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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM 8-K
_____________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 10, 2025
Commission File Number: 1-11607
DTE Energy Company
| | | | | | | | |
| Michigan | | 38-3217752 |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S Employer Identification No.) |
Registrants address of principal executive offices: One Energy Plaza, Detroit, Michigan 48226-1221
Registrants telephone number, including area code: (313) 235-4000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
Title of Each Class | | Trading Symbol(s) | | Name of Exchange on which Registered |
| Common stock, without par value | | DTE | | New York Stock Exchange |
| | | | |
| 2017 Series E 5.25% Junior Subordinated Debentures due 2077 | | DTW | | New York Stock Exchange |
| | | | |
| 2020 Series G 4.375% Junior Subordinated Debentures due 2080 | | DTB | | New York Stock Exchange |
| | | | |
| 2021 Series E 4.375% Junior Subordinated Debentures due 2081 | | DTG | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under Exchange Act (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Executive Severance Allowance Plan Amendment
On September 10, 2025, the Benefit Plan Administration Committee (the "BPAC") of DTE Energy Company (the "Company") adopted resolutions approving Amendment 1 (the "Amendment") to the DTE Energy Company Executive Severance Allowance Plan (the "Plan"). The Plan establishes a uniform approach to severance applicable to eligible senior executives (which may include named executive officers) of the Company and its subsidiaries upon a termination of employment without Cause (as defined in the Plan). Under the terms of Amendment 1, the Company's Chief Executive Officer is eligible to receive enhanced payments and benefits if terminated, including 24 months of COBRA continuation coverage premiums and a lump sum payment of 200% of Base Pay. The foregoing summary is qualified in its entirety by reference to the terms of the Amendment, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Change in Control and Indemnification Agreements
On September 11, 2025, the Company entered into a Change in Control Severance Agreement with each of its executive officers: Diane M. Antishin, Joi M. Harris, Trevor F. Lauer, Kathrine M. Lorenz, Lisa A. Muschong, Tracy J. Myrick, Gerardo Norcia, Matthew T. Paul, Robert A. Richard, David Ruud and Mark W. Stiers (each, an "Executive" and together, the "Executives"). Forms of the Agreements are attached as Exhibits 10.2, 10.3 and 10.4 to this Form 8-K (the "CIC Agreements"). Each of the CIC Agreements is effective as of September 11, 2025 and replaces previous Change-in-Control Severance Agreements between the Company and the Executives. The description set forth below is qualified in its entirety by reference to the forms of the CIC Agreements attached hereto. Capitalized terms used herein are defined in the CIC Agreements.
The CIC Agreements are intended to provide continuity of management in the event there is a Change in Control of the Company (as defined in the CIC Agreements) and to align executive and shareholder interests in support of corporate transactions. The CIC Agreements provide for severance compensation in the event that the Executive's employment is terminated (actually or constructively) within two years after a Change in Control of the Company. The cash severance benefit is the sum of (i) a multiple of the Executive's base salary plus Annual Bonus, assuming target performance goals for such year would be met, plus (ii) a lump sum payment of the Executive's pro-rated Annual Bonus (reduced by any pro-rated Annual Bonus otherwise paid because of the Executive's termination). An additional amount is paid as consideration for the prohibition against engaging in any Competitive Activity for one year after termination that is imposed by the CIC Agreements.
The Company also entered into an Indemnification Agreement with each of its Executives and each of its non-employee Directors effective September 11, 2025 in the form attached to this Form 8-K as
Exhibit 10.5. The Indemnification Agreements replace previous Indemnification Agreements between the Company and the Executives and Directors. The description set forth below is qualified in its entirety by reference to the form of Indemnification Agreement attached hereto. Capitalized terms used herein are defined in the Indemnification Agreements.
The Indemnification Agreements provide that the Company will indemnify an Indemnitee against all Liabilities and Expenses incurred by the Indemnitee in connection with any civil, criminal, or other proceeding to which the Indemnitee is a party by reason of their service to the Company. The Company will pay the reasonable fees, costs and expenses incurred by the Indemnitee in connection with any such proceeding, and may assume the defense and employ counsel for the Indemnitee.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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| Amendment 1 to DTE Energy Company Executive Severance Allowance Plan |
| |
| Form of Change in Control Severance Agreement, dated as of September 11, 2025, between DTE Energy Company and each of Diane M. Antishin, Joi M. Harris, Trevor F. Lauer, Kathrine M. Lorenz, Gerardo Norcia, Matthew T. Paul, Robert A. Richard, David Ruud and Mark W. Stiers |
| |
| Form of Change in Control Severance Agreement, dated as of September 11, 2025, between DTE Energy Company and Lisa A. Muschong |
| |
| Form of Change in Control Severance Agreement, dated as of September 11, 2025, between DTE Energy Company and Tracy J. Myrick |
| |
| Form of Indemnification Agreement between DTE Energy Company and each Executive Officer and non-employee Director |
| |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: September 16, 2025
| | | | | |
| DTE Energy Company |
| (Registrant) |
| |
| /s/Diane M. Antishin |
| Diane M. Antishin |
| Senior Vice President - Human Resources and Chief Diversity and Inclusion Officer |
| |
Exhibit 10.1
Amendment 1 to the
DTE Energy Company Executive Severance Allowance Plan
(Effective July 1, 2022)
Recitals
As authorized by resolutions adopted by the DTE Energy Benefit Plan Administration Committee on September 10, 2025, the DTE Energy Company Executive Severance Allowance Plan (Amended and Restated Effective July 1, 2022) (the “Plan”) is amended as follows, effective immediately:
Plan Amendment
1. Section 1.4A of the Plan is added to read as follows:
1.4A “CEO” means the Chief Executive Officer of DTE Energy Company.
2. Section 3.1 of the Plan is amended in its entirety to read as follows:
3.1 Basic Benefit. A Participant will receive the benefit amount determined under the following schedule, based on the Participant's period of employment in a Group 5 or higher position (the number of whole years of service from the Participant's Service Date to the Participant's Severance Date) and the Participant's Base Pay as of the Severance Date:
For Participants other than the CEO
| | | | | |
Years of service are | Basic Benefit is |
Less than 2 years | 50% of Base Pay |
2 or more years | 100% of Base Pay |
For Participant who is the CEO
| | | | | |
Years of service are | Basic Benefit is |
Any | 200% of Base Pay |
3. Section 3.2 of the Plan is amended in its entirety to read as follows:
3.2 Supplemental Benefits.
(a) COBRA for Participants other than the CEO. A Participant has the choice of:
(1) Option a.1 -- payment by the Company of 12 months of COBRA continuation coverage premiums for coverage for the Participant (and the Participant's eligible covered dependents, if applicable) under the Health Plan if the Participant timely elects COBRA continuation coverage under the Health Plan, with the period for which COBRA continuation coverage premiums are paid by the Company running concurrently with the 18-month
COBRA continuation coverage
Amendment 1 to the DTE Energy Company Executive Severance Allowance Plan (Effective July 1, 2022)
61977718.1
period to which the Participant (and the Participant's eligible covered dependents, if applicable) is entitled; or
(2) Option a.2 -- a lump sum payment equal to one month of COBRA continuation coverage premiums for the Health Plan coverage in effect for the Participant and the Participant's eligible covered dependents on the Severance Date, multiplied by 12.
A Participant who timely elects COBRA continuation coverage under the Health Plan will be treated as having elected Option a.1, above. A Participant who wishes to elect Option a.2 may notify the Company in writing before the end of the COBRA election period, and before electing COBRA continuation coverage, that the Participant elects Option a.2. A Participant who has not elected COBRA by the end of the COBRA election period and who has not notified the Company of the Participant's election of Option a.2 will be treated as having elected Option a.2.
(b) COBRA for Participant who is the CEO. A Participant has the choice of:
(1) Option b.1 -- (I) payment by the Company of 18 months of COBRA continuation coverage premiums for coverage for the Participant (and the Participant's eligible covered dependents, if applicable) under the Health Plan, if the Participant timely elects COBRA continuation coverage under the Health Plan, with the period for which COBRA continuation coverage premiums are paid by the Company running concurrently with the 18-month COBRA continuation coverage period to which the Participant (and the Participant's eligible covered dependents, if applicable) is entitled, plus (II) a lump sum payment equal to one month of COBRA continuation coverage premiums for the Health Plan coverage in effect for the Participant and the Participant's eligible covered dependents on the Severance Date, multiplied by 6; or
(2) Option b.2 -- a lump sum payment equal to one month of COBRA continuation coverage premiums for the Health Plan coverage in effect for the Participant and the Participant's eligible covered dependents on the Severance Date, multiplied by 24.
A Participant who timely elects COBRA continuation coverage under the Health Plan will be treated as having elected Option b.1, above. A Participant who wishes to elect Option b.2 may notify the Company in writing before the end of the COBRA election period, and before electing COBRA continuation coverage, that the Participant elects Option b.2. A Participant who has not elected COBRA by the end of the COBRA election period and who has not notified the Company of the Participant's election of Option b.2 will be treated as having elected Option b.2.
(c) Outplacement Assistance For All Participants. A Participant has a choice of
Amendment 1 to the DTE Energy Company Executive Severance Allowance Plan (Effective July 1, 2022)
61977718.1
(1) Option c.1 -- External outplacement assistance for up to six months after the Severance Date, with the provider and level of assistance determined by the Company; or
(2) Option c.2 -- A lump sum payment of the cash equivalent value of the external outplacement assistance services under Option c.1, as determined by the Company.
A Participant must elect benefits under Option c.1 or Option c.2 in writing in a manner acceptable to the Company.
4. Sections 3.3(b)-(e) of the Plan are amended in their entirety to read as follows:
(b) Supplemental Benefits under Sections 3.2(a)(2), (b)(2), and (c)(2), and the lump sum payment under Section 3.2(b)(1)(II), will be paid no later than March 15 of the calendar year following the calendar year that includes the Severance Date.
(c) All payments of Basic Benefits and Supplemental Benefits under Sections 3.2(a)(2), (b)(2), and (c)(2), and the lump sum payment under Section 3.2(b)(1)(II), are subject to any withholding permitted or required by Federal, State or local law.
(d) If a Participant dies after executing a Severance Agreement but before payment of a Basic Benefit or Supplemental Benefits under Sections 3.2(a)(2), (b)(2), and (c)(2), and the lump sum payment under Section 3.2(b)(1)(II), the payment will be made to the Participant's Beneficiary in a single lump-sum within 30 calendar days following notice to the Company of the Participant's death.
(e) If a Participant dies before all Supplemental Benefits required under Section 3.2(a)(1) or Section 3.2(b)(1)(I) (as applicable) have been provided, the Supplemental Benefits will continue on behalf of the Participant's qualified beneficiaries (if they have COBRA continuation coverage under the Health Plan at the time of the Participant's death) for the period required under Section 3.2(a)(1) or Section 3.2(b)(1)(I) (as applicable).
This Amendment is executed on behalf of the Committee by its Chairperson, as authorized by the Committee’s consent resolutions.
By: /s/Diane M. Antishin______________
Diane M. Antishin
Sr. Vice President, Human Resources
Amendment 1 to the DTE Energy Company Executive Severance Allowance Plan (Effective July 1, 2022)
61977718.1
Exhibit 10.2
CHANGE IN CONTROL SEVERANCE AGREEMENT
This CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”) is entered into as of [ ], 2025 (the “Effective Date”) between DTE Energy Company, a Michigan corporation (the “Company”), and [ ] (the “Executive”).
RECITALS
A. The Executive is an executive or a key employee of the Company or one or more of its Subsidiaries and has made and is expected to continue to make major contributions to the short- and long-term profitability, growth and financial strength of the Company.
B. The Company recognizes that, as is the case for most publicly held companies, the possibility of a Change in Control exists and that potential employment uncertainty resulting from a Change in Control may distract management from conducting the Company’s business or cause management employees to leave the Company’s employ.
C. The Company wants to provide security to its senior executives and key employees to enable them to discharge their duties during the consideration and consummation of a Change in Control in order to preserve the value of the Company for its shareholders.
In consideration of these objectives, the Company and the Executive agree as follows:
1. Term of Agreement. The term of this Agreement (the “Term”) begins on the Effective Date and ends on the earlier of:
(a) the later of:
(1) this Agreement’s Expiration Date; or
(2) the last day of the Severance Period.
or
(b) the date prior to a Change in Control on which the Executive ceases for any reason to be an employee of the Company and any Subsidiary. For purposes of this Section 1(b), the Executive does not cease to be an employee of the Company and any Subsidiary if the Executive’s employment is transferred between the Company and any Subsidiary, or among any Subsidiaries.
2. Right to Receive Severance Benefits and Other Consideration. The Executive will become entitled to the severance benefits and other consideration provided under this Agreement if the Executive’s employment is terminated because of a Qualifying Termination.
3. Severance Benefits and Other Consideration.
(a) Severance Benefits. The Severance Benefits payable under this Agreement are equal to the sum of all of the following:
(1) A lump sum payment equal to the sum of:
(A) Base Pay; plus
(B) the Applicable Annual Bonus
multiplied by:
(C) the lesser of:
(i) 200%; or
(ii) 200% multiplied by a fraction, the numerator of which is the number of full calendar months from the Executive’s Termination Date to the Executive’s 65th birthday, and the denominator of which is 36.
(2) A lump sum payment equal to:
(A) the Applicable Annual Bonus
(B) multiplied by the following fraction:
(i) the numerator is the number of days prior to the Executive’s Termination Date during the calendar year in which the Termination Date occurs; and
(ii) the denominator is 365,
(C) then reduced by the Annual Bonus for the year in which the Termination Date occurs that is payable to the Executive under the terms of the Annual Plan because the Executive has attained age 55 and completed 10 years of service with the Company and all Subsidiaries.
(3) Full accelerated vesting of any and all outstanding time-based and performance-based equity awards, with performance-based vesting awards being accelerated on the assumption that performance goals achieved for the applicable year are equal to the greater of target and actual performance through the date of the Change in Control, and that the Executive was employed for the entire year or until any later date required to receive such payment.
(4) For Welfare Benefits provided to the Executive immediately prior to the Executive’s Termination Date (or, if greater, immediately prior to reduction, termination, or denial), a lump sum payment equal to the present value of the cost of coverage for the Benefit Continuation Period. The cost of coverage will be determined at applicable rates in effect as of the Termination Date. The present
value of the cost will be determined using an interest rate equal to the composite prime rate in effect as of the Termination Date in the Northeast Edition of The Wall Street Journal.
(5) Additional age, service, and compensation credit for the length of the Benefit Continuation Period for determining the Executive’s benefits under the following plans (or any successors to these plans):
(A) DTE Energy Company Supplemental Retirement Plan; and
(B) DTE Energy Company Executive Supplemental Retirement Plan (including the Management Supplemental Benefit Plan, if applicable to the Executive).
(6) Outplacement services by a firm selected by the Executive, at a cost to the Company in an amount not to exceed 15% of the Executive’s Base Pay. No payments by the Company for outplacement services will be made after December 31st of the calendar year following the calendar year including the Termination Date.
(b) Other Consideration. In consideration for the restrictive covenant set forth in Section 9(d), the Executive shall be entitled to a lump sum payment in an amount equal to:
(1) the sum of:
(A) Base Pay; plus
(B) the Applicable Annual Bonus;
multiplied by
(C) the lesser of:
(i) 100%; or
(ii) 100% multiplied by a fraction, the numerator of which is the number of full calendar months from the Executive’s Termination Date to the Executive’s 65th birthday, and the denominator of which is 36.
4. Timing of Payments.
(a) Timing. Payments under the following Sections will be paid on the later of the date which is 60 days after the Executive’s Termination Date or any later date required by Code Section 409A or any other law:
(1) Section 3(a)(1);
(2) Section 3(a)(2);
(3) Section 3(a)(4); and
(4) Section 3(b).
(b) Withholding of Taxes. The Company will withhold from any amounts payable under this Agreement all federal, state, city or other taxes that the Company is required to withhold under any law or government regulation or ruling.
(c) Interest. If the Company fails to make any payment or provide any benefit required to be made or provided under this Agreement on a timely basis, the Company shall pay interest on the amount or value at an annualized rate of interest equal to the composite prime rate as quoted from time to time during the relevant period in the Northeast Edition of The Wall Street Journal. The interest shall be payable as it accrues on demand, but the Company shall not be required to pay interest more frequently than monthly. Any change in the prime rate shall be effective on and as of the date of the change.
5. Non-Duplication of Severance Benefits and Other Consideration.
(a) Qualifying Termination During Concurrent Severance Periods. If the Executive experiences a Qualifying Termination when two or more Severance Periods are running concurrently (because two or more Changes in Control have occurred), the Executive will have a Qualifying Termination with respect to each Severance Period. A determination of the payments and benefits to be provided under this Agreement will be made for each Qualifying Termination. However, the Executive will receive only:
(1) the greatest lump sum payment under Section 3(a)(1) payable for any Qualifying Termination;
(2) the greatest lump sum payment under Section 3(a)(2) for any Qualifying Termination;
(3) the greatest benefits under Section 3(a)(3) for any Qualifying Termination;
(4) the greatest lump sum under Section 3(a)(4) for any Qualifying Termination;
(5) the greatest benefits under Section 3(a)(5) for any Qualifying Termination;
(6) the greatest benefits under Section 3(a)(6) for any Qualifying Termination; and
(7) the greatest lump sum payment under Section 3(b) for any Qualifying Termination.
(b) Effect on Other Employee Benefits. Except as expressly provided within this Agreement, the Executive’s Qualifying Termination will not affect any greater rights the
Executive may have under any agreement, policy, plan, program or arrangement of the Company or Subsidiary providing Employee Benefits (other than Severance Pay), which rights are governed by the terms of the agreement, policy, plan, program or arrangement; provided, however, that in any instance where a duplication of benefits is provided under this Agreement and another agreement, policy, plan, program or arrangement, then the two agreements shall be coordinated so that no duplication of benefits is provided, as reasonably determined in the sole discretion of the Company. The benefits received by the Executive under this Agreement because of a Qualifying Termination supersede and are in lieu of any other Severance Pay to which the Executive may be entitled
(c) Coordination with Other Agreements. Notwithstanding any other agreement between the parties to the contrary, the terms and conditions of this Agreement shall supersede any and all inconsistent terms of any other agreement and/or arrangement entered into between the parties, whether preceding or following the Effective Date.
6. Mitigation. The Company acknowledges that it will be difficult and may be impossible for the Executive to find reasonably comparable employment following the Termination Date. Accordingly, the Company acknowledges that payment of the severance compensation by the Company to the Executive under this Agreement is reasonable. The Executive is not required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise. No profits, income, earnings or other benefits from any source will create any mitigation, offset, reduction or other obligation on the part of the Executive, except as may have been otherwise paid to the Executive by the Company or a Subsidiary in connection with or in consideration of the Executive’s release and settlement of any claims arising out of the Executive’s employment or the termination of the Executive’s employment.
7. Arbitration; Legal Fees and Expenses.
(a) Except for legal proceedings brought by the Executive or the Company for injunctive relief, any dispute or claim involving this Agreement will be submitted to final and binding arbitration. The arbitration will take place in Oakland County, Michigan before a single neutral arbitrator under the then-current National Rules for the Resolution of Employment Disputes of the American Arbitration Association. The arbitrator will issue a written opinion and will not have authority to render an award beyond the scope and specific terms of this Agreement. Judgment upon the arbitrator’s award may be entered in any court of competent jurisdiction. Any demand for arbitration must be made within 30 days of when the party knew or should have known of the alleged dispute or claim. Failure to timely demand arbitration makes the dispute or claim non-arbitrable. The Executive and the Company expressly waive their rights to institute or prosecute any lawsuits or other court proceedings and waive their right to a jury trial, except for the legal proceedings excluded above.
(b) It is the intent of the Company that the Executive not be required to incur legal fees and the related expenses associated with the interpretation, enforcement or defense of the Executive’s rights under this Agreement because the legal fees and related expenses would substantially detract from the benefits intended to be extended to the Executive under this Agreement.
(c) If it appears to the Executive that the Company has failed to comply with any of its obligations under this Agreement or if the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any action or proceeding designed to deny, or to recover from, the Executive the benefits provided or intended to be provided to the Executive under this Agreement, the Company irrevocably authorizes the Executive to retain counsel of the Executive’s choice, at the expense of the Company as provided in this Section 7, to advise and represent the Executive in connection with any interpretation, enforcement or defense of the Executive’s rights under this Agreement.
(d) The Executive may pursue any legal defense of the Executive’s rights under this Agreement whether by or against the Company or any Director, officer, stockholder or other person affiliated with the Company, in any jurisdiction.
(e) Whether or not the Executive prevails in connection with any defense of the Executive’s rights under this Agreement, the Company will pay and be solely financially responsible for reasonable hourly attorneys’ fees and related fees and expenses incurred by the Executive under this Section 7, but only if the arbitrator determines the Executive’s claim was brought in good faith and was not frivolous. If the Executive’s request for injunctive relief is denied and the Executive does not timely demand arbitration for the dispute or claim underlying the Executive’s request for injunctive relief, the Executive’s request for injunctive relief is deemed to be frivolous and not brought in good faith for purposes of this Section 7(e).
(f) The Company’s payment of the Executive’s legal fees and expenses under this Section 7 following termination of the Executive’s employment (whether or not in a Qualifying Termination) will be made during the first calendar year beginning after the date the Executive’s employment terminated.
8. Survival of Rights and Obligations. The rights and obligations of the Executive and the Company under the following Sections will survive the termination or expiration of this Agreement and the termination of the Executive’s employment after a Change in Control for any reason:
(a) Section 3 (Severance Benefits and Other Consideration);
(b) Section 4 (Timing of Payments);
(c) Section 5 (Non-Duplication of Severance Benefits and Other Consideration);
(d) Section 6 (Mitigation); and
(e) Section 7 (Arbitration; Legal Fees and Expenses).
9. Confidential Information; Non-Disparagement; Non-Solicitation; Competitive Activity.
(a) Confidential Information. At all times following the Termination Date, the Executive will not, without the prior written consent of the Company, either directly or indirectly use, appropriate, or disseminate, disclose, or communicate to any person or entity any confidential information of the Company or any Subsidiary that is now known or later becomes known to the Executive because of the Executive’s employment with the Company or any Subsidiary, unless the disclosure is required by a valid subpoena or order issued by a court or governmental body.
(1) For purposes of this Section 9(a), “confidential information” is any confidential, proprietary, or trade secret information, including concepts, ideas, information, and materials related to the Company or any Subsidiary, customer records, customer lists, economic and financial analyses, financial data, customer contracts, marketing plans, notes, memoranda, lists, books, correspondence, manuals, reports or research, whether developed by the Company or a Subsidiary or developed by the Executive while employed by the Company or a Subsidiary.
(2) This Section 9(a) does not apply to any confidential information that becomes publicly disseminated by means other than a breach of this provision.
(b) Non-Disparagement. The Executive will not make any verbal or written comments to any third party that are defamatory, disparaging, or critical of the Company or any Subsidiary or its products, management, employees, officers or operations or that would otherwise adversely affect the finances or business reputation of the Company or any Subsidiary.
(c) Non-Solicitation. To the extent not prohibited by applicable law:
(1) For a period of two years after the Termination Date, the Executive will not solicit, divert, take away, or attempt to take away any customer of the Company or any Subsidiary or the business of any customer of the Company or any Subsidiary.
(A) A “customer” of the Company or any Subsidiary is any person or other entity to which the Company or any Subsidiary has sold services or products during the 24-month period immediately preceding the Termination Date, any person or other entity that the Company or any Subsidiary is in the process of selling services or products, or any person or other entity to which the Company or any Subsidiary has submitted or is in the process of submitting a bid to sell services or products.
(2) For a period of two years after the Termination Date, the Executive will not solicit, attempt to employ, or employ any individual who is an employee, consultant, or agent of the Company or any Subsidiary.
(d) Competitive Activity. To the extent not prohibited by applicable law, for a period of one year following the Termination Date, the Executive will not engage in any
Competitive Activity. If the Executive engages in any Competitive Activity earlier than one year following the Termination Date, the Executive must repay (to the extent not prohibited by applicable law) to the Company the consideration paid to the Executive under Section 3(b).
(e) Whistleblower Protection. Notwithstanding paragraphs (a) through (d) of this Section, nothing contained in this Agreement shall be construed to prevent the Executive from reporting any act or failure to act to, or otherwise communicating with, the Securities and Exchange Commission or other governmental body or prevent the Executive from obtaining a fee as a “whistleblower” under Rule 21F-17(a) under the Securities Exchange Act of 1934 or other rules or regulations implemented under the Dodd-Frank Wall Street Reform Act and Consumer Protection Act.
10. Employment Rights. Nothing in this Agreement creates any right or duty on the part of the Company or the Executive to have the Executive remain in the employment of the Company or any Subsidiary prior to or following any Change in Control.
11. Successors and Binding Agreement.
(a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform it if the succession had not taken place. This Agreement will be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any person acquiring directly or indirectly all or substantially all of the business or assets of the Company by purchase, merger, consolidation, reorganization or otherwise, with the successor thereafter deemed to be the “Company” for the purposes of this Agreement. Other than as permitted under this Section 11(a), this Agreement is not assignable, transferable or delegable by the Company.
(b) This Agreement will inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees.
(c) This Agreement is personal in nature and neither of the parties may, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 11(a) and 11(b). The Executive’s right to receive payments under this Agreement is not assignable, transferable or delegable, including by pledge, creation of a security interest, or otherwise, other than by a transfer by the Executive’s will or by the laws of descent and distribution. If any assignment or transfer not permitted by this Section 11(c) is attempted, the Company will have no liability to pay any amount attempted to be assigned, transferred or delegated.
12. Notices.
(a) All communications, including notices, consents, requests or approvals, required or permitted to be given under this Agreement must be in writing.
(b) All notices must be provided by:
(1) hand delivery (deemed provided when delivered);
(2) electronic facsimile transmission, with verbal confirmation of receipt (deemed provided when transmitted);
(3) United States registered or certified mail, return receipt requested, postage prepaid (deemed provided five business days after mailing); or
(4) a nationally recognized overnight courier service such as Federal Express or UPS (deemed provided three business days after deposit with courier service).
(c) Notices to the Company must be addressed to the attention of the Vice President – Human Resources of the Company at the Company’s principal executive office.
(d) Notices to the Executive must be addressed to the Executive at the Executive’s principal residence.
(e) The Company or the Executive can change the address to which notices to that party are to be addressed by providing notice to the other party as required under this Section 12, except that notices of changes of address are effective only upon actual receipt.
13. Governing Law. The validity, interpretation, construction and performance of this Agreement will be governed by and construed in accordance with the substantive laws of the State of Michigan, without giving effect to its principles of conflict of laws.
14. Validity. If any provision of this Agreement or the application of any provision to any person or circumstances is held invalid, unenforceable or otherwise illegal by a court of competent jurisdiction, the remainder of this Agreement and the application of the provision to any other person or circumstances will not be affected. The provision held to be invalid, unenforceable or otherwise illegal will be amended to the minimum extent necessary to make it enforceable, valid or legal.
15. Miscellaneous.
(a) No provision of this Agreement may be modified, waived or discharged unless the waiver, modification or discharge is agreed to in writing signed by the Executive and the Company.
(b) No waiver by either party at the time of any breach by the other party or compliance with any condition or provision of this Agreement to be performed by the other party will
be a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.
(c) No agreements or representations, oral or otherwise, expressed or implied, with respect to the subject matter of this Agreement have been made by either party which are not set forth expressly in this Agreement.
(d) References to Sections are to references to Sections of this Agreement.
16. Prior Agreements. As of the Effective Date, this Agreement supersedes and replaces all prior change-in-control severance agreements and similar agreements between the Executive and the Company or any of its Subsidiaries (“Prior Agreements”). All Prior Agreements cease to be of force and effect as of the Effective Date.
17. Counterparts. This Agreement may be executed in one or more counterparts, each of which is deemed an original but all of which together will constitute one agreement.
18. Definitions. For purposes of this Agreement, the following definitions apply:
(a) Agreement is this Change in Control Severance Agreement.
(b) Agreement Expiration Date is the later of:
(1) the day before the third anniversary of the Effective Date; or
(2) the last day of any extension of this Agreement under this Section 18(b).
Beginning on the first anniversary of the Effective Date and on each subsequent anniversary of the Effective Date, this Agreement will automatically be extended for an additional year unless, not later than 90 days preceding any anniversary of the Effective Date:
(3) the Company gives notice that it does not wish to have the Term extended; or
(4) the Company gives notice that it wishes the Term to be extended for a period of less than one year, in which case the term of this Agreement will automatically be extended for the shorter period and will then terminate if not further extended by written agreement between the Company and the Executive.
(c) Annual Bonus is the aggregate annual bonus to which the Executive would have been entitled under the Annual Plan in the applicable year, presuming that the Executive’s individual performance multiplier is 100%. If the Executive participates in an Annual Plan without a specified target, the Executive’s Annual Bonus is 1/3 of the sum of the Executive’s payments under the Annual Plan for the three years preceding the applicable year (even if the Executive has not participated in the plan for three years).
(d) Annual Plan is the DTE Energy Company Annual Incentive Plan, a Subsidiary’s annual incentive plan, or any successor annual incentive plan (as applicable).
(e) Applicable Annual Bonus is the greater of:
(i) the Annual Bonus for the year in which the Change in Control occurs; or
(ii) the Annual Bonus for the year in which the Termination Date occurs,
in either case calculated based on the assumption that target performance goals for the applicable year would be met and the Executive was employed for the entire year or until any later date required to receive the payment.
(f) Base Pay is the Executive’s annual base salary (prior to any pre-tax deferrals made under any employee benefit plans of the Company) in effect immediately prior to the Change in Control or immediately prior to the Executive’s Termination Date, if higher.
(g) Benefit Continuation Period is the shorter of:
(1) the two-year period beginning on the Executive’s Termination Date; or
(2) the period beginning on the Executive’s Termination Date and ending on the date the Executive attains age 65.
(h) Board is the Board of Directors of the Company.
(i) Cause. The Executive’s employment will be considered terminated for “Cause” if prior to termination of the Executive’s employment, the Board reasonably determines, based on a preponderance of the evidence reasonably available to the Board as of the date the Board adopts the resolution described below, that the Executive committed or engaged in:
(1) an intentional act of fraud, embezzlement or theft at a level that constitutes a felony in connection with the Executive’s duties or in the course of the Executive’s employment with the Company or a Subsidiary, whether or not the Executive is convicted or pleads guilty or nolo contender (no contest) to any related criminal charges;
(2) intentional wrongful damage to property of the Company or a Subsidiary;
(3) intentional wrongful disclosure of secret processes or confidential information of the Company or a Subsidiary;
(4) intentional wrongful engagement in any Competitive Activity (to the extent not prohibited by applicable law);
(5) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company that is not cured within 30 days after the
Board delivers to the Executive a written demand for substantial performance specifically identifying the Executive’s failure to perform; or
(6) other intentional activity, including but not limited to a breach of the Executive’s fiduciary duties with respect to the Company, a Subsidiary, or any welfare plan or pension plan sponsored by the Company or a Subsidiary;
which, in the reasonable judgment of the Board and based on a preponderance of the evidence available to the Board is significantly detrimental to the reputation, goodwill or business of the Company or significantly disrupts the workplace environment or operation of the Company’s business or administrative activities.
For purposes of this Agreement, no act or failure to act on the part of the Executive will be deemed “intentional” if it was due primarily to an error in the Executive’s judgment or the Executive’s negligence. An act will be deemed “intentional” only if done or omitted to be done by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of the Company.
For purposes of this Agreement, the Executive has not been terminated for Cause unless and until:
(7) a meeting of the Board is called and held for the purpose of determining if the Executive is to be terminated for Cause; and
(8) the Executive is given reasonable notice of the meeting and an opportunity to be heard before the Board, with the Executive’s counsel if the Executive so chooses; and
(9) at that meeting the Board finds, in the good faith opinion of the Board, that the Executive has committed an act entitling the Board to terminate the Executive’s employment for Cause; and
(10) the Executive has been provided a copy of the resolution duly adopted at that meeting by the affirmative vote of not less than three-quarters of the Board then in office and specifying in detail the particulars of the Board’s finding.
The Executive and the Executive’s beneficiaries retain the right to contest the validity or propriety of the Board’s determination that the Executive’s employment has been terminated for Cause.
(j) Change in Control occurs if any of the following events occurs during the Term of this Agreement:
(1) Any "Person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any affiliate, (B) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the common stock or (C) a person who
holds at least twenty percent (20%) or more of the combined voting power represented by the Company’s then outstanding voting securities as of the effective date of the transaction) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the combined voting power represented by the Company’s then outstanding voting securities;
(2) a sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect, including a liquidation) other than (A) a sale or disposition by the Company of all or substantially all of the Company’s assets to a person or persons who beneficially own, directly or indirectly, at least fifty-five percent (55%) or more of the combined voting power of the outstanding voting securities of the Company at the time of the sale, or (B) pursuant to a spin-off type transaction, directly or indirectly, of such assets to the Company's stockholders;
(3) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (other than (A) a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (1), (2), or (4) of this Section a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; and
(4) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty-five percent (55%) of the combined voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.
Notwithstanding the foregoing to the contrary, for purposes of clarity and avoidance of doubt, the following acquisitions shall not be taken into consideration when determining whether a Change in Control has been consummated: (A) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company; (B) any acquisition by the Company; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company.
(k) Code is the Internal Revenue Code of 1986, as amended.
(l) Company is DTE Energy Company, a Michigan corporation.
(m) Competitive Activity is the Executive’s direct employment, without the written consent of the Board (or any committee of the Board to which the Board delegates its authority under this Section 18(m) in writing), in any business or enterprise (including the Executive’s own business or enterprise) if:
(1) the business or enterprise engages in substantial and direct competition with the Company or any of its Subsidiaries in any state in which the Company or Subsidiary was engaged in business or actively negotiating to enter business on the Termination Date; and
(2) the business’s or enterprise’s sales of any product or service competitive with any product or service of the Company or any of its Subsidiaries amounted to 10% of the business’s or enterprise’s net sales for its most recently completed fiscal year; and
(3) the Company’s or Subsidiary’s net sales of the competitive product or service amounted to 10% of the Company’s or Subsidiary’s net sales for its most recently completed fiscal year; and
(4) the Board determines the Executive’s employment in the business or enterprise is detrimental to the Company or any of its Subsidiaries.
“Competitive Activity” does not include the mere ownership of not more than 10% of the total combined voting power or aggregate value of all classes of stock or other securities in the enterprise and the Executive’s exercise of rights resulting from ownership of the stock.
The Board (or its delegate) has sole discretion and authority to determine if the Executive is engaging in Competitive Activity for purposes of this Agreement.
It is the Executive’s responsibility to provide information sufficient for the Board (or its delegate) to make these determinations.
(n) Determination Firm has the meaning set forth in Section 19.
(o) Director is a member of the Board.
(p) Effective Date is the date set forth in the preamble of this Agreement.
(q) Employee Benefits are the perquisites, benefits and service credit for benefits provided under all employee retirement income and welfare benefit policies, plans, programs or arrangements in which the Executive is entitled to participate, including without limitation any stock option, stock purchase, stock appreciation, savings, pension, supplemental executive retirement, or other retirement income or welfare benefit, deferred compensation, incentive compensation, group or other life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by the Company or a Subsidiary), disability, salary continuation, expense reimbursement and other employee
benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs or arrangements that may be adopted hereafter by the Company or a Subsidiary, providing perquisites, benefits and service credit for benefits at least as great in the aggregate as are payable prior to a Change in Control.
(r) ERISA is the Employee Retirement Income Security Act of 1974, as amended.
(s) Exchange Act is the Securities Exchange Act of 1934, as amended.
(t) Excise Tax has the meaning set forth in Section 19.
(u) Executive is the individual identified in the preamble of this Agreement.
(v) Full Payment has the meaning set forth in Section 19.
(w) Good Reason. The Executive terminates employment for “Good Reason” if the Executive voluntarily terminates his or her employment during the Severance Period following the occurrence of any of the following events during the Severance Period:
(1) a material diminution in the Executive’s Base Pay, provided, however that a Base Pay reduction that is applied uniformly among like-kind individuals will not be deemed to constitute Good Reason;
(2) a material diminution in the nature or scope of the Executive’s title, authority, duties, or responsibilities from those applicable to the Executive immediately prior to consummation of the Change in Control;
(3) the Company requiring the Executive’s office nearest to his or her principal residence to be located at a different place which is more than 35 miles from where such office is located as of immediately prior to the Change in Control; or
(4) a material breach by the Company of any term or provision of this Agreement, including the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement.
No event or condition described in this Section 18(w) shall constitute Good Reason unless, (x) within ninety (90) days from the Executive first acquiring actual knowledge of the existence of the Good Reason condition described in this Section 18(w), the Executive provides the Board written notice (in accordance with Section 12) of the Executive’s intention to terminate the Executive’s employment for Good Reason and the grounds for such termination; (y) such grounds for termination (if susceptible to correction) are not corrected by the successor within thirty (30) days of such successor’s receipt of such notice (or, in the event that such grounds cannot be corrected within such thirty-day (30) period, such successor has not taken all reasonable steps within such thirty-day (30) period to correct such grounds as promptly as practicable thereafter); and (z) the Executive terminates the Executive’s employment with the Company immediately following expiration of such thirty-day (30) period. For purposes of this Section 18(w), any attempt by the successor to correct a stated Good Reason shall not be deemed an admission by such successor that the
Executive’s assertion of Good Reason is valid.
(x) Prior Agreement has the meaning set forth in Section 16.
(y) Qualifying Termination means:
(1) Termination of the Executive’s employment by the Company or a Subsidiary during the Severance Period other than a termination:
(A) because of the Executive’s death;
(B) because the Executive became permanently disabled within the meaning of, and began receiving disability benefits under, the Company or Subsidiary sponsored long-term disability plan in effect for, or applicable to, the Executive immediately prior to the Change in Control; or
(C) under any mandatory retirement policy of the Company or a Subsidiary; or
(D) for Cause;
or
(2) Termination of the Executive’s employment by the Executive during the Severance Period for Good Reason, regardless of whether any other reason, other than Cause, for the Executive’s termination exists or has occurred, including other employment.
(z) Payment has the meaning set forth in Section 19.
(aa) Reduced Payment has the meaning set forth in Section 19.
(bb) Severance Pay is the collective benefits provided under any agreement, policy, plan, program, or arrangement of the Company or a Subsidiary or any provision of any individual severance, employment, or other agreement between the Executive and the Company or a Subsidiary that are paid to the Executive solely because of the termination of the Executive’s employment.
(cc) Severance Period resulting from a Change in Control is the period beginning on the date a Change in Control occurs and ending on the earliest of:
(1) the second anniversary of the Change in Control;
(2) the Executive’s 65th birthday; or
(3) the Executive’s death.
(dd) Subsidiary is an entity in which the Company directly or indirectly beneficially owns 50% or more of the outstanding Voting Stock.
(ee) Term has the meaning set forth in Section 1.
(ff) Termination Date is the date on which the Executive’s employment is terminated by a Qualifying Termination.
(gg) Welfare Benefits are benefits provided under employee welfare benefit plans, as defined in ERISA Section 3(1).
(hh) Voting Stock is securities entitled to vote generally in the election of Directors.
19. Code 280G Potential Reductions.
(a) Notwithstanding any other provision in this Agreement, if any payment or benefit the Executive would receive pursuant to this Agreement, a Change in Control of the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Code Section 280G, and (ii) but for this sentence, be subject to the excise tax imposed by Code Section 4999 (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Payment are paid to the Executive, which of the following two amounts would maximize the Executive’s after-tax proceeds: (i) payment in full of the entire amount of the Payment (a “Full Payment”), or (ii) payment of only a part of the Payment so that the Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”), whichever amount results in the Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.
For purposes of determining whether and the extent to which the Payment will be subject to the Excise Tax: (i) no portion of the Payment the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Code Section 280G(b) shall be taken into account; (ii) no portion of the Payment shall be taken into account which does not constitute a “parachute payment” within the meaning of Code Section 280G(b)(2) (including, without limitation, by reason of Code Section 280G(b)(4)(A)) and, in calculating the Excise Tax, no portion of such Payment shall be taken into account which constitutes reasonable compensation for services actually rendered, within the meaning of Code Section 280G(b)(4)(B), in excess of the “base amount” (as set forth in Code Section 280G(b)(3)) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Payment shall be determined by in accordance with the principles of Code Sections 280G(d)(3) and (4).
For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, (i) the Payment shall be paid only to the extent permitted under the Reduced Payment alternative, and the Executive shall have no rights to any additional payments and/or benefits constituting the Payment, and (ii) reduction in payments
and/or benefits shall occur in the following order: reduction of cash payments, cancellation of accelerated vesting of equity awards, and reduction of other benefits.
(b) All determinations required to be made under this Section 19, including whether an Excise Tax would otherwise be imposed, whether the Full Payments shall be reduced, the amount of any such reduction and the assumptions to be utilized in arriving at such determinations not expressly provided for herein, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually acceptable to the Company and the Executive (the “Determination Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Company that a payment is due to be made hereunder, or such earlier time as is requested by the Executive. All reasonable fees and expenses of the Determination Firm shall be borne solely by the Company. Any determination by the Determination Firm shall be binding upon the Company and Executive, absent manifest error.
(c) The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 19 shall not of itself limit or otherwise affect any other rights of the Executive under this Agreement.
In witness whereof, this Agreement has been entered into by the Company and the Executive as of the Effective Date.
___________________________________
[Executive’s Name]
DTE ENERGY COMPANY
__________________________________
Diane M. Antishin
Sr VP - HR & Chief D&I Officer
Exhibit 10.3
CHANGE IN CONTROL SEVERANCE AGREEMENT
This CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”) is entered into as of [ ], 2025 (the “Effective Date”) between DTE Energy Company, a Michigan corporation (the “Company”), and [ ] (the “Executive”).
RECITALS
A. The Executive is an executive or a key employee of the Company or one or more of its Subsidiaries and has made and is expected to continue to make major contributions to the short- and long-term profitability, growth and financial strength of the Company.
B. The Company recognizes that, as is the case for most publicly held companies, the possibility of a Change in Control exists and that potential employment uncertainty resulting from a Change in Control may distract management from conducting the Company’s business or cause management employees to leave the Company’s employ.
C. The Company wants to provide security to its senior executives and key employees to enable them to discharge their duties during the consideration and consummation of a Change in Control in order to preserve the value of the Company for its shareholders.
In consideration of these objectives, the Company and the Executive agree as follows:
1. Term of Agreement. The term of this Agreement (the “Term”) begins on the Effective Date and ends on the earlier of:
(a) the later of:
(1) this Agreement’s Expiration Date; or
(2) the last day of the Severance Period.
or
(b) the date prior to a Change in Control on which the Executive ceases for any reason to be an employee of the Company and any Subsidiary. For purposes of this Section 1(b), the Executive does not cease to be an employee of the Company and any Subsidiary if the Executive’s employment is transferred between the Company and any Subsidiary, or among any Subsidiaries.
2. Right to Receive Severance Benefits and Other Consideration. The Executive will become entitled to the severance benefits and other consideration provided under this Agreement if the Executive’s employment is terminated because of a Qualifying Termination.
3. Severance Benefits and Other Consideration.
(a) Severance Benefits. The Severance Benefits payable under this Agreement are equal to the sum of all of the following:
(1) A lump sum payment equal to the sum of:
(A) Base Pay; plus
(B) the Applicable Annual Bonus
multiplied by:
(C) the lesser of:
(i) 150%; or
(ii) 150% multiplied by a fraction, the numerator of which is the number of full calendar months from the Executive’s Termination Date to the Executive’s 65th birthday, and the denominator of which is 24.
(2) A lump sum payment equal to:
(A) the Applicable Annual Bonus
(B) multiplied by the following fraction:
(i) the numerator is the number of days prior to the Executive’s Termination Date during the calendar year in which the Termination Date occurs; and
(ii) the denominator is 365,
(C) then reduced by the Annual Bonus for the year in which the Termination Date occurs that is payable to the Executive under the terms of the Annual Plan because the Executive has attained age 55 and completed 10 years of service with the Company and all Subsidiaries.
(3) Full accelerated vesting of any and all outstanding time-based and performance-based equity awards, with performance-based vesting awards being accelerated on the assumption that performance goals achieved for the applicable year are equal to the greater of target and actual performance through the date of the Change in Control, and that the Executive was employed for the entire year or until any later date required to receive such payment.
(4) For Welfare Benefits provided to the Executive immediately prior to the Executive’s Termination Date (or, if greater, immediately prior to reduction, termination, or denial), a lump sum payment equal to the present value of the cost of coverage for the Benefit Continuation Period. The cost of coverage will be determined at applicable rates in effect as of the Termination Date. The present value of the cost will be determined using an interest rate equal to the composite
prime rate in effect as of the Termination Date in the Northeast Edition of The Wall Street Journal.
(5) Additional age, service, and compensation credit for the length of the Benefit Continuation Period for determining the Executive’s benefits under the following plans (or any successors to these plans):
(A) DTE Energy Company Supplemental Retirement Plan; and
(B) DTE Energy Company Executive Supplemental Retirement Plan (including the Management Supplemental Benefit Plan, if applicable to the Executive).
(6) Outplacement services by a firm selected by the Executive, at a cost to the Company in an amount not to exceed 15% of the Executive’s Base Pay. No payments by the Company for outplacement services will be made after December 31st of the calendar year following the calendar year including the Termination Date.
(b) Other Consideration. In consideration for the restrictive covenant set forth in Section 9(d), the Executive shall be entitled to a lump sum payment in an amount equal to:
(1) the sum of:
(A) Base Pay; plus
(B) the Applicable Annual Bonus;
multiplied by
(C) the lesser of:
(i) 50%; or
(ii) 50% multiplied by a fraction, the numerator of which is the number of full calendar months from the Executive’s Termination Date to the Executive’s 65th birthday, and the denominator of which is 24.
4. Timing of Payments.
(a) Timing. Payments under the following Sections will be paid on the later of the date which is 60 days after the Executive’s Termination Date or any later date required by Code Section 409A or any other law:
(1) Section 3(a)(1);
(2) Section 3(a)(2);
(3) Section 3(a)(4); and
(4) Section 3(b).
(b) Withholding of Taxes. The Company will withhold from any amounts payable under this Agreement all federal, state, city or other taxes that the Company is required to withhold under any law or government regulation or ruling.
(c) Interest. If the Company fails to make any payment or provide any benefit required to be made or provided under this Agreement on a timely basis, the Company shall pay interest on the amount or value at an annualized rate of interest equal to the composite prime rate as quoted from time to time during the relevant period in the Northeast Edition of The Wall Street Journal. The interest shall be payable as it accrues on demand, but the Company shall not be required to pay interest more frequently than monthly. Any change in the prime rate shall be effective on and as of the date of the change.
5. Non-Duplication of Severance Benefits and Other Consideration.
(a) Qualifying Termination During Concurrent Severance Periods. If the Executive experiences a Qualifying Termination when two or more Severance Periods are running concurrently (because two or more Changes in Control have occurred), the Executive will have a Qualifying Termination with respect to each Severance Period. A determination of the payments and benefits to be provided under this Agreement will be made for each Qualifying Termination. However, the Executive will receive only:
(1) the greatest lump sum payment under Section 3(a)(1) payable for any Qualifying Termination;
(2) the greatest lump sum payment under Section 3(a)(2) for any Qualifying Termination;
(3) the greatest benefits under Section 3(a)(3) for any Qualifying Termination;
(4) the greatest lump sum under Section 3(a)(4) for any Qualifying Termination;
(5) the greatest benefits under Section 3(a)(5) for any Qualifying Termination;
(6) the greatest benefits under Section 3(a)(6) for any Qualifying Termination; and
(7) the greatest lump sum payment under Section 3(b) for any Qualifying Termination.
(b) Effect on Other Employee Benefits. Except as expressly provided within this Agreement, the Executive’s Qualifying Termination will not affect any greater rights the Executive may have under any agreement, policy, plan, program or arrangement of the
Company or Subsidiary providing Employee Benefits (other than Severance Pay), which rights are governed by the terms of the agreement, policy, plan, program or arrangement; provided, however, that in any instance where a duplication of benefits is provided under this Agreement and another agreement, policy, plan, program or arrangement, then the two agreements shall be coordinated so that no duplication of benefits is provided, as reasonably determined in the sole discretion of the Company. The benefits received by the Executive under this Agreement because of a Qualifying Termination supersede and are in lieu of any other Severance Pay to which the Executive may be entitled
(c) Coordination with Other Agreements. Notwithstanding any other agreement between the parties to the contrary, the terms and conditions of this Agreement shall supersede any and all inconsistent terms of any other agreement and/or arrangement entered into between the parties, whether preceding or following the Effective Date.
6. Mitigation. The Company acknowledges that it will be difficult and may be impossible for the Executive to find reasonably comparable employment following the Termination Date. Accordingly, the Company acknowledges that payment of the severance compensation by the Company to the Executive under this Agreement is reasonable. The Executive is not required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise. No profits, income, earnings or other benefits from any source will create any mitigation, offset, reduction or other obligation on the part of the Executive, except as may have been otherwise paid to the Executive by the Company or a Subsidiary in connection with or in consideration of the Executive’s release and settlement of any claims arising out of the Executive’s employment or the termination of the Executive’s employment.
7. Arbitration; Legal Fees and Expenses.
(a) Except for legal proceedings brought by the Executive or the Company for injunctive relief, any dispute or claim involving this Agreement will be submitted to final and binding arbitration. The arbitration will take place in Oakland County, Michigan before a single neutral arbitrator under the then-current National Rules for the Resolution of Employment Disputes of the American Arbitration Association. The arbitrator will issue a written opinion and will not have authority to render an award beyond the scope and specific terms of this Agreement. Judgment upon the arbitrator’s award may be entered in any court of competent jurisdiction. Any demand for arbitration must be made within 30 days of when the party knew or should have known of the alleged dispute or claim. Failure to timely demand arbitration makes the dispute or claim non-arbitrable. The Executive and the Company expressly waive their rights to institute or prosecute any lawsuits or other court proceedings and waive their right to a jury trial, except for the legal proceedings excluded above.
(b) It is the intent of the Company that the Executive not be required to incur legal fees and the related expenses associated with the interpretation, enforcement or defense of the Executive’s rights under this Agreement because the legal fees and related expenses would substantially detract from the benefits intended to be extended to the Executive under this Agreement.
(c) If it appears to the Executive that the Company has failed to comply with any of its obligations under this Agreement or if the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any action or proceeding designed to deny, or to recover from, the Executive the benefits provided or intended to be provided to the Executive under this Agreement, the Company irrevocably authorizes the Executive to retain counsel of the Executive’s choice, at the expense of the Company as provided in this Section 7, to advise and represent the Executive in connection with any interpretation, enforcement or defense of the Executive’s rights under this Agreement.
(d) The Executive may pursue any legal defense of the Executive’s rights under this Agreement whether by or against the Company or any Director, officer, stockholder or other person affiliated with the Company, in any jurisdiction.
(e) Whether or not the Executive prevails in connection with any defense of the Executive’s rights under this Agreement, the Company will pay and be solely financially responsible for reasonable hourly attorneys’ fees and related fees and expenses incurred by the Executive under this Section 7, but only if the arbitrator determines the Executive’s claim was brought in good faith and was not frivolous. If the Executive’s request for injunctive relief is denied and the Executive does not timely demand arbitration for the dispute or claim underlying the Executive’s request for injunctive relief, the Executive’s request for injunctive relief is deemed to be frivolous and not brought in good faith for purposes of this Section 7(e).
(f) The Company’s payment of the Executive’s legal fees and expenses under this Section 7 following termination of the Executive’s employment (whether or not in a Qualifying Termination) will be made during the first calendar year beginning after the date the Executive’s employment terminated.
8. Survival of Rights and Obligations. The rights and obligations of the Executive and the Company under the following Sections will survive the termination or expiration of this Agreement and the termination of the Executive’s employment after a Change in Control for any reason:
(a) Section 3 (Severance Benefits and Other Consideration);
(b) Section 4 (Timing of Payments);
(c) Section 5 (Non-Duplication of Severance Benefits and Other Consideration);
(d) Section 6 (Mitigation); and
(e) Section 7 (Arbitration; Legal Fees and Expenses).
9. Confidential Information; Non-Disparagement; Non-Solicitation; Competitive Activity.
(a) Confidential Information. At all times following the Termination Date, the Executive will not, without the prior written consent of the Company, either directly or indirectly use, appropriate, or disseminate, disclose, or communicate to any person or entity any confidential information of the Company or any Subsidiary that is now known or later becomes known to the Executive because of the Executive’s employment with the Company or any Subsidiary, unless the disclosure is required by a valid subpoena or order issued by a court or governmental body.
(1) For purposes of this Section 9(a), “confidential information” is any confidential, proprietary, or trade secret information, including concepts, ideas, information, and materials related to the Company or any Subsidiary, customer records, customer lists, economic and financial analyses, financial data, customer contracts, marketing plans, notes, memoranda, lists, books, correspondence, manuals, reports or research, whether developed by the Company or a Subsidiary or developed by the Executive while employed by the Company or a Subsidiary.
(2) This Section 9(a) does not apply to any confidential information that becomes publicly disseminated by means other than a breach of this provision.
(b) Non-Disparagement. The Executive will not make any verbal or written comments to any third party that are defamatory, disparaging, or critical of the Company or any Subsidiary or its products, management, employees, officers or operations or that would otherwise adversely affect the finances or business reputation of the Company or any Subsidiary.
(c) Non-Solicitation. To the extent not prohibited by applicable law:
(1) For a period of two years after the Termination Date, the Executive will not solicit, divert, take away, or attempt to take away any customer of the Company or any Subsidiary or the business of any customer of the Company or any Subsidiary.
(A) A “customer” of the Company or any Subsidiary is any person or other entity to which the Company or any Subsidiary has sold services or products during the 24-month period immediately preceding the Termination Date, any person or other entity that the Company or any Subsidiary is in the process of selling services or products, or any person or other entity to which the Company or any Subsidiary has submitted or is in the process of submitting a bid to sell services or products.
(2) For a period of two years after the Termination Date, the Executive will not solicit, attempt to employ, or employ any individual who is an employee, consultant, or agent of the Company or any Subsidiary.
(d) Competitive Activity. To the extent not prohibited by applicable law, for a period of one year following the Termination Date, the Executive will not engage in any
Competitive Activity. If the Executive engages in any Competitive Activity earlier than one year following the Termination Date, the Executive must repay (to the extent not prohibited by applicable law) to the Company the consideration paid to the Executive under Section 3(b).
(e) Whistleblower Protection. Notwithstanding paragraphs (a) through (d) of this Section, nothing contained in this Agreement shall be construed to prevent the Executive from reporting any act or failure to act to, or otherwise communicating with, the Securities and Exchange Commission or other governmental body or prevent the Executive from obtaining a fee as a “whistleblower” under Rule 21F-17(a) under the Securities Exchange Act of 1934 or other rules or regulations implemented under the Dodd-Frank Wall Street Reform Act and Consumer Protection Act.
10. Employment Rights. Nothing in this Agreement creates any right or duty on the part of the Company or the Executive to have the Executive remain in the employment of the Company or any Subsidiary prior to or following any Change in Control.
11. Successors and Binding Agreement.
(a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform it if the succession had not taken place. This Agreement will be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any person acquiring directly or indirectly all or substantially all of the business or assets of the Company by purchase, merger, consolidation, reorganization or otherwise, with the successor thereafter deemed to be the “Company” for the purposes of this Agreement. Other than as permitted under this Section 11(a), this Agreement is not assignable, transferable or delegable by the Company.
(b) This Agreement will inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees.
(c) This Agreement is personal in nature and neither of the parties may, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 11(a) and 11(b). The Executive’s right to receive payments under this Agreement is not assignable, transferable or delegable, including by pledge, creation of a security interest, or otherwise, other than by a transfer by the Executive’s will or by the laws of descent and distribution. If any assignment or transfer not permitted by this Section 11(c) is attempted, the Company will have no liability to pay any amount attempted to be assigned, transferred or delegated.
12. Notices.
(a) All communications, including notices, consents, requests or approvals, required or permitted to be given under this Agreement must be in writing.
(b) All notices must be provided by:
(1) hand delivery (deemed provided when delivered);
(2) electronic facsimile transmission, with verbal confirmation of receipt (deemed provided when transmitted);
(3) United States registered or certified mail, return receipt requested, postage prepaid (deemed provided five business days after mailing); or
(4) a nationally recognized overnight courier service such as Federal Express or UPS (deemed provided three business days after deposit with courier service).
(c) Notices to the Company must be addressed to the attention of the Vice President – Human Resources of the Company at the Company’s principal executive office.
(d) Notices to the Executive must be addressed to the Executive at the Executive’s principal residence.
(e) The Company or the Executive can change the address to which notices to that party are to be addressed by providing notice to the other party as required under this Section 12, except that notices of changes of address are effective only upon actual receipt.
13. Governing Law. The validity, interpretation, construction and performance of this Agreement will be governed by and construed in accordance with the substantive laws of the State of Michigan, without giving effect to its principles of conflict of laws.
14. Validity. If any provision of this Agreement or the application of any provision to any person or circumstances is held invalid, unenforceable or otherwise illegal by a court of competent jurisdiction, the remainder of this Agreement and the application of the provision to any other person or circumstances will not be affected. The provision held to be invalid, unenforceable or otherwise illegal will be amended to the minimum extent necessary to make it enforceable, valid or legal.
15. Miscellaneous.
(a) No provision of this Agreement may be modified, waived or discharged unless the waiver, modification or discharge is agreed to in writing signed by the Executive and the Company.
(b) No waiver by either party at the time of any breach by the other party or compliance with any condition or provision of this Agreement to be performed by the other party will
be a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.
(c) No agreements or representations, oral or otherwise, expressed or implied, with respect to the subject matter of this Agreement have been made by either party which are not set forth expressly in this Agreement.
(d) References to Sections are to references to Sections of this Agreement.
16. Prior Agreements. As of the Effective Date, this Agreement supersedes and replaces all prior change-in-control severance agreements and similar agreements between the Executive and the Company or any of its Subsidiaries (“Prior Agreements”). All Prior Agreements cease to be of force and effect as of the Effective Date.
17. Counterparts. This Agreement may be executed in one or more counterparts, each of which is deemed an original but all of which together will constitute one agreement.
18. Definitions. For purposes of this Agreement, the following definitions apply:
(a) Agreement is this Change in Control Severance Agreement.
(b) Agreement Expiration Date is the later of:
(1) the day before the third anniversary of the Effective Date; or
(2) the last day of any extension of this Agreement under this Section 18(b).
Beginning on the first anniversary of the Effective Date and on each subsequent anniversary of the Effective Date, this Agreement will automatically be extended for an additional year unless, not later than 90 days preceding any anniversary of the Effective Date:
(3) the Company gives notice that it does not wish to have the Term extended; or
(4) the Company gives notice that it wishes the Term to be extended for a period of less than one year, in which case the term of this Agreement will automatically be extended for the shorter period and will then terminate if not further extended by written agreement between the Company and the Executive.
(c) Annual Bonus is the aggregate annual bonus to which the Executive would have been entitled under the Annual Plan in the applicable year, presuming that the Executive’s individual performance multiplier is 100%. If the Executive participates in an Annual Plan without a specified target, the Executive’s Annual Bonus is 1/3 of the sum of the Executive’s payments under the Annual Plan for the three years preceding the applicable year (even if the Executive has not participated in the plan for three years).
(d) Annual Plan is the DTE Energy Company Annual Incentive Plan, a Subsidiary’s annual incentive plan, or any successor annual incentive plan (as applicable).
(e) Applicable Annual Bonus is the greater of:
(i) the Annual Bonus for the year in which the Change in Control occurs; or
(ii) the Annual Bonus for the year in which the Termination Date occurs,
in either case calculated based on the assumption that target performance goals for the applicable year would be met and the Executive was employed for the entire year or until any later date required to receive the payment.
(f) Base Pay is the Executive’s annual base salary (prior to any pre-tax deferrals made under any employee benefit plans of the Company) in effect immediately prior to the Change in Control or immediately prior to the Executive’s Termination Date, if higher.
(g) Benefit Continuation Period is the shorter of:
(1) the two-year period beginning on the Executive’s Termination Date; or
(2) the period beginning on the Executive’s Termination Date and ending on the date the Executive attains age 65.
(h) Board is the Board of Directors of the Company.
(i) Cause. The Executive’s employment will be considered terminated for “Cause” if prior to termination of the Executive’s employment, the Board reasonably determines, based on a preponderance of the evidence reasonably available to the Board as of the date the Board adopts the resolution described below, that the Executive committed or engaged in:
(1) an intentional act of fraud, embezzlement or theft at a level that constitutes a felony in connection with the Executive’s duties or in the course of the Executive’s employment with the Company or a Subsidiary, whether or not the Executive is convicted or pleads guilty or nolo contender (no contest) to any related criminal charges;
(2) intentional wrongful damage to property of the Company or a Subsidiary;
(3) intentional wrongful disclosure of secret processes or confidential information of the Company or a Subsidiary;
(4) intentional wrongful engagement in any Competitive Activity (to the extent not prohibited by applicable law);
(5) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company that is not cured within 30 days after the
Board delivers to the Executive a written demand for substantial performance specifically identifying the Executive’s failure to perform; or
(6) other intentional activity, including but not limited to a breach of the Executive’s fiduciary duties with respect to the Company, a Subsidiary, or any welfare plan or pension plan sponsored by the Company or a Subsidiary;
which, in the reasonable judgment of the Board and based on a preponderance of the evidence available to the Board is significantly detrimental to the reputation, goodwill or business of the Company or significantly disrupts the workplace environment or operation of the Company’s business or administrative activities.
For purposes of this Agreement, no act or failure to act on the part of the Executive will be deemed “intentional” if it was due primarily to an error in the Executive’s judgment or the Executive’s negligence. An act will be deemed “intentional” only if done or omitted to be done by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of the Company.
For purposes of this Agreement, the Executive has not been terminated for Cause unless and until:
(7) a meeting of the Board is called and held for the purpose of determining if the Executive is to be terminated for Cause; and
(8) the Executive is given reasonable notice of the meeting and an opportunity to be heard before the Board, with the Executive’s counsel if the Executive so chooses; and
(9) at that meeting the Board finds, in the good faith opinion of the Board, that the Executive has committed an act entitling the Board to terminate the Executive’s employment for Cause; and
(10) the Executive has been provided a copy of the resolution duly adopted at that meeting by the affirmative vote of not less than three-quarters of the Board then in office and specifying in detail the particulars of the Board’s finding.
The Executive and the Executive’s beneficiaries retain the right to contest the validity or propriety of the Board’s determination that the Executive’s employment has been terminated for Cause.
(j) Change in Control occurs if any of the following events occurs during the Term of this Agreement:
(1) Any "Person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any affiliate, (B) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the common stock or (C) a person who
holds at least twenty percent (20%) or more of the combined voting power represented by the Company’s then outstanding voting securities as of the effective date of the transaction) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the combined voting power represented by the Company’s then outstanding voting securities;
(2) a sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect, including a liquidation) other than (A) a sale or disposition by the Company of all or substantially all of the Company’s assets to a person or persons who beneficially own, directly or indirectly, at least fifty-five percent (55%) or more of the combined voting power of the outstanding voting securities of the Company at the time of the sale, or (B) pursuant to a spin-off type transaction, directly or indirectly, of such assets to the Company's stockholders;
(3) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (other than (A) a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (1), (2), or (4) of this Section a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; and
(4) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty-five percent (55%) of the combined voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.
Notwithstanding the foregoing to the contrary, for purposes of clarity and avoidance of doubt, the following acquisitions shall not be taken into consideration when determining whether a Change in Control has been consummated: (A) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company; (B) any acquisition by the Company; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company.
(k) Code is the Internal Revenue Code of 1986, as amended.
(l) Company is DTE Energy Company, a Michigan corporation.
(m) Competitive Activity is the Executive’s direct employment, without the written consent of the Board (or any committee of the Board to which the Board delegates its authority under this Section 18(m) in writing), in any business or enterprise (including the Executive’s own business or enterprise) if:
(1) the business or enterprise engages in substantial and direct competition with the Company or any of its Subsidiaries in any state in which the Company or Subsidiary was engaged in business or actively negotiating to enter business on the Termination Date; and
(2) the business’s or enterprise’s sales of any product or service competitive with any product or service of the Company or any of its Subsidiaries amounted to 10% of the business’s or enterprise’s net sales for its most recently completed fiscal year; and
(3) the Company’s or Subsidiary’s net sales of the competitive product or service amounted to 10% of the Company’s or Subsidiary’s net sales for its most recently completed fiscal year; and
(4) the Board determines the Executive’s employment in the business or enterprise is detrimental to the Company or any of its Subsidiaries.
“Competitive Activity” does not include the mere ownership of not more than 10% of the total combined voting power or aggregate value of all classes of stock or other securities in the enterprise and the Executive’s exercise of rights resulting from ownership of the stock.
The Board (or its delegate) has sole discretion and authority to determine if the Executive is engaging in Competitive Activity for purposes of this Agreement.
It is the Executive’s responsibility to provide information sufficient for the Board (or its delegate) to make these determinations.
(n) Determination Firm has the meaning set forth in Section 19.
(o) Director is a member of the Board.
(p) Effective Date is the date set forth in the preamble of this Agreement.
(q) Employee Benefits are the perquisites, benefits and service credit for benefits provided under all employee retirement income and welfare benefit policies, plans, programs or arrangements in which the Executive is entitled to participate, including without limitation any stock option, stock purchase, stock appreciation, savings, pension, supplemental executive retirement, or other retirement income or welfare benefit, deferred compensation, incentive compensation, group or other life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by the Company or a Subsidiary), disability, salary continuation, expense reimbursement and other employee
benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs or arrangements that may be adopted hereafter by the Company or a Subsidiary, providing perquisites, benefits and service credit for benefits at least as great in the aggregate as are payable prior to a Change in Control.
(r) ERISA is the Employee Retirement Income Security Act of 1974, as amended.
(s) Exchange Act is the Securities Exchange Act of 1934, as amended.
(t) Excise Tax has the meaning set forth in Section 19.
(u) Executive is the individual identified in the preamble of this Agreement.
(v) Full Payment has the meaning set forth in Section 19.
(w) Good Reason. The Executive terminates employment for “Good Reason” if the Executive voluntarily terminates his or her employment during the Severance Period following the occurrence of any of the following events during the Severance Period:
(1) a material diminution in the Executive’s Base Pay, provided, however that a Base Pay reduction that is applied uniformly among like-kind individuals will not be deemed to constitute Good Reason;
(2) a material diminution in the nature or scope of the Executive’s title, authority, duties, or responsibilities from those applicable to the Executive immediately prior to consummation of the Change in Control;
(3) the Company requiring the Executive’s office nearest to his or her principal residence to be located at a different place which is more than 35 miles from where such office is located as of immediately prior to the Change in Control; or
(4) a material breach by the Company of any term or provision of this Agreement, including the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement.
No event or condition described in this Section 18(w) shall constitute Good Reason unless, (x) within ninety (90) days from the Executive first acquiring actual knowledge of the existence of the Good Reason condition described in this Section 18(w), the Executive provides the Board written notice (in accordance with Section 12) of the Executive’s intention to terminate the Executive’s employment for Good Reason and the grounds for such termination; (y) such grounds for termination (if susceptible to correction) are not corrected by the successor within thirty (30) days of such successor’s receipt of such notice (or, in the event that such grounds cannot be corrected within such thirty-day (30) period, such successor has not taken all reasonable steps within such thirty-day (30) period to correct such grounds as promptly as practicable thereafter); and (z) the Executive terminates the Executive’s employment with the Company immediately following expiration of such thirty-day (30) period. For purposes of this Section 18(w), any attempt by the successor to correct a stated Good Reason shall not be deemed an admission by such successor that the
Executive’s assertion of Good Reason is valid.
(x) Prior Agreement has the meaning set forth in Section 16.
(y) Qualifying Termination means:
(1) Termination of the Executive’s employment by the Company or a Subsidiary during the Severance Period other than a termination:
(A) because of the Executive’s death;
(B) because the Executive became permanently disabled within the meaning of, and began receiving disability benefits under, the Company or Subsidiary sponsored long-term disability plan in effect for, or applicable to, the Executive immediately prior to the Change in Control; or
(C) under any mandatory retirement policy of the Company or a Subsidiary; or
(D) for Cause;
or
(2) Termination of the Executive’s employment by the Executive during the Severance Period for Good Reason, regardless of whether any other reason, other than Cause, for the Executive’s termination exists or has occurred, including other employment.
(z) Payment has the meaning set forth in Section 19.
(aa) Reduced Payment has the meaning set forth in Section 19.
(bb) Severance Pay is the collective benefits provided under any agreement, policy, plan, program, or arrangement of the Company or a Subsidiary or any provision of any individual severance, employment, or other agreement between the Executive and the Company or a Subsidiary that are paid to the Executive solely because of the termination of the Executive’s employment.
(cc) Severance Period resulting from a Change in Control is the period beginning on the date a Change in Control occurs and ending on the earliest of:
(1) the second anniversary of the Change in Control;
(2) the Executive’s 65th birthday; or
(3) the Executive’s death.
(dd) Subsidiary is an entity in which the Company directly or indirectly beneficially owns 50% or more of the outstanding Voting Stock.
(ee) Term has the meaning set forth in Section 1.
(ff) Termination Date is the date on which the Executive’s employment is terminated by a Qualifying Termination.
(gg) Welfare Benefits are benefits provided under employee welfare benefit plans, as defined in ERISA Section 3(1).
(hh) Voting Stock is securities entitled to vote generally in the election of Directors.
19. Code 280G Potential Reductions.
(a) Notwithstanding any other provision in this Agreement, if any payment or benefit the Executive would receive pursuant to this Agreement, a Change in Control of the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Code Section 280G, and (ii) but for this sentence, be subject to the excise tax imposed by Code Section 4999 (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Payment are paid to the Executive, which of the following two amounts would maximize the Executive’s after-tax proceeds: (i) payment in full of the entire amount of the Payment (a “Full Payment”), or (ii) payment of only a part of the Payment so that the Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”), whichever amount results in the Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.
For purposes of determining whether and the extent to which the Payment will be subject to the Excise Tax: (i) no portion of the Payment the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Code Section 280G(b) shall be taken into account; (ii) no portion of the Payment shall be taken into account which does not constitute a “parachute payment” within the meaning of Code Section 280G(b)(2) (including, without limitation, by reason of Code Section 280G(b)(4)(A)) and, in calculating the Excise Tax, no portion of such Payment shall be taken into account which constitutes reasonable compensation for services actually rendered, within the meaning of Code Section 280G(b)(4)(B), in excess of the “base amount” (as set forth in Code Section 280G(b)(3)) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Payment shall be determined by in accordance with the principles of Code Sections 280G(d)(3) and (4).
For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, (i) the Payment shall be paid only to the extent permitted under the Reduced Payment alternative, and the Executive shall have no rights to any additional payments and/or benefits constituting the Payment, and (ii) reduction in payments
and/or benefits shall occur in the following order: reduction of cash payments, cancellation of accelerated vesting of equity awards, and reduction of other benefits.
(b) All determinations required to be made under this Section 19, including whether an Excise Tax would otherwise be imposed, whether the Full Payments shall be reduced, the amount of any such reduction and the assumptions to be utilized in arriving at such determinations not expressly provided for herein, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually acceptable to the Company and the Executive (the “Determination Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Company that a payment is due to be made hereunder, or such earlier time as is requested by the Executive. All reasonable fees and expenses of the Determination Firm shall be borne solely by the Company. Any determination by the Determination Firm shall be binding upon the Company and Executive, absent manifest error.
(c) The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 19 shall not of itself limit or otherwise affect any other rights of the Executive under this Agreement.
In witness whereof, this Agreement has been entered into by the Company and the Executive as of the Effective Date.
___________________________________
[Executive’s Name]
DTE ENERGY COMPANY
__________________________________
Diane M. Antishin
Sr VP - HR & Chief D&I Officer
Exhibit 10.4
CHANGE IN CONTROL SEVERANCE AGREEMENT
This CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”) is entered into as of [ ], 2025 (the “Effective Date”) between DTE Energy Company, a Michigan corporation (the “Company”), and [ ] (the “Executive”).
RECITALS
A. The Executive is an executive or a key employee of the Company or one or more of its Subsidiaries and has made and is expected to continue to make major contributions to the short- and long-term profitability, growth and financial strength of the Company.
B. The Company recognizes that, as is the case for most publicly held companies, the possibility of a Change in Control exists and that potential employment uncertainty resulting from a Change in Control may distract management from conducting the Company’s business or cause management employees to leave the Company’s employ.
C. The Company wants to provide security to its senior executives and key employees to enable them to discharge their duties during the consideration and consummation of a Change in Control in order to preserve the value of the Company for its shareholders.
In consideration of these objectives, the Company and the Executive agree as follows:
1. Term of Agreement. The term of this Agreement (the “Term”) begins on the Effective Date and ends on the earlier of:
(a) the later of:
(1) this Agreement’s Expiration Date; or
(2) the last day of the Severance Period.
or
(b) the date prior to a Change in Control on which the Executive ceases for any reason to be an employee of the Company and any Subsidiary. For purposes of this Section 1(b), the Executive does not cease to be an employee of the Company and any Subsidiary if the Executive’s employment is transferred between the Company and any Subsidiary, or among any Subsidiaries.
2. Right to Receive Severance Benefits. The Executive will become entitled to the severance benefits provided under this Agreement if the Executive’s employment is terminated because of a Qualifying Termination.
3. Severance Benefits.
(a) Severance Benefits. The Severance Benefits payable under this Agreement are equal to the sum of all of the following:
(1) A lump sum payment equal to the sum of:
(A) Base Pay; plus
(B) the Applicable Annual Bonus
(2) A lump sum payment equal to:
(A) the Applicable Annual Bonus
(B) multiplied by the following fraction:
(i) the numerator is the number of days prior to the Executive’s Termination Date during the calendar year in which the Termination Date occurs; and
(ii) the denominator is 365,
(C) then reduced by the Annual Bonus for the year in which the Termination Date occurs that is payable to the Executive under the terms of the Annual Plan because the Executive has attained age 55 and completed 10 years of service with the Company and all Subsidiaries.
(3) Full accelerated vesting of any and all outstanding time-based and performance-based equity awards, with performance-based vesting awards being accelerated on the assumption that performance goals achieved for the applicable year are equal to the greater of target and actual performance through the date of the Change in Control, and that the Executive was employed for the entire year or until any later date required to receive such payment.
(4) For Welfare Benefits provided to the Executive immediately prior to the Executive’s Termination Date (or, if greater, immediately prior to reduction, termination, or denial), a lump sum payment equal to the present value of the cost of coverage for the Benefit Continuation Period. The cost of coverage will be determined at applicable rates in effect as of the Termination Date. The present value of the cost will be determined using an interest rate equal to the composite
prime rate in effect as of the Termination Date in the Northeast Edition of The Wall Street Journal.
(5) Additional age, service, and compensation credit for the length of the Benefit Continuation Period for determining the Executive’s benefits under the following plans (or any successors to these plans):
(A) DTE Energy Company Supplemental Retirement Plan; and
(B) DTE Energy Company Executive Supplemental Retirement Plan (including the Management Supplemental Benefit Plan, if applicable to the Executive).
(6) Outplacement services by a firm selected by the Executive, at a cost to the Company in an amount not to exceed 15% of the Executive’s Base Pay. No payments by the Company for outplacement services will be made after December 31st of the calendar year following the calendar year including the Termination Date.
4. Timing of Payments.
(a) Timing. Payments under the following Sections will be paid on the later of the date which is 60 days after the Executive’s Termination Date or any later date required by Code Section 409A or any other law:
(1) Section 3(a)(1);
(2) Section 3(a)(2); and
(3) Section 3(a)(4).
(b) Withholding of Taxes. The Company will withhold from any amounts payable under this Agreement all federal, state, city or other taxes that the Company is required to withhold under any law or government regulation or ruling.
(c) Interest. If the Company fails to make any payment or provide any benefit required to be made or provided under this Agreement on a timely basis, the Company shall pay interest on the amount or value at an annualized rate of interest equal to the composite prime rate as quoted from time to time during the relevant period in the Northeast Edition of The Wall Street Journal. The interest shall be payable as it accrues on demand, but the Company shall not be required to pay interest more frequently than monthly. Any change in the prime rate shall be effective on and as of the date of the change.
5. Non-Duplication of Severance Benefits.
(a) Qualifying Termination During Concurrent Severance Periods. If the Executive experiences a Qualifying Termination when two or more Severance Periods are running concurrently (because two or more Changes in Control have occurred), the Executive will have a Qualifying Termination with respect to each Severance Period. A determination of the payments and benefits to be provided under this Agreement will be made for each Qualifying Termination. However, the Executive will receive only:
(1) the greatest lump sum payment under Section 3(a)(1) payable for any Qualifying Termination;
(2) the greatest lump sum payment under Section 3(a)(2) for any Qualifying Termination;
(3) the greatest benefits under Section 3(a)(3) for any Qualifying Termination;
(4) the greatest lump sum under Section 3(a)(4) for any Qualifying Termination;
(5) the greatest benefits under Section 3(a)(5) for any Qualifying Termination; and
(6) the greatest benefits under Section 3(a)(6) for any Qualifying Termination.
(b) Effect on Other Employee Benefits. Except as expressly provided within this Agreement, the Executive’s Qualifying Termination will not affect any greater rights the Executive may have under any agreement, policy, plan, program or arrangement of the
Company or Subsidiary providing Employee Benefits (other than Severance Pay), which rights are governed by the terms of the agreement, policy, plan, program or arrangement; provided, however, that in any instance where a duplication of benefits is provided under this Agreement and another agreement, policy, plan, program or arrangement, then the two agreements shall be coordinated so that no duplication of benefits is provided, as reasonably determined in the sole discretion of the Company. The benefits received by the Executive under this Agreement because of a Qualifying Termination supersede and are in lieu of any other Severance Pay to which the Executive may be entitled
(c) Coordination with Other Agreements. Notwithstanding any other agreement between the parties to the contrary, the terms and conditions of this Agreement shall supersede any and all inconsistent terms of any other agreement and/or arrangement entered into between the parties, whether preceding or following the Effective Date.
6. Mitigation. The Company acknowledges that it will be difficult and may be impossible for the Executive to find reasonably comparable employment following the Termination Date. Accordingly, the Company acknowledges that payment of the severance compensation by the Company to the Executive under this Agreement is reasonable. The Executive is not required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise. No profits, income, earnings or other benefits from any source will create any mitigation, offset, reduction or other obligation on the part of the Executive, except as may have been otherwise paid to the Executive by the Company or a Subsidiary in connection with or in consideration of the Executive’s release and settlement of any claims arising out of the Executive’s employment or the termination of the Executive’s employment.
7. Arbitration; Legal Fees and Expenses.
(a) Except for legal proceedings brought by the Executive or the Company for injunctive relief, any dispute or claim involving this Agreement will be submitted to final and binding arbitration. The arbitration will take place in Oakland County, Michigan before a single neutral arbitrator under the then-current National Rules for the Resolution of Employment Disputes of the American Arbitration Association. The arbitrator will issue a written opinion and will not have authority to render an award beyond the scope and specific terms of this Agreement. Judgment upon the arbitrator’s award may be
entered in any court of competent jurisdiction. Any demand for arbitration must be made within 30 days of when the party knew or should have known of the alleged dispute or claim. Failure to timely demand arbitration makes the dispute or claim non-arbitrable. The Executive and the Company expressly waive their rights to institute or prosecute any lawsuits or other court proceedings and waive their right to a jury trial, except for the legal proceedings excluded above.
(b) It is the intent of the Company that the Executive not be required to incur legal fees and the related expenses associated with the interpretation, enforcement or defense of the Executive’s rights under this Agreement because the legal fees and related expenses would substantially detract from the benefits intended to be extended to the Executive under this Agreement.
(c) If it appears to the Executive that the Company has failed to comply with any of its obligations under this Agreement or if the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any action or proceeding designed to deny, or to recover from, the Executive the benefits provided or intended to be provided to the Executive under this Agreement, the Company irrevocably authorizes the Executive to retain counsel of the Executive’s choice, at the expense of the Company as provided in this Section 7, to advise and represent the Executive in connection with any interpretation, enforcement or defense of the Executive’s rights under this Agreement.
(d) The Executive may pursue any legal defense of the Executive’s rights under this Agreement whether by or against the Company or any Director, officer, stockholder or other person affiliated with the Company, in any jurisdiction.
(e) Whether or not the Executive prevails in connection with any defense of the Executive’s rights under this Agreement, the Company will pay and be solely financially responsible for reasonable hourly attorneys’ fees and related fees and expenses incurred by the Executive under this Section 7, but only if the arbitrator determines the Executive’s claim was brought in good faith and was not frivolous. If the Executive’s request for injunctive relief is denied and the Executive does not timely demand arbitration for the dispute or claim underlying the Executive’s request for injunctive relief, the Executive’s request for injunctive relief is deemed to be frivolous and not brought in good faith for purposes of this Section 7(e).
(f) The Company’s payment of the Executive’s legal fees and expenses under this Section 7 following termination of the Executive’s employment (whether or not in a Qualifying Termination) will be made during the first calendar year beginning after the date the Executive’s employment terminated.
8. Survival of Rights and Obligations. The rights and obligations of the Executive and the Company under the following Sections will survive the termination or expiration of this Agreement and the termination of the Executive’s employment after a Change in Control for any reason:
(a) Section 3 (Severance Benefits);
(b) Section 4 (Timing of Payments);
(c) Section 5 (Non-Duplication of Severance Benefits);
(d) Section 6 (Mitigation); and
(e) Section 7 (Arbitration; Legal Fees and Expenses).
9. Confidential Information; Non-Disparagement; Non-Solicitation; Competitive Activity.
(a) Confidential Information. At all times following the Termination Date, the Executive will not, without the prior written consent of the Company, either directly or indirectly use, appropriate, or disseminate, disclose, or communicate to any person or entity any confidential information of the Company or any Subsidiary that is now known or later becomes known to the Executive because of the Executive’s employment with the Company or any Subsidiary, unless the disclosure is required by a valid subpoena or order issued by a court or governmental body.
(1) For purposes of this Section 9(a), “confidential information” is any confidential, proprietary, or trade secret information, including concepts, ideas, information, and materials related to the Company or any Subsidiary, customer records, customer lists, economic and financial analyses, financial data, customer contracts, marketing plans, notes, memoranda, lists, books, correspondence, manuals, reports or research, whether developed by the Company or a Subsidiary or developed by the Executive while employed by the Company or a Subsidiary.
(2) This Section 9(a) does not apply to any confidential information that becomes publicly disseminated by means other than a breach of this provision.
(b) Non-Disparagement. The Executive will not make any verbal or written comments to any third party that are defamatory, disparaging, or critical of the Company or any Subsidiary or its products, management, employees, officers or operations or that would otherwise adversely affect the finances or business reputation of the Company or any Subsidiary.
(c) Non-Solicitation. To the extent not prohibited by applicable law:
(1) For a period of two years after the Termination Date, the Executive will not solicit, divert, take away, or attempt to take away any customer of the Company or any Subsidiary or the business of any customer of the Company or any Subsidiary.
(A) A “customer” of the Company or any Subsidiary is any person or other entity to which the Company or any Subsidiary has sold services or products during the 24-month period immediately preceding the Termination Date, any person or other entity that the Company or any
Subsidiary is in the process of selling services or products, or any person or other entity to which the Company or any Subsidiary has submitted or is in the process of submitting a bid to sell services or products.
(2) For a period of two years after the Termination Date, the Executive will not solicit, attempt to employ, or employ any individual who is an employee, consultant, or agent of the Company or any Subsidiary.
(d) Competitive Activity. To the extent not prohibited by applicable law, for a period of one year following the Termination Date, the Executive will not engage in any
Competitive Activity.
(e) Whistleblower Protection. Notwithstanding paragraphs (a) through (d) of this Section, nothing contained in this Agreement shall be construed to prevent the Executive from reporting any act or failure to act to, or otherwise communicating with, the Securities and Exchange Commission or other governmental body or prevent the Executive from obtaining a fee as a “whistleblower” under Rule 21F-17(a) under the Securities Exchange Act of 1934 or other rules or regulations implemented under the Dodd-Frank Wall Street Reform Act and Consumer Protection Act.
10. Employment Rights. Nothing in this Agreement creates any right or duty on the part of the Company or the Executive to have the Executive remain in the employment of the Company or any Subsidiary prior to or following any Change in Control.
11. Successors and Binding Agreement.
(a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent the Company would be required to perform it if the succession had not taken place. This Agreement will be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any person acquiring directly or indirectly all or substantially all of the business or assets of the Company by purchase, merger, consolidation, reorganization or otherwise, with the successor thereafter deemed to be the “Company” for the purposes of this Agreement. Other than as permitted under this Section 11(a), this Agreement is not assignable, transferable or delegable by the Company.
(b) This Agreement will inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees and legatees.
(c) This Agreement is personal in nature and neither of the parties may, without the consent of the other, assign, transfer or delegate this Agreement or any rights or obligations hereunder except as expressly provided in Sections 11(a) and 11(b). The Executive’s right to receive payments under this Agreement is not assignable, transferable or delegable, including by pledge, creation of a security interest, or
otherwise, other than by a transfer by the Executive’s will or by the laws of descent and distribution. If any assignment or transfer not permitted by this Section 11(c) is attempted, the Company will have no liability to pay any amount attempted to be assigned, transferred or delegated.
12. Notices.
(a) All communications, including notices, consents, requests or approvals, required or permitted to be given under this Agreement must be in writing.
(b) All notices must be provided by:
(1) hand delivery (deemed provided when delivered);
(2) electronic facsimile transmission, with verbal confirmation of receipt (deemed provided when transmitted);
(3) United States registered or certified mail, return receipt requested, postage prepaid (deemed provided five business days after mailing); or
(4) a nationally recognized overnight courier service such as Federal Express or UPS (deemed provided three business days after deposit with courier service).
(c) Notices to the Company must be addressed to the attention of the Vice President – Human Resources of the Company at the Company’s principal executive office.
(d) Notices to the Executive must be addressed to the Executive at the Executive’s principal residence.
(e) The Company or the Executive can change the address to which notices to that party are to be addressed by providing notice to the other party as required under this Section 12, except that notices of changes of address are effective only upon actual receipt.
13. Governing Law. The validity, interpretation, construction and performance of this Agreement will be governed by and construed in accordance with the substantive laws of the State of Michigan, without giving effect to its principles of conflict of laws.
14. Validity. If any provision of this Agreement or the application of any provision to any person or circumstances is held invalid, unenforceable or otherwise illegal by a court of competent jurisdiction, the remainder of this Agreement and the application of the provision to any other person or circumstances will not be affected. The provision held to be invalid, unenforceable or otherwise illegal will be amended to the minimum extent necessary to make it enforceable, valid or legal.
15. Miscellaneous.
(a) No provision of this Agreement may be modified, waived or discharged unless the waiver, modification or discharge is agreed to in writing signed by the Executive and the Company.
(b) No waiver by either party at the time of any breach by the other party or compliance with any condition or provision of this Agreement to be performed by the other party will
be a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.
(c) No agreements or representations, oral or otherwise, expressed or implied, with respect to the subject matter of this Agreement have been made by either party which are not set forth expressly in this Agreement.
(d) References to Sections are to references to Sections of this Agreement.
16. Prior Agreements. As of the Effective Date, this Agreement supersedes and replaces all prior change-in-control severance agreements and similar agreements between the Executive and the Company or any of its Subsidiaries (“Prior Agreements”). All Prior Agreements cease to be of force and effect as of the Effective Date.
17. Counterparts. This Agreement may be executed in one or more counterparts, each of which is deemed an original but all of which together will constitute one agreement.
18. Definitions. For purposes of this Agreement, the following definitions apply:
(a) Agreement is this Change in Control Severance Agreement.
(b) Agreement Expiration Date is the later of:
(1) the day before the third anniversary of the Effective Date; or
(2) the last day of any extension of this Agreement under this Section 18(b).
Beginning on the first anniversary of the Effective Date and on each subsequent anniversary of the Effective Date, this Agreement will automatically be extended for an additional year unless, not later than 90 days preceding any anniversary of the Effective Date:
(3) the Company gives notice that it does not wish to have the Term extended; or
(4) the Company gives notice that it wishes the Term to be extended for a period of less than one year, in which case the term of this Agreement will automatically be extended for the shorter period and will then terminate if not further extended by written agreement between the Company and the Executive.
(c) Annual Bonus is the aggregate annual bonus to which the Executive would have been entitled under the Annual Plan in the applicable year, presuming that the Executive’s individual performance multiplier is 100%. If the Executive participates in an Annual Plan without a specified target, the Executive’s Annual Bonus is 1/3 of the sum of the Executive’s payments under the Annual Plan for the three years preceding the applicable year (even if the Executive has not participated in the plan for three years).
(d) Annual Plan is the DTE Energy Company Annual Incentive Plan, a Subsidiary’s annual incentive plan, or any successor annual incentive plan (as applicable).
(e) Applicable Annual Bonus is the greater of:
(i) the Annual Bonus for the year in which the Change in Control occurs; or
(ii) the Annual Bonus for the year in which the Termination Date occurs,
in either case calculated based on the assumption that target performance goals for the applicable year would be met and the Executive was employed for the entire year or until any later date required to receive the payment.
(f) Base Pay is the Executive’s annual base salary (prior to any pre-tax deferrals made under any employee benefit plans of the Company) in effect immediately prior to the Change in Control or immediately prior to the Executive’s Termination Date, if higher.
(g) Benefit Continuation Period is the two-year period beginning on the Executive’s Termination Date.
(h) Board is the Board of Directors of the Company.
(i) Cause. The Executive’s employment will be considered terminated for “Cause” if prior to termination of the Executive’s employment, the Board reasonably determines, based on a preponderance of the evidence reasonably available to the Board as of the date the Board adopts the resolution described below, that the Executive committed or engaged in:
(1) an intentional act of fraud, embezzlement or theft at a level that constitutes a felony in connection with the Executive’s duties or in the course of the Executive’s employment with the Company or a Subsidiary, whether or not the Executive is convicted or pleads guilty or nolo contender (no contest) to any related criminal charges;
(2) intentional wrongful damage to property of the Company or a Subsidiary;
(3) intentional wrongful disclosure of secret processes or confidential information of the Company or a Subsidiary;
(4) intentional wrongful engagement in any Competitive Activity (to the extent not prohibited by applicable law);
(5) willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company that is not cured within 30 days after the
Board delivers to the Executive a written demand for substantial performance specifically identifying the Executive’s failure to perform; or
(6) other intentional activity, including but not limited to a breach of the Executive’s fiduciary duties with respect to the Company, a Subsidiary, or any welfare plan or pension plan sponsored by the Company or a Subsidiary;
which, in the reasonable judgment of the Board and based on a preponderance of the evidence available to the Board is significantly detrimental to the reputation, goodwill or business of the Company or significantly disrupts the workplace environment or operation of the Company’s business or administrative activities.
For purposes of this Agreement, no act or failure to act on the part of the Executive will be deemed “intentional” if it was due primarily to an error in the Executive’s judgment or the Executive’s negligence. An act will be deemed “intentional” only if done or omitted to be done by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of the Company.
For purposes of this Agreement, the Executive has not been terminated for Cause unless and until:
(7) a meeting of the Board is called and held for the purpose of determining if the Executive is to be terminated for Cause; and
(8) the Executive is given reasonable notice of the meeting and an opportunity to be heard before the Board, with the Executive’s counsel if the Executive so chooses; and
(9) at that meeting the Board finds, in the good faith opinion of the Board, that the Executive has committed an act entitling the Board to terminate the Executive’s employment for Cause; and
(10) the Executive has been provided a copy of the resolution duly adopted at that meeting by the affirmative vote of not less than three-quarters of the Board then in office and specifying in detail the particulars of the Board’s finding.
The Executive and the Executive’s beneficiaries retain the right to contest the validity or propriety of the Board’s determination that the Executive’s employment has been terminated for Cause.
(j) Change in Control occurs if any of the following events occurs during the Term of this Agreement:
(1) Any "Person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any affiliate, (B) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the common stock or (C) a person who
holds at least twenty percent (20%) or more of the combined voting power represented by the Company’s then outstanding voting securities as of the effective date of the transaction) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing twenty percent (20%) or more of the combined voting power represented by the Company’s then outstanding voting securities;
(2) a sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction having a similar effect, including a liquidation) other than (A) a sale or disposition by the Company of all or substantially all of the Company’s assets to a person or persons who beneficially own, directly or indirectly, at least fifty-five percent (55%) or more of the combined voting power of the outstanding voting securities of the Company at the time of the sale, or (B) pursuant to a spin-off type transaction, directly or indirectly, of such assets to the Company's stockholders;
(3) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (other than (A) a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (1), (2), or (4) of this Section a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; and
(4) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty-five percent (55%) of the combined voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.
Notwithstanding the foregoing to the contrary, for purposes of clarity and avoidance of doubt, the following acquisitions shall not be taken into consideration when determining whether a Change in Control has been consummated: (A) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company; (B) any acquisition by the Company;
(C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company.
(k) Code is the Internal Revenue Code of 1986, as amended.
(l) Company is DTE Energy Company, a Michigan corporation.
(m) Competitive Activity is the Executive’s direct employment, without the written consent of the Board (or any committee of the Board to which the Board delegates its authority under this Section 18(m) in writing), in any business or enterprise (including the Executive’s own business or enterprise) if:
(1) the business or enterprise engages in substantial and direct competition with the Company or any of its Subsidiaries in any state in which the Company or Subsidiary was engaged in business or actively negotiating to enter business on the Termination Date; and
(2) the business’s or enterprise’s sales of any product or service competitive with any product or service of the Company or any of its Subsidiaries amounted to 10% of the business’s or enterprise’s net sales for its most recently completed fiscal year; and
(3) the Company’s or Subsidiary’s net sales of the competitive product or service amounted to 10% of the Company’s or Subsidiary’s net sales for its most recently completed fiscal year; and
(4) the Board determines the Executive’s employment in the business or enterprise is detrimental to the Company or any of its Subsidiaries.
“Competitive Activity” does not include the mere ownership of not more than 10% of the total combined voting power or aggregate value of all classes of stock or other securities in the enterprise and the Executive’s exercise of rights resulting from ownership of the stock.
The Board (or its delegate) has sole discretion and authority to determine if the Executive is engaging in Competitive Activity for purposes of this Agreement.
It is the Executive’s responsibility to provide information sufficient for the Board (or its delegate) to make these determinations.
(n) Determination Firm has the meaning set forth in Section 19.
(o) Director is a member of the Board.
(p) Effective Date is the date set forth in the preamble of this Agreement.
(q) Employee Benefits are the perquisites, benefits and service credit for benefits provided under all employee retirement income and welfare benefit policies, plans,
programs or arrangements in which the Executive is entitled to participate, including without limitation any stock option, stock purchase, stock appreciation, savings, pension, supplemental executive retirement, or other retirement income or welfare benefit, deferred compensation, incentive compensation, group or other life, health, medical/hospital or other insurance (whether funded by actual insurance or self-insured by the Company or a Subsidiary), disability, salary continuation, expense reimbursement and other employee benefit policies, plans, programs or arrangements that may now exist or any equivalent successor policies, plans, programs or arrangements that may be adopted hereafter by the Company or a Subsidiary, providing perquisites, benefits and service credit for benefits at least as great in the aggregate as are payable prior to a Change in Control.
(r) ERISA is the Employee Retirement Income Security Act of 1974, as amended.
(s) Exchange Act is the Securities Exchange Act of 1934, as amended.
(t) Excise Tax has the meaning set forth in Section 19.
(u) Executive is the individual identified in the preamble of this Agreement.
(v) Full Payment has the meaning set forth in Section 19.
(w) Good Reason. The Executive terminates employment for “Good Reason” if the Executive voluntarily terminates his or her employment during the Severance Period following the occurrence of any of the following events during the Severance Period:
(1) a material diminution in the Executive’s Base Pay, provided, however that a Base Pay reduction that is applied uniformly among like-kind individuals will not be deemed to constitute Good Reason;
(2) a material diminution in the nature or scope of the Executive’s title, authority, duties, or responsibilities from those applicable to the Executive immediately prior to consummation of the Change in Control;
(3) the Company requiring the Executive’s office nearest to his or her principal residence to be located at a different place which is more than 35 miles from where such office is located as of immediately prior to the Change in Control; or
(4) a material breach by the Company of any term or provision of this Agreement, including the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement.
No event or condition described in this Section 18(w) shall constitute Good Reason unless, (x) within ninety (90) days from the Executive first acquiring actual knowledge of the existence of the Good Reason condition described in this Section 18(w), the Executive provides the Board written notice (in accordance with Section 12) of the Executive’s intention to terminate the Executive’s employment for Good Reason and the grounds for such termination; (y) such grounds for termination (if susceptible to
correction) are not corrected by the successor within thirty (30) days of such successor’s receipt of such notice (or, in the event that such grounds cannot be corrected within such thirty-day (30) period, such successor has not taken all reasonable steps within such thirty-day (30) period to correct such grounds as promptly as practicable thereafter); and (z) the Executive terminates the Executive’s employment with the Company immediately following expiration of such thirty-day (30) period. For purposes of this Section 18(w), any attempt by the successor to correct a stated Good Reason shall not be deemed an admission by such successor that the Executive’s assertion of Good Reason is valid.
(x) Prior Agreement has the meaning set forth in Section 16.
(y) Qualifying Termination means:
(1) Termination of the Executive’s employment by the Company or a Subsidiary during the Severance Period other than a termination:
(A) because of the Executive’s death;
(B) because the Executive became permanently disabled within the meaning of, and began receiving disability benefits under, the Company or Subsidiary sponsored long-term disability plan in effect for, or applicable to, the Executive immediately prior to the Change in Control; or
(C) for Cause;
or
(2) Termination of the Executive’s employment by the Executive during the Severance Period for Good Reason, regardless of whether any other reason, other than Cause, for the Executive’s termination exists or has occurred, including other employment.
(z) Payment has the meaning set forth in Section 19.
(aa) Reduced Payment has the meaning set forth in Section 19.
(bb) Severance Pay is the collective benefits provided under any agreement, policy, plan, program, or arrangement of the Company or a Subsidiary or any provision of any individual severance, employment, or other agreement between the Executive and the Company or a Subsidiary that are paid to the Executive solely because of the termination of the Executive’s employment.
(cc) Severance Period resulting from a Change in Control is the period beginning on the date a Change in Control occurs and ending on the earliest of:
(1) the second anniversary of the Change in Control; or
(2) the Executive’s death.
(dd) Subsidiary is an entity in which the Company directly or indirectly beneficially owns 50% or more of the outstanding Voting Stock.
(ee) Term has the meaning set forth in Section 1.
(ff) Termination Date is the date on which the Executive’s employment is terminated by a Qualifying Termination.
(gg) Welfare Benefits are benefits provided under employee welfare benefit plans, as defined in ERISA Section 3(1).
(hh) Voting Stock is securities entitled to vote generally in the election of Directors.
19. Code 280G Potential Reductions.
(a) Notwithstanding any other provision in this Agreement, if any payment or benefit the Executive would receive pursuant to this Agreement, a Change in Control of the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Code Section 280G, and (ii) but for this sentence, be subject to the excise tax imposed by Code Section 4999 (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Payment are paid to the Executive, which of the following two amounts would maximize the Executive’s after-tax proceeds: (i) payment in full of the entire amount of the Payment (a “Full Payment”), or (ii) payment of only a part of the Payment so that the Executive receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”), whichever amount results in the Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.
For purposes of determining whether and the extent to which the Payment will be subject to the Excise Tax: (i) no portion of the Payment the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Code Section 280G(b) shall be taken into account; (ii) no portion of the Payment shall be taken into account which does not constitute a “parachute payment” within the meaning of Code Section 280G(b)(2) (including, without limitation, by reason of Code Section 280G(b)(4)(A)) and, in calculating the Excise Tax, no portion of such Payment shall be taken into account which constitutes reasonable compensation for services actually rendered, within the meaning of Code Section 280G(b)(4)(B), in excess of the “base amount” (as set forth in Code Section 280G(b)(3)) that is allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Payment shall be determined by in accordance with the principles of Code Sections 280G(d)(3) and (4).
For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, (i) the Payment shall be paid only to
the extent permitted under the Reduced Payment alternative, and the Executive shall have no rights to any additional payments and/or benefits constituting the Payment, and (ii) reduction in payments and/or benefits shall occur in the following order: reduction of cash payments, cancellation of accelerated vesting of equity awards, and reduction of other benefits.
(b) All determinations required to be made under this Section 19, including whether an Excise Tax would otherwise be imposed, whether the Full Payments shall be reduced, the amount of any such reduction and the assumptions to be utilized in arriving at such determinations not expressly provided for herein, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually acceptable to the Company and the Executive (the “Determination Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Company that a payment is due to be made hereunder, or such earlier time as is requested by the Executive. All reasonable fees and expenses of the Determination Firm shall be borne solely by the Company. Any determination by the Determination Firm shall be binding upon the Company and Executive, absent manifest error.
(c) The fact that the Executive’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 19 shall not of itself limit or otherwise affect any other rights of the Executive under this Agreement.
In witness whereof, this Agreement has been entered into by the Company and the Executive as of the Effective Date.
___________________________________
[Executive’s Name]
DTE ENERGY COMPANY
__________________________________
Diane M. Antishin
Sr VP - HR & Chief D&I Officer
Exhibit 10.5
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (“Agreement”) is entered into as of ______________ (“Effective Date”) between DTE Energy Company, a Michigan corporation (“DTE Energy”), and ______________________. (the “Indemnitee”).
RECITALS
A.The Indemnitee currently is, and/or will be in the future, serving in one or more capacities as a director, officer, employee, or agent of DTE Energy or one of its subsidiaries or, at the request of DTE Energy, as a director, officer, employee, agent, fiduciary or trustee of, or in a similar capacity for, another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan or other entity, and in so doing is and will be performing a valuable service to or on behalf of DTE Energy.
B.DTE Energy has in the past filed, and may propose in the future to file, registration statements under the Securities Act of 1933 (and may make related filings under applicable state securities laws) for the public offering and sale of its securities or the securities of certain of its affiliates, and may in the future request the Indemnitee to execute registration statements, in one or more of the capacities listed in the previous recital, as indicated in those registration statements, and to take other actions in connection with such registration statements and sales of such securities.
C.DTE Energy and the Indemnitee recognize the substantial increase in corporate litigation in general, which may subject directors, officers, employees, agents and fiduciaries such as the Indemnitee to risks of liability and expense in defending against such litigation. DTE Energy and the Indemnitee further recognize the continued difficulty in obtaining liability insurance for directors, officers, employees, agents and fiduciaries, the significant increases in the cost of such insurance, the general limitations in the coverage of such insurance and the lack of assurance that such insurance will continue to be available in the future.
D.DTE Energy desires to attract and retain highly qualified individuals such as the Indemnitee to serve DTE Energy and recognizes that the circumstances described above have made attracting and retaining such persons more difficult.
E. To induce the Indemnitee to serve or continue to serve DTE Energy in one or more of the capacities described above, DTE Energy desires to provide the Indemnitee with specific contractual assurance of the Indemnitee’s rights to full indemnification against litigation risks and expenses (regardless, among other things, of any amendment to or revocation of the indemnification
provisions of DTE Energy’s Articles of Incorporation or any change in the ownership of DTE Energy or the composition of the DTE Energy Board).
F. It is reasonable, prudent and necessary for DTE Energy to obligate itself contractually to indemnify the Indemnitee as described in this Agreement, so that the Indemnitee may serve or continue to serve DTE Energy free from undue concern that the Indemnitee will not be adequately indemnified. The Indemnitee is relying upon the rights afforded under this Agreement in serving or continuing to serve DTE Energy.
Accordingly, and in order to induce the Indemnitee to agree to serve or continue serving in an Official Capacity, DTE Energy and the Indemnitee agree as follows:
1. Definitions. As used in this Agreement, the following terms when capitalized have the following meanings:
(a) “BCA” means the Michigan Business Corporation Act, as amended from time to time.
(b) “Change in Control” means a “change in control” as defined in the Change in Control Severance Agreement entered into between DTE Energy and the Indemnitee, or if the Indemnitee is not party to a Change in Control Severance Agreement, as “change in control” is defined in the form of Change in Control Severance Agreement incorporated by reference as an exhibit to DTE Energy’s most recent annual report on Form 10-K filed with Securities and Exchange Commission.
(c) “Disinterested Directors” with respect to any Proceeding means directors of DTE Energy who are not parties or threatened to be made parties to such Proceeding.
(d) “DTE Energy Board” means the Board of Directors of DTE Energy as it exists from time to time.
(e) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
(f) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(g) “Expenses” means all reasonable fees, costs and expenses actually incurred by the Indemnitee in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding, including, without limitation, attorneys’ fees, disbursements and retainers, fees and disbursements of expert witnesses, private
investigators and professional advisors (including, without limitation, accountants and investment bankers), travel and deposition costs, expenses of investigations, judicial or administrative proceedings and appeals, court costs, transcript costs, copying costs, printing and binding costs, telephone and fax transmission charges, postage, costs of delivery services, and costs of secretarial services. The term “Expenses” does not include the amount of judgments, fines, penalties, amounts paid in settlement, ERISA excise taxes, or other excise taxes actually levied against the Indemnitee.
(h) “Independent Counsel” means an attorney, a law firm, or a member of a law firm, who (or which) is experienced in matters of corporation law and neither presently is, nor in the past three (3) years has been, retained to represent: (i) DTE Energy or the Indemnitee in any other matter material to either such party; or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” does not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either DTE Energy or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement.
(i) “Independent Director” means an independent director of DTE Energy as defined in Section 107(3) of the BCA, as it may be amended from time to time, or any successor to that provision.
(j) “Liabilities” means damages (including, without limitation, punitive, exemplary and the multiplied portion of any damages), losses, claims, judgments, liabilities, fines, penalties, ERISA excise taxes and other excise taxes and amounts paid in settlement.
(k) “Official Capacity” means service to DTE Energy as director, officer employee or agent or, at the request of DTE Energy, as a director, officer, general partner, manager, member, employee, agent, fiduciary, or trustee of, or in a similar capacity for, another corporation, partnership, limited liability company, joint venture, trust, employee benefit plan (including a plan qualified under ERISA) or other entity. For purposes of this definition, if the Indemnitee is serving or has served as a director, partner, trustee, officer, employee or agent of a subsidiary, the Indemnitee will be deemed to be serving at the request of DTE Energy. Notwithstanding the foregoing, unless DTE Energy’s written request to serve another entity indicates that indemnification from DTE Energy will be available, the person to whom the request is made will not be deemed to be serving in an Official Capacity.
(l) “Proceeding” means any threatened, pending or completed claim, action, suit, arbitration, alternate dispute resolution process, investigation, administrative hearing, appeal, or any other proceeding of any nature, whether civil, criminal, administrative, arbitrative or investigative, whether formal or informal, and whether brought by or in the right of DTE Energy, a class of its security holders, or any other party.
(m) “Reviewing Party” means (i) Disinterested Directors constituting a quorum of the DTE Energy Board, acting by majority vote; or (ii) if such a quorum is not obtainable, a committee duly designated by the DTE Energy Board consisting solely of two (2) or more Disinterested Directors, acting by majority vote; or (iii) all Independent Directors who are not parties or threatened to be made parties to such Proceeding, acting unanimously; or (iv) Independent Counsel acting by written opinion who has been designated (A) by Disinterested Directors or a committee thereof as described in clause (i) or (ii) above, subject to the approval of the Indemnitee, which will not be unreasonably withheld, or (B) if the Disinterested Directors or committee is unable or fails to so designate, by the Indemnitee, subject to the approval of the DTE Energy Board, which will not be unreasonably withheld; provided, that following any Change in Control, Reviewing Party will mean Independent Counsel acting by written opinion, designated in accordance with clause (iv).
(n) “Securities Act” means the Securities Act of 1933, as amended.
(o) “Securities Liabilities” has the meaning set forth in Section 6(d).
2. Service by the Indemnitee. The Indemnitee agrees to serve in each Official Capacity held now or in the future for so long as the Indemnitee is duly elected or appointed or, if earlier, until (a) the Indemnitee’s death, retirement, resignation or removal or (b) such service is otherwise terminated pursuant to DTE Energy’s Articles of Incorporation, Bylaws or the BCA. The Indemnitee will discharge his/her duties and responsibilities to the best of his/her ability. The Indemnitee may at any time and for any reason resign from such position (subject to any other obligation, whether contractual or imposed by operation of law). Nothing in this Agreement confers upon the Indemnitee the right to continue in the employ of DTE Energy or in any Official Capacity, or affect the right of DTE Energy to terminate, in DTE Energy’s sole discretion (with or without cause) and at any time, the Indemnitee’s employment or the Indemnitee’s service in any Official Capacity, in each case subject to any contractual rights of the Indemnitee under agreements with DTE Energy other than this Agreement.
3.Indemnity.
(a)To the full extent permitted by applicable law, as it now exists or may hereafter be amended, but subject to the provisions of this Agreement, DTE Energy will indemnify the Indemnitee against all Liabilities and Expenses incurred by the Indemnitee in connection with any Proceeding (whether or not by or in the right of DTE Energy) to which the Indemnitee was or is a party or is threatened to be made a party by reason of Indemnitee’s Official Capacity. Subject to Section 6(d), the provisions of this Section 3(a) include, without limitation:
(i) any and all Liabilities and Expenses arising under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise asserted in any Proceeding brought by DTE Energy, a shareholder thereof or a third party which relates directly or indirectly to (A) the registration, purchase, sale or ownership of any securities of DTE Energy or any of its affiliates, (B) any fiduciary obligation owed with respect thereto or (C) any misstatement or omission of a material fact by DTE Energy in violation of any duty of disclosure imposed on it by federal or state securities or common laws; and
(ii) Expenses incurred by the Indemnitee in connection with Proceedings brought by the Indemnitee to establish or enforce a right to indemnification under (A) this Agreement as contemplated in Section 10, (B) the Articles of Incorporation of DTE Energy, or (C) any other statute or law or otherwise, except to the extent relating to claims that are determined, pursuant to arbitration under Section 10, to be not in good faith and/or frivolous.
(b) To the full extent permitted by law, the termination of any Proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent will not, of itself, create a presumption that the Indemnitee did not meet the standards of conduct required under the BCA to permit indemnification of the Indemnitee with respect to any particular claim.
(c) To the extent that the Indemnitee has been successful, on the merits or otherwise, in defense of any Proceeding to which the Indemnitee was a party by reason of his or her Official Capacity, or in defense of any claim, issue or matter in such a Proceeding (including, without limitation, the dismissal of the Proceeding or a claim, issue or matter in the Proceeding without prejudice), the Indemnitee will be indemnified against the Expenses incurred by the Indemnitee in connection with the Proceeding to the fullest extent permitted by law.
(d) If the Indemnitee is entitled to indemnification under Section 3(a) or 3(c) for a portion of Expenses or Liabilities incurred in connection with any Proceeding, but not for the total amount, DTE Energy will indemnify the Indemnitee for the portion of the Expenses or Liabilities for which the Indemnitee is entitled to be indemnified.
(e) Upon application to a court by the Indemnitee pursuant to Section 564c of the BCA, and a determination of such court that the Indemnitee is fairly and reasonably entitled to indemnification, DTE Energy will pay to the Indemnitee the amount so ordered by the court.
4. Advancement of Expenses.
(a) Subject to applicable law, DTE Energy will pay Expenses incurred by the Indemnitee in connection with any Proceeding arising from the Indemnitee’s Official Capacity, in advance of the final disposition of the Proceeding, if so requested by the Indemnitee. The Expenses to be paid by DTE Energy under this Section 4 include those incurred by the Indemnitee in connection with any proceeding by the Indemnitee seeking to enforce the Indemnitee’s right to indemnification pursuant to this Agreement, DTE Energy’s Articles of Incorporation or otherwise. To the extent required by applicable law, an evaluation of the reasonableness of Expenses for which advance payment is requested hereunder will be made by the Reviewing Party.
(b) DTE Energy will pay Expenses under this Section 4 within twenty (20) days after the receipt by DTE Energy of a written statement or statements from the Indemnitee requesting such advance or advances substantially in the form of Exhibit 1 attached hereto and made a part hereof. The Indemnitee may submit such statements from time to time. A statement or statements requesting payment of such Expenses shall reasonably evidence the Expenses incurred by the Indemnitee and, to the extent required under the BCA at the time the statement is submitted, shall include or be accompanied by a written undertaking executed personally by or on behalf of the Indemnitee to repay such amount if it is ultimately determined that the Indemnitee did not meet the applicable standard of conduct, if any, required under the BCA for the indemnification of a person under the circumstances or otherwise is not entitled to be indemnified against such Expenses pursuant to this Agreement or otherwise. Each written undertaking to pay amounts advanced must be an unlimited general obligation of the Indemnitee but need not be secured and will be accepted without reference to the financial ability of the Indemnitee to make repayment.
5. Limitations.
(a) Notwithstanding the foregoing, DTE Energy will not be liable to indemnify the Indemnitee under this Agreement for Expenses or Liabilities:
(i) with respect to a claim, issue or matter in which the Indemnitee has been found liable to DTE Energy, except to the extent that the Court conducting the proceeding or another court of competent jurisdiction determines upon application that the Indemnitee is fairly and reasonably entitled to indemnification in view of all relevant circumstances whether or not the Indemnitee met the standard of conduct required under applicable law or was so adjudged liable to DTE Energy; and provided that if the Indemnitee was adjudged liable, such indemnification will be limited to reasonable Expenses incurred, as provided in Section 564c of the BCA, as it may be amended from time to time, or any successor to that provision;
(ii) with respect to amounts paid in settlement of any action, suit or proceeding affected without DTE Energy’s written consent, which consent will not be unreasonably withheld;
(iii) with respect to any Proceeding (A) for recovery or disgorgement of profits made from the purchase and sale or sale and purchase by the Indemnitee of equity securities of DTE Energy or any of its affiliates pursuant to Section 16(b) of the Exchange Act, the rules and regulations promulgated thereunder, or similar provisions of any federal, state or local statutory law or (B) arising from transactions in publicly traded securities of DTE Energy or any of its affiliates that were effected by the Indemnitee in violation of Section 10(b) of the Exchange Act, including Rule 10b-5 promulgated thereunder.
(iv) to the extent arising from any fine or similar governmental imposition which DTE Energy is prohibited by applicable law from paying;
(v) with respect to any Proceeding initiated by Indemnitee, including any Proceeding brought by the Indemnitee against DTE Energy, any entity which it controls, any director, officer or employee thereof, or any third party, unless the Proceeding was previously authorized by a majority of the DTE Energy Board; provided, that this subsection (v) does not apply to counterclaims or affirmative defenses asserted by the Indemnitee in a Proceeding brought against the Indemnitee arising from the Indemnitee’s Official Capacity, nor to Proceedings brought by the Indemnitee to establish or enforce a right to indemnification
under this Agreement, the Articles of Incorporation of DTE Energy, any other statute or law or otherwise;
(vi) to the extent based upon or attributable to (A) acts of the Indemnitee involving bad faith, active and deliberate dishonesty, fraud or willful misconduct or (B) the Indemnitee gaining in fact a personal profit to which the Indemnitee was not legally entitled, as determined in a final judgment or order from which all rights of appeal have been extinguished; or
(vii) to the extent the Indemnitee has actually received payment (from DTE Energy or any DTE Energy affiliates) under any insurance policy, the Articles, the Bylaws or otherwise) of the amounts otherwise payable hereunder; provided, however, that DTE Energy will reimburse the Indemnitee for any such amount that the Indemnitee is subsequently required to disgorge, unless the Indemnitee is not entitled thereto pursuant to the provisions of this Agreement.
(b) No act, omission, liability, knowledge, or other fact of or relating to any other person, including without limitation any other person who is also an indemnitee under any agreement with DTE Energy, will be imputed to the Indemnitee for the purposes of determining the applicability of any exclusion set forth herein.
(c) In consideration of the undertakings of DTE Energy in this Agreement, the Indemnitee acknowledges and agrees that the limitations set forth in Section 5(a) will apply in the event that the Indemnitee makes a claim for indemnification under this Agreement, DTE Energy’s Articles of Incorporation or otherwise, and the Indemnitee hereby waives any right to indemnification for any of the items specified in Section 5(a) except in compliance with the provisions thereof, whether arising under this Agreement, DTE Energy’s Articles of Incorporation or Bylaws, or otherwise.
(d) To the extent that an Indemnitee is serving in an Official Capacity for another entity at the written request of DTE Energy, the indemnification provided for hereunder will be secondary to the indemnification obligations and/or insurance coverages provided by such enterprise, and those obligations and coverages will be primary to DTE Energy’s obligations hereunder.
6. Procedures Applicable to Claims for Indemnity.
(a) Indemnitee agrees to promptly notify DTE Energy in writing upon being served or otherwise receiving any summons, citation, subpoena, complaint, indictment, information
or other document relating to any Proceeding or matter which may be subject to indemnification hereunder. The failure to notify DTE Energy shall not relieve DTE Energy of any obligation which it may have to Indemnitee under this Agreement or otherwise, unless and only to the extent that such failure or delay materially prejudices DTE Energy. The Indemnitee may request indemnification hereunder by submitting to DTE Energy a request for indemnification substantially in the form of Exhibit 2 attached hereto and made a part hereof.
(b) To the extent required by applicable law, any indemnification under Section 3(a) (except as provided by Section 3(c) or unless ordered by a court) will be made by DTE Energy only as authorized in the specific case upon a determination by the Reviewing Party that the Indemnitee has met the standard of conduct for indemnification prescribed by applicable law. DTE Energy will pay the reasonable fees and expenses of any Independent Counsel that acts as Reviewing Party and will indemnify fully such Independent Counsel against costs, charges and expenses (including attorneys’ fees and expenses) actually and reasonably incurred by such counsel arising out of or in connection with this Agreement or the opinion of such counsel pursuant hereto. The making of a determination pursuant to this subsection (b) is not required as a prerequisite to the payment of expenses in advance pursuant to Section 4.
(c) DTE Energy agrees to use its best efforts to facilitate a prompt determination by the Reviewing Party with respect to any claim for Indemnification to which subsection (b) applies, and (to the extent such determination is required by applicable law) with respect to the reasonableness of any Expenses for which payment in advance is requested pursuant to Section 4. In connection therewith, (i) the Indemnitee will be afforded the opportunity to make submissions to the Reviewing Party with respect to the claim and (ii) unless prohibited by applicable law, it will be presumed that the Indemnitee has met the applicable standard of conduct permitting indemnification, and that the Expenses for which advancement is requested are reasonable, and the burden of proof will be on DTE Energy to establish that the Indemnitee is not entitled to indemnification. Except as provided in Section 10, any determination by the Reviewing Party will be conclusive and binding on DTE Energy and the Indemnitee. All costs and expenses (including, without limitation, attorneys’ fees and disbursements) in connection with the Reviewing Party’s review and any arbitration proceedings relating thereto will be borne by DTE Energy, except to the extent that it is determined in any such arbitration that the Indemnitee’s claim was not made in good faith and/or was frivolous.
(d) Both DTE Energy and the Indemnitee have been advised that it is the position of the Securities and Exchange Commission that indemnification for liabilities arising under the federal securities laws (“Securities Liabilities”) is against public policy and is, therefore, unenforceable. Further, both DTE Energy and the Indemnitee acknowledge that DTE Energy may have undertaken in the past, and/or may undertake in the future, in connection with the registration of any of its or its affiliates’ securities under the Securities Act, not to pay indemnification amounts relating to Securities Liabilities without first submitting to a court of competent jurisdiction the question whether such indemnification is against public policy, unless in the opinion of DTE Energy’s counsel the matter has been settled by controlling precedent. DTE Energy and the Indemnitee agree that, upon presentation of any claim for indemnification relating to Securities Liabilities, DTE Energy will, unless in the opinion of DTE Energy’s counsel the matter has been settled by controlling precedent, submit to a court of competent jurisdiction the question of whether such indemnification by it is against public policy as expressed in the federal securities laws and the parties will be governed by the final adjudication of such issue.
(e) The Indemnitee agrees to cooperate with DTE Energy in connection with the investigation, prosecution or defense of any Proceeding for which indemnification or the advancement of Expenses may be claimed hereunder, including without limitation providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination.
7. Assumption of Defense; Settlement of Actions.
(a) Except as otherwise provided below, to the extent that it may wish, DTE Energy may assume the defense of any Proceeding for which indemnification is requested and may employ counsel of its choosing, subject to the approval of the Indemnitee, which shall not be unreasonably withheld. DTE Energy will deliver notice to the Indemnitee of its election to assume the defense of a Proceeding. Following delivery of such notice, DTE Energy will not be liable to the Indemnitee under this Agreement for any Expenses subsequently incurred by the Indemnitee in connection with the defense of the Proceeding, other than as provided below. The Indemnitee will have the right to employ its own counsel in any such Proceeding, but the fees and expenses of such counsel incurred after notice from DTE Energy of its assumption of the defense of the Proceeding will be at the expense of the Indemnitee, unless (i) the employment of counsel by the Indemnitee has
been authorized in writing by DTE Energy, (ii) the Indemnitee has been informed in writing by counsel, in form and substance reasonably satisfactory to DTE Energy, that there may be a conflict of interest between DTE Energy and the Indemnitee in the conduct of the defense of the Proceeding, or that the Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with the position of other defendants in such Proceeding, or (iii) DTE Energy has not in fact employed counsel to assume the defense of a Proceeding within a reasonable time after delivery of its notice of election to assume the defense. In each of the foregoing cases, the fees and expenses of the Indemnitee’s counsel will be paid and advanced by DTE Energy, subject to Section 4. DTE Energy may not assume the defense of any Proceeding brought by or on behalf of DTE Energy or as to which the Indemnitee has concluded that there may be a conflict of interest between DTE Energy and the Indemnitee as set forth in clause (ii) above.
(b) DTE Energy will not be required to obtain the consent of the Indemnitee to the settlement of any Proceeding that DTE Energy has undertaken to defend if DTE Energy assumes full and sole responsibility for all obligations arising under the terms of the settlement and the settlement grants the Indemnitee a complete and unqualified release in respect of potential Liabilities for the claims raised in the Proceeding. DTE Energy will not otherwise settle any Proceeding that it has undertaken to defend without the written consent of the Indemnitee, which will not be unreasonably withheld.
8. Contribution.
(a) To the extent the indemnification provided for under this Agreement is determined not to be permissible under applicable law, DTE Energy, in lieu of indemnifying the Indemnitee, will, to the extent permitted by law, contribute to the amount of any and all Expenses and Liabilities incurred or paid by the Indemnitee for which such indemnification is not permitted. The amount DTE Energy contributes will be (i) in such proportion as is appropriate to reflect the relative benefits received by DTE Energy and Indemnitee, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of DTE Energy and any and all other parties (including without limitation persons other than the Indemnitee who serve or served in an Official Capacity) who may be at fault, on the one hand, and the Indemnitee on the other in connection with the action or inaction which resulted in such Expenses or Liabilities, as well as any other relevant equitable considerations. DTE Energy and the Indemnitee agree that it would not
be just and equitable if contribution were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to herein.
(b) In connection with the registration or sale of DTE Energy’s securities, the relative benefits received by DTE Energy and the Indemnitee will be deemed to be in the same respective proportions that the net proceeds from the offering (before deducting expenses) received by DTE Energy and the Indemnitee, in each case as set forth in the table on the cover page of the applicable prospectus, bear to the aggregate public offering price of the securities so offered. The relative fault of DTE Energy and the Indemnitee will be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by DTE Energy or the Indemnitee and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation.
9. Subrogation. In the event of payment under this Agreement, DTE Energy will be subrogated to the extent of such payment to all of the rights of the Indemnitee to recover against any person with respect thereto. The Indemnitee will execute all papers required and will do all other things that may be reasonably necessary to secure such rights, including the execution of such documents necessary to enable DTE Energy effectively to bring suit to enforce such rights.
10. Enforcement.
(a) Except with respect to claims relating to Securities Liabilities subject to Section 6(d), if there has been no determination by the Reviewing Party, with regard to a claim for indemnification submitted by the Indemnitee to DTE Energy pursuant to Section 3, within twenty (20) days following the later of the time that the claim is submitted by DTE Energy to the Reviewing Party or the time that the Indemnitee makes his or her last submission to the Reviewing Party, or if the Reviewing Party determines that the Indemnitee is not permitted to be indemnified hereunder, the Indemnitee will have the right to commence arbitration in accordance with Section 13 seeking a determination of the Indemnitee’s right to indemnification or challenging any such determination by the Reviewing Party. DTE Energy will appear in any such arbitration proceeding and agrees that a final determination in any such proceeding will be conclusive and binding on it. Pending a final determination hereunder, DTE Energy, upon the written request of the Indemnitee, will take all such
action as may be necessary or appropriate (including, without limitation, the posting of any surety, appeal or other bonds) to stay or prevent any execution, enforcement or collection of any judgments, penalties, fines or other amounts for which the Indemnitee may be liable and for which the Indemnitee has requested indemnification hereunder or under DTE Energy’s Articles of Incorporation or the applicable laws of the State of Michigan.
(b) In any arbitration proceeding brought under Section 10(a), it will be a defense to a claim for indemnification pursuant to Section 3(a) that the Indemnitee has not met the standards of conduct which make it permissible under the BCA for DTE Energy to indemnify the Indemnitee for the amount claimed, but the burden of proving such defense will be on DTE Energy. Neither the failure of the Reviewing Party to have made a determination prior to commencement of such action that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the BCA, nor an actual determination by the Reviewing Party that the Indemnitee has not met such applicable standard of conduct, will be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct.
(c) It is the intent of DTE Energy that the Indemnitee will not be required to incur the expenses associated with the enforcement of the Indemnitee’s rights under this Agreement by arbitration or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. Accordingly, if it should appear to the Indemnitee that DTE Energy has failed to comply with any of its obligations under the Agreement or in the event that DTE Energy or any other person takes any action to declare this Agreement void or unenforceable, or institutes any proceeding designed (or having the effect of being designed) to deny, or to recover from, the Indemnitee the benefits intended to be provided to the Indemnitee hereunder, DTE Energy irrevocably authorizes the Indemnitee from time to time to retain counsel of the Indemnitee’s choice, to represent the Indemnitee in connection with the initiation of arbitration or defense of any arbitration or other legal action, whether by or against DTE Energy, or any director, officer, stockholder or other person affiliated with DTE Energy, and DTE Energy will be responsible to pay all costs thereof except to the extent that the Indemnitee’s claims are determined, pursuant to arbitration hereunder, to be not in good faith and/or frivolous. Regardless of the outcome thereof, DTE Energy will pay and be solely responsible for any and all costs, charges and expenses, including without limitation attorneys’ and other fees and expenses reasonably incurred by the Indemnitee, but only to the extent resulting from (i) DTE Energy’s failure to perform
its obligations under this Agreement or (ii) DTE Energy or any person contesting the validity or enforceability of this Agreement or any provision thereof as aforesaid.
11. Liability Insurance.
(a) DTE Energy will, from time to time, make a good faith determination whether or not it is practicable for it to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors and, if appropriate, persons serving in other Official Capacities, with coverage for losses from wrongful acts, or to ensure DTE Energy’s performance of its indemnification obligations under this Agreement.
(b) Notwithstanding the foregoing, DTE Energy will have no obligation to obtain or maintain such insurance if DTE Energy determines in good faith that such insurance is not necessary or is not reasonably available, if the premium costs for such insurance are disproportionate to the amount of coverage provided, if the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit or if the Indemnitee is covered by similar insurance maintained by a direct or indirect wholly-owned subsidiary of DTE Energy.
(c) DTE Energy’s decision whether or not to adopt and maintain such insurance will not affect in any way its obligations to indemnify the Indemnitee under this Agreement or otherwise. In policies of director and officer liability insurance, to the extent practicable, the Indemnitee will be insured in such a manner as to provide the Indemnitee the same rights and benefits as are accorded to the most favorably insured of DTE Energy’s directors, if the Indemnitee is a director; or of DTE Energy’s officers, if the Indemnitee is not a director but is an officer.
(d) DTE Energy agrees that the provisions of this Agreement will remain in effect regardless of whether liability or other insurance coverage is at any time obtained or retained by DTE Energy; except that any payments made to, or on behalf of, the Indemnitee under an insurance policy will reduce the obligations of DTE Energy hereunder as contemplated by Section 5(a)(vii).
(e) If, at the time of the receipt by DTE Energy of any claim for indemnification pursuant this Agreement, DTE Energy has liability insurance in effect which may cover such claim, DTE Energy will give prompt written notice of the commencement of the claim to the insurers in accordance with the procedures set forth in each of the policies. DTE Energy will thereafter take all reasonable action necessary or desirable to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such action, suit, proceeding, inquiry or investigation in accordance with the terms of such policies.
12. Successors. DTE Energy will require and cause any successor (whether direct or indirect and whether occurring by reorganization, purchase of assets, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of DTE Energy, to enter into a written agreement in form and substance reasonably satisfactory to the Indemnitee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that DTE Energy would be required to perform if no such succession had taken place.
13. Arbitration of Disputes. Except as otherwise expressly provided herein, any dispute concerning the Indemnitee’s right to indemnification under this Agreement and any other dispute arising hereunder, including but not limited to matters of validity, interpretation, application, and enforcement, will be determined exclusively by and through final and binding arbitration held in Oakland County, Michigan. DTE Energy and the Indemnitee expressly and conclusively waive their right to proceed to a judicial determination with respect to such matter; provided, however, that in the event of a claim for indemnification against Securities Liabilities (other than the payment by DTE Energy of Expenses incurred or paid by the Indemnitee in the successful defense of any action, suit, or proceeding), the provisions of Section 6(d) will apply. The arbitration will be conducted in accordance with the commercial arbitration rules then in effect of the American Arbitration Association before a panel of three (3) arbitrators, the first of whom will be selected by DTE Energy, the second of whom will be selected by the Indemnitee and the third of whom will be selected by the other two (2) arbitrators. Each arbitrator must have knowledge and experience in matters of corporation law or experience as a director or executive officer of a corporation with publicly traded securities. Any award entered by the arbitrators will be final and binding on the parties and judgment thereon may be entered in any court of competent jurisdiction.
14. Nonexclusivity and Severability.
(a) Except as provided in Section 5(c), the right to indemnification provided by this Agreement is not exclusive of any other rights to which the Indemnitee may be entitled under DTE Energy’s Articles of Incorporation, Bylaws, the BCA, any other statute, insurance policy, agreement, vote of shareholders or of directors or otherwise, both as to actions in the Indemnitee’s Official Capacity and as to actions in another capacity while holding such office.
(b) If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of
this Agreement and the application of such provision to other persons or circumstances will not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal will be reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal.
(c) DTE Energy will not adopt any amendment to its Articles of Incorporation the effect of which would be to deny, diminish or encumber the Indemnitee’s rights existing on the Effective Date to indemnity pursuant to its Articles of Incorporation, the BCA or any other applicable law as applied to any act or failure to act occurring in whole or in part prior to the effective date upon which the amendment was approved by the DTE Energy Board or the shareholders of DTE Energy, as the case may be. In the event that DTE Energy adopts any amendment to its Articles of Incorporation the effect of which is to so deny, diminish or encumber the Indemnitee’s rights to indemnity, such amendment will apply only to acts or failures to act occurring entirely after the effective date thereof unless the Indemnitee voted in favor of such adoption as a director or holder of record of DTE Energy’s voting stock, as the case may be.
15. Effectiveness. The provisions of this Agreement apply to covered Proceedings pending on the date of this Agreement or commenced hereafter, and cover and will cover acts or omissions or alleged acts or omissions of the Indemnitee taken in an Official Capacity, including without limitation those that (a) occurred prior to the date of this Agreement or (b) are first asserted or brought after the Indemnitee’s service in the relevant Official Capacity has terminated.
16. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Michigan, without giving effect to choice of law principles that would require the application of the laws of any other jurisdiction.
17. Non-Disclosure. Except as expressly required by any federal securities laws or other federal or state law, neither party hereto will disclose any payments under this Agreement unless prior approval of the other party is obtained.
18. Whistleblower Protection. Nothing contained in this Agreement shall be construed to prevent Indemnitee from reporting any act or failure to act to, or otherwise communicating with, the Securities and Exchange Commission or other governmental body or prevent Indemnitee from obtaining a fee as a “whistleblower” under Rule 21F-17(a) under the Securities Exchange Act of 1934 or other rules or regulations implemented under the Dodd-Frank Wall Street Reform Act and Consumer Protection Act.
19. Entire Agreement; Modification. This Agreement contains the entire agreement of the parties relating to the subject matter hereof. This Agreement may be modified only by an instrument in writing signed by both parties hereto. The provisions of this Agreement will survive the death, disability, or incapacity of the Indemnitee or the termination of the Indemnitee’s service in an Official Capacity and will inure to the benefit of the Indemnitee’s heirs, executors and administrators.
20. Independent Legal Advice. The Indemnitee acknowledges that the Indemnitee has been advised to obtain independent legal advice with respect to entering into this Agreement, that the Indemnitee has had the opportunity to obtain such independent legal advice, and that the Indemnitee is entering into this Agreement with full knowledge of the contents hereof, of the Indemnitee’s own free will and with full authority and capacity to do so.
21. Certain Terms. For purposes of this Agreement, references to the masculine include the feminine and vice versa; references to the singular include the plural and vice versa.
22. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
IN WITNESS WHEREOF, this Agreement has been entered into by DTE Energy and the Indemnitee as of the date first written above.
DTE ENERGY COMPANY
By:
Name: Diane M. Antishin
Title: Sr VP - HR & Chief D&I Officer
INDEMNITEE
________________________________
Name:
Exhibit 1
UNDERTAKING
| | | | | |
| STATE OF MICHIGAN | ) |
| ) SS |
| COUNTY OF | ) |
I, __________________________, being first duly sworn, do depose and say as follows:
1. This Undertaking is submitted pursuant to the Indemnification Agreement dated as of ___________ (the “Indemnification Agreement”), between DTE Energy Company, a Michigan corporation and the undersigned. Capitalized terms used in this Indemnification Statement and not otherwise defined have the meaning given to them in the Indemnification Agreement.
2. I am requesting advancement of certain Expenses which I have incurred or will incur in defending an actual or threatened Proceeding to which I am a party or am threatened to be made a party by reason of my Official Capacity.
3. I hereby undertake to repay this advancement of expenses if it is ultimately determined that I did not meet the applicable standard of conduct, if any, required under the BCA for the indemnification of a person under the circumstances or that I am otherwise not entitled be indemnified by DTE Energy under the Indemnification Agreement or otherwise.
4. My undertaking to repay is my unlimited general obligation.
5. The costs, charges and expenses which advancement is requested are, general, all expenses related to ____________________________________.
___________________________________
(Name)
Subscribed and sworn to before me, a Notary Public in and for said County and State, this ______day of ________________, 20_____________.
____________________________________
[Seal]
My commission expires the _____ day of _____________________, 20_______.
Exhibit 2
INDEMNIFICATION STATEMENT
| | | | | |
| STATE OF MICHIGAN | ) |
| ) SS |
| COUNTY OF | ) |
I, __________________________, being first duly sworn, do depose and say as follows:
1. This Indemnification Statement is submitted pursuant to the Indemnification Agreement dated as of ___________ (the “Indemnification Agreement”), between DTE Energy Company, a Michigan corporation and the undersigned. Capitalized terms used in this Indemnification Statement and not otherwise defined have the meaning given to them in the Indemnification Agreement.
2. I am requesting indemnification against Expenses and Liabilities that have been or will be incurred by me in connection with an actual or threatened Proceeding to which I am a party or am threatened to be made a party by reason of my Official Capacity. A detailed listing of the Expenses and Liabilities that I have incurred to date is attached. I will provide additional detail with respect to Expenses and Liabilities
3. With respect to all matters related to any such Proceeding, I am entitled to be indemnified as herein contemplated in the Indemnification Agreement.
4. Without limiting any other rights which I have or may have, I am requesting indemnification against Liabilities which have arisen or may arise out of the following: ____________________________________.
________________________________
(Name)
Subscribed and sworn to before me, a Notary Public in and for said County and State, this ______day of ________________, 20____.
[Seal] ___________________________________
My commission expires the _____ day of ________________________, 20________.
