Re: Transition Agreement
Exhibit 10.4
June 25, 2007 |
Dear Xxxxxx:
As you are aware, The Bank of New York Company, Inc. (together with its affiliates, the
“Company”) and Mellon Financial Corporation (together with its affiliates, “Mellon”) have entered
an agreement and plan of merger dated as of December 3, 2006 (as amended and restated from time to
time, the “Merger Agreement”), pursuant to which the Company and Mellon will merge (the “Merger”)
to form a new corporation as of the consummation of the Merger (the date of consummation, the
“Effective Date”) to be named The Bank of New York Mellon Corporation (together with its
affiliates, “BNY-Mellon”). By operation of the Merger, BNY-Mellon will succeed to all of the
rights and obligations of the Company under this Agreement from and after the Effective Date.
You are currently a senior executive officer of the Company. As such, you are an integral
part of the Company’s management, and a key participant in the decision-making process relative to
the planning and policy for BNY-Mellon. You will become a member of BNY-Mellon’s newly formed
“Executive Committee” as of the Effective Date.
The Company believes that it is critical to its continued success, and to the ultimate success
of the Merger, that you remain employed with the Company through the Effective Date, and with
BNY-Mellon after the consummation of the Merger. In order to induce you to remain with the Company
through the Merger and with BNY-Mellon after the Merger, the Company offers you the position and
benefits provided for in this Transition Agreement (this “Agreement”), including the special
protections applicable during the 36–month period following the Effective Date (such period, the
“Transition Period”) as described in this Agreement. This Agreement will become effective on the
Effective Date; in the event the consummation of the Merger does not occur for any reason before
the date the Merger
Agreement terminates by its terms, this Agreement will terminate and will be of no force or
effect.
You understand that this Agreement supplements, and does not supersede in any way, the Change
in Control Agreement between you and the Company, dated as of July 11, 2000 (your “Existing CIC
Agreement”). You further understand that the Merger will not constitute a “Change in Control” of
the Company as defined under your Existing CIC Agreement. If a Change in Control of BNY-Mellon
occurs during the Transition Period, if applicable, you may elect to receive benefits under either
(1) the terms of this Agreement or (2) the terms of your Existing CIC Agreement. By operation of
the Merger, “BNY-Mellon” will be substituted for the Company effective as of the Effective Date for
purposes of your Existing CIC Agreement (including but not limited to the definitions contained
therein). A “Change in Control” of BNY-Mellon under this Agreement shall have the same meaning as
a “Change in Control” under your Existing CIC Agreement.
Your employment with BNY-Mellon will begin on the Effective Date. You will have the position
of President of BNY-Mellon, and will serve on the BNY-Mellon Executive Committee. You will report
only to the Chief Executive Officer and be entitled to a total compensation opportunity that
reflects, relative to the other members of the BNY-Mellon Executive Committee, your position as the
most senior member of the BNY-Mellon Executive Committee other than the Chairman and Chief
Executive Officer. You will also hold such other positions and have such responsibilities as set
forth in the Merger Agreement. Your responsibilities, authority and entitlements will be
consistent and commensurate with your position.
Effective on the last trading day of the Company’s common stock before the Effective Date, you
will receive an option to purchase 500,000 shares of Company common stock pursuant to a special,
one-time equity incentive grant under the terms and conditions set forth in the award agreement
attached as Annex A (the “Special Option”).
(a) Severance Payments. If your employment with BNY-Mellon is terminated during
the Transition Period either by BNY-Mellon other than for Cause (as defined in Section 3(d)) or by
you for Good Reason (as defined in Section 3(d)), then BNY-Mellon will provide to you, within 30
days following your Termination Date (as defined in Section 3(d)) or for Performance Shares and
Performance Units, as soon as practicable after the end of the applicable performance period in
accordance with the applicable award agreements, if later, the following, subject in each case to
Section 3(c) and Section 4(j):
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(i) Cash Severance. BNY-Mellon will pay you a lump sum in cash equal to 3 times
the sum of (x) your annual base salary in effect immediately before the time a Notice of
Termination (as defined in Section 3(d)) is provided to you or is provided by you or, if higher,
your annual base salary in effect immediately before the Effective Date, and (y) the highest annual
cash bonus earned by you from the Company or BNY-Mellon during the Company’s and BNY-Mellon’s
previous 3 completed fiscal years immediately before your Termination Date (the “Bonus Amount”).
(ii) Pro Rata Bonus for Year of Termination. BNY-Mellon will pay you a lump sum
in cash equal to the pro rata portion of your annual bonus for the fiscal year in which the
Termination Date occurs, in an amount equal to the result of multiplying (x) the Bonus Amount, and
(y) a fraction, the numerator of which is the number of calendar days in the year in which the
Termination Date occurs through the Termination Date, and the denominator of which is 365.
(iii) Equity Awards.
(A) Unearned Performance Units. BNY-Mellon will pay you a pro
rata portion of any of your unearned Performance Units, based on the number of
full months of the relevant “Performance Cycle Measurement Period” (as defined
in the Performance Share Agreement of the Company’s 2003 Long-Term Incentive
Plan (“LTIP”)) which have elapsed before your Termination Date, to the extent
such Performance Units are earned based on actual performance at the end of the
applicable Performance Cycle Measure Period, and the remainder of your
Performance Units will be cancelled.
(B) Earned Unvested Performance Shares. At your Termination
Date, any Performance Shares awarded to you under the Performance Share
Agreement of the LTIP (or any successor plans) to the extent earned as of your
Termination Date based on actual performance at the end of the applicable
performance period will be deemed non-forfeitable, and you will be fully vested
in such Performance Shares.
(C) Restricted Stock Awards. Except as otherwise provided for
in your April 2, 2007 restricted share unit award, at your Termination Date,
the restrictions applicable to all shares of restricted stock and restricted
share units awarded under the LTIP (or any successor plans) will lapse, and you
will be fully vested in all such shares and share units.
(D) Stock Options. Except as otherwise provided for in your
April 2, 2007 stock option award, any stock options granted under the LTIP (or
any prior or successor plans) (the “Options”) that are unvested at your
Termination Date will fully vest upon your Termination Date or if
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later, one year following the grant date of the applicable Option, and
such Options will remain exercisable for 3 years after the Termination Date
(but in no event later than the original expiration date of the Options),
notwithstanding any Option terms which may be to the contrary; provided that
any more favorable terms provided for with respect to the Special Option will
continue to apply to the Special Option notwithstanding anything to the
contrary in this Section 3(a)(iii)(D).
(E) BNY-Mellon Equity. Any shares of restricted stock and
restricted share units, performance shares, performance units and any other
forms of equity compensation (other than stock options) awarded to you
following the Effective Date by BNY-Mellon that remain unvested at your
Termination Date will immediately vest in full, and all restrictions thereon
will immediately lapse; provided that any such performance shares and
performance units will be payable only to the extent earned based on actual
performance as of the end of the applicable performance period. Any options to
purchase shares of BNY-Mellon granted to you by BNY-Mellon after the Effective
Date will vest and remain exercisable in accordance with the terms of the
applicable BNY-Mellon plans and award agreements.
(iv) Retirement Plan Payment. BNY-Mellon will pay to you the lump sum actuarial
equivalent (utilizing actuarial assumptions no less favorable to you than those in effect under the
Company’s Retirement Plan on the date of this Agreement) of the excess of the (A) benefits under
the Company’s Retirement Plan and Excess Benefit Plan and any other defined benefit retirement
plans of the Company and BNY-Mellon (including any nonqualified supplemental executive retirement
plan (“SERP”) in which you may have rights) (collectively, the “Defined Benefit Plans”) which you
would receive if your employment continued for 3 years after your Termination Date, assuming for
this purpose that (x) your accrued benefits under the Defined Benefit Plans were fully vested as of
the Effective Date (including under the SERP, regardless of whether you have attained age 60) and
any additional benefits you may earn under the Defined Benefit Plans were fully vested as of your
Termination Date, (y) in each of the 3 years you received salary at the annual rate in effect
immediately before your Termination Date and bonus compensation equal to the Bonus Amount and (z)
there was no reduction or offset under the Defined Benefit Plans for the actuarial value of your
account under the Company’s Employee Stock Ownership Plan (the “ESOP”), over (B) the vested accrued
benefits payable under the Defined Benefit Plans as of your Termination Date if there was no
reduction or offset thereunder for the actuarial value of your ESOP account. For the avoidance of
doubt, the payments under this Section 3(a)(iv) are in addition to any rights to payment you may
have with respect to vested accrued benefits under the Defined Benefit Plans as of your Termination
Date.
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(c) your attainment of age 65, all insured and self-insured employee welfare benefit plans in
which you were entitled to participate immediately before your Termination Date, to the extent that
your continued participation is possible under the general terms and provisions of such plans (and
any applicable funding media) and that you continue to pay an amount equal to your regular
contribution to participate in such plans. If your participation in any such plan is barred,
BNY-Mellon will arrange, at its sole cost and expense, to cause to have issued for your dependents’
and your benefit individual policies of insurance providing benefits
substantially similar (on a pre-tax basis) to those which you otherwise would have been entitled to receive under such plans
pursuant to this Section 3(a)(v). If such insurance is not available at a reasonable cost to
BNY-Mellon, BNY-Mellon will provide you and your dependents with equivalent benefits (on a
pre-tax basis). You will not be required to pay any premiums or other
charges (other than any applicable taxes) in an amount
greater than that which you would have paid in order to participate in such plans. Notwithstanding
anything to the contrary herein, no benefits will be provided pursuant to this Section 3(a)(v) to
the extent such benefits would result in the duplication of any benefits provided to you under
another BNY-Mellon plan.
(b) Special Termination Right. You may terminate your employment for any reason
or for no reason following the end of the Transition Period, provided you give BNY-Mellon at least
six months notice of your intent to so terminate your employment (your “Special Termination
Right”). If you exercise your Special Termination Right, you will receive within 30 days following
your Termination Date or for Performance Shares and Performance Units, as soon as practicable after
the end of the applicable performance period in accordance with the applicable award agreements, if
later, subject in each case to Section 3(c) and Section 4(j): (1) immediate vesting of any unvested
Options (other than your April 2, 2007 stock option award) and BNY-Mellon stock options which you
hold at the date of your Termination Date, and such Options and BNY-Mellon stock options will
remain exercisable for (x) 5 years if you are eligible for Retirement on such date (as defined in
Section 3(d)), or (y) 3 years if you are not eligible for Retirement on such date, notwithstanding
the original terms of such Options and BNY-Mellon stock options (but not later than the original
expiration dates of such respective options), and your Special Option will remain exercisable for
the full 10-year term of the option, (2) pro rata vesting of any unearned Performance Shares and
Performance Units, in each case based on actual performance as of the end of the applicable
performance period in accordance with Section 3(a)(iii)(A) hereof, and full vesting of any earned
(as of your Termination Date based on actual performance at the end of the applicable performance
period) unvested Performance Shares and Performance Units, (3) pro rata vesting of your April 2,
2007 restricted share unit and stock option awards pursuant to the terms of such awards, (4)
payment of the lump sum actuarial equivalent (calculated using actuarial assumptions no less
favorable to you than those in effect under the Company’s Retirement Plan immediately before the
Effective Date) of the benefits you would receive under the SERP, calculated for all purposes
(including deemed additional years of service) as if you had attained the greater of (x) age 60 or
(y) your actual age at the date you exercise the Special Termination Right and (5) a lump-sum cash
payment equal to the pro-rata portion of your annual bonus for the fiscal year in which you
exercise your Special Termination Right, calculated in accordance with Section 3(a)(ii) hereof,
except that “Bonus Amount” in clause (x) of Section 3(a)(ii) shall mean the amount of your annual
bonus for the fiscal year of your termination as determined by BNY-Mellon based on actual
performance achieved through the end of such fiscal year, to be paid, notwithstanding
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anything to the contrary herein, at the same time that annual bonuses for such year are paid
to other BNY-Mellon executives but in no event later than two and one half months after the end of
such fiscal year. You shall also retain your rights under the Special Option. For the avoidance of
doubt, the payments under this Section 3(b) are in addition to any rights to payment you may have
with respect to vested accrued benefits under the Defined Benefit Plans as of your Termination
Date.
(c) Release Condition and Restrictive Covenants. In consideration of and as a condition to
your receipt of the compensation and benefits to be provided to you under this Agreement, and in
recognition of your access to the confidential and proprietary information and valued client
relationships and trade secrets of the Company and, in the future, BNY-Mellon, if on your
Termination Date you are eligible to receive Severance Payments under Section 3(a) of this
Agreement or if you are exercising your Special Termination Right, you agree that (A) you will
execute a release in favor of BNY-Mellon and all of its affiliates substantially in the form
attached to this Agreement as Exhibit A, and the release must become effective and irrevocable in
accordance with its terms and (B) you will be subject to the following:
(i) Noncompete. During your employment and through the end of the Restricted
Period, you will not, directly or indirectly (A) hold a 3% or greater equity, voting or profit
participation interest in a Competitive Enterprise (as defined below) or (B) render any services,
whether as an employee, officer, consultant, agent or otherwise, to a Competitive Enterprise (as
defined in Section 3(d)) including, without limitation, engaging in, directly or indirectly, or
managing or supervising personnel engaged in, any of the Relevant Activities (as defined in Section
3(d)).
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concerning its business, affairs, products, suppliers or customers which, if disclosed, would
have a material adverse effect upon the business or operations of BNY-Mellon. You understand,
however, that the obligations of this Section 3(c)(iv) shall not interfere with your: (a) making
any disclosure of information in any action or proceeding relating to this Agreement or as
otherwise required by law or legal process; or (b) participating, cooperating, or testifying in any
action, investigation or proceeding brought by any governmental agency or legislative body, any
self-regulatory organization, or BNY-Mellon’s Legal or Compliance Departments; provided that, to
the extent permitted by law, upon receipt of any such subpoena, court order or other legal process
compelling the disclosure of any such information, you will give prompt written notice to
BNY-Mellon so as to provide it an opportunity to protect its interests in confidentiality to the
fullest extent possible. You understand that you will not be entitled to any compensation from
BNY-Mellon or to recover monetary damages or any other form of personal relief from BNY-Mellon for
your time incurred in responding to or participating in any proceeding relating to any such
subpoena, court order or other legal process or otherwise in connection with any such action,
investigation or proceeding, provided however, that nothing contained in this Section shall (1)
limit your rights or limit the obligations of BNY-Mellon (A) under Section 4(b)(i) of this
Agreement or (B) under the by-laws and Certificate of Incorporation of BNY-Mellon, including
without limitation, your rights to, and BNY-Mellon’s obligation to provide, indemnification or (2)
limit or restrict your rights and remedies against any party other than BNY-Mellon or any of its
affiliates or subsidiaries. You also agree to cooperate with BNY-Mellon with respect to any past,
present or future legal matters that relate to or arise out of your employment with it or its
predecessors. The obligations of this Section 3(c)(iv)) will not apply to the extent that the
aforesaid matters (a) are disclosed in circumstances where you are legally required to do so or (b)
become generally known to and available for use by the public otherwise than by your wrongful act
or omission.
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and the remainder of this Agreement will not be affected thereby, and will remain in full
force and effect. Notwithstanding Section 4(i) of this Agreement, in the event of any violation by
you of this Section 3(c), BNY-Mellon, in addition to any other remedies it may have, will have the
right to institute and maintain a proceeding in a court of competent jurisdiction to compel
specific performance of the provisions of this Section 3(c) or to issue an injunction restraining
any action by you in violation of this Section 3(c), and/or to obtain other equitable and monetary
relief, including without limitation the relief described in Section 3(h).
(d) Definitions. The following definitions apply for purposes of this Agreement:
(i) “Cause” means termination upon (A) your willful and continued failure
to substantially perform your duties with BNY-Mellon other than any such failure resulting from
your incapacity due to physical or mental illness after the Board of Directors of BNY-Mellon
delivers to you a demand for substantial performance, which specifically identifies the manner in
which such Board believes that you have not substantially performed your duties, (B) your willful
engaging in illegal conduct or gross misconduct which is materially and demonstrably injurious to
BNY-Mellon, (C) your conviction of, or plea or nolo contendere to, a felony, (D) your refusal to
cooperate in any BNY-Mellon investigations after BNY-Mellon has requested your cooperation, or (E)
any other material violations of BNY-Mellon’s written Code of Conduct. For purposes of this
paragraph (i), no act or failure to act on your part will be considered “willful” unless done, or
omitted to be done, by you in bad faith and without reasonable belief that your action or omission
was in, or not opposed to, BNY-Mellon’s best interest. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board of Directors of BNY-Mellon or
based upon the advice of counsel for BNY-Mellon will be conclusively presumed to be done, or
omitted to be done, by you in good faith and in BNY-Mellon’s best interests. It is also expressly
understood that your attention to matters not directly related to BNY-Mellon’s business will not
provide a basis for termination for Cause so long as either the Board of Directors of the Company
or BNY-Mellon has approved your engagement in such activities.
(ii) “Competitive Enterprise” means any business enterprise that either
(A) is a banking institution, whether incorporated or not, a substantial portion of the business of
which consists of exercising fiduciary powers similar to those permitted to national banks under
the authority of the Comptroller of the Currency pursuant to 12. U.S.C. 92a, that competes anywhere
with any trust, safekeeping, custodial or related activities that BNY-Mellon is then engaged in or
(B) holds a 5% or greater equity, voting or profit participation interest in such banking
institution.
(iii) “Good Reason” means your termination of your employment during the
Transition Period based on the occurrence of any of the following events without your prior written
consent if within 30 days after receipt from you of a notice describing the circumstances that
constitute Good Reason BNY-Mellon fails to cure such circumstances:
(A) your removal from (1) BNY-Mellon’s Executive
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Committee or (2) the positions granted to you under the Merger Agreement;
(B) any material and adverse change in your duties or
responsibilities with BNY-Mellon (including that you report directly to the
BNY-Mellon’s Chief Executive Officer), or any change in your corporate title or
any material and adverse change in your status with BNY-Mellon, in any case
from that established by BNY-Mellon as of the Effective Date, consistent with
the positions set forth in Section 1 of this Agreement and in the Merger
Agreement;
(C) any material breach by BNY-Mellon of Section 1 of this
Agreement;
(D) BNY-Mellon’s reduction of your base salary or reduction of
your annual and long-term target bonus opportunities (other than any
across-the-board bonus opportunity reductions applicable to all members of the
Executive Committee), in each case as in effect immediately before the
Effective Date. Subject to the foregoing, you acknowledge that a reduction in
your earned annual or long term bonus amounts do not constitute Good Reason
under this Agreement as long as any such amounts have been determined and
earned in accordance with the applicable bonus opportunity guidelines;
(E) BNY-Mellon’s requirement that you are based at an office
located more than 50 miles from where your office with BNY-Mellon is located
established as of the Effective Date, except for travel required by
BNY-Mellon’s business or travel to an extent substantially consistent with your
business travel obligations for the Company immediately before the Effective
Date; or
(F) BNY-Mellon’s failure to obtain from any Successor (defined
below) the assent to this Agreement contemplated by Section 4(a)(i) hereof.
If you do not provide written notice to BNY-Mellon within 90 days after you have knowledge
that an event constituting Good Reason has occurred and terminate employment within two years
following the first occurrence of such event, that event will no longer constitute Good Reason.
(iv) “Relevant Activities” include any activity (A) which is similar or
substantially related to any activities in which you were engaged, in whole or in part, at the
Company or BNY-Mellon; (B) for which you had direct or indirect managerial or supervisory
responsibility at the Company or BNY-Mellon or (C) which calls for the application of the
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same or similar specialized knowledge or skills as those used by you in your activities with
the Company and BNY-Mellon.
(v) “Restricted Period” means the period beginning on your Termination
Date and ending on the date 12 months thereafter.
(vi) “Retirement” means termination after you reach age 55.
(vii) “Termination Date” means (a) if your employment is terminated by
BNY-Mellon for Cause or by you for Good Reason, the date specified in the Notice of Termination, or
(b) if your employment is terminated by BNY-Mellon for any reason other than Cause, the date
specified in the Notice of Termination, which in no event will be a date earlier than 90 days after
the date on which a Notice of Termination is given, unless an earlier date has been expressly
agreed to by you in writing either in advance of, or after, receiving such Notice of Termination.
If BNY-Mellon terminates your employment for Cause, and if you have not previously expressly agreed
in writing to the termination, then within 30 days after your receipt of the Notice of Termination
with respect thereto, you may notify BNY-Mellon that a dispute exists concerning the termination,
in which event the Termination Date will be the date set either by mutual written agreement of the
parties or by the arbitrators in a proceeding as provided in Section 4(i) hereof. During the
pendency of any such dispute, BNY-Mellon may place you on unpaid leave, provided that you will be
permitted to continue to participate in any BNY-Mellon group health plans in which you were a
participant just before the time the Notice of Termination is given and until the dispute is
resolved in accordance with Section 4(i).
(e) Notice of Termination. Any purported termination by you or BNY-Mellon occurring after the
Effective Date will be communicated to the other party by a written Notice of Termination. For
purposes of this Agreement, “Notice of Termination” means a notice indicating the specific
termination provision in this Agreement relied upon and, to the extent required by Section 3(g),
including a copy of any applicable resolution of the BNY-Mellon Board of Directors.
(f) Death or Disability. Notwithstanding anything to the contrary herein, for purposes of
this Agreement, a termination as a result of your death or “disability” (as defined under the
BNY-Mellon disability policy then in effect) will not be treated as a termination other than for
Cause pursuant to Section 3(a).
(g) Termination only upon 3/4 Vote of Board of Directors. Notwithstanding anything in this
Agreement to the contrary, you will not be deemed to have been terminated by BNY-Mellon, either for
Cause or for any reason other than Cause, unless and until there has been delivered to you a copy
of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire
membership of the Board of Directors of BNY-Mellon of its members (excluding you and, if
applicable, any other director involved in events leading to the Board of Directors of BNY-Mellon
’s consideration of terminating your employment for
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Cause) at a meeting held for that purpose, and in the case of a proposed termination for
Cause, after reasonable notice to you and an opportunity for you, together with your counsel, to be
heard before the Board of Directors of BNY-Mellon. In the case of a termination for Cause, such
resolution must find that in the good faith opinion of such Board you were guilty of the conduct
set forth in any of
Section 3(d)(i)(A) through (E) and specifying the particulars thereof in detail.
Section 3(d)(i)(A) through (E) and specifying the particulars thereof in detail.
(h) Right to Recapture Certain Option Gains. If at any time after you exercise all or any
part of the Special Option it is determined pursuant to Section 4(i) or Section 3(c)(vi) that you
(A) engaged in conduct constituting Cause or (B) committed a breach of any of the restrictive
covenants set forth in Section 3(c), then any gain realized by you as a result of any such exercise
on or after the date on which such conduct or breach occurred shall be repaid by you to BNY-Mellon
upon notice from BNY-Mellon. Such gain shall be determined on a gross basis, without reduction for
any taxes incurred, as of the date of the exercise, without regard to any subsequent change in the
fair market value of BNY-Mellon shares.
(i) BNY-Mellon will require, by agreement in form and substance reasonably
satisfactory to you, assent to the fulfillment of BNY-Mellon’s obligations under this Agreement
from any Successor (as defined herein). For purposes of this Agreement, “Successor” means any
person (as such term is defined in Section 3(a)(9) and as used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) that succeeds to, or has the practical ability to
control (either immediately or with the passage of time), BNY-Mellon’s business directly, by merger
or consolidation, or indirectly, by purchase of the combined voting power of BNY-Mellon’s then
outstanding securities or otherwise.
(ii) This Agreement will inure to the benefit of and be enforceable by your
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If you should die while any amount would still be payable to you hereunder
if you had continued to live, all such amounts, unless otherwise provided herein, will be paid in
accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there
is no such designee, to your estate.
(iii) For purposes of this Agreement, references to “BNY-Mellon” include any
corporation or other entity which is the surviving or continuing entity in respect of any merger,
consolidation or form of business combination in which BNY-Mellon ceases to exist, including but
not limited to any Successor.
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(i) BNY-Mellon will reimburse you, on a current basis, for all reasonable legal
fees and related expenses you incur in connection with this Agreement after the Merger, including,
without limitation, all such fees and expenses, if any, that you incur in (1) contesting or
disputing any termination of your employment, or which you incur in seeking advice with respect to
the matters set forth in this Agreement; (2) your seeking to obtain or enforce any right or benefit
provided by this Agreement, in each case, regardless of whether or not your claim is upheld or
ultimately successful on the merits and (3) responding to any subpoena, court order or other legal
process as described in Section 3(c)(iv). You will be required, however, to repay any such amounts
to BNY-Mellon to the extent that a court issues a final and non-appealable order setting forth the
determination that the position taken by you was frivolous or advanced by you in bad faith. In
addition to the fees and expenses provided herein, you will also be paid interest on any disputed
amount ultimately paid to you at the prime rate announced by BNY-Mellon from time to time from the
date payment should have been made until paid in full. Such rights are in addition to and shall
not limit any indemnification rights you may have under the Certificate of Incorporation of
BNY-Mellon, and the by-laws of the Company and The Bank of New York.
(ii) You will not be required to mitigate the amount of any payment BNY-Mellon
becomes obligated to make to you in connection with this Agreement by seeking other employment or
otherwise.
(c) Certain Additional Payments. The parties hereto acknowledge that the Company will not
undergo a change in its ownership or effective control due to the Merger for purposes of Sections
280G and 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), and, therefore, any
payments made to you pursuant to this Agreement or otherwise from the Company or BNY-Mellon in
connection with the Merger will not be deemed “parachute payments” as defined under Section 280G of
the Code. However, in the event of a subsequent change in the ownership or effective control of
BNY-Mellon following the Merger, if any payments under this Agreement at any time would constitute
“excess parachute” payments under Section 280G Code, BNY-Mellon’s obligations to you with respect
to such payments will be determined in accordance with applicable provisions of your Existing CIC
Agreement which require that you be provided with a gross-up for any excise taxes imposed under
Sections 280G and 4999 of the Code (for purposes of clarity, and for purposes of example only,
notwithstanding your election to receive benefits under this Agreement rather than the Existing CIC
Agreement in the event of a Change in Control of BNY-Mellon).
(d) Taxes. All payments to be made to you under this Agreement will be subject to required
withholding of federal, state and local income and employment taxes.
(e) Survival. The respective obligations of, and benefits afforded to, BNY-Mellon and you
under this Agreement will survive termination of this Agreement, except in the event that the
consummation of the Merger does not occur.
(f) Notice. For the purposes of this Agreement, notices and all other communications provided
for in the Agreement will be in writing and will be deemed to have
12
been duly given when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid and addressed, to the appropriate address set forth on the first page of
this Agreement, provided that all notices to BNY-Mellon will be directed to the attention of the
General Counsel of BNY-Mellon, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of address will be effective
only upon receipt.
(g) Miscellaneous. No provision of this Agreement may be modified, waived or discharged
unless such modification, waiver or discharge is agreed to in a writing signed by you and, before
the Effective Date, the Company, and after the Effective Date, BNY-Mellon. No waiver by either
party hereto at any time of any breach by the other party hereto of, or of compliance with, any
condition or provision of this Agreement to be performed by such other party will be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction and performance of this Agreement will be
governed by the laws of the State of New York applied without regard to conflict of laws
principles.
(h) Validity. The invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision of this Agreement, which will remain
in full force and effect. Any such invalid or unenforceable provision shall be deemed severed
from, and no longer a part of, the remaining provisions of this Agreement.
(i) Arbitration. Other than as specifically described in Section 3(c)(vi) of this Agreement,
any dispute or controversy arising under or in connection with this Agreement will be settled
exclusively by arbitration in New York City by 3 arbitrators in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the arbitrators’ award
in any court having jurisdiction. BNY-Mellon will bear all costs and expenses arising in
connection with any arbitration proceeding pursuant to this Section 4(i).
(j) Section 409A of the Code. If your termination of employment occurs during 2007, there
will be no payment under Section 3(a)(iii)(A), (B) or (C) or clause (2) or (3) of Section 3(b)
until January 1, 2008 unless the LTIP and the accompanying award agreement would have provided for
an earlier payment on such termination. In addition, if you are a “specified employee” within the
meaning of Section 409A of the Code at the time of your termination of employment, any payments to
you pursuant to Section 3(a)(i), Section 3(a)(iii) (other than with respect to stock options,
restricted shares or performance shares that are not subject to Section 409A of the Code), Section
3(a)(iv), or clause (2) with respect to Performance Units, clause (3) with respect to restricted
share units or clause (4) of Section 3(b), and any benefits to you pursuant to Section 3(a)(v) to
the extent required by Treas. Reg. §409A-1(a)(5), will be delayed until the day after the six-month
anniversary of your Termination Date, or if earlier, the date of your death (at which time you will
be provided with all payments that would have been made to you through such time but for this
sentence and
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provided reimbursement for all benefits that would have been provided to you through such time
but for this sentence). Without limiting the foregoing, this Agreement will be interpreted in a
manner to avoid adverse consequences to you under Section 409A of the Code. If any compensation or
benefits provided by this Agreement may result in the application of Section 409A of the Code,
after giving effect to the first two sentences of this Section 4(j), you and BNY-Mellon will agree
on a modification to the Agreement in the least restrictive manner necessary in order to, where
applicable (1) exclude such compensation from the definition of “deferred compensation” within the
meaning of such Section 409A, or (2) comply with the provisions of Section 409A, other applicable
provision(s) of the Code and/or any rules, regulations or other regulatory guidance issued under
such statutory provisions and to make such modifications such that you will receive all payments
and benefits hereunder in the shortest amount of time from the date otherwise due, while no portion
of any payments to you hereunder will be subject to the excise taxes of Section 409A of the Code,
in each case, without any diminution in the value of the payments to you.
* * * *
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If
this Agreement is acceptable to you, please sign both copies of this letter indicating your
agreement to its terms, keep one signed copy of the letter for yourself and return the other signed
copy to me. This Agreement may be executed in two or more counterparts, each of which will be
deemed to be an original. A signature transmitted by facsimile will be deemed an original
signature.
We
thank you for the valuable services you have performed for the Company, and we look forward
to your continued contribution to the success of the Company through its transition into
BNY-Mellon.
Sincerely, | ||
The Bank of New York Company, Inc. | ||
/s/ Xxxx X. Xxxxxx | ||
Name: Xxxx X. Xxxxxx Title: Vice Chairman and General Counsel |
Accepted and Agreed:
/s/ Xxxxxx X. Xxxxxxx |
|||
Date | June 25, 2007 |
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Exhibit A
G E N E R A L R E L E A S E
GENERAL RELEASE (this “Release”) by Xxxxxx X. Xxxxxxx (“you”) in favor of The Bank of New York
Mellon Corporation (the “Company”), its subsidiaries, affiliates, and all of their officers,
directors, employees, shareholders, attorneys and agents and their predecessors, successors and
assigns, individually and in their official capacities (together, the “Released Parties”).
WHEREAS, you are seeking payments under your Transition Agreement, dated June 25, 2007 (as the
same may have been amended from time to time, the “Transition Agreement”), with the Company that
are conditioned on the effectiveness of this Release.
1. General Release. You, for yourself and for your heirs, executors, administrators,
successors and assigns, knowingly and voluntarily forever waive, terminate, cancel, release and
discharge the Released Parties from and against any and all legally waivable claims, causes of
action, allegations, rights, obligations, liabilities or charges (collectively, “Claims”) that you
(or your heirs, executors, administrators, successors and assigns) have or may have, whether known
or unknown, by reason of any matter, cause or thing occurring at any time before and including the
date of this Release, including, without limitation, claims for compensation or bonuses (including,
without limitation, any claim for an award under any compensation plan or arrangement); breach of
contract; tort; wrongful, abusive, unfair, constructive or unlawful discharge or dismissal;
impairment of economic opportunity defamation; age and national origin discrimination; sexual
harassment; back pay; front pay; benefits’ attorneys’ fees; whistleblower claims; emotional
distress’ intentional infliction of emotional distress’ assault’ battery; pain and suffering;
punitive or exemplary damages; violations of the Equal Pay Act, Title VII of the Civil Rights Act
of 1964, the Civil Rights Act of 1991, the Age Discrimination Employment Act of 1967 (“ADEA”), the
Americans with Disabilities Act of 1991, the Employee Retirement Income Security Act, the Older
Workers Benefit Protection Act of 1990, the Xxxxxxxx-Xxxxx Act of 2002, the Worker Adjustment and
Retraining Notification Act of 1989, the Family and Medical Leave Act of 1993, the New York State
and New York City anti-discrimination laws, including all amendments to any of the aforementioned
acts; and violations of any other federal, state, or municipal fair employment statutes or laws,
including, without limitation, violations of any other law, rule, regulation or ordinance
pertaining to employment, wages, compensation, hours
16
worked, or any other matters related in any way to your employment with the Company and its
affiliates (and their respective predecessors) or the termination of that employment. In
addition, in consideration of the provisions of this Release, you further agree to waive any and
all rights under the laws of any jurisdiction in the United States or any other country that limit
a general release to those claims that are known or suspected to exist in your favor as of the
Effective Release Date (as defined below). You also understand you are releasing any rights or
claims concerning bonus(es) and any award(s) or grant(s) under any incentive compensation plan or
program, except as specifically set forth in the Transition Agreement.
(a) release any Claims relating to the payments and benefits set forth in the Transition
Agreement;
(b) release any Claims arising after the date of this Release;
(c) limit or prohibit in any way your (or your beneficiaries’ or legal representatives’)
ability to bring an action to enforce the terms of this Release;
(d) release the Company’s obligations to you as a past, present, or future customer or client
of the Company or its affiliates;
(e) release any claim for employee benefits under plans covered by the Employee Retirement
Income Security Act of 1974, as amended, or other vested benefits to the extent that such claims
may not lawfully be waived or for any payments or benefits under any plans of the Company that have
vested according to the terms of those plans;
(f) release any claims for indemnification in accordance with applicable laws and the
corporate governance documents of the Company including any right to contribution, in accordance
with their terms as in effect from time to time or pursuant to any applicable directors and
officers insurance policy with respect to any liability incurred by you as an officer or director
of the Company or any right you may have to obtain contribution as permitted by law in the event of
entry of judgment.
The Claims that are not released pursuant to this Section 2 are collectively referred to as the
“Surviving Claims.”
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civil action, suit, arbitration, administrative charge or other legal proceeding seeking
equitable or monetary relief concerning any claim released by you herein, you shall not seek or
accept any personal relief from or as the result of such civil action, suit, arbitration,
administrative charge or other legal proceeding.
(a) this Release does not release, waive or discharge any rights or claims that may arise for
actions or omissions after the date of this Release;
(b) you are entering into this Release and releasing, waiving and discharging rights or claims
only in exchange for consideration which you are not already entitled to receive;
(c) you have been advised, and are being advised by this Release, to consult with an attorney
before executing this Release, and you acknowledge that you have consulted with counsel of your
choice concerning the terms and conditions of this Release;
(d) you have been advised, and are being advised by this Release, that you have 21 days within
which to consider this Release; and
(e) you are aware that this Release shall become null and void if you revoke your agreement to
this Release within 7 days following the date of execution and delivery of this Release. You may
revoke this Release at any time during such 7-day period by delivering (or causing to be delivered)
to the Company’s Director of Human Resources a written notice of your revocation of this Release.
In the event that the 7th day following the date you sign this Release falls on a
Saturday, Sunday or legal holiday, you will have until 5:00 p.m. on the next business day to
deliver your written notice of revocation. You expressly understand and agree that if you do not
sign this Release, or if you revoke it within this 7-day period, you are not entitled to, and will
not receive, any of the payments or benefits provided for under the Transition Agreement.
(f) this Release shall become effective and irrevocable on the 8th day following the day on
which you have signed it, unless you have revoked it as provided in Paragraph 4(e) above
(“Effective Release Date”).
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5. Additional Agreements. You acknowledge and represent that you have returned or will
return prior to the Effective Release Date , all Company-owned property, including but not limited
to, all documents and records, materials, policies, procedures, forms and documents, identification
cards, credit cards, telephone cards, files, memoranda, keys and other equipment and/or supplies in
your possession, custody or control and all copies thereof, that you have retained no such item in
your possession, custody or control, and you understand that the Company has relied upon your
representation and that the return of such property is an express condition of your Transition
Agreement and this Release. You may retain all benefits-related documents pertaining to you.
Xxxxxx X. Xxxxxxx |
||||
19
STATE OF
|
) | |||||
) ss.: | ||||||
COUNTY OF
|
) |
On this
day of
, before me personally came Xxxxxx X. Xxxxxxx to me known and
known to me to be the person described in and who executed the foregoing Release and he duly
acknowledged to me that he executed the same.
Notary Public |
||||
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Annex A
(Attach Option Agreement)
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