provided in Section 3.4.
Incentive Compensation: With respect to an Employee Member, incentive payments include payments made under the Companys Short-Term Incentive Plans, Central Department annual bonus plans, Shared Services Executive Team bonus plans or programs as adopted from time to time by the Committee, that are payable in cash by the Company to such Member.
Letter Agreements: Letter agreements entered into by Parent as of the Closing Date with key employees of Sterling that provide for continued employment with Parent following the Closing Date (as defined in the Merger Agreement) and for the establishment of an individual deferred compensation account for each employee who has entered into such a letter agreement.
Member: Each Director Member, each Employee Member and each Special Severance Member, as the context requires.
Merger Agreement: The Agreement and Plan of Merger dated as of January 16, 2011, as amended, by and between Parent and Sterling.
Plan: The Sterling Bancshares, Inc. Deferred Compensation Plan, as amended from time to time.
Plan Year: The calendar year.
Separation from Service: A termination of employment or service that constitutes a separation from service under the regulations issued under Section 409A of the Code.
Special Severance Account: An individual bookkeeping account for a Special Severance Member (which may be comprised of a Salary Deferred Account and a Bonus Deferred Account or may consist of solely a Deferred Account) that is initially credited with the Special Severance
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Amount (as specified in the applicable Letter Agreement and as allocated between the Salary Deferred Account and the Bonus Deferred Account, if applicable). Such account shall be credited (or debited) with its share of net income (or net loss) as provided in Section 3.4.
Special Severance Amount: The amount set forth in Annex A to the applicable Letter Agreement with each Special Severance Member (as such amount may increase or decrease based on performance of the Funds designated by the Special Severance Member), subject to reduction as set forth in the applicable Letter Agreement. As set forth in the applicable Letter Agreement, the Special Severance Amount will either be credited under both the Salary Deferred Account and the Bonus Deferred Account (as each are defined in the applicable Letter Agreement) or solely under a Deferred Account (as defined in the applicable Letter Agreement).
Special Severance Member: A Member who has entered into a Letter Agreement with Parent.
Specified Employee: An employee who is a key employee (as defined in Section 416 of the Code) at any time during the 12-month period ending on each December 31. Such a key employee will become a Specified Employee on the April 1 following such December 31 identification date. The provisions of the regulations under Section 409A of the Code concerning the determination of Specified Employees in corporate transactions are hereby incorporated by reference.
Sterling: Sterling Bancshares, Inc.
Subsidiary: Any corporation that is a subsidiary corporation of the Company within the meaning of Section 424(f) of the Code and any other entity that would be such a subsidiary corporation if the entity were a corporation.
Trust: The grantor trust, if any, established under the Trust Agreement.
Trust Agreement: The agreement, if any, entered into between the Company and the Trustee pursuant to Article X.
Trust Fund: The funds and properties, if any, held pursuant to the provisions of the Trust Agreement, together with all income, profits and increments thereto.
Trustee: The trustee or trustees qualified and acting under the Trust Agreement at any time.
Unforeseeable Emergency: A severe financial hardship to the Member resulting from an illness or accident of the Member, the Members spouse, the Members beneficiary or the Members dependent (as defined in Section 152 of the Code, without regard to Section 152(b)(i), (b)(2), and (d)(1)(B)); the loss of the Members property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance); or other
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similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Member, each determined in accordance with the regulations under Section 409A of the Code.
Valuation Dates: Each business day on which the principal securities markets are open.
1.2 Number and Gender. Wherever appropriate herein, words used in the singular shall be considered to include the plural and words used in the plural shall be considered to include the singular. The masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender.
1.3 Headings. The headings of Articles and Sections herein are included solely for convenience, and if there is any conflict between such headings and the text of the Plan, the text shall control.
II.
2.1 Participation. Prior to each applicable Election Date, the Committee, in its sole discretion, shall select and cause to be notified those employees of the Company who are eligible to be contributing Employee Members with respect to such Plan Year or the remainder of such Plan Year, as the case may be; provided however, only employees who are members of a select group of management or highly compensated employees, within the meaning of Section 201 of ERISA, shall be eligible to contribute with respect to such Plan Year. In addition, each Director automatically shall be eligible to participate. Each eligible individual (employee or Director) may become a contributing Member for a Plan Year (or part thereof) by executing and filing with the Company, prior to the Election Date applicable to such individual for such Plan Year, the Compensation deferral election form prescribed by the Company for the Plan. Notwithstanding the foregoing, without regard to whether an employee elects to defer Compensation under the Plan for any Plan Year, (i) an employee designated as eligible to be a contributing Member for such Plan Year (or part thereof) shall be deemed a Member for purposes of any Company Deferral made for that Plan Year that is not an employer matching contribution and (ii) each Special Severance Member shall, for all purposes of this Plan, be a Member as regards his Special Severance Account until such time as the Special Severance Account has been distributed in full. Subject to the above requirements of Section 201 of ERISA continuing to be satisfied and the provisions of Section 2.2, an Employee Member shall remain eligible to defer Compensation hereunder and receive an allocation of any Company Deferrals for each Plan Year following his initial year of participation in the Plan provided his Compensation continues to meet the Committees determination of the amount necessary to qualify under the Plan for such year.
The Committees selection of eligible employees may be by a general classification, e.g., officers of certain levels or above or the receipt of annual compensation greater than a certain annual amount, and any such selection criteria may be deemed to be an ongoing one until changed by the Committee.
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2.2 Cessation of Active Participation. Notwithstanding any provision herein to the contrary, a Member of the Plan shall cease to be eligible to defer Compensation hereunder or receive an allocation of Company Deferrals, if otherwise eligible, effective as of the first day of any year designated by the Committee. Any such Committee action shall be communicated to the affected employee prior to the effective date of such action.
2.3 Adopting Subsidiaries. It is contemplated that any Subsidiary, whether or not presently existing, may become a party hereto by action of its officers and the approval of the Committee, but without the need for approval of its board of directors or of the Committee. The provisions of the Plan shall apply equally to each Subsidiary and its employees in the same manner as is expressly provided for Parent and its employees, except that the power to appoint or otherwise affect the Committee and the Trustee and the power to amend or terminate the Plan or amend the Trust Agreement shall be exercised by the Committee or Committee alone. Transfer of employment among the Companies and Subsidiaries shall not be considered a termination of employment hereunder. Any Subsidiary may, by appropriate action of its officers without the need for approval of its board of directors or the Committee or the Committee, terminate its participation in the Plan effective as of the first day of any future Plan Year. Moreover, the Committee may, in its discretion, terminate a Subsidiarys Plan participation effective as of the first day of any future Plan Year.
III.
Account Credits and Allocations of Income or Loss
3.1 Member Deferrals.
(a) For each Plan Year (or applicable part thereof) an Employee Member may elect to defer an integral percentage of from 5% to 90% of his Base Salary and a Director Member may elect to defer an integral percentage of from 5% to 100% of his Directors Fees. A Director Member may, if permitted by the Committee, make separate deferral elections for his annual directors fees, meeting fees, committee meeting fees, and/or special meeting fees with respect to his Directors Fees paid in cash and a separate election with respect to his Directors Fees paid in Company stock. Compensation for a Plan Year not deferred by such an election shall be received by such Employee Member in cash and by such Director Member in cash or in Company stock, as the case may be. A Members election to defer an amount of his Compensation pursuant to this Section shall be made prior to the Election Date applicable to such Member by executing a Compensation deferral election form pursuant to which the Member authorizes the Company to reduce his Compensation in the elected amount and the Company, in consideration thereof, agrees to credit an equal amount to such Members Deferral
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Account maintained under the Plan. Compensation deferrals made by a Member shall be credited to such Members Deferral Account as of a date determined in accordance with procedures established from time to time by the Committee; provided, however, that such deferrals shall be credited to the Members Deferral Account no later than 30 days after the date upon which the Compensation deferred would have been received by such Member if he had not elected to defer such amount pursuant to this paragraph (a).
(b) For each Plan Year that an Employee Member is paid Incentive Compensation, such Member may elect to defer an integral percentage of from 5% to 90% of such Incentive Compensation. Incentive Compensation paid with respect to services rendered in a Plan Year and not deferred by such an election shall be received by such Member in cash. A Members election to defer an amount of his Incentive Compensation pursuant to this Section shall be made by executing an Incentive Compensation deferral election form pursuant to which the Member authorizes the Company to reduce his Incentive Compensation in the elected amount and the Company, in consideration thereof, agrees to credit an equal amount to such Members Deferral Account maintained under the Plan. Incentive Compensation deferrals made by a Member shall be credited to such Members Deferral Account as of a date determined in accordance with procedures established from time to time by the Committee; provided, however, that such deferrals shall be credited to the Members Deferral Account no later than 30 days after the date upon which the Incentive Compensation deferred would have been received by such Member if he had not elected to defer such amount pursuant to this paragraph (b).
(c) For each Plan Year that an Employee Member is paid an Eligible Bonus, such Member may elect to defer an integral percentage of from 5% to 90% of such Eligible Bonus. Eligible Bonus payments paid with respect to services rendered in a Plan Year and not deferred by such an election shall be received by such Member in cash. A Members election to defer an amount of his Eligible Bonus shall be made by executing a deferral election form pursuant to which the Member authorizes the Company to reduce his Eligible Bonus by the designated amount and the Company, in consideration thereof, agrees to credit an equal amount to such Members Deferral Account maintained under the Plan. Eligible Bonus deferrals made by a Member shall be credited to such Members Deferral Account as of a date determined in accordance with procedures established from time to time by the Committee; provided, however, that such deferrals shall be credited to the Members Deferral Account no later than 30 days after the date upon which the Eligible Bonus would have been received by such Member if he had not elected to defer such amount pursuant to this paragraph (c).
(d) A Members Compensation deferral election shall become effective as of the Election Date which is on or after the date the election form is filed with the Company and shall be effective only with respect to Compensation that is for services rendered
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after the Election Date. A Members Compensation deferral election shall be irrevocable on and after the Election Date and remain in force and effect for the entire Plan Year with respect to which it is made (or the remainder thereof, if applicable) and shall remain effective for each subsequent Plan Year, provided the Member remains eligible to make deferrals, until changed in accordance with paragraph (e).
(e) A Member may change or revoke his Compensation deferral election for any subsequent Plan Year by filing the proper form with the Company or designated representative prior to the beginning of the Plan Year for which the change or revocation is to become effective.
(f) In the event that Parent has adopted a formal policy of deferring payment of any compensation (as reported on IRS Form W-2) that is payable to an Employee Member based on Parents determination that such compensation will not be deductible by Parent under Section 162(m) of the Code, such amount shall be treated as a Member deferral under this Section 3.1. An Employee Member shall not be permitted to make a deferral election or distribution election with respect to any amount described in this paragraph (f).
3.2 Company Contributions in General. Except as provided below, with respect to each Plan Year the Company may credit the Company Account of each Employee Member with an amount equal to the difference between the following:
(a) the amount of matching and profit sharing contributions that the Company would have contributed to the ESP on the Members behalf that Plan Year if there were (i) no elective deferral contributions made by the Member to this Plan for that Plan Year, (ii) no compensation limit as prescribed in Section 401(a)(17) of the Code, (iii) no dollar limit on 401(k) deferrals as prescribed in Section 402(g)(1) of the Code, and (iv) no limitation on annual additions as prescribed by Section 415 of the Code, less
(b) the sum of the amount of (i) the Company profit sharing contribution actually contributed to the ESP on the Members behalf for that Plan Year, plus (ii) the amount of the Company matching contribution the Company would have made on behalf of the Member had the Member made that year the maximum 401(k) contribution that is subject to the Company matching contribution under the ESP.
Notwithstanding the foregoing, the Committee may, in its sole discretion, at any time increase or decrease the Company matching and/or profit sharing contribution amount under Section 3.2(i) any Plan Year for one or more Members, including all Members.
3.3 Company Contributions to the Special Severance Accounts. As soon as practicable following the Closing Date (as defined in the Merger Agreement), Parent shall credit to the Special Severance Account of each Special Severance Member under this Plan an amount
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equal to the Special Severance Amount (which may be allocated between the Salary Deferred Account and the Bonus Deferred Account) as set forth in Annex A to the applicable Letter Agreement, subject to reduction as set forth in the applicable Letter Agreement. No Member deferral pursuant to Section 3.1 of this Plan nor Company contribution pursuant to Section 3.2 of this Plan may be made to a Special Severance Account.
3.4 Allocation of Net Income or Loss and Changes in Value Among Accounts.
(a) As of each Valuation Date, the Committee shall cause to be determined the net income (or net loss) of each Fund for the period elapsed since the next preceding Valuation Date. The net income (or net loss) of each Fund since the next preceding Valuation Date shall be ascertained by the Committee or its designee in such manner as it deems appropriate, provided that such determination shall include any net increase or net decrease (whether or not realized) in the value of the assets of each such Fund since the next preceding Valuation Date, and may include expenses of administering the Fund, the Trust and the Plan.
(b) For purposes of allocations of net income (or net loss), each Members Accounts shall be divided into subaccounts to reflect such Members deemed investment designation in a particular Fund or Funds pursuant to Article IV. As of each Valuation Date, the net income (or net loss) of each Fund, separately and respectively, shall be allocated among the corresponding subaccounts of the Members who had such corresponding subaccounts on the next preceding Valuation Date, and each such corresponding subaccount shall be credited with (or debited for) that portion of such net income (or net loss) that the value of each such corresponding subaccount on such next preceding Valuation Date was of the value of all such corresponding subaccounts on such date; provided, however, that the value of such subaccounts as of the next preceding Valuation Date shall be reduced by the amount of any payments debited thereto in accordance with Section 7.4 since the next preceding Valuation Date.
(c) So long as there is any balance in any Account, such Account shall continue to receive allocations pursuant to this Section.
IV.
4.1 Member Investments.
(a) The same investment funds offered under the ESP shall be deemed offered under this Plan for investment of Accounts. Except as provided in Section 4.2, each Member may be given an election to designate, in accordance with the procedures established from time to time by the Committee, the manner in which the amounts allocated to his Accounts shall be deemed to be invested from among the Funds made
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available from time to time for such purpose by the Committee. Such Member may designate one of such Funds for the deemed investment of all the amounts allocated to his Accounts or he may split the deemed investment of the amounts allocated to his Accounts between such Funds in such increments as the Committee may prescribe. If a Member fails to make a proper designation, then his Accounts shall be deemed to be invested in the default Fund or Funds designated by the Committee from time to time in a uniform and nondiscriminatory manner.
(b) Subject to any limitations as proscribed by the Committee, a Member may be given the opportunity to change his deemed investment designation for future amounts to be allocated to his Accounts. Any such change shall be made in accordance with the procedures established by the Committee, and the frequency of such changes may be limited by the Committee.
(c) A Member may also be given the opportunity to elect to convert his deemed investment designation with respect to the amounts already allocated to his Accounts. Any such conversion shall be made in accordance with the procedures established by the Committee, and the frequency of such conversions may be limited by the Committee.
(d) The Committee may elect to establish a hypothetical investment fund that holds shares of the Parents common stock (the Stock Fund). If such a fund is established, a Member may elect to invest his Accounts in such fund. The Committee may in its sole discretion refuse to recognize Member elections that it determines may cause the Members Accounts to become subject to the short-swing profit provisions of Section 16b of the Securities Exchange Act of 1934 and establish special election procedures for Members subject to Section 16 of such Act. In the event that any amounts are deferred under this Plan pursuant to Subsection 3.1(e) and such amounts originally would have been paid in shares of the Parents common stock, such amounts shall be invested in the Stock Fund and shall remain invested in such fund until the earlier of (i) the date the Committee elects to eliminate the Stock Fund, or (ii) the date the Committee formally acts to allow the reinvestment of such amounts in any alternate investment Fund provided under the Plans terms. Notwithstanding the foregoing, the Special Severance Members shall not have the option of allocating any portion of the Special Severance Account to the Stock Fund.
4.2 Director Members Stock Fees. A Director Members deferral with respect to his Directors Fees payable in Company stock automatically shall be deemed invested in the Company Stock Fund.
4.3 Earnings. The income, interest, dividends, investment gains and losses of a Fund shall be credited as reinvested in that Fund.
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4.4 Fund Changes. Notwithstanding anything herein to the contrary, at any time the Committee may change the Funds made available for purposes of the Plan, including freezing and deleting current Funds.
V.
5.1 Accounts.
(a) A Member shall have a 100% vested (nonforfeitable) interest in his Deferral Account at all times.
(b) An Employee Members Company Account shall be vested to the same extent as an Employee Members Employer Non-Elective Contribution Account under the ESP. In addition, a Members Company Account automatically shall be 100% vested upon a Change in Control of Parent, as such term is defined in its stock option plan from time to time.
(c) A Members Grandfathered Account, if any, shall be 100% vested.
(d) A Members Special Severance Account shall be 100% vested.
VI.
6.1 Unforeseeable Emergency Benefit. In the event that the Committee, upon written petition of a Member, determines in its sole discretion that such Member has suffered an Unforeseeable Emergency, such Member shall be entitled to a benefit in an amount not to exceed the lesser of (i) the amount determined by the Committee as necessary to satisfy such Unforeseeable Emergency plus such amount determined by the Committee as necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Members assets (to the extent the liquidation of such assets would not itself cause severe financial hardship), or (ii) the then vested value of such Members Account(s). Such benefit shall be paid in a single lump sum, cash payment as soon as administratively practicable after the Committee has made its determinations with respect to the availability and amount of such benefit. If a Members Account(s) are deemed to be invested in more than one Fund, such benefit shall be distributed prorata from each Fund in which such Account(s) is deemed to be invested. In no event may the amount withdrawn exceed the amount determined by the Committee as necessary to satisfy the requirements of Section 409A of the Code. Notwithstanding anything in the Plan to the contrary, upon any Unforeseeable Emergency withdrawal, the Members deferrals for such Plan Year shall automatically cease and shall not automatically resume as of the next Plan Year. In all events, notwithstanding any other provision of the Plan, this Section 6.1 shall not apply to Special Severance Accounts.
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6.2 Restriction on In-Service Distributions. Section 6.1 shall not be applicable to a Member following his Separation from Service or a Special Severance Member (with respect to his Special Severance Account) at any time, and the amounts credited to such Members Accounts shall be payable to such Member only in accordance with the provisions of Article VII.
6.3 Automatic 162(m) Distributions. In the event that any amounts are deferred under this Plan pursuant to Subsection 3.1(f), some or all of such amounts shall be automatically distributed from the Plan during the first Plan Year in which the Committee, acting on behalf of Parent, reasonably anticipates that the payment can be made without causing Parent to be subject to the deduction limit under Section 162(m) of the Code on the incremental increase in the Employee Members total annual compensation that is paid or payable during such Plan Year.
VII.
7.1 Amount of Benefit. The Member or, in the event of his death, the Members beneficiary, shall be entitled to a payment equal in value to the Members vested balance in his Accounts. The time and form of such payment shall be subject to the further provisions of this Article VII.
7.2 Time of Payment.
(a) Except with respect to Special Severance Accounts, payment of a Members benefit under Section 7.1 shall be made or begin as soon as administratively practicable after the date of the Members Separation from Service (and in no event later than 30 days after such Separation from Service), except the payment of the Company Account and the Deferral Account to a Member who is a Specified Employee shall be made on the first date that is more than six months after the date of his Separation from Service (or, if earlier, the date of death of the Member), as adjusted for interim investment Fund performance. Any installments otherwise payable during such six-month period shall be paid in a lump sum on the first day after such six-month period (or death of the Member). The foregoing six-month delay shall not apply to a payment made pursuant to a qualified domestic relations order (QDRO), as permitted by the regulations under Section 409A of the Code.
(b) Payment of a Special Severance Members benefit under Section 7.1 shall be made in accordance with the payment terms and schedule set forth on Annex A to the Special Severance Members Letter Agreement, including the delay of payment provisions, to the extent applicable, that are incorporated into the Letter Agreements.
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(c) Subject to the delay requirements applicable to Specified Employees under Subsection (a) above, payment of any amounts deferred by an Employee Member pursuant to Subsection 3.1(f) shall be made immediately following such Members Separation from Service.
7.3 Designation of Beneficiaries.
(a) Each Member shall have the right to designate the beneficiary or beneficiaries to receive payment of his benefit in the event of his death. Each such designation shall be made by executing the beneficiary designation form prescribed by the Committee and filing same with the Committee. Any such designation may be changed at any time by execution of a new designation in accordance with this Section.
(b) If no such designation is on file with the Committee at the time of the death of the Member or such designation is not effective for any reason as determined by the Committee, then the designated beneficiary or beneficiaries to receive such benefit shall be as follows:
(i) If a Member leaves a surviving spouse, subject to any QDRO, his benefit shall be paid to such surviving spouse; and
(ii) If a Member does not leave a surviving spouse, subject to any QDRO, his benefit shall be paid to such Members executor or administrator of his estate, or to his heirs at law if there is no administration of such Members estate.
7.4 Source of Payment of Benefits. To the extent the Trust Fund (if established) has sufficient assets, the Trustee shall pay benefits to Members or their beneficiaries, except to the extent the Company pays the benefits directly and provides adequate evidence of such payment to the Trustee. To the extent the Trustee does not or cannot pay benefits out of the Trust Fund, or a Trust Fund is not established, the benefits shall be paid by the Company. Any benefit payments made to a Member or for his benefit pursuant to any provision of the Plan shall be debited to such Members Accounts.
7.5 Forms of Benefit Payments.
(a) All benefits of Members shall be paid in cash unless invested in the Company Stock Fund, in which case shares of Company stock shall be distributed. Benefits shall be paid in one of the following forms as elected by the Member, other than Special Severance Accounts which shall be paid as provided in Section 7.5(e):
(i) a single lump sum payment; or
(ii) in annual installment payments (e.g., 1/20, 1/19, etc. of the Account balance on the installment payment date) for a term certain not to exceed 20 years
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(as designated by the Member). In the event of such Members death prior to the end of the designated installment term, any unpaid balance shall be paid in a lump sum to his Beneficiary.
(b) A Member may elect, on the form prescribed by the Committee, one of the above forms of payment. With respect to an Employee Members Grandfathered Account, such election must be made not later than one year prior to the date of such Members Separation of Service. With respect to an Employee Members Company Account and Deferral Account, such payment election must be made at the time of the Members initial election to defer Compensation under the Plan for any period after December 31, 2004 and such election shall apply to both an Employee Members Company Account and Deferral Account. Such election shall apply to all future deferrals made by the Employee Member under the Plan. In the event a Member fails to timely elect the form in which his benefit payments are to be made, such benefits shall be paid to the Member in the form of a single lump sum.
(c) With the consent of the Committee, an Employee Member may change his elected form of benefit payment with respect to (i) his Grandfathered Account , provided that no such change shall be effective if made within 12 months of the date of such Members Separation from Service and (ii) his Company Account and Deferral Account, provided that no such change shall be effective if (1) made within 12 months of the date of such Members Separation from Service, (2) the change fails to defer the date of each payment to be made under the prior election for a period of less than five years, and (3) made less than 12 months prior to the date of the first scheduled payment. Notwithstanding anything in the Plan to the contrary, no change in a deferral election form or the form of payment may accelerate the date of payment for any amounts already deferred under the Plan.
(d) Notwithstanding an election to receive installments, if the value of the Members Accounts (other than a Special Severance Account) on his Separation from Service is less than the applicable dollar amount under Section 402(g)(l)(B) of the Code, his Accounts shall be paid in a single lump sum.
(e) Notwithstanding anything to the contrary set forth herein, the benefits payable pursuant to the Special Severance Accounts shall be paid in the form or forms and on the schedule set forth on Annex A to each Special Severance Members Letter Agreement, subject to the conditions of the applicable Letter Agreement.
7.6 Cash-Out of Grandfathered Benefits. The Committee, in its sole discretion, may accelerate all or any part of the installment payments of a terminated Members Grandfathered Account at any time, notwithstanding the election made by the Member.
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7.7 Unclaimed Benefits. In the case of a benefit payable on behalf of a Member, if the Committee is unable to locate the Member or beneficiary to whom such benefit is payable, upon the Committees determination thereof, such benefit shall be forfeited to the Company. Notwithstanding the foregoing, if subsequent to any such forfeiture the Member or beneficiary to whom such benefit is payable makes a valid claim for such benefit, such forfeited benefit shall be restored to the Plan by the Company unadjusted for any subsequent earnings or losses of the deemed investments subsequent to such forfeiture.
VIII.
8.1 Appointment of Committee. The general administration of the Plan shall be vested in the Governance, Compensation and Nominating Committee of the Board, or such other committee appointed by the Board to administer the Plan (the Committee).
8.2 Reserved.
8.3 Self-Interest of Members. No member of the Committee shall have any right to vote or decide upon any matter relating solely to himself under the Plan or to vote in any case in which his individual right to claim any benefit under the Plan is particularly involved. In any case in which a Committee member is so disqualified to act and the remaining members cannot agree, the Committee shall appoint a temporary substitute member to exercise all the powers of the disqualified member concerning the matter in which he is disqualified.
8.4 Committee Powers and Duties. The Committee shall supervise the administration and enforcement of the Plan according to the terms and provisions hereof and shall have all powers necessary to accomplish these purposes, including, but not by way of limitation, the right, power, authority, and duty:
(a) To make rules, regulations, and bylaws for the administration of the Plan that are not inconsistent with the terms and provisions hereof, and to enforce the terms of the Plan and the rules and regulations promulgated thereunder by the Committee;
(b) To construe in its discretion all terms, provisions, conditions, and limitations of the Plan;
(c) To correct any defect or to supply any omission or to reconcile any inconsistency that may appear in the Plan in such manner and to such extent as it shall deem in its discretion expedient to effectuate the purposes of the Plan;
(d) To employ and compensate such accountants, attorneys, investment advisors, and other agents, employees, and independent contractors as the Committee may deem necessary or advisable for the proper and efficient administration of the Plan;
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(e) To determine in its discretion all questions relating to eligibility;
(f) To determine whether and when there has been a termination of a Members employment with the Company and its Subsidiaries;
(g) To make a determination in its discretion as to the right of any person to a benefit under the Plan and to prescribe procedures to be followed by distributees in obtaining benefits hereunder;
(h) To receive and review reports from the Trustee as to the financial condition of the Trust Fund, including its receipts and disbursements; and
(i) To establish or designate Funds as investment options as provided in Article IV.
8.5 Claims Review. In any case in which a claim for Plan benefits of a Member or beneficiary is denied or modified, the Committee shall furnish written notice to the claimant within ninety days (or within 180 days if additional information requested by the Committee necessitates an extension of the ninety-day period), which notice shall:
(a) State the specific reason or reasons for the denial or modification;
(b) Provide specific reference to pertinent Plan provisions on which the denial or modification is based;
(c) Provide a description of any additional material or information necessary for the Member, his beneficiary, or representative to perfect the claim and an explanation of why such material or information is necessary; and
(d) Explain the Plans claim review procedure as contained herein.
In the event a claim for Plan benefits is denied or modified, if the Member, his beneficiary, or a representative of such Member or beneficiary desires to have such denial or modification reviewed, he must, within sixty days following receipt of the notice of such denial or modification, submit a written request for review by the Committee of its initial decision. In connection with such request, the Member, his beneficiary, or the representative of such Member or beneficiary may review any pertinent documents upon which such denial or modification was based and may submit issues and comments in writing. Within sixty days following such request for review the Committee shall, after providing a full and fair review, render its final decision in writing to the Member, his beneficiary or the representative of such Member or beneficiary stating specific reasons for such decision and making specific references to pertinent Plan provisions upon which the decision is based. If special circumstances require an extension of such sixty-day period, the Committees decision shall be rendered as soon as possible, but not later than 120 days after receipt of the request for review. If an extension of time for review is
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required, written notice of the extension shall be furnished to the Member, beneficiary, or the representative of such Member or beneficiary prior to the commencement of the extension period.
8.6 Company to Supply Information. The Company shall supply full and timely information to the Committee, including, but not limited to, information relating to each Members Compensation, termination of employment and such other pertinent facts as the Committee may require. The Company shall advise the Trustee of such of the foregoing facts as are deemed necessary for the Trustee to carry out the Trustees duties under the Plan and the Trust Agreement. When making a determination in connection with the Plan, the Committee shall be entitled to rely upon the aforesaid information furnished by the Company.
8.7 Indemnity. To the extent permitted by applicable law, the Company shall indemnify and save harmless each member of the Committee against any and all expenses, liabilities and claims (including legal fees incurred to defend against such liabilities and claims) arising out of their discharge in good faith of responsibilities under or incident to the Plan. Expenses and liabilities arising out of willful misconduct shall not be covered under this indemnity. This indemnity shall not preclude such further indemnities as may be available under insurance purchased by the Company or provided by the Company under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, as such indemnities are permitted under applicable law.
IX.
9.1 Payment of Expenses. All expenses incident to the administration of the Plan and Trust, including but not limited to, legal, accounting, Trustee fees, and expenses of the Committee, may be paid by the Company and, if not paid by the Company, shall be paid by the Trustee from the Trust Fund.
9.2 Trust Fund Property. All income, profits, recoveries, contributions, forfeitures and any and all moneys, securities and properties of any kind at any time received or held by the Trustee shall be held for investment purposes as a commingled Trust Fund pursuant to the terms of the Trust Agreement. The Committee shall maintain one or more Accounts in the name of each Member, but the maintenance of an Account designated as the Account of a Member shall not mean that such Member shall have a greater or lesser interest than that due him by operation of the Plan and shall not be considered as segregating any funds or property from any other funds or property contained in the commingled fund. No Member shall have any title to any specific asset in the Trust Fund.
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X.
The Plan is intended to constitute an unfunded, unsecured plan of deferred compensation for tax purposes and for purposes of Title I of ERISA which is maintained for a select group of management or highly compensated employees of the Company. Plan benefits provided under the Plan are to be paid out of the Companys general assets. Nevertheless, subject to the terms hereof and of the Trust Agreement, the Company may, in the sole discretion of the Committee, transfer money or other property to the Trustee and the Trustee shall pay Plan benefits to Members and their beneficiaries out of the Trust Fund on behalf of the Company.
Parent, in its sole discretion, may establish the Trust and enter into the Trust Agreement.
XI.
11.1 Not Contract of Employment. The adoption and maintenance of the Plan shall not be deemed to be a contract between the Company and any person or to be consideration for the employment of any person. Nothing herein contained shall be deemed to give any person the right to be retained in the employ of the Company or to restrict the right of the Company to discharge any person at any time nor shall the Plan be deemed to give the Company the right to require any person to remain in the employ of the Company or to restrict any persons right to terminate his employment at any time.
11.2 Alienation of Interest Forbidden. The interest of a Member or his beneficiary or beneficiaries hereunder may not be sold, transferred, assigned, or encumbered in any manner, either voluntarily or involuntarily, and any attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be null and void; neither shall the benefits hereunder be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person to whom such benefits or funds are payable, nor shall they be an asset in bankruptcy or subject to garnishment, attachment or other legal or equitable proceedings.
11.3 Withholding. All deferrals to and payments under the Plan shall be subject to applicable tax withholding and other deductions as shall be required of the Company under any applicable law.
11.4 Amendment. The Committee may from time to time, in its discretion, amend, in whole or in part, any or all of the provisions of the Plan; provided, however, that no amendment may be made that would materially impair the rights of a Member with respect to amounts already allocated to his Accounts. For purposes of the foregoing, no amendment that the Committee believes is necessary or appropriate to comply with the requirements of Section 409A of the Code shall be deemed to materially impair the rights of a Member.
11.5 Plan Termination. The Committee may terminate the Plan in connection with a change of control event, as defined by the regulations under Section 409A, provided that: (i) such termination is within 30 days before or 12 months following the change of control event,
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and (ii) all plans and other arrangements that are treated as a single plan with this Plan for purposes of Section 409A are terminated and liquidated with respect to each Member that experienced the change of control event and all amounts deferred under such terminated plans and arrangements are paid to the affected Members within 12 months of the date the Company takes all necessary action to terminate such plans and programs.
In addition, the Committee may terminate the Plan at any time, provided that (i) all other programs that would be aggregated with this Plan, if the service provider Member under this Plan also had deferrals under such other programs, are terminated and liquidated, (ii) no payments are made within 12 months of such termination except payments that would be made if the Plan were not terminated, (iii) all payments are made within 24 months of the date all action to irrevocably terminate and liquidate the Plan are taken, (iv) the termination does not occur proximate to a downturn in the financial health of the Company, and (v) the Company does not adopt a new plan that would be aggregated with any terminated plan if the same service provider participated in both within three years following the date the Company takes all action to irrevocably terminate the Plan.
11.6 Company Stock Plan. With respect to Director Members, the provisions of Section 8 of the Sterling Bancshares, Inc. 2003 Stock Incentive and Compensation Plan (Stock Plan) are incorporated herein by reference and in the event of any conflict with the terms of this Plan, the provisions of the Stock Plan shall control. This Plan, as it applies to Director Members, shall constitute a component of the Stock Plan and not a separate plan for purposes of any shareholder approval requirements under the rules of the applicable securities exchange on which the Company stock is traded.
11.7 Severability. If any provision of this Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provisions hereof; instead, each provision shall be fully severable and the Plan shall be construed and enforced as if said illegal or invalid provision had never been included herein.
11.8 Governing Laws. All provisions of the Plan shall be construed in accordance with the laws of Texas (without regard to any conflicts of law principles) except to the extent preempted by applicable federal law.
EXECUTED July 28, 2011, effective for all purposes as provided above.
COMERICA INCORPORATED. | ||
By: | /s/ Megan D. Burkhart | |
Name: | Megan D. Burkhart | |
Title: | Executive Vice President and Chief Human Resources Officer |
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Exhibit 5.1
[Comerica Letterhead]
Jon W. Bilstrom
Executive Vice President, Governance,
Regulatory Relations and Legal Affairs,
and Secretary
July 28, 2011
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: COMERICA INCORPORATED REGISTRATION STATEMENT ON FORM S-8
Dear Sir/Madam:
I am Executive Vice President, Governance, Regulatory Relations and Legal Affairs, and Secretary to Comerica Incorporated, a Delaware corporation (the Corporation). This opinion is being rendered with respect to the registration statement on Form S-8 (the Registration Statement) filed by the Corporation with the Securities and Exchange Commission on July 28, 2011 for the purpose of registering under the Securities Act of 1933 (the Act), as amended, (i) 500,000 shares of common stock, $5.00 par value, of the Corporation (the Plan Shares) and (ii) $12,000,000 of deferred compensation obligations (the Deferred Compensation Obligations). The Plan Shares are to be issued under the Amended and Restated Sterling Bancshares, Inc. 2003 Stock Incentive and Compensation Plan (the LTIP Plan) and the Sterling Bancshares, Inc. Deferred Compensation Plan (as Amended and Restated) (the Deferred Compensation Plan). The Deferred Compensation Obligations are to be issued under the Deferred Compensation Plan.
I have examined such certificates, instruments, and documents and reviewed such questions of law as I have considered necessary or appropriate for the purposes of this opinion. In addition, in rendering this opinion I have assumed without verification the genuineness of all signatures, the authenticity of all documents submitted to me as originals, the conformity of certified copies submitted to me with the original documents to which such certified copies relate and the legal capacity of all individuals executing any of the foregoing documents.
I have not considered, and I express no opinion as to, the laws of any jurisdiction other than the federal securities laws of the United States and the General Corporation Law of the State of Delaware, in each case as in effect on the date hereof.
Based on and subject to the foregoing, and subject to the qualifications, assumptions and limitations stated herein, I am of the opinion that:
1. | The Plan Shares have been duly authorized and, when issued in accordance with the terms of the LTIP Plan or the Deferred Compensation Plan, as applicable, and, when the Registration Statement shall have become effective, will be legally issued, fully paid and non-assessable; and |
2. | The Deferred Compensation Obligations, upon being issued under and in conformity with the Deferred Compensation Plan, will be legally binding obligations of the Company enforceable in accordance with the terms of the Deferred Compensation Plan, subject to the effects of (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors rights generally, (b) general equitable principles (whether considered in a proceeding in equity or at law) and (c) an implied covenant of good faith and fair dealing. |
I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, I do not thereby admit that I am within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Jon W. Bilstrom |
Executive Vice President, Governance, Regulatory Relations and Legal Affairs, and Secretary |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in this Registration Statement on Form S-8 of Comerica Incorporated, pertaining to the registration of shares of common stock of Comerica Incorporated issuable pursuant to the Sterling Bancshares, Inc. Deferred Compensation Plan (as Amended and Restated) and the Amended and Restated Sterling Bancshares, Inc. 2003 Stock Incentive and Compensation Plan, of our reports dated February 28, 2011, with respect to the consolidated financial statements of Comerica Incorporated, and the effectiveness of internal control over financial reporting of Comerica Incorporated, included in its Annual Report (Form 10-K) for the year ended December 31, 2010, filed with the Securities and Exchange Commission.
July 28, 2011
Dallas, Texas
/s/ Ernst & Young LLP
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and/or officers of Comerica Incorporated, a corporation organized under the laws of the State of Delaware (the Corporation), hereby constitutes and appoints Jon W. Bilstrom and Thad A. Schaefer and each of them (with full power to each of them to act alone), his or her true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him or her and on his or her behalf and in his or her name, place and stead, in any and all capacities, to sign, execute and to affix his or her seal to and file with the Securities and Exchange Commission (or any other governmental or regulatory authority) one or more Registration Statements on Form S-8 (or any other appropriate form), and any and all amendments (including post-effective amendments) thereto, with all exhibits and any and all documents required to be filed with respect thereto, relating to the registration under the Securities Act of 1933, as amended, of the Corporations common stock, par value $5.00 per share, and/or deferred compensation obligations of the Corporation, which may be issued by the Corporation pursuant to awards granted under one or more equity plans of Sterling Bancshares, Inc., a Texas corporation assumed by the Corporation, granting unto said attorneys, and each of them, full power and authority to do and to perform each and every act and thing requisite and necessary to be done in order to effectuate the same as fully to all intents and purposes as he himself or she herself might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned directors and/or officers has hereunto set his or her hand as of July 28, 2011.
Signature | Title | |||
/s/ Ralph W. Babb, Jr. Ralph W. Babb, Jr. |
Chairman, President, Chief Executive Officer and |
|||
/s/ Elizabeth S. Acton Elizabeth S. Acton |
Executive Vice President and Chief Financial |
|||
/s/ Muneera S. Carr Muneera S. Carr |
Senior Vice President and Chief Accounting |
|||
/s/ Roger A. Cregg Roger A. Cregg |
Director | |||
/s/ T. Kevin DeNicola T. Kevin DeNicola |
Director |
Signature | Title | |||
/s/ Jacqueline P. Kane Jacqueline P. Kane |
Director | |||
/s/ Richard G. Lindner Richard G. Lindner |
Director | |||
/s/ Alfred A. Piergallini Alfred A. Piergallini |
Director | |||
/s/ Robert S. Taubman Robert S. Taubman |
Director | |||
/s/ Reginald M. Turner, Jr. Reginald M. Turner, Jr. |
Director | |||
/s/ Nina G. Vaca Nina G. Vaca |
Director |