AGREEMENT AND RELEASE
Exhibit 10
AGREEMENT AND RELEASE
This Agreement and Release, including the Exhibits hereto (“Agreement”), sets forth
the mutual understanding by and between JPMorgan Chase & Co. (“JPMC”), on behalf of itself
and its subsidiaries, successors and assigns (collectively, the “Firm”) and Xxxxxxx X.
Xxxxxxx (“Xxxxxxx”), concerning the terms and conditions of Xxxxxxx’ separation from the
Firm, and the respective obligations of Xxxxxxx to the Firm and the Firm to Xxxxxxx. This Agreement
shall be binding and effective as of the Effective Date (as defined in Section 16(c) below).
In consideration of the mutual promises and covenants contained in this Agreement, JPMC and
Xxxxxxx, each having independently concluded that it is in its and his best interest to do so,
agree as follows:
1. Resignation Date.
Xxxxxxx’ resignation from all positions, offices and directorships with the Firm and the
withdrawal of his “Controlled Function” registration with the United Kingdom Financial Services
Authority on behalf of the Firm was effective September 30, 2009 (“Resignation Date”).
Notwithstanding these resignations, during the period that commences on the Resignation Date and
ends on February 5, 2010 (“Separation Date”), Xxxxxxx shall (a) remain an employee of JPMC
or one of its subsidiaries on a paid leave of absence and provide occasional advice and
consultation to the Firm on matters related to his former duties with JPMC, as requested by the CEO
of JPMC or his designate from time to time; (b) be paid his base salary at the rate in effect on
the Resignation Date in accordance with the Firm’s normal payroll practices (which shall satisfy
JPMC’s obligations to pay Xxxxxxx’ accrued unused vacation days); (c) be reimbursed by JPMC in
accordance with the Firm’s expense policies for reasonable expenses he incurs in providing such
advice and consultation to the Firm; (d) retain benefits coverage and receive benefits in
accordance with the terms of the respective plans, with no adverse changes in the terms of the
respective plans as of the Resignation Date other than changes applicable to all similarly situated
employees; and (e) continue to be subject to the JPMC Code of Conduct and other policies applicable
to employees of the Firm, except to the extent that such Code, and such policies, are inconsistent
with the express terms of this Agreement. On the Separation Date, Xxxxxxx’ employment with the Firm
will terminate for all purposes.
2. Separation Benefits.
(a) Special Award. As consideration under this Agreement, JPMC shall provide Xxxxxxx
with a special award equal to $13,759,200 (“Special Award”). The Special Award shall be
wholly non-forfeitable (and thus, e.g., not subject to clawback or recoupment) except to
the extent set forth in Section 3 below. A portion of Xxxxxxx’ Special Award equal to $2 million
(“$2 Million Cash Award”), net of applicable withholding taxes, shall be paid to Xxxxxxx in
a lump sum no later than the Effective Date specified in Section 16(c). The remaining amount of
the Special Award ($11,759,200) (“Award Remainder”), net of (x) applicable withholding
taxes and (y) an amount equal to the amount by which 40% of the Award Remainder exceeds the
applicable withholding taxes (such excess to be paid directly to Xxxxxxx), shall be (i) paid not
later than ten days after the Effective Date into an escrow account (“Cash Escrow Account”)
subject to the Escrow Agreement (as defined in Section 2(h) below), and (ii) distributed, subject
to the terms of the Escrow Agreement and this Agreement, to Xxxxxxx not
later than ten days after February 1, 2012. Xxxxxxx acknowledges that the Special Award is
subject to taxation under United States and United Kingdom tax laws as income with respect to
calendar year 2010.
(b) Lump Sum Severance Payment. JPMC shall pay to Xxxxxxx $500,000 (i.e. 52
weeks of his current base salary), reduced by applicable withholding taxes, in a cash lump sum, on
April 1, 2010, in full satisfaction of all severance to which Xxxxxxx may be entitled from the Firm
under the JPMorgan Xxxxx Xxxxxxxxx Pay Plan or any other severance pay plan or program (the
“Severance Plan Payment”). The Severance Plan Payment shall be wholly non-forfeitable
except to the extent set forth in Section 3(c) below.
(c) Fees. JPMC shall pay the provider directly, or reimburse Xxxxxxx, for any and all
reasonable legal, accounting, tax advisory, career counseling, and other professional fees and
charges incurred by or on behalf of Xxxxxxx and associated with his separation from JPMC but not to
exceed $1,000,000 in the aggregate (the “Fee Payment”), in each case within thirty days
after Xxxxxxx provides JPMC with documentation substantiating such fees and charges, so long as
Xxxxxxx provides such documentation no later than November 30, 2010. Xxxxxxx acknowledges that
JPMC will withhold applicable taxes, and report amounts as income to Xxxxxxx, as it deems
necessary. The Fee Payment shall be wholly non-forfeitable.
(d) Options/SARs.
(i) General. All options (“Options”) to acquire JPMC common stock (“Common
Stock”), and all stock appreciation rights with respect to Common Stock (“SARs”),
granted by JPMC to Xxxxxxx and outstanding as of February 5, 2010 are listed on Exhibit A.
Except as otherwise expressly provided in this Section 2(d), all Options and SARs that are
outstanding on the Resignation Date shall be subject to and treated in accordance with the
respective terms of the plan and award agreement under which such award was granted, as amended,
for employees who cease to be employed with the Firm as a result of a job elimination or employees
whose employment terminated without “cause,” whichever is more favorable to Xxxxxxx. Except as
described below in Sections 2(d)(ii), 2(d)(iii) and 2(d)(iv), all Options and SARs that are
outstanding on February 5, 2010 shall remain exercisable through the earlier of February 5, 2012,
and the expiration of their ten (10) year life.
(ii) 2009 SARs. Notwithstanding anything elsewhere to the contrary, the SARs granted
to Xxxxxxx under the JPMC Long Term Incentive Plan (the “Plan”) effective January 20, 2009
(“2009 SARs”) shall be treated as follows:
(A) The 2009 SARs that became exercisable by Xxxxxxx effective January 20, 2010 (i.e.,
20% of the 2009 SARs) were exercised by Xxxxxxx prior to February 5, 2010.
(B) Forty percent (40%) of the 2009 SARs shall become exercisable by Xxxxxxx on the Effective
Date. Xxxxxxx hereby authorizes and directs JPMC, on Xxxxxxx’ behalf and for his account, to (w)
exercise such SARs as of the Effective Date (or on the first business day thereafter if the
Effective Date is not a business day) and withhold the
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number of shares required to satisfy tax withholding obligations associated with the exercise,
and (x) sell the net number of such shares derived from such exercise on the business day
immediately following the date the shares become available for sale. Xxxxxxx understands and
agrees that such shares will be sold through JPMC’s stock administrator (BNY Mellon Shareholder
Services) and will be subject to the stock administrator’s normal terms and conditions, including
fees and commissions. Xxxxxxx hereby directs JPMC’s stock administrator to release the proceeds of
the sale to JPMC, and JPMC shall deliver the proceeds as follows: (y) JPMC will deliver to Xxxxxxx
an amount equal to the excess of 40% of the gross “spread” in the SARs at the time of
exercise over the amount of the applicable withholding taxes, and (z) the balance of the
proceeds shall be promptly deposited into an escrow account (the “SARs Escrow Account”)
subject to the Escrow Agreement. Xxxxxxx agrees to provide such documentation to JPMC, or to
JPMC’s stock administrator, as is reasonably requested to effectuate the foregoing.
(C) The 2009 SARs that became exercisable on January 20, 2010, and (subject to the Escrow
Agreement) the 2009 SARs that become exercisable on the Effective Date, shall be wholly
non-forfeitable except (x) to the extent as set forth in Sections 3(a) and 3(c) of this Agreement
and (y) to the extent the 2009 SARs grant was based on materially inaccurate performance metrics or
any material misrepresentation by Xxxxxxx.
(D) Any outstanding 2009 SARs that are not cancelled or exercised on or before February 5,
2012, shall be cancelled pursuant to the administrative procedures of the Plan on that date.
(E) The remaining forty percent (40%) of the 2009 SARs shall be cancelled as of the Separation
Date.
(iii) 2008 SARs. Notwithstanding anything elsewhere to the contrary, the SARs that
were granted to Xxxxxxx under the Plan effective January 22, 2008 (“2008 SARs”) and that
became exercisable on January 22, 2009 and 2010 (forty percent of the 2008 SARs in the aggregate)
(x) shall remain exercisable pursuant to the administrative procedures of the Plan through February
5, 2012, and (y) shall be wholly non-forfeitable except to the extent set forth in Section 3(a) of
this Agreement. Any outstanding 2008 SARs not cancelled or exercised on or before February 5, 2012,
shall be cancelled pursuant to the administrative procedures of the Plan on that date. The
remaining sixty percent of the 2008 SARs award shall be cancelled as of the Separation Date.
(iv) 2005 SARs. Notwithstanding anything elsewhere to the contrary, the 233,333 of
the SARs that were granted to Xxxxxxx under the Plan effective October 20, 2005 (“2005
SARs”) and that were exercisable as of his Resignation Date (x) shall remain exercisable
pursuant to the administrative procedures of the Plan through May 6, 2010, and (y) shall be wholly
non-forfeitable (and thus, e.g., not subject to cancellation prior to May 6, 2010 or
recoupment). Any outstanding 2005 SARs that are not cancelled or exercised on or before May 6,
2010, shall be cancelled pursuant to the administrative procedures of the Plan on that date. The
remaining 116,677 2005 SARs shall be cancelled as of the Separation Date.
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(v) No Holding Period. Shares derived from Xxxxxxx’ exercise of exercisable SARs or
Options may be sold by Xxxxxxx at any time after the Effective Date (subject to applicable
securities laws).
(e) Restricted Stock Units.
(i) All restricted stock units (“RSUs”) granted by JPMC to Xxxxxxx and outstanding as
of February 5, 2010 are listed on Exhibit A. Except to the extent otherwise expressly
provided in this Section 2(e), all RSUs that are outstanding on the Resignation Date shall be
subject to and treated in accordance with the respective terms of the plan and award agreement
under which such RSUs were granted, as amended, for employees who cease to be employed with the
Firm as a result of a job elimination or employees whose employment terminated without “cause,”
whichever is more favorable to Xxxxxxx. Accordingly, nothing in this Agreement shall adversely
affect Xxxxxxx’ rights to dividend equivalents on outstanding RSUs.
(ii) The RSUs that were granted on January 18, 2007 (“2007 RSUs”), and the RSUs that
were granted on January 22, 2008 (“0000 XXXx”) and that vested on January 25, 2010
(i.e., 50% of the 2008 RSUs), shall be wholly non-forfeitable (and thus, e.g., not
subject to forfeiture or recoupment) except to the extent set forth in Section 3(a) below.
(iii) The remaining fifty percent (50%) of the 2008 RSUs, which are scheduled to vest on
January 25, 2011, shall be wholly non-forfeitable except to the extent set forth in Sections 3(a)
and 3(c) below.
(iv) Any restrictions under applicable award agreements that would restrict Xxxxxxx from
selling shares issued to Xxxxxxx under such agreements are hereby waived.
(f) Medical Benefits. For purposes of unsubsidized retiree medical benefits under the
terms and conditions of the JPMC Medial Plan, as amended from time to time, Xxxxxxx will be treated
as meeting the age and service requirements under such Plan as of his Separation Date, making him
and his qualified dependents eligible for benefits thereunder as of his Separation Date. Actual
receipt of benefits will depend on Xxxxxxx enrolling for coverage and paying required contributions
or premiums, each on a timely basis, as well as submitting claims in accordance with the terms of
the Plan; provided that no adverse amendment to his or his dependents’ benefits will be made unless
such change is applicable to all similarly situated former employees.
(g) Office and Assistant. JPMC will provide Xxxxxxx with: (i) the services of his
current assistant (unless JPMC terminates her employment for cause or she terminates her employment
voluntarily) at JPMC’s expense; and (ii) an office allowance of $5,200 per calendar month, paid no
later than the end of the calendar month to which the allowance relates (or, in the case of the
allowance for February 2010, the seventh business day following the Effective Date), from February
1, 2010, through the earliest of: (A) September 30, 2010; (B) the date he becomes employed
full-time by another employer; (C) the date he becomes employed part-time by another employer if
such employer provides him with an office or if, in JPMC’s sole discretion,
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such employment would conflict with the interests of JPMC; and (D) the date that he accepts
self-employment assignments (including consulting or directorships) that, in JPMC’s sole
discretion, would conflict with the interests of JPMC. Xxxxxxx acknowledges that JPMC will
withhold applicable taxes, and report amounts as income to Xxxxxxx, as it deems necessary. Xxxxxxx
shall notify JPMC in writing before accepting other employment or self-employment before September
30, 2010.
(h) Escrow Account. The terms and conditions of the Cash Escrow Account and the SARs
Escrow Account (together, and including certain gains and income accounts described in the Escrow
Agreement, the “Accounts”) shall be governed by an escrow account agreement (“Escrow
Agreement”), in substantially the form attached hereto as Exhibit B, that shall be executed by
the Parties on or before the Effective Date. The purpose of the Accounts is to ensure (i) that
Xxxxxxx complies with the covenants set forth in Sections 5, 6 and 7 of this Agreement, (ii) that
(as more fully described in this Section 2(h) below) there is a source of funds available to JPMC
under Section 3 below, and (iii) that certain distinctions are maintained for United Kingdom tax
purposes.
The Accounts shall be held separately under the Escrow Agreement, shall be separately
accounted for, and shall be subject to forfeiture only to the extent set forth in Section 3 below.
Each Account shall have investment opportunities to the extent provided by the Escrow Agreement,
and Xxxxxxx shall have the right to direct transactions with respect to the amounts or assets in
each Account to the extent set forth in the Escrow Agreement. The balance in the SARs Escrow
Account (and its associated gains and income Accounts) shall be released to Xxxxxxx within ten days
after February 1, 2011, to the extent that there is no bona fide and genuine dispute (asserted on
or before February 1, 2011) between the parties as to whether those Accounts should be forfeited in
accordance with Sections 3(a) or 3(c) of this Agreement. The balance in the Cash Escrow Account
(and its associated gains and income Accounts) shall be released to Xxxxxxx within ten days after
February 1, 2012, to the extent that there is no bona fide and genuine dispute (asserted on or
before February 1, 2012) as to whether those Accounts should be forfeited in accordance with
Sections 3(a), 3(b) or 3(c) of this Agreement. If a bona fide and genuine dispute exists in either
such case, then the applicable amount shall not be released until such dispute is resolved by
mutual agreement of the parties or by the arbitration in accordance with Section 14(b) below.
3. Restrictions/Recoupment Provisions.
(a) Recoupment.
(i) Each of the Special Award and the shares of Common Stock acquired upon exercise of, or
vesting of, the 2009 SARs, the 2008 SARs, the 2008 RSUs, and the 0000 XXXx shall remain subject to
recoupment and/or cancellation under the express terms of the JPMC Bonus Recoupment Policy
(“Policy”). A copy of the Policy is attached hereto as Exhibit C. The Policy will
not be disproportionately applied to Xxxxxxx as compared to any similarly situated current or
former employee. In addition, the 2009 SARs and shares of Common Stock acquired upon exercise of
the 2009 SARs shall remain subject to recoupment or cancellation if the 2009 SAR grant was based on
materially inaccurate performance metrics or any material
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misrepresentation by Xxxxxxx. (For the avoidance of doubt, any reference in this Agreement to
recoupment or repayment of SARs or RSUs shall mean recoupment or repayment of (x) Common Stock
acquired on the exercise of such SARs or vesting of such RSUs, as applicable, or (y) if such shares
of Common Stock have been sold, an amount equal to the “Fair Market Value” (defined as the
average of the high and low selling price on the New York Stock Exchange of a share of Common
Stock) of such all shares of Common Stock determined on the date of sale.
(ii) In the event that JPMC proposes to recoup or cancel, under this Section 3(a), all or any
portion of any payment or award, JPMC shall give Xxxxxxx a written notice that (x) states in
reasonable detail the grounds for the proposed recoupment or cancellation, (y) sets forth the
amount to be recouped and/or award to be cancelled. JPMC shall be repaid first from the SARs
Escrow Account to the extent of the assets therein (if any), and second from the Cash Escrow
Account to the extent of assets therein (if any). If there are insufficient assets in the two
Accounts, then Xxxxxxx shall within 90 days pay any remaining amount owed to JPMC. Any recoupment
or cancellation under this Section 3(a) shall be subject to de novo review, prior
to implementation and at Xxxxxxx’ election, through arbitration in accordance with Section 14(b)
below.
(b) 2010 Terms and Conditions/Non-Solicit.
(i) Xxxxxxx agrees that from his Separation Date through January 31, 2012, the Award Remainder
is subject to forfeiture, in whole or in part, to JPMC if, without curing any such act in
accordance with Section 3(b)(iii) below: (A) he engages in conduct detrimental to JPMC, insofar as
it causes material financial or reputational harm to the JPMC or its business activities (other
than engaging in competition with the Firm); (B) the award was based on materially inaccurate
performance metrics, whether or not he was responsible for the inaccuracy; (C) the award was based
on a material misrepresentation by Xxxxxxx, or (D) he failed to properly identify, raise or assess,
in a timely manner and as reasonably expected, risks, and/or concerns with respect to risks, that
are material to the Firm or its business activities.
(ii) In addition, notwithstanding anything in Section 7(a) to the contrary, for the one-year
period immediately following January 31, 2011, Xxxxxxx agrees that the Award Remainder is subject
to forfeiture and/or repayment, in whole or in part, to JPMC if Xxxxxxx, on his own behalf or on
behalf of any other person or entity, directly or indirectly, without the written permission of the
Director of Human Resources of JPMC, solicits, induces or encourages any employees or former
employees identified in the second sentence of Section 7(a) to leave the Firm or to apply for
employment elsewhere.
(iii) In the event that JPMC proposes to forfeit or require repayment of all or part of the
Award Remainder under this Section 3(b), JPMC shall give Xxxxxxx a written notice that (x) states
the grounds for the forfeiture in reasonable detail and (y) sets forth the amount to be forfeited.
Xxxxxxx shall have thirty (30) days after receiving such notice to cure such grounds to the
reasonable satisfaction of JPMC. Any forfeiture or repayment under this Section 3(b) shall be
subject to de novo review, prior to implementation and at Xxxxxxx’ election,
through arbitration in accordance with Section 14(b) below.
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(c) Application of Sections 5, 6 and 7.
(i) The amounts and awards listed in Section 3(c)(iii) below shall be subject to cancellation
or recoupment if Xxxxxxx materially breaches Section 5 below, Section 6 below, or the
non-solicitation provisions in Section 7 below, or if Xxxxxxx breaches the non-hire restrictions in
Section 7 below, and in either case does not cure such breach in accordance with Section 3(c)(ii)
below.
(ii) In the event that JPMC proposes to cancel or recoup, under this Section 3(c), any of the
amounts or awards listed in Section 3(c)(iii) below, JPMC shall give Xxxxxxx a written notice that
(x) states in reasonable detail the grounds on which the cancellation or recoupment is based, and
(y) describes the amounts or awards to be cancelled or recouped. Xxxxxxx shall have thirty (30)
days after receiving such notice to cure such grounds to the reasonable satisfaction of JPMC. Any
proposed cancellation or recoupment under this Section 3(c) shall be subject to de
novo review, prior to implementation and at Xxxxxxx’ election, through arbitration in
accordance with Section 14(b) below.
(iii) The following amounts and awards are subject to this Section 3(c): the Severance Plan
Payment, all or any part of the 2009 SARs described in Section 2(d)(ii)(B) (including amounts in
the SARs Escrow Account), all or any part of the 2008 RSUs described in Section 2(e)(iii) and the
Award Remainder (including amounts in the Cash Escrow Account).
(iv) Upon request by JPMC, Xxxxxxx shall certify his compliance with Sections 5, 6, and 7 and
supply any information JPMC reasonably requests relating to such compliance.
4. Certain Acknowledgements.
(a) Deferred Compensation Plans . The Firm and Xxxxxxx each acknowledge and agree
that (i) Xxxxxxx’ rights and account balances under (A) the Deferred Compensation Program of
JPMorgan Chase & Co. and Participating Companies, and (B) the JPMorgan Chase & Co. 2005 Deferred
Compensation Program (Restated Effective as of December 31, 2008) are 100% vested and wholly
non-forfeitable (and thus, e.g., not subject to set-off for any claims relating to his
employment by the Firm or the termination of such employment); and (ii) each such plan shall be
administered in accordance with its terms in a manner that does not discriminate against Xxxxxxx as
compared to any other similarly situated participant..
(b) Pension and 401(k) Plans. The Firm and Xxxxxxx each acknowledge and agree that (i)
all of Xxxxxxx’ rights and balances under each retirement plan, program and arrangement of JPMC in
which he participates are 100% vested and wholly non-forfeitable; and (ii) each such plan, program
and arrangement shall be administered in accordance with its terms in a manner that does not
discriminate against Xxxxxxx as compared to any other similarly situated participant.
(c) Employee Co-Investment Programs. The Firm and Xxxxxxx each acknowledge and agree
that Xxxxxxx’ participation in One Equity Partners I and One Equity
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Partners II shall continue to be governed by the applicable governing documents in a manner
that does not discriminate against Xxxxxxx as compared to any other similarly situated investor in
such programs.
(d) JPMC Banking Relationship. The Firm and Xxxxxxx each acknowledge and agree that,
notwithstanding anything to the contrary in any agreement, plan or other document, any banking or
brokerage account that Xxxxxxx maintains or hereinafter may establish with the Firm (other than the
account established pursuant to the Escrow Agreement) will not be adversely affected by this
Agreement or by anything related to his employment with the Firm or the termination of such
employment. Without limiting the foregoing, JPMC will not seek to set off from any such account,
other than the account established pursuant to the Escrow Agreement) any amounts that JPMC may
assert Xxxxxxx owes in connection with any claim related to his employment by the Firm.
5. Proprietary and Confidential Information.
(a) Xxxxxxx agrees that, by virtue of his position with JPMC and the nature of JPMC’s
businesses, he has had access to proprietary and confidential information regardless of the source,
that is the sole and exclusive property of the Firm or its customers or investors
(“Confidential Information”) and that has been developed, acquired or compiled by JPMC at
great effort or expense. Confidential Information that concerns previous, current or prospective
customers, investors or portfolio companies of the Firm (“Customers”) and the affairs and
business methods and activities of the Firm include, but are not limited to, Confidential
Information that consists of: names, addresses and telephone numbers of Customers; account
information, financial standing, investment holdings and other financial data compiled by the Firm
and/or provided by Customers; information concerning specific financial needs and requirements of
Customers with respect to investments, financial position and standing; trading and underwriting
positions; all records and documents concerning the affairs and business of the Firm and/or
Customers (including copies, originals, notes and extracts therefrom, and any graphic formats or
electronic media); methods, procedures, devices and other means used by the Firm in the provision
of services to Customers and in the conduct of its own business, including data processing
programs, data bases, formulae, secret processes, inventions, research projects, and all other
matters of a technical nature; and all other information concerning the Firm, its employees,
compensation, operations, activities and Customers that is not publicly available from directories
or other generally available public sources and/or that provides the Firm with a competitive
advantage over competitors that would be difficult to acquire or duplicate without the use of
improper or unauthorized means. Notwithstanding any other provision of this Agreement, information
and records that have entered the public domain other than as a result of an act of Xxxxxxx in
violation of this Agreement shall not constitute Confidential Information.
(b) Xxxxxxx agrees that he owes a duty to the Firm to maintain the confidentiality of
Confidential Information. Xxxxxxx further specifically acknowledges and agrees that any material
disclosure or use by Xxxxxxx of any Confidential Information will be or may become highly
detrimental to the business of the Firm and that serious loss of business and pecuniary damage to
the Firm will or may result therefrom. Therefore, in consideration of the promises contained
herein, and except in the course of performing his duties under Section 1
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above for the Firm prior to the Separation Date or as otherwise explicitly provided in this
Agreement, Xxxxxxx shall: (i) hold in the strictest confidence all such Confidential Information;
(ii) not use any Confidential Information except pursuant to the specific written authorization of
JPMC; and (iii) not disclose any Confidential Information to any person or entity without JPMC’s
specific written authorization or as compelled by subpoena, court order or other lawful process.
(c) Except to the extent otherwise explicitly provided in this Agreement, Xxxxxxx agrees to
return to JPMC, on or before the Separation Date, each and every record or document containing
Confidential Information (including photocopies, originals, notes or extracts therefrom, and any
graphic formats or electronic media) in his possession or control. If Xxxxxxx becomes legally
compelled by an order of a court or government agency to disclose of any Confidential Information,
he shall provide prompt prior written notice of any such request for assistance or testimony to
JPMC by facsimile to Xxxxxxx X. Xxxxxx, JPMC General Counsel, in accordance with Section 14(j)
below.
(d) Notwithstanding any provision of this Agreement or elsewhere to the contrary, the Firm
hereby waives any right to pursue any claim against Xxxxxxx based on the so-called “inevitable
disclosure doctrine,” and to that end agrees that the restrictions set forth in this Section 5
shall not be interpreted or applied to prohibit Xxxxxxx from engaging in any employment or other
professional activity that otherwise complies with the restrictions of this Agreement.
(e) Notwithstanding anything in this Agreement or elsewhere to the contrary:
(i) Xxxxxxx may retain and utilize, both before and after the Separation Date: (x) any
document or other information that relates to his personal benefits, entitlements or obligations
(including, without limitation, his tax obligations); (y) his personal property, including without
limitation his desk calendar, his personal contact list and his personal files; and (z) such other
documents and information as shall have been approved in writing by a member of the JPMC Operating
Committee; and
(ii) Xxxxxxx may make truthful statements and may disclose documents and information: (w) in
connection with performing his obligations under Section 1 above and/or Section 12 below; (x) when
required by law, subpoena, court order or when requested by any regulatory, governmental or similar
body or entity; provided that, to the extent permitted by law, Xxxxxxx shall promptly inform JPMC
of any such obligation prior to complying with any such order or participating in any such
proceeding; (y) in confidence to any attorney or other professional advisor for the purpose of
securing professional advice; or (z) as reasonably necessary in connection with any proceeding
under Section 14 (b) or 14 (c) below.
6. Non-Disparagement; Public Statements.
(a) Xxxxxxx will not do or say anything (or encourage others to do or say anything) that
should reasonably be expected to disparage or impact negatively the name or reputation in the
marketplace of the Firm or any of its employees, officers or directors. Without
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the prior written consent of the General Counsel of JPMC, Xxxxxxx will not make any direct or
indirect written or oral statements to the press, television, radio or other media concerning any
matters pertaining to the business and affairs of the Firm or any of its officers or directors or
pertaining to any matters related to Executive’s employment or termination of employment with the
Firm other than to say that he had a long and rewarding career with the Firm.
(b) The General Counsel of JPMC will instruct members of the Operating Committee not to do or
say anything (or encourage others to do or say anything) that should reasonably be expected to
disparage or impact negatively Xxxxxxx’ name or reputation in the marketplace.
7. Non-Solicitation/Non-Hire of Employees.
(a) Xxxxxxx hereby represents that following his Resignation Date he has not, and from the
Resignation Date through January 31, 2011 (the “Restricted Period”) he will not, on his own
behalf or on behalf of any other person or entity, directly or indirectly, without the written
permission of the Director of Human Resources of JPMC: (i) solicit, induce or encourage any of the
Firm’s then current employees to leave the Firm or to apply for employment elsewhere or (ii) hire
or have any involvement in the solicitation or hiring of any employee or former employee. These
restrictions on non-solicitation and hiring apply only to employees or former employees who were
employed on the Resignation Date or the Separation Date (y) at or above the level of Executive
Director (or the equivalent) in JPMorgan Investment Bank, JPMorgan Cazenove or the office of JPMC’s
Chief Investment Officer; or (z) at or above the level of Managing Director in other areas of the
Firm, unless (with respect to both (y) and (z)) the individual’s employment was terminated by the
Firm for reasons other than “cause” (as defined in the terms and conditions of the 2009 SARs) more
than six months before the date of solicitation or hire. During the Restricted Period in response
to any employment inquiries from employees covered by these restrictions, Xxxxxxx will say only
that he is precluded by agreement from any discussions regarding their employment; Xxxxxxx will not
refer such employees elsewhere. For the avoidance of doubt, this Section shall not prohibit any
entity with which Xxxxxxx is affiliated from independently, without any direct or indirect
involvement by Xxxxxxx, from soliciting or hiring JPMC employees.
(b) Notwithstanding any provision of this Agreement to the contrary, Xxxxxxx shall be released
from his obligations under Section 7(a), and JPMC shall have no remedy for Xxxxxxx’ violation of
Section 7(a), if JPMC materially violates the economic terms of this Agreement such that Xxxxxxx
suffers material economic harm; provided, however, that Xxxxxxx must provide JPMC with written
notice describing the violation in reasonable detail , and JPMC shall be provided a period of ten
days after receipt of such notice to cure such violation, in which case JPMC’s violation will be
deemed not to have occurred; provided further that action by JPMC under Section 3 taken in good
faith will not constitute a violation of the economic terms of this Agreement.
8. Restrictions under Other Agreements.
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Any restrictions outside this Agreement to which Xxxxxxx is subject as a result of his
employment with the Firm (including without limitation the provisions of any equity awards) that
purport to restrict or prohibit Xxxxxxx from (a) soliciting or hiring the Firm’s employees, (b)
working for another employer or (c) soliciting customers or clients of the Firm, are waived
effective on Xxxxxxx’ Separation Date. Furthermore, Sections 5, 6, 7 and 8 of this Agreement fully
supersede any agreements or covenants with the Firm to which Xxxxxxx is subject covering the
subjects addressed by Sections 5, 6, and 7.
9. Representations.
(a) Xxxxxxx represents and warrants that, to his knowledge, in the course of his employment
with the Firm, he has not committed any material violation of applicable law, and except as
expressly disclosed to JPMC, he does not have any knowledge that any person under his authority or
management has committed any such violation. Xxxxxxx further represents and warrants that he has
responded and will respond truthfully and fully to all inquiries of the Firm’s designated
investigators and counsel, and that during his employment with the Firm, Xxxxxxx has not committed
any material violation of JPMC’s Code of Conduct or engaged in material misconduct related to his
duties for the Firm (including without limitation improper accounting or failure to comply with
internal controls), and, except as expressly disclosed to JPMC, he does not have any knowledge that
any person under his authority or management has committed such a violation or engaged in such
misconduct. Xxxxxxx further represents and warrants that, except as expressly disclosed to JPMC,
he does not have any knowledge of any wrongdoing by the Firm’s employees, agents or vendors that
could reasonably be considered to be detrimental to the financial interests, reputation or goodwill
of the Firm or its management in any material respect. Following the Separation Date, any inquiries
directed to Xxxxxxx under this Section 8(a) by the Firm’s designated investigators or counsel shall
be on reasonable terms, taking into consideration Xxxxxxx’ personal and professional schedule.
(b) JPMC represents and warrants that (i) it is fully authorized by action of the Compensation
Committee of its Board of Directors (and of any other person or body whose action is required) to
enter into this Agreement and to perform its obligations under it, (ii) the execution, delivery and
performance of this Agreement by it does not violate any applicable law, regulation, order,
judgment or decree, and (iii) upon the Effective Date of this Agreement, this Agreement shall be
its valid and binding obligation, enforceable against the Firm in accordance with its terms, except
to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally.
10. Indemnification.
This Agreement does not release, limit or otherwise affect (i) any right to indemnification
and/or defense/advancement that Xxxxxxx may have under applicable certificates of incorporation,
by-laws or binding written agreements with Firm to the extent consistent with applicable law or
(ii) any right to directors’ and officers’ liability coverage available to similarly situated
former employees to which Xxxxxxx would be entitled in the absence of this Agreement. Xxxxxxx shall
be entitled to indemnification and advancement of expenses to the fullest extent
11
provided under JPMC’s indemnification Bylaw as in effect on the Resignation Date, a copy of
which is attached as Exhibit D.
11. Release.
(a) JPMC represents, and Xxxxxxx acknowledges, that the payments and benefits provided to
Xxxxxxx under this Agreement exceed in the aggregate those to which he otherwise would be entitled
as of the date of this Agreement.
(b) In consideration of JPMC entering this Agreement, Xxxxxxx hereby releases and gives up any
and all claims and rights arising out of or relating to his employment with the Firm or the
termination thereof (collectively, “Released Claims”) that he has or may have against JPMC
or any of its affiliates, or against any present or former employee, agent, officer, director,
shareholder, member, principal, successor, assign, trustee, heir, administrator, executor or
representative or any of the foregoing (collectively, the “Releasees”), up to the date
Xxxxxxx signs this Agreement; provided, however, that JPMC acknowledges and agrees
that Xxxxxxx is not releasing the Releasees from: (i) any rights or entitlements arising under or
preserved by this Agreement; (ii) payment of any and all benefits and/or monies earned, accrued,
vested or otherwise owing, if any, to Xxxxxxx under the terms of JPMC’s retirement, savings
incentive and/or deferred compensation plans or co-investment partnerships (except that Xxxxxxx
hereby releases and waives any claims that his termination was to avoid payment of such benefits or
payments, and that, as a result of his termination, he is entitled to additional benefits or
payments); (iii) any rights to post-employment participation under the terms of any welfare benefit
plan sponsored by the Firm to the extent provided by governing law or the terms of such plan as in
effect from time to time; or (iv) any rights that cannot be waived under applicable governing law.
This Section 11(b) releases all of Xxxxxxx’ claims to the extent set forth in the immediately
preceding sentence, including claims of which Xxxxxxx is not aware and claims not specifically
mentioned in this release, and, to the extent set forth in the immediately preceding sentence,
applies to all of Xxxxxxx’ claims arising from or relating to any act, omission, occurrence or
event that has happened up to the date that Xxxxxxx signs this Agreement, including, but not
limited to, claims:
(i) relating to the terms and conditions of Xxxxxxx’ employment with the Firm, or the
cessation of employment with the Firm;
(ii) relating to discrimination on the basis of age, alienage, citizenship, creed, disability,
gender, handicap, marital status, national origin, race, religion, sex, or sexual orientation;
(iii) arising under: Title VII of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act, 29 U.S.C. §621 et seq., as amended; the Equal Pay Act; the
Rehabilitation Act of 1973; the Americans with Disabilities Act; the Family and Medical Leave Act;
and any other federal, state or local statute, ordinance, rule, regulation or order relating to
employment;
(iv) arising under the laws of the United Kingdom;
12
(v) based on common law;
(vi) for whistle-blowing, libel, slander or defamation;
(vii) for wages, bonus, compensation, expense reimbursement, vacation, compensatory time,
severance, fees, benefits or any other sum of money or thing of value whatsoever; and
(viii) for attorney’s fees, costs, disbursements and the like.
(c) Contemporaneously with execution of this Agreement, Xxxxxxx will execute the U.K.
Compromise Agreement attached as Exhibit E, which is incorporated into this Agreement by
reference.
(d) As of the date Xxxxxxx signs this Agreement, Xxxxxxx represents that he has no physical or
mental disability resulting from his employment with JPMC which would form the basis for a Workers’
Compensation claim against the Firm.
(e) Xxxxxxx agrees that he has not and will not file or cause to be filed any charge, claim,
lawsuit or legal proceeding based on any claim released under Section 11(b) above that seeks
personal, equitable or monetary relief for Xxxxxxx in connection with any matter occurring at any
time in the past concerning Xxxxxxx’ employment relationship with the Firm, up to and including the
date of this Agreement or involving any continuing effects of any acts or practices which may have
arisen or occurred on or prior to the date of this Agreement; provided, however,
that the foregoing does not affect any right to file an administrative charge with the Equal
Employment Opportunity Commission (“EEOC”), subject to the restriction that if any such
charge is filed, Xxxxxxx agrees that should he or any other person, organization, or other entity
file, charge, claim, xxx or cause or permit to be filed any charge, civil action, suit or legal
proceeding, with the EEOC or otherwise, against JPMC involving any matter occurring at any time in
the past, Xxxxxxx will not seek or accept any personal relief (including, but not limited to,
monetary award, recovery, relief or settlement) in such charge, civil action, suit or proceeding to
the extent that such relief is based on any claim released under Section 11(b) above.
12. Cooperation.
Xxxxxxx agrees to reasonably cooperate with JPMC after his Resignation Date with respect to
any matter (including any audit, tax proceeding, litigation, internal or external investigation or
governmental proceeding) about which Xxxxxxx may have knowledge or information. Such reasonable
cooperation shall include, but not be limited to, appearing at mutually convenient locations for
conferences and interviews at such times as may be reasonably requested and in general providing
JPMC and its counsel with the full benefit of his knowledge with respect to any such matter, to the
extent reasonably requested; provided, that all reasonable out-of-pocket costs associated
with such cooperation (including legal fees and expenses in the event that JPMC’s counsel
determines that it cannot represent both JPMC and Xxxxxxx simultaneously in any such matter) shall
be paid by JPMC promptly upon receipt of reasonable
13
supporting documentation, but in no event later than the end of the calendar year following
the calendar year in which the costs and expenses are incurred.
13. Acknowledgment.
Xxxxxxx hereby acknowledges that: (a) he has been advised by JPMC to consult with an attorney
of his choice prior to executing this Agreement; (b) he has had a reasonable opportunity to
consider this Agreement; (c) he has read this Agreement fully and carefully and understands its
terms; and (d) he is signing this Agreement knowingly, freely and voluntarily without duress,
coercion or undue influence and with full and free understanding of its terms.
14. Miscellaneous.
(a) The parties agree that this Agreement shall be governed by, construed, performed and
enforced in accordance with its express terms, and otherwise in accordance with the laws of the
State of New York applicable to contracts made and to be performed wholly therein.
(b) JPMC (on its own behalf and on behalf of the Firm) and Xxxxxxx agree that any claim or
dispute arising out of or relating to this Agreement (including, without limitation, its Exhibits)
or in any way related to Xxxxxxx’ employment with the Firm or the termination of such employment
shall, except to the extent provided in Section 14(c) below with respect to certain claims for
injunctive relief, be resolved by binding, confidential arbitration in Manhattan, in accordance
with this Section 14(b) and the Commercial Arbitration Rules (and not the National Rules for
Resolution of Employment Disputes of the American Arbitration Association) before a single
arbitrator. The arbitrator shall issue a written decision explaining in reasonable detail the
basis for any award that is made.
(c) JPMC and Xxxxxxx acknowledge that the time, scope, geographic area and other provisions of
Sections 5, 6 and 7 (“Covenants”) have been specifically negotiated by sophisticated
commercial parties and agree that all such provisions are reasonable under the circumstances of
this Agreement. Xxxxxxx acknowledges and agrees that the terms of the Covenants: (i) are
reasonable in light of all of the circumstances, (ii) are sufficiently limited to protect the
legitimate interests of the Firm, (iii) impose no undue hardship on Xxxxxxx, and (iv) are not
injurious to the public. Xxxxxxx further acknowledges and agrees that Xxxxxxx’ breach of the
Covenants before February 1, 2011, will cause the Firm irreparable harm, which cannot be adequately
compensated by money damages, and that if the Firm elects to prevent Xxxxxxx from breaching such
provisions by obtaining an injunction against Xxxxxxx, there is a reasonable probability of the
Firm’s eventual success on the merits. Xxxxxxx consents and agrees that if Xxxxxxx commits any such
breach or threatens to commit any breach before February 1, 2011, the Firm shall be entitled to
temporary and permanent injunctive relief from a court of competent jurisdiction, without posting
any bond or other security and without the necessity of proof of actual damage, in addition to, and
not in lieu of, such other remedies as may be available to the Firm for such breach, including the
recovery of money damages.
14
(d) Notwithstanding anything in this Agreement or elsewhere, the Firm may withhold from any
payments or benefits otherwise due to Xxxxxxx any amounts that it is required (or authorized by
Xxxxxxx) to withhold in respect of taxes or deductions for benefits.
(e) Notwithstanding anything in this Agreement or elsewhere to the contrary, this Agreement is
intended to be interpreted and applied so that any payment or benefit set forth herein shall either
be exempt from the requirements under Section 409A of the Internal Revenue Code of 1986, as amended
(together with any successor thereto, “Section 409A”) or shall comply with such
requirements. Without limiting the generality of the immediately preceding sentence, the parties
agree that Xxxxxxx (i) had a “separation from service” within the meaning of Section 409A as of the
Resignation Date, (ii) has not had from his Resignation Date to the Effective Date of the Agreement
any duties or responsibilities that are inconsistent with his having a separation from service on
his Resignation Date and (iii) is a “specified employee” within the meaning of Section 409A and
that no payment of deferred compensation subject to Section 409A (which is not otherwise exempt)
shall be made to him prior to the expiration of six full months from the date of his separation
from service, i.e., the Resignation Date.
(f) Xxxxxxx shall be under no obligation to seek other employment or otherwise mitigate any of
the Firm’s obligations to him under this Agreement, and there shall be no offset against amounts
and benefits due to Xxxxxxx under this Agreement on account of any remuneration or other benefit he
receives from any third party for services after the Separation Date.
(g) This Agreement is and shall be binding on and inure to the benefit of Xxxxxxx and any
person or entity who succeeds to Xxxxxxx’ rights or responsibilities. In the event of Xxxxxxx’
death or a judicial determination of his incapacity, references to him in this Agreement shall be
deemed, where appropriate, to be references to his heir(s), beneficiaries, executor(s) or other
legal representative(s). This Agreement is made for the benefit of and shall be binding upon JPMC
and all of its subsidiaries and affiliated entities and benefit plans, and all of its or their
past, present or future trustees, directors, officers, employees, agents, fiduciaries, successors
and assigns.
(h) The parties agree that this Agreement (including without limitation the Exhibits) may not
be altered, amended, modified, superseded, assigned, canceled or terminated except by an express
written agreement duly executed by both parties.
(i) This Agreement sets forth the entire agreement between the Firm and Xxxxxxx and, except as
otherwise provided in this Agreement, fully supersedes any and all prior agreements or
understandings between them pertaining to the subject matter hereof as described in the first
paragraph of this Agreement.
(j) Any notice, consent, demand, request, or other communication given to a person in
connection with this Agreement shall be in writing and shall be deemed to have been duly given to
such person (i) when delivered personally to such person, (ii) provided that a written
acknowledgment of receipt is obtained, five days after being sent by prepaid certified or
registered mail, or two days after being sent by a nationally recognized overnight courier, to the
15
most recent address provided by, or on behalf of, such person. Notices shall, if addressed to
the Firm, be sent to Xxxxxxx X. Xxxxxx, JPMC General Counsel, 000 Xxxx Xxxxxx Xx 00, Xxx Xxxx, XX
00000-0000, (ph) 000-000-0000, (fax) 000-000-0000 and shall, if addressed to Xxxxxxx, be sent to
him at his office at JPMC (so long as he maintains such an office), and at his principal residence
(as identified in JPMC’s records), with a copy in either case sent to: Xxxxxxxx Xxxxx LLP (attn:
Xxxxxx X. Xxxxxxxx, Esq.), 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000.
(k) This Agreement may be executed in counterparts, each of which shall be deemed an original
and all of which together shall constitute one and the same instrument. Signed and notarized
signature pages delivered by facsimile (including, without limitation, by “pdf”) shall be deemed
effective for all purposes.
(l) The headings of the Sections and sub-sections contained in this Agreement are for the
convenience only and shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.
15. Severability.
The parties agree that if any of the provisions, terms, clauses, or waivers or releases of
claims or rights contained in this Agreement are declared illegal, unenforceable, or ineffective in
a legal forum of competent jurisdiction, such provisions, terms, clauses, waivers or releases of
claims or rights shall be deemed severable, such that all other provisions, terms, clauses and
waivers and releases of claims and rights contained in this Agreement shall remain valid and
binding upon the parties. It is the intent of the parties, however, that any invalid, void or
otherwise unenforceable provisions be automatically replaced by other provisions which are as
similar as possible in terms to such invalid, void or otherwise unenforceable provisions but are
valid and enforceable to the fullest extent permitted by law.
16. Effective Date.
(a) Xxxxxxx acknowledges that he has had more than 21 days to consider and review this
Agreement and that he has been represented by counsel of his own choosing in reviewing and
negotiating this Agreement. Xxxxxxx further acknowledges and agrees that he may change his mind
and revoke this Agreement within seven (7) days after delivering a signed and notarized counterpart
copy of this Agreement to JPMC, by delivering written notification of his intent to revoke to Xxxxx
X. Xxxxxxx, Esq. via facsimile to 000-000-0000, hand delivery or overnight courier within that
seven (7) day period. JPMC may not revoke this Agreement after it has been executed by both
parties.
(b) If for any reason Xxxxxxx fails to execute and deliver this Agreement by March 3, 2010 or
revokes this Agreement, then notwithstanding anything to the contrary contained herein, Xxxxxxx’
resignation will be treated as a resignation effective as of the Separation Date for all purposes,
and all benefits that would have inured to Xxxxxxx solely as a result of this Agreement will
automatically be forfeited.
16
(c) This Agreement shall become effective on the first day following the expiration of the
revocation period described in Section 16(a) above (the “Effective Date”).
IN WITNESS WHEREOF, this Agreement and Release has been executed by a duly authorized
representative of JPMC and Xxxxxxx as of the date(s) written below.
JPMORGAN CHASE & CO.
By: |
/s/ Xxxx X. Xxxxxxxx | |||
| Executive Vice President |
On this 1
day of March, 2010, before me personally came XXXX X. XXXXXXXX known to me to be
the person described herein and who executed the foregoing Agreement and Release on behalf of
JPMorgan Chase & Co, and he duly acknowledged to me that he executed the same on behalf of JPMorgan
Chase & Co.
| /s/ Notary Public | ||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| XXXXXXX X. XXXXXXX | ||||
On this 3
day of March, 2010, before me personally came XXXXXXX X. XXXXXXX known to me to be
the person described herein and who executed the foregoing Agreement and Release, and he duly
acknowledged to me that he executed the same.
| /s/ Notary Public | ||
17
EXHIBIT A
JPMorgan Chase Options/Stock Appreciation
Outstanding as of February 5, 2010
Outstanding as of February 5, 2010
| Number | ||||||||||||||||||||||||
| Exercisable | ||||||||||||||||||||||||
| After January | ||||||||||||||||||||||||
| 31, 2010 | ||||||||||||||||||||||||
| except for | ||||||||||||||||||||||||
| 2009 SARS | ||||||||||||||||||||||||
| that become | ||||||||||||||||||||||||
| Number | exercisable | Number | ||||||||||||||||||||||
| Exercised | as of the | forfeited on | ||||||||||||||||||||||
| Date of | Number | Exercise | Prior to | Effective | Last date to | Separation | ||||||||||||||||||
| Grant | Granted | Price | 02/05/10 | Date ( | exercise | Date | ||||||||||||||||||
1/18/2001 |
292,855 | $ | 51.22 | 0 | 292,855 | 1/18/2011 | 0 | |||||||||||||||||
1/18/2001 |
79,015 | $ | 51.22 | 0 | 79,015 | 1/18/2011 | 0 | |||||||||||||||||
1/18/2001 |
320,228 | $ | 51.22 | 0 | 320,228 | 1/18/2011 | 0 | |||||||||||||||||
1/18/2001 |
30,600 | $ | 51.22 | 0 | 30,600 | 1/18/2011 | 0 | |||||||||||||||||
7/02/2001 |
666,741 | $ | 44.995 | 0 | 666,741 | 7/02/2011 | 0 | |||||||||||||||||
1/17/2002 |
187,289 | $ | 36.85 | 0 | 187,289 | 1/17/2012 | 0 | |||||||||||||||||
2/11/2004 |
367,868 | $ | 39.96 | 0 | 367,868 | 2/05/2012 | 0 | |||||||||||||||||
10/20/2005 |
350,000 | $ | 34.78 | 0 | 233,333 | 5/06/2010 | 116,667 | |||||||||||||||||
1/22/2008 |
400,000 | $ | 39.83 | 0 | 160,000 | 2/05/2012 | 240,000 | |||||||||||||||||
1/20/2009 |
700,000 | $ | 19.49 | 140,000 | 280,000 | * | 2/05/2012 | 280,000 | ||||||||||||||||
| * | Become exercisable as of the Effective Date as defined in the Agreement. |
JPMorgan Restricted Stock Units
Outstanding as of February 5, 2010
Outstanding as of February 5, 2010
| Number Subject | ||||||||||||||||
| Number Vested | to Future Vesting | |||||||||||||||
| Grant Date | Number Granted | Prior to 01/31/10 | Date | Vesting Date | ||||||||||||
1/22/2008 |
369,069 | 184,534 | 184,535 | 1/25/2011 | ||||||||||||
EXHIBIT B
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (as the same may be amended or modified from time to time pursuant
hereto, this “Escrow Agreement”) is made and entered into as of March , 2010, by and among Xxxxxxx
X. Xxxxxxx (“Xxxxxxx”), JPMorgan Chase & Co. (“JPMC”) and JPMorgan Chase Bank, National
Association (“Escrow Agent”). Xxxxxxx and JPMC are herein referred to collectively as the
“Parties.”
WHEREAS, pursuant to an Agreement and Release dated March 3, 2010, between Xxxxxxx and JPMC
(“Agreement”), Xxxxxxx and JPMC have agreed that (i) the balance of proceeds derived from the sale
of certain shares of JPMC common stock as more fully described in Section 2(d)(ii)(B) of the
Agreement and (ii) U.S. $7,055,520 of the Special Award (as defined in Section 2(a) of the
Agreement) shall be held in an escrow account subject to this Escrow Agreement and the Agreement.
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Appointment. The Parties hereby appoint the Escrow Agent as their escrow agent for the
purposes set forth herein, and the Escrow Agent hereby accepts such appointment under the terms and
conditions set forth herein. As further described below, the Escrow Agent shall establish six
accounts (the “Accounts”) in the name of Xxxxxxx (the “SARs Escrow Account”, the “SARs Gains
Account”, the “SARs Income Account”, the “Cash Escrow Account”, the “Cash Gains Account” and the
“Cash Income Account”), subject to the terms and conditions of the Agreement, this Escrow Agreement
and, to the extent not inconsistent with the terms hereof, the Escrow Agent’s customary procedures
as set forth in the Escrow Agent’s applicable disclosures. Subject only to the provisions of this
Escrow Agreement, Xxxxxxx shall, for all purposes be treated as the owner of any and all
Investments (as defined below) held in any of the Accounts. Xxxxxxx hereby authorizes the Escrow
Agent to act hereunder notwithstanding that the Escrow Agent or any of its divisions, branches or
affiliates may have a material interest in the transaction or a potential conflict of duty or
interest.
2. Funds.
(a) Not later than 10 days after the Effective Date (as defined in the Agreement), JPMC shall
deposit, in accordance with Section 2(a) of the Agreement, into the Cash Escrow Account with the
Escrow Agent the sum of U.S. $7,055,520.00.
(b) In accordance with Section 2(d)(ii)(B) of the Agreement, JPMC or the Administrator of JPMC
Stock Program shall deposit into SARs Escrow Account with the Escrow Agent the balance of the
proceeds derived from the sale of certain shares of JPMC common stock.
(c) Gains, losses and additions or subtractions in the six Accounts shall be separately
accounted for by the Escrow Agent as described in Section 2(d) below and, subject to
the terms and conditions hereof, the Escrow Agent shall invest and reinvest any cash deposited
in the Accounts, and all proceeds thereof, as directed in Section 3 below.
(d) While any Investments, other than cash, are held in any of the Accounts, Xxxxxxx shall be
entitled to all rights with respect to such Investments, including without limitation the right to
exercise all voting power and to receive any and all dividends and/or distributions with respect to
such Investments; provided, however, that (i) any Securities (as defined below) distributed in
respect of any such Investments, and (ii) any cash dividends or cash proceeds or other property
acquired, received or obtained with respect to any such Investments (collectively, “Income and
Gains”), shall be held in one of four separate accounts: a “SARs Gains Account” for the proceeds
(“Gains”) derived from the sale of any Investments in the SARs Escrow Account; a “SARs Income
Account” for any other income, if any (“Income”), that is derived from Investments in the SARs
Escrow Account (together with the SARs Gains Account and the SARS Escrow Account, the “SARs
Accounts”); a “Cash Gains Account” for Gains, if any, derived from the sale of any Investments in
the Cash Escrow Account; and a “Cash Income Account” for Income, if any, derived from Investments
in the Cash Escrow Account (together with the Cash Gains Account and the Cash Escrow Account, the
“Cash Accounts”). All interest or dividends arising from Investments in the SARs Gains Account and
the SARs Escrow Account shall be reinvested in the SARs Income Account in accordance with Xxxxxxx’
instructions and Section 3 below. All interest or dividends arising from Investments in the Cash
Gains Account and the Cash Escrow Account shall be reinvested in the Cash Income Account in
accordance with Xxxxxxx’ instructions and Section 3 below. Upon the Escrow Agent’s receipt of
Xxxxxxx’ appropriate written instruction(s), the proceeds from the sale of any Investment in any
Account (other than the SARs Gains Account or the Cash Gains Account) shall be transferred by the
Escrow Agent to either the SARs Gains Account or the Cash Gains Account, as appropriate, and held
there and reinvested in accordance with Xxxxxxx’ instructions and Section 3 below.
(e) Use of Depositories; Nominee Name.
(i) The Escrow Agent may deposit any securities (collectively the “Securities”) credited to
any Account with, and hold Securities in, any securities depository, settlement system,
dematerialized book entry system or similar system (together a “Securities Depository”) on such
terms as such systems customarily operate, and Xxxxxxx will provide the Escrow Agent with such
documentation or acknowledgements that the Escrow Agent may require to hold the Securities in such
systems. The Escrow Agent is not responsible for the selection or monitoring of any Securities
Depository and will have no responsibility for any act or omission by (or the insolvency of) any
Securities Depository. In the event Xxxxxxx incurs a loss due to the negligence, willful
misconduct, or insolvency of a Securities Depository, the Escrow Agent will make reasonable
endeavors, in its discretion, to seek recovery from the Securities Depository, but Escrow Agent
will not be obligated to institute legal proceedings, file proofs of claim in any insolvency
proceeding, or take any similar action.
(ii) The Escrow Agent will identify in its books that Securities credited to any Account,
belong to Xxxxxxx (except as otherwise may be agreed by the Escrow Agent and Xxxxxxx).
(iii) The Escrow Agent is authorized, in its discretion:
2
A. to hold in bearer form, such securities as are customarily held in bearer form or are
delivered to the Escrow Agent in bearer form;
B. to hold Securities in or deposit Securities with any Securities Depository or settlement
system;
C. to hold Securities in omnibus accounts on a fungible basis and to accept delivery of
securities of the same class and denomination as those deposited with the Escrow Agent; and
D. to register in the name of Xxxxxxx, the Escrow Agent, a Securities Depository, or their
respective nominees, such Securities as are customarily held in registered form.
(iv) Entitlements. With respect to all Securities held in any Account, the Escrow Agent by
itself, or through the use of the book entry system or the appropriate Securities Depository,
shall, unless otherwise instructed in writing to the contrary by Xxxxxxx: (A) collect all income
and other payments reflecting interest and principal on the Securities in any Account and transfer
and/or disburse such amounts as directed by Xxxxxxx; (B) forward to Xxxxxxx copies of all
information or documents that Escrow Agent may receive from an issuer of Securities which, in the
opinion of the Escrow Agent, are intended for the beneficial owner of the Securities including,
without limitation, all proxies and other authorizations properly executed and all proxy
statements, notices and reports; (C) execute, as Escrow Agent, any certificates of ownership,
affidavits, declarations or other certificates under any tax laws now or hereafter in effect in
connection with the collection of bond and note coupons; and (D) hold directly, or through the book
entry system or Securities Depository, all rights issued with respect to any Securities held by the
Escrow Agent hereunder. Upon receipt of written instructions from Xxxxxxx, the Escrow Agent shall
(1) release and exchange Securities held hereunder for other Securities and/or cash in connection
with (x) any sale, conversion privilege, reorganization, recapitalization, redemption in kind,
consolidation, tender offer or exchange offer, or (y) any exercise, subscription, purchase or other
similar rights; and (2) present Securities for payment upon maturity, redemption or other
retirement of the Securities.
3. Investment of Funds.
(a) Any balance in any Account that is in the form of cash shall be invested as directed by
Xxxxxxx in accordance with Section 3(c) below. In accordance with the Escrow Agent’s procedures,
one third of the initial deposit to the Cash Escrow Account shall be invested in the X.X Xxxxxx
Short Duration Fund, another one third of such initial deposit shall be invested in the X.X. Xxxxxx
Strategic Income Opportunities Fund, and the remaining one third of such initial deposit shall be
invested in X.X. Xxxxxx High Yield Bond Fund, unless otherwise instructed in writing by Xxxxxxx in
accordance with Section 3(c) below.
In accordance with the Escrow Agent’s procedures, one third of the initial deposit to the SARs
Escrow Account shall be invested in the X.X Xxxxxx Short Duration Fund, one third of such initial
deposit shall be invested in the X.X. Xxxxxx Strategic Income Opportunities Fund, and the
3
remaining one third of such deposit shall be invested in the X.X. Xxxxxx High Yield Bond Fund,
unless otherwise instructed in writing by Xxxxxxx in accordance with Section 3(c) below.
(b) Xxxxxxx may provide written instructions in accordance with Section 3(c) below to the
Escrow Agent to facilitate the purchase, or sale, for any Account of: (i) any publicly traded
Securities; (ii) shares in any mutual fund that is selected by Xxxxxxx and acceptable to the Escrow
Agent (including but not limited to a JPMorgan Money Market Mutual Fund (“MMMF”) and the three
funds identified in Section 3(a) above), based upon Xxxxxxx’ independent review of prospectuses
previously delivered to Xxxxxxx; and (iii) such other Securities and investments as may be
authorized or agreed upon by the Escrow Agent and Xxxxxxx (all of the foregoing collectively,
“Investments”). Notwithstanding the foregoing, (1) any sale or purchase of Securities pursuant to
the foregoing shall be subject to instructions to the executing broker dealer or other party to:
(x) deliver the proceeds of any such sale to the Escrow Agent and (y) deliver any Securities
acquired upon any such purchase to the Securities Depositary specified by the Escrow Agent (as more
fully described in Section 2(e) above), and (2) no purchase of any Investment will be permitted if
the applicable Account does not have sufficient liquidity to cover the purchase price.
(c) Written investment instructions, if any, shall specify the Account to which they apply and
the type and identity of the Investments to be purchased and/or sold. The Escrow Agent is hereby
authorized to execute purchases and sales of Investments through the facilities of its own trading
or capital markets operations or those of any affiliated entity. The Escrow Agent or any of its
affiliates may receive compensation with respect to any investment directed hereunder including
without limitation charging an applicable agency fee in connection with each transaction. Xxxxxxx
recognizes and agrees that the Escrow Agent will not provide supervision, recommendations or advice
relating to either the investment of cash held in the Accounts or the purchase, sale, retention or
other disposition of any Investments described herein. The Escrow Agent shall not have any
liability for any loss sustained as a result of the purchase, sale, retention or other disposition
of any Investment made pursuant to the terms of this Escrow Agreement or as a result of any
liquidation of any Investment prior to its maturity or for the failure of Xxxxxxx to give the
Escrow Agent instructions to invest or reinvest the assets held in an Account. The Escrow Agent
shall have the right to liquidate any Investment held in order to provide funds necessary to make
required payments under this Escrow Agreement.
4. Disposition and Termination.
(a) Subject to Section 4(b) below, JPMC hereby instructs the Escrow Agent to release the cash
balances and/or Investments in the SARs Accounts (as directed in writing by Xxxxxxx) to Xxxxxxx (or
his designee(s)) between February 2, 2011 and February 11, 2011, and to release the cash balances
and/or Investments in the Cash Accounts (as directed in writing by Xxxxxxx) to Xxxxxxx (or his
designee(s)) between February 2, 2012 and February 11, 2012. Xxxxxxx, or his authorized
representatives, shall be entitled, to the extent permitted under applicable law, to designate the
recipient(s) of distribution(s) from the Accounts under this Escrow Agreement in the event of his
death by giving timely written notice to JPMC and the Escrow Agent thereof. In the event of
Xxxxxxx’ death or a judicial determination of his incompetence, references in this Agreement to
Xxxxxxx shall be deemed, where appropriate, to refer to his designated beneficiar(ies), his estate,
his executor(s), or his other legal
4
representative(s). Unless otherwise instructed in writing, cash disbursements to Xxxxxxx
shall be made to the account designated in Section 12(b) below.
(b) If, on or before February 1, 2011, with respect to the SARs Accounts or if, on or before
February 1, 2012, with respect to the Cash Accounts, JMPC advises the Escrow Agent in writing that
JPMC has provided a notice of recoupment/cancellation/forfeiture to Xxxxxxx under Section 3(a)(ii),
3(b)(iii) or 3(c)(ii) of the Agreement, as applicable, the Escrow Agent shall cease to effectuate
any written instructions received from Xxxxxxx as permitted in Section 4(a) of this Escrow
Agreement and shall continue to hold the Accounts (or portions thereof) that are the object of the
claimed recoupment/cancellation/forfeiture, as the case may be, subject to the terms of this Escrow
Agreement, until it receives either (i) written direction signed by both Xxxxxxx and JPMC or (ii)
an award from an arbitrator appointed under Section 14(b) of the Agreement certified to be final by
one of the Parties with a copy to the other Party; (provided that the non-certifying Party does
not provide the Escrow Agent with a written objection within seven days immediately following
receipt of the other Party’s certification of the award ) that, in either case (A) states that
the matter has been resolved (whether by agreement or in arbitration) and (B) directs the Escrow
Agent as to the proper distribution of the balances in the applicable Account(s). Immediately
following receipt of such written notification, the Escrow Agent shall distribute the amounts
remaining in the applicable Account(s) in accordance with such direction.
(c) Upon delivery of all balances in all Accounts by the Escrow Agent to either Party in
accordance with Sections 4(a) and 4(b) above, this Escrow Agreement shall terminate, subject to the
provisions of Sections 5 through 11 below, which shall survive such termination.
5. Escrow Agent.
(a) The Escrow Agent shall have only those duties as are specifically and expressly provided
herein, which shall be deemed purely ministerial in nature, and no other duties shall be implied.
The Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of, nor have any
requirements to comply with, the terms and conditions of any other agreement, instrument or
document between the Parties, in connection herewith, if any, including without limitation the
Agreement (nor shall the Escrow Agent be required to determine if any person or entity has complied
with any such agreements, nor shall any additional obligations of the Escrow Agent be inferred from
the terms of such agreements, even though reference thereto may be made in this Escrow Agreement).
In the event of any conflict between the terms and provisions of this Escrow Agreement, those of
the Agreement, any schedule or exhibit attached to the Escrow Agreement, or any other agreement
among the Parties, the terms and conditions of this Escrow Agreement shall control. The Escrow
Agent may rely upon and shall not be liable for acting or refraining from acting upon any written
notice, document, instruction or request furnished to it hereunder and believed by it to be genuine
and to have been signed or presented by the proper Party or Parties without inquiry and without
requiring substantiating evidence of any kind. The Escrow Agent shall be under no duty to inquire
into or investigate the validity, accuracy or content of any such document, notice, instruction or
request. The Escrow Agent shall have no duty to solicit any payments which may be due it or the
Account(s) nor shall the
5
Escrow Agent have any duty or obligation to confirm or verify the accuracy or correctness of
any amounts deposited with it hereunder.
(b) The Escrow Agent shall not be liable for any action taken, suffered or omitted to be taken
by it in good faith except to the extent that a final adjudication of a court of competent
jurisdiction determines that the Escrow Agent’s gross negligence or willful misconduct was the
primary cause of any loss to either Party. The Escrow Agent may execute any of its powers and
perform any of its duties hereunder directly or through attorneys, and shall be liable only for its
gross negligence or willful misconduct (as finally adjudicated in a court of competent
jurisdiction) in the selection of any such attorney. The Escrow Agent may consult with counsel,
accountants and other skilled persons to be selected and retained by it. The Escrow Agent shall
not be liable for any action taken, suffered or omitted to be taken by it in accordance with, or in
reliance upon, the advice or opinion of any such counsel, accountants or other skilled persons. In
the event that the Escrow Agent shall be uncertain or believe there is some ambiguity as to its
duties or rights hereunder or shall receive instructions, claims or demands from any party hereto
which, in its opinion, conflict with any of the provisions of this Escrow Agreement, it shall be
entitled to refrain from taking any action and its sole obligation shall be to keep safely all
property held in escrow until it shall be given a direction in writing by the Parties which
eliminates such ambiguity or uncertainty to the satisfaction of Escrow Agent or by a final and
non-appealable order or judgment of a court of competent jurisdiction. The Parties agree to pursue
any redress or recourse in connection with any dispute without making the Escrow Agent a party to
the same. Anything in this Escrow Agreement to the contrary notwithstanding, in no event shall the
Escrow Agent be liable for special, incidental, punitive, indirect or consequential loss or damage
of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has
been advised of the likelihood of such loss or damage and regardless of the form of action.
6. Succession.
(a) The Escrow Agent may resign and be discharged from its duties or obligations hereunder by
giving thirty (30) days advance notice in writing of such resignation to the Parties specifying a
date when such resignation shall take effect. If the Parties have failed to appoint a successor
escrow agent prior to the expiration of thirty (30) days following receipt of the notice of
resignation, the Escrow Agent may petition any court of competent jurisdiction for the appointment
of a successor escrow agent or for other appropriate relief, and any such resulting appointment
shall be binding upon all of the parties hereto. Escrow Agent’s sole responsibility after such
thirty (30) day notice period expires shall be to hold each Account (without any obligation to
reinvest the same) and to deliver the same to a designated substitute escrow agent, if any, or in
accordance with the directions of a final order or judgment of a court of competent jurisdiction,
at which time of delivery Escrow Agent’s obligations hereunder shall cease and terminate, subject
to the provisions of Sections 7 and 8 hereunder. The Escrow Agent shall have the right to withhold
an amount equal to any amount due and owing to the Escrow Agent, plus any costs and expenses the
Escrow Agent shall reasonably believe may be incurred by the Escrow Agent in connection with the
termination of the Escrow Agreement.
(b) Any entity into which the Escrow Agent may be merged or converted or with which it may be
consolidated, or any entity to which all or substantially all the escrow
6
business may be transferred, shall be the Escrow Agent under this Escrow Agreement without
further act.
7. Compensation and Reimbursement. JPMC agrees to (a) pay the Escrow Agent for all its
services to be rendered hereunder, which unless otherwise agreed in writing shall be as described
in Schedule 2 attached hereto, and (b) pay or reimburse the Escrow Agent upon request for all
expenses, disbursements and advances, including, without limitation reasonable attorney’s fees and
expenses, incurred or made by it in connection with the performance of this Escrow Agreement.
8. Patriot Act Disclosure/Taxpayer Identification Numbers/Tax Reporting.
(a) Patriot Act Disclosure. Section 326 of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT
Act”) requires the Escrow Agent to implement reasonable procedures to verify the identity of any
person that opens a new account with it. Accordingly, the Parties acknowledge that Section 326 of
the USA PATRIOT Act and the Escrow Agent’s identity verification procedures require the Escrow
Agent to obtain information which may be used to confirm the Parties identity including without
limitation name, address and organizational documents (“identifying information”). The Parties
agree to provide the Escrow Agent with and consent to the Escrow Agent obtaining from third parties
any such identifying information required as a condition of opening an account with or using any
service provided by the Escrow Agent.
(b) Taxpayer Identification Numbers (“TIN”). Xxxxxxx has provided the Escrow Agent
with his fully executed Internal Revenue Service Form W-9 and/or other required documentation.
(c) Tax Reporting. All interest or other income earned under the Escrow Agreement
shall be allocated to Xxxxxxx and reported, as and to the extent required by law, by the Escrow
Agent to the IRS, or any other taxing authority, on IRS Form 1099 or 1042S (or other appropriate
form) as income earned from the Investments by Xxxxxxx whether or not said income has been
distributed during such year. Any other tax returns required to be filed will be prepared and
filed by Xxxxxxx with the IRS and any other taxing authority as required by law. The Parties
acknowledge and agree that Escrow Agent shall have no responsibility for the preparation and/or
filing of any income, franchise or any other tax return with respect to each Account or any income
earned by the Investments. The Parties further acknowledge and agree that any taxes payable from
the income earned in respect of Investments held in the Accounts shall be paid by Xxxxxxx, except
that Escrow Agent shall withhold any taxes it deems appropriate out of the applicable Account,
including but not limited to required withholding in the absence of proper tax documentation, and
shall remit such taxes to the appropriate authorities.
9. Notices. All communications hereunder shall be in writing and shall be deemed to be duly
given and received:
(a) upon delivery, if delivered personally, or upon confirmed transmittal, if by facsimile;
7
(b) on the next Business Day (as hereinafter defined) if sent by overnight courier; or
(c) four (4) Business Days after mailing if mailed by prepaid registered mail, return receipt
requested, to the appropriate notice address set forth below or at such other address as any party
hereto may have furnished to the other parties in writing by registered mail, return receipt
requested.
If to JPMorgan Chase & Co.:
|
0 Xxxxx Xxxxxxxxx Xxxxx, Xx. 00 | |
| Xxx Xxxx, Xxx Xxxx 00000-0000 | ||
| Attention: Xxxxxxx Xxxxx, Managing Director | ||
| Tel No.: 000-000-0000 | ||
| Fax No.: 000-000-0000 | ||
If to Xxxxxxx:
|
To the address separately provided to the Escrow Agent and to JPMC. | |
With a copy to:
|
Xxxxxxxx Xxxxx LLP | |
| 000 Xxxxx Xxxxxx, 00xx Xxxxx | ||
| Xxx Xxxx, Xxx Xxxx 00000 | ||
| Attn: Xxxxxx X. Xxxxxxxx | ||
| Tel No.: 000-000-0000 | ||
| Fax No.: 000-000-0000 | ||
If to the Escrow Agent:
|
JPMorgan Chase Bank, N.A. | |
| Escrow Services | ||
| 0 Xxx Xxxx Xxxxx, 00xx Xxxxx | ||
| Xxx Xxxx Xxxx, XX 00000 | ||
| Attention: Xxxxxxx Xxxxx | ||
| Xxxxxx Xxxxxx | ||
| Fax No.: 000-000-0000 |
Notwithstanding the above, in the case of communications delivered to the Escrow Agent
pursuant to (a), (b) and (c) of this Section 10, such communications shall be deemed to have been
given on the date received by an officer of the Escrow Agent or any employee of the Escrow Agent
who reports directly to any such officer at the above-referenced office. In the event that the
Escrow Agent, in its sole discretion, shall determine that an emergency exists, the Escrow Agent
may use such other means of communication as the Escrow Agent deems appropriate. “Business Day”
shall mean any day other than a Saturday, Sunday or any other day on which the Escrow Agent located
at the notice address set forth above is authorized or required by law or executive order to remain
closed.
10. Compliance with Court Orders. In the event that any escrow property shall be attached,
garnished or levied upon by any court order or any order of any arbitration panel appointed
pursuant to Section 14(b) of the Agreement, or the delivery thereof shall be stayed or enjoined by
an order of any court or any order of any arbitration panel appointed pursuant to
8
Section 14(b) of the Agreement, or any order, judgment or decree shall be made or entered by
any court order affecting the property deposited under this Escrow Agreement, the Escrow Agent is
hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders or
decrees so entered or issued, which it is advised by legal counsel of its own choosing is binding
upon it, whether with or without jurisdiction, and in the event that the Escrow Agent obeys or
complies with any such writ, order or decree it shall not be liable to any of the parties hereto or
to any other person, entity, firm or corporation, by reason of such compliance notwithstanding such
writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.
11. Miscellaneous.
(a) The provisions of this Escrow Agreement may be waived, altered, amended or supplemented,
in whole or in part, only by a writing signed by the Escrow Agent and the Parties. Neither this
Escrow Agreement nor any right or interest hereunder may be assigned in whole or in part by the
Escrow Agent or any Party, except as provided in Section 6, without the prior consent of the Escrow
Agent and the other parties.
(b) This Escrow Agreement shall be governed by and construed under the laws of the State of
New York. Each Party irrevocably waives any objection on the grounds of venue, forum non-conveniens
or any similar grounds and irrevocably consents to service of process by mail or in any other
manner permitted by applicable law and consents to the jurisdiction of the courts located in the
State of New York. The Parties further hereby waive any right to a trial by jury with respect to
any lawsuit or judicial proceeding arising or relating to this Escrow Agreement.
(c) No party to this Escrow Agreement is liable to any other party for losses due to, or if it
is unable to timely perform its obligations under the terms of this Escrow Agreement because of,
acts of God, fire, war, terrorism, floods, strikes, electrical outages, equipment or transmission
failure, or other causes reasonably beyond its control.
(d) This Escrow Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument. All
signatures of the parties to this Escrow Agreement may be transmitted by facsimile (including,
without limitation, by “pdf” followed by confirmed facsimile), and such facsimile will, for all
purposes, be deemed to be the original signature of such party whose signature it reproduces, and
will be binding upon such party.
(e) If any provision of this Escrow Agreement is determined to be prohibited or unenforceable
by reason of any applicable law of a jurisdiction, then such provision shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions thereof, and any such prohibition or unenforceability in such
jurisdiction shall not invalidate or render unenforceable such provisions in any other
jurisdiction.
(f) No person who is not a Party to this Escrow Agreement shall have the right to enforce any
term of this Escrow Agreement. The Parties represent, warrant and covenant that each document,
notice, instruction or request provided by either Party to the Escrow Agent
9
shall comply with applicable laws and regulations. Where, however, the conflicting provisions
of any such applicable law may be waived, they are hereby irrevocably waived by the parties hereto
to the fullest extent permitted by law, to the end that this Escrow Agreement shall be enforced as
written.
(g) Except as expressly provided in Section 4(a) or 8 above, nothing in this Escrow Agreement,
whether express or implied, shall be construed to give to any person or entity other than the
Escrow Agent and the Parties any legal or equitable right, remedy, interest or claim under or in
respect of this Escrow Agreement or any funds escrowed hereunder.
12. Security Procedures.
(a) In the event funds transfer instructions are given (whether in writing or by facsimile
(other than as set forth in Section 12(b) below)) for Xxxxxxx, the Escrow Agent is authorized to
seek confirmation of such instructions by telephone call-back to Xxxxxxx only, at the phone number
designated on Schedule 1 hereto. In the event the Escrow Agent receives notice of judicial
determination of Xxxxxxx’x incapacitation pursuant to Section 4(a) hereto, the Escrow Agent is
authorized to seek confirmation of such instructions by telephone call-back to Xxxxxxx Xxxxxxx at
the phone number designated on Schedule 1 hereto. The Escrow Agent may rely upon the confirmation
of anyone purporting to be Xxxxxxx or Xxxxxxx Xxxxxxx, as the case may be. The persons and
telephone numbers for call-backs may be changed only in a writing actually received and
acknowledged by the Escrow Agent. If the Escrow Agent is unable to contact any of the authorized
representatives identified in Schedule 1, no funds will be transferred until the Escrow Agent is
able to receive such confirmation. The Escrow Agent and the beneficiary’s bank in any funds
transfer may rely solely upon any account numbers or similar identifying numbers provided by
Xxxxxxx or JPMC to identify (i) the beneficiary, (ii) the beneficiary’s bank, or (iii) an
intermediary bank. The Escrow Agent may apply any of the escrowed funds for any payment order it
executes using any such identifying number, even when its use may result in a person other than the
beneficiary being paid, or the transfer of funds to a bank other than the beneficiary’s bank or an
intermediary bank designated. The Parties acknowledge that these security procedures are
commercially reasonable.
(b) Xxxxxxx acknowledges that the Escrow Agent is authorized to use the funds transfer
instructions provided to it by Xxxxxxx under separate written cover to disburse any funds due to
Xxxxxxx under this Escrow Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the date set
forth above.
XXXXXXX X. XXXXXXX
00
XXXXXXXX XXXXX & XX.
Xx: |
||||
Name: |
||||
Title: |
||||
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
as Escrow Agent
as Escrow Agent
By: |
||||
Name: |
||||
Title: |
||||
11
EXHIBIT B
SCHEDULE 1
INFORMATION PROVIDED TO ESCROW AGENT UNDER SEPARATE COVER
INFORMATION PROVIDED TO ESCROW AGENT UNDER SEPARATE COVER
EXHIBIT C
Bonus Recoupment Policy
In the event of a material restatement of the Firm’s financial results, the Board
believes it would be appropriate to review the circumstances that caused the restatement and
consider issues of accountability for those who bore responsibility for the events, including
whether anyone responsible engaged in misconduct. As part of that review, consideration would also
be given to any appropriate action regarding compensation that may have been awarded to such
persons. In particular, it would be appropriate to consider whether any compensation was awarded on
the basis of having achieved specified performance targets, whether an officer engaged in
misconduct that contributed to the restatement and whether such compensation would have been
reduced had the financial results been properly reported. Misconduct includes violation of the
Firm’s Code of Conduct or policies or any act or failure to act that could reasonably be expected
to cause financial or reputational harm to the Firm.
Depending on the outcome of that review, appropriate action could include actions such as
termination, reducing compensation in the year the restatement was made, seeking repayment of any
bonus received for the period restated or any gains realized as a result of exercising an option
awarded for the period restated, or canceling any unvested equity compensation awarded for the
period restated. Consideration may also be given to whether or not any one or more of such actions
should be extended to employees who did not engage in misconduct that contributed to the
restatement.
EXHIBIT D
Indemnification By-law
Section 9.01. Right to Indemnification. The Corporation shall, to the fullest extent permitted
by applicable law as then in effect indemnify any person (the “Indemnitee”) who was or is involved
in any manner (including, without limitation, as a party or a witness), or is threatened to be made
so involved, in any threatened, pending or completed investigation, claim, action, suit or
proceeding, whether civil, criminal, administrative, or investigative (including without
limitation, any action, suit or proceeding by or in the right of the Corporation to procure a
judgment in its favor, but excluding any action, suit, or proceeding, or part thereof brought by
such person against the Corporation or any affiliate of the Corporation unless consented to by the
Corporation) (a “Proceeding”) by reason of the fact that he is or was a director, officer, or
employee of the Corporation, or is or was serving at the request of the Corporation as a director,
officer or employee of another corporation, partnership, joint venture, trust or other enterprise,
against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such Indemnitee in connection with such Proceeding (or part
thereof). Such indemnification shall be a contract right and shall include the right to receive
payment in advance of any expenses incurred by the Indemnitee in connection with such Proceeding,
consistent with the provisions of applicable law as then in effect.
Section 9.02. Contracts and Funding. The Corporation may enter into contracts with any
director, officer, or employee of the Corporation in furtherance of the provisions of this Article
IX and may create a trust fund, grant a security interest or use other means (including, without
limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect
indemnification as provided in this Article IX.
Section 9.03. Employee Benefit Plans. For purposes of this Article IX, references to “other
enterprises” shall include employee benefit plans; references to “fines” shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and references to “serving at
the request of the Corporation” shall include any service as a director, officer, or employee of
the Corporation which imposes duties on, or involves services by, such director, officer, or
employee with respect to an employee benefit plan, its participants, or beneficiaries; and a person
who acted in good faith and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner not opposed to the best interest of a corporation.
Section 9.04. Indemnification Not Exclusive Right. The right of indemnification and
advancement of expenses provided in this Article IX shall not be exclusive of any other rights to
which a person seeking indemnification may otherwise be entitled, under any statute, by-law,
agreement vote of stockholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such office. The provisions of
this Article IX shall inure to the benefit of the heirs and legal representatives of any person
entitled to indemnity under this Article IX and shall be applicable to Proceedings commenced or
continuing after the adoption of
Page 1 of 3
this Article IX, whether arising from acts or omissions occurring
before or after such adoption.
Section 9.05. Advancement of Expenses; Procedures. In furtherance, but not in limitation, of
the foregoing provisions, the following procedures and remedies shall apply with respect to
advancement of expenses and the right to indemnification under this Article IX:
(a) Advancement of Expenses. All reasonable expenses incurred by or on behalf of the
Indemnitee in connection with any Proceeding shall be advanced to the Indemnitee by the Corporation
within 30 days after the receipt by the Corporation of a statement or statements from the
Indemnitee requesting such advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall reasonably evidence the expenses
incurred by the Indemnitee. In addition, such statement or statements shall, to the extent required
by law at the time of such advance, and otherwise except as may be determined by or under the
authority of the General Counsel, include or be accompanied by a written undertaking by or on
behalf of the Indemnitee to repay the amounts advanced if it should ultimately be determined that
the Indemnitee is not entitled to be indemnified against such expenses. Notwithstanding the absence
of such a written undertaking, acceptance of any such advancement of expenses shall constitute such
an undertaking by the Indemnitee.
(b) Written Request for Indemnification. To obtain indemnification under this Article IX, an
Indemnitee shall submit to the Secretary a written request, including such documentation and
information as is reasonably available to the Indemnitee and reasonably necessary to determine
whether and to what extent the Indemnitee is entitled to indemnification (the “Supporting
Documentation”). The determination of the Indemnitee’s entitlement to indemnification shall be made
within a reasonable time after receipt by the Corporation of the written request for
indemnification together with the Supporting Documentation.
(c) Procedure for Determination. Where the Indemnitee is a current or former director or a
current officer of the Corporation, the Indemnitee’s entitlement to indemnification under this
Article IX shall be determined (i) by the Board by a majority vote of a quorum (as defined in
Article II of these By-laws) consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by
the stockholders, but only if a majority of the disinterested directors, if they constitute a
quorum of the Board, presents the issue of entitlement to indemnification to the stockholders for
their determination. Where the Indemnitee is not a current or former director or a current officer
of the Corporation, the Indemnitee’s entitlement to indemnification under this Article IX may be
determined by the General Counsel. For purposes of this Article IX, the term “officer, when used
with respect to the Corporation, shall mean those officers of the Corporation who are deemed to be
Executive Officers for purposes of the annual report of the Corporation filed on Form 10-K under
the Exchange Act.
Page 2 of 3
Section 9.06. Amendment or Repeal. Any repeal or modification of the foregoing provisions of
this Article IX shall not adversely affect any right or protection hereunder of any Indemnitee in
respect of any act or omission occurring prior to the time of such repeal or modification.
Page 3 of 3
EXHIBIT E
UK COMPROMISE AGREEMENT
UK COMPROMISE AGREEMENT
March 1, 2010
Xx. Xxxxxxx X. Xxxxxxx
00 Xxxxxxx Xxxx
Xxxxxx, Xxxxxx Xxxxxxx W148ED
00 Xxxxxxx Xxxx
Xxxxxx, Xxxxxx Xxxxxxx W148ED
WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
Dear Xx. Xxxxxxx:
This letter, including the Agreement and Release attached hereto and incorporated herein by
reference (“US Release”), will set out the terms on which the termination of your employment with
JPMorgan Chase & Co (“JPMC”) and all of its Associated Companies (collectively, the “Firm”) will
occur.
Termination Date/Resignation from Directorships and Offices
Your resignation from all directorships and offices you held with JPMC and all of its Associated
Companies was effective as of September 30, 2009. You hereby agree to sign and deliver to the Firm
on demand any written resignations that you may be asked for from all other offices, trusteeships
and appointments which you held in connection with your employment.
Your employment with the Firm terminated as of 5 February 2010 (“the Separation Date”).
Duties, Salary & Benefits up to Termination Date
These shall be as set out in the US Release.
No Debts etc Owed by Firm
You acknowledge that there are no sums of money due to you from the Firm except as provided for in
the US Release. You confirm that, except as provided in the US Release, you do not have and will
not have, following the Separation Date, any claim or entitlement under or in connection with any
bonus, incentive, share option or similar scheme and that neither the Firm nor any nor any trustees
of any scheme established by the JPMC nor any Associated Company is or shall be liable to make any
payment or provide you with shares under any such scheme.
Return of Firm Property
Except as provided in the US Release, you have returned to the Firm on or before the Separation
Date all property which is in your possession or custody or under your control belonging to the
Firm and all property belonging to third parties which is in your possession or custody or under
your control by virtue of your employment. The property to which this paragraph applies includes,
but is not limited to, passes, keys, credit cards, XX Xxxxxx taxi cards, business equipment,
documents, correspondence, lists of customers or clients, computer discs and data and all copies
and duplicates of such items whether in a physical or electronic form.
Continuing Obligations
You acknowledge that notwithstanding the termination of your employment, you continue to have
certain duties to the Firm, as provided in the US Release (including, without limitation, Sections,
5, 6, 7 and 12 of the US Release), and you hereby agree to comply with such obligations. You agree
and acknowledge that the sum of £100 has been delivered to you in consideration of such
obligations.
Xx. Xxxxxxx X. Xxxxxxx
March 1, 2010
Page 2
March 1, 2010
Page 2
Compensation
JPMC shall for itself and each Associated Company pay to you the payments and benefits set out in
the US Release as compensation in connection with the termination of your employment (“the
Separation Benefits”). The Separation Benefits will be provided to you, subject to your delivering
to the Firm all things that you are required to deliver pursuant to this letter, including the US
Release.
In accordance with the Terms and Conditions of awards made under the JPMorgan Chase Long Term
Incentive Plan, as amended from time to time, failure to sign and return this agreement will result
in the forfeiture of any outstanding equity awards.
Tax Indemnity
The Firm gives no warranty as to whether income tax or employee National Insurance contributions
are lawfully payable in respect of the Separation Benefits provided under this letter and you will
be solely responsible for any such income tax or employee National Insurance contributions which
arise for payment, except to the extent that the Firm has made or does make an actual deduction in
respect of such liability. Further, you will indemnify the Firm in respect of any assessments,
determination or demands levied or made by the HM Revenue & Customs and/or the Contributions Agency
in respect of such liability and any interest, charges or penalties arising in respect of it.
Full and Final Settlement
The terms of this letter (including the US Release) are without any admission of any liability and
shall be in full and final satisfaction of all and any claims or rights of action that you may have
whether arising under European Union law, common law, statute or otherwise in any United Kingdom
jurisdiction, United States jurisdiction or any jurisdiction outside of the United Kingdom or
United States against JPMC or any Associated Company or any of its or their present or former
directors or employees in connection with or arising out of your employment, the termination of
your employment or any other matter whatsoever (including but not limited to your holding any
office or resigning any office in JPMC or any Associated Company) and you agree to irrevocably
waive any such claims or rights of action which you have save always in respect of any claim for
personal injury or any accrued pension rights.
Statutory Compromise
You agree to refrain from instituting or continuing before an employment tribunal or any other
court any proceedings against JPMC and/or any Associated Company complaining that:
| (a) | unlawful deductions have been made from your wages in breach of Part II of the Employment Rights Xxx 0000; | ||
| (b) | you were unfairly dismissed in breach of Part X of the Employment Rights Xxx 0000 in respect of the termination of your employment on the Termination Date; | ||
| (c) | you were unlawfully discriminated against on grounds of sex or marital status in breach of Parts I and II of the Sex Discrimination Xxx 0000; | ||
| (d) | JPMC or any Associated Company has breached the equality clause implied under s.1 Equal Pay Xxx 0000; | ||
| (e) | you were unlawfully discriminated against on grounds of colour, race, nationality or ethnic or national origins in breach of Parts I and II of the Race Relations Xxx 0000; | ||
| (f) | you were unlawfully discriminated against on grounds of disability in breach of Part II of the Disability Discrimination Xxx 0000; |
Xx. Xxxxxxx X. Xxxxxxx
March 1, 2010
Page 3
March 1, 2010
Page 3
| (g) | JPMC or any Associated Company was in breach of the Working Time Regulations 1998; | ||
| (h) | you were unlawfully discriminated against on grounds of sexual orientation in breach of the Employment Equality (Sexual Orientation) Regulations 2003; | ||
| (i) | you were unlawfully discriminated against on grounds of religious belief in breach of the Employment Equality (Religion or Belief) Regulations 2003; | ||
| (j) | you were unlawfully discriminated against on grounds of age in breach of the Employment Equality (Age) Regulations 2006; and/or that, | ||
| (k) | you had been subjected to a detriment having made a protected disclosure in contravention of the Employment Rights Xxx 0000; | ||
| (l) | you had suffered a breach of contract or wrongful dismissal. |
You confirm that:
| (a) | prior to accepting the terms of this letter you received independent legal advice from Xxxxxxx Xxxxxx of the firm Xxxxxx & Co. (“the Qualified Lawyer”) as to the terms and effect of the letter if accepted by you and, in particular, its effect on your ability to pursue your rights before an employment tribunal or any other English court; | ||
| (b) | you have been advised by the Qualified Lawyer that there is in force and was, at the time you received the advice referred to above, a contract of insurance or an indemnity provided for members of a profession or professional body covering the risk of a claim by you in respect of loss arising in consequence of that advice; and | ||
| (c) | it is agreed that the conditions regulating compromise agreements contained in s.203 Employment Rights Xxx 0000, s.77 Sex Discrimination Xxx 0000, s.72 Race Relations Xxx 0000, Schedule 3A of the Disability Discrimination Xxx 0000, s.35 Working Time Regulations 1998, schedule 4 of the Employment Equality (Sexual Orientation) Regulations 2003, schedule 4 of the Employment Equality (Religion or Belief) Regulations 2003 and schedule 5 of the Employment Equality (Age) Regulations 2006 are intended to be and have been satisfied. |
You warrant that you are not aware of any statutory claims that you may have other than those
referred to in the paragraph titled “Statutory Compromise” or any claims in respect of personal
injury, or claims in respect of any accrued pension benefits under the JPMorgan UK Pension Plan.
Miscellaneous
You acknowledge and agree that this letter constitutes a valid and effective compromise and release
of claims under English law. Any disputes arising under this letter shall be covered by Section
14(b) of the US Release.
No third party will have rights under the Contracts (Rights of Third Parties) Xxx 0000 to enforce
any term of this Agreement except under the paragraphs titled “No Debts etc Owed by Firm
”, “Continuing Obligations”, “Full and Final Settlement” and “Statutory Compromise”. The third
parties referred to therein may only enforce those paragraphs with the written consent of the Firm
and you and the Firm will not require the consent of any third party to rescind or vary the terms
of this Agreement at any time.
Xx. Xxxxxxx X. Xxxxxxx
March 1, 2010
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March 1, 2010
Page 4
In this letter the term “Associated Company” shall mean any subsidiary of JPMC, and “subsidiary”
shall have the meanings assigned to it by s.1159 Companies Xxx 0000.
This letter (including the US Release) shall be deemed to be without prejudice and subject to
contract until such time as this letter is signed and dated by both parties and the US Release
becomes effective, when this letter shall be treated as an open document evidencing a binding
agreement.
The terms of this letter (including the US Release) contain the entire understanding between us and
supersede all, if any, subsisting agreements, arrangements or understandings, written or oral,
relating to the termination of your employment and any such agreements, arrangements or
understandings shall be deemed to have been terminated by mutual consent.
If the terms set out above are acceptable to you, please:
| (a) | sign and date the enclosed duplicate of this letter; and | ||
| (b) | have the Qualified Lawyer sign and date the certificate attached to the duplicate; and then | ||
| (c) | return the duplicate to me under cover of a letter on the headed notepaper of the Qualified Lawyer’s firm within 14 days. |
I confirm my acceptance of the terms set out above.
Signed |
Date | |||||||||
| For and on behalf of JPMorgan Chase & Co: | ||||||||||
Signed
|
Date | |||||||||
| Xxxx X. Xxxxxxxx | ||||||||||
| Executive Vice President | ||||||||||
QUALIFIED LAWYER’S CERTIFICATE
I hereby certify that:
| (a) | I am a solicitor of the Supreme Court of England and Wales holding a current practising certificate | ||
| (b) | I have advised Xxxxxxx X. Xxxxxxx of the terms and effect of the letter to which this certificate is attached and in particular its effect on his ability to pursue his rights under English law before an employment tribunal or any other court in respect of those proceedings referred to in the paragraph titled “Statutory Compromise” of the letter following his acceptance of the terms of the letter. | ||
| (c) | There was in force at the time that I gave the advice referred to above a contract of insurance or indemnity provided for members of a profession or professional body covering the risk of a claim under English law by my client in respect of loss arising in consequence of that advice. |
Signature of Qualified Lawyer
|
||||
| Partner, .Xxxxxx & Co | ||||
| 66 Lincoln’s Inn Fields | ||||
| London, XX0X 0XX | ||||
Date |
||||
