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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
between
Mellon Bank, N.A.
and
Xxxxx X. Xxxxxxx
Effective as of July 25, 1993
(As Amended and Restated
Effective September 19,1995)
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THIS AGREEMENT, made effective as of July 25, 1993 by and between Mellon Bank,
N.A. (the "Company"), a national banking association, and Xxxxx X. Xxxxxxx (the
"Executive"),
WITNESSETH THAT:
WHEREAS, the Executive, who has served as Chairman and Chief Executive Officer
of the Company and Mellon Bank Corporation (the "Holding Company"), effective
as of June 19, 1987, is willing to continue to serve in such capacity, and the
Company desires to retain the Executive in such capacity on the terms and
conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. EMPLOYMENT. The Company agrees to continue to employ the Executive, and the
Executive agrees to continue to be employed by the Company, for the Term
provided in paragraph 3(a) below and upon the other terms and conditions
hereinafter provided. The Executive hereby represents and warrants that he has
the legal capacity to execute and perform this Agreement, that it is a valid
and binding agreement, enforceable against him according to its terms, and that
its execution and performance by him does not violate the terms of any existing
agreement or understanding to which the Executive is a party. In addition, the
Executive represents and warrants that he knows of no reason why he is not
physically capable of performing his obligations under this Agreement in
accordance with its terms.
2. POSITION AND RESPONSIBILITIES. During the Term, the Executive (a) agrees to
serve as the Chairman and Chief Executive Officer of the Company and the
Holding Company, and to be responsible for the general management of the
affairs of the Company and the Holding Company, reporting directly to the
respective Boards of Directors of the Company (the "Board") and the Holding
Company, and as a member of such boards for the period for which he is and
shall from time to time be elected, (b) shall be given such
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authority as is appropriate to carry out the duties described above, and
(c) agrees to serve, if elected, as an officer and director of any other
subsidiary or affiliate of the Company or the Holding Company.
3. TERM AND DUTIES.
(a) TERM OF EMPLOYMENT. The term of the Executive's employment under this
Agreement shall be deemed to have commenced on July 25, 1993 and shall
continue thereafter through December 31, 1998 (the "Term").
(b) DUTIES. During the Term, and except for illness or incapacity and
reasonable vacation periods of no more than 4 weeks in any calendar year (or
such other period as shall be consistent with the Company's policies for other
key executives), the Executive shall devote all of his business time,
attention, skill and efforts exclusively to the business and affairs of the
Company and the Holding Company and their subsidiaries and affiliates, shall
not be engaged in any other business activity, and shall perform and discharge
well and faithfully the duties which may be assigned to him from time to time
by the board of directors of the Company or the Holding Company; provided,
however, that nothing in this Agreement shall preclude the Executive from
devoting time during reasonable periods required for:
(i) serving, in accordance with the Company's policies and with the prior
approval of the Board, as a director or member of a committee of any
company or organization involving no actual or potential conflict of interest
with the Company or the Holding Company or any of their subsidiaries or
affiliates;
(ii) delivering lectures and fulfilling speaking engagements;
(iii) engaging in charitable and community activities; and
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(iv) investing his personal assets in businesses in which his participation is
solely that of an investor in such form or manner as will not violate Section 7
below or require any services on the part of the Executive in the operation or
the affairs of such business, provided, however, that such activities do not
materially affect or interfere with the performance of the Executive's duties
and obligations to the Company or the Holding Company.
4. COMPENSATION. For all services rendered by the Executive in any capacity
required hereunder during the Term, including, without limitation, services as
an executive, officer, director, or member of any committee of the Company, the
Holding Company or any subsidiary, affiliate or division thereof, the Executive
shall be compensated as follows:
(a) BASE SALARY. The Company shall pay the Executive a fixed salary ("Base
Salary") of $760,000 per annum, subject to such periodic review (which shall
occur at least annually) and such periodic increases as the Board shall deem
appropriate in accordance with the Company's customary procedures and practices
regarding the salaries of senior officers; provided, however, in determining
such increases, the Board shall take into consideration the base salaries of
the chief executive officers of the 10 largest bank holding companies in the
United States, ranked by total assets, the performance of which is
substantially similar to that of the Holding Company. Base Salary shall be
payable in accordance with the customary payroll practices of the Company, but
in no event less frequently than monthly.
(b) BONUS. The Company shall pay the Executive such amounts, if any, as may be
due under the terms of the Mellon Bank Corporation Profit Bonus Plan (or any
successor plan), with such payments of bonus to be made in accordance with the
terms of such bonus plan. For the Profit Bonus Plan award for 1994 (payable in
1995) and for future years, it is understood that the Executive may receive
some
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portion of his Profit Bonus Plan award in the form of restricted stock or
phantom stock units, such awards are to be made on the same terms as apply to
other members of the Office of the Chairman.
(c) STOCK OPTIONS. The Holding Company shall from time to time after the date
of this Agreement consider the grant to the Executive of options to purchase
shares of the Holding Company's Cornmon Stock (the "Common Stock"). Such
options shall be granted under and subject in all respects to the terms of the
Holding Company's Long-Term Profit Incentive Plan (1981) (or any successor
plan) and, in the event of retirement, shall be exercisable through their
stated expiration date.
(d) ADDITIONAL BENEFITS. Except as modified by this Agreement, the Executive
shall be entitled to participate in all compensation or employee benefit plans
or programs, and to receive all benefits, perquisites and emoluments for which
any salaried employees are eligible under any plan or program, now or hereafter
established and maintained by the Company or the Holding Company for senior
officers, to the extent permissible under the general terms and provisions of
such plans or programs and in accordance with the provisions thereof, including
group hospitalization, health, dental care, senior executive life or other life
insurance, travel or accident insurance, disability plans, tax-qualified or
non-qualified pension, savings, thrift and profit-sharing plans, deferred
compensation plans, termination pay programs, sick-leave plans, auto allowance
or auto lease plans, and executive contingent compensation plans, including,
without limitation, capital accumulation programs and stock purchase,
restricted stock or stock option plans.
Specifically, but not by way of limitation, the Company shall furnish the
Executive, without cost to him, with life insurance for the benefit of the
Executive's designated beneficiary in an amount at least equal to twice his
Base Salary (without regard to any deferrals of Base Salary made by the
Executive).
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Notwithstanding the foregoing, nothing in this Agreement shall preclude the
amendment or termination of any such plan or program, on the condition that
such amendment or termination is applicable generally to all of the senior
officers of the Company or any subsidiary or affiliate and that no such
amendment may result in a reduction of the amount of benefits provided to the
Executive under any such plan or program or the life insurance provided for the
benefit of the Executive's designated beneficiary.
(e) PERQUISITES. The Company will also furnish the Executive, without cost to
him, with (i) a Company-owned or leased automobile and driver, (ii) membership
in one country club located within the Pittsburgh metropolitan area and one
business club located in Pittsburgh, (iii) an annual physical examination of
the Executive by a physician selected by the Executive, (iv) participation in
the Company's matching gifts program, and (v) personal financial, investment or
tax advice, not to exceed a reasonable sum per annum, to the extent costs or
expenses of the Executive to be reimbursed are properly documented for Federal
income taxation purposes to preserve any deduction for such reimbursements to
which the Company may be entitled.
5. BUSINESS EXPENSES. The Company shall pay or reimburse the Executive for all
reasonable travel or other expenses incurred by the Executive (and his spouse
where there is a legitimate business reason for his spouse to accompany him in
connection with the performance of his duties and obligations under this
Agreement, subject to the Executive's presentation of appropriate vouchers in
accordance with such procedures as the Company may from time to time establish
for senior officers and to preserve any deductions for Federal income taxation
purposes to which the Company may be entitled.
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6. EFFECT OF TERMINATION OF EMPLOYMENT.
(a) In the event the Executive's employment hereunder terminates due to either
Permanent Disability, a Without Cause Termination, or a Constructive Discharge,
the Company shall, as liquidated damages or severance pay, or both, continue,
subject to the provisions of Section 7 below, to pay the Executive's Base
Salary as in effect at the time of such termination from the date of
termination until the end of the Term, provided, however, that in the case of
Permanent Disability, such payments shall be offset by any amounts otherwise
paid to the Executive under the Company's disability program generally
available to other employees. In addition, earned but unpaid Base Salary as of
the date of termination of employment shall be payable in full and the target
bonus award (or, if higher, the bonus award the Executive would have received
had he been employed throughout the bonus year), including any restricted stock
or phantom stock units payable in lieu of any portion of the Profit Bonus Plan
award, shall be payable on a pro-rated basis for the year in which such
termination of employment occurs only. The Executive shall continue to
participate through the end of the Term, or such longer period as shall be
prescribed in any plan or program, in all compensation or employee benefit
plans or programs maintained by the Company or the Holding Company in which he
was participating on the date of termination, including group hospitalization,
health, dental care, senior executive life or other life insurance, travel or
accident insurance, disability plans, tax qualified savings plans, thrift and
profit-sharing plans and deferred compensation plans, all in accordance with
the terms and conditions of the applicable employee benefit plans in effect
from time to time as applied to employees. The Executive shall continue to
receive years of service credit under all tax-qualified or non-qualified
retirement plans and related excess benefit plans maintained by the Company for
the Executive through the end of the Term and shall be 100% vested in such
plans as of the date of the termination of his employment. The Perquisites set
forth in Paragraphs 4(e)(i), (ii) and (v) shall continue through the first
anniversary of the Executive's termination of employment (except for the driver
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which shall continue only for the 90-day period following the Executive's
termination of employment). Any options to purchase shares of the Holding
Company's Common Stock or shares of restricted stock which are unvested as of
the date of the Executive's termination of employment shall continue to vest
and be exercisable through the end of the Term and thereafter, as permitted by
the applicable plan. The Executive shall have no duty or obligation to seek
other employment through the end of the Term or thereafter.
(b) In the event the Executive's employment hereunder terminates due to a
Termination for Cause or the Executive terminates employment with the Company
for reasons other than a Constructive Discharge, Permanent Disability or
retirement pursuant to Section 8 below, earned but unpaid Base Salary as of the
date of termination of employment shall be payable in full. However, no other
payments shall be made, or benefits provided, by the Company under this
Agreement except for stock options to the extent already vested and
exercisable, and except for benefits, which have already become vested, under
the Supplemental Pension provided in Section 8 of this Agreement and under the
terms of employee benefit programs maintained by the Company or its affiliates
for its employees generally.
(c) For purposes of this Agreement, the following terms have the following
meanings:
(i) The term, "Termination for Cause", means, to the maximum extent
permitted by applicable law, a termination of the Executive's employment by
the Company by a vote of a majority of the Board members then in office,
because the Executive has (a) been convicted of a criminal offense covered by
Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. Section 1829, or (b)
has entered a plea of nolo contendere thereto, or (c) has breached or failed to
perform his duties hereunder, and such breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness, (within the meaning of
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Section 1713(a) of the Pennsylvania Business Corporation Law, as amended),
or a final determination has been reached that the Executive has violated the
representations made in Section 1 above, or the provisions of Section 7,
below; provided, however, that the Board has given the Executive advance
notice of such Termination for Cause including the reasons therefor, together
with a reasonable opportunity for the Executive to appear with counsel before
the Board and to reply to such notice.
(ii) The term, "Constructive Discharge", means a termination of the Executive's
employment by the Executive due to a failure of the Company or its successors
to fulfill the obligations under this Agreement in any material respect,
including (a) any failure to elect or reelect or to appoint or reappoint the
Executive to the offices of Chairman and Chief Executive Officer of the Company
and the Holding Company or as a member of each of their boards of directors or
(b) any other material change by the Company and the Holding Company in the
functions, duties or responsibilities of the Executive's position with the
Company and the Holding Company which would reduce the ranking or level,
dignity, responsibility, importance or scope of such position, (c) any
imposition on the Executive of a requirement to be permanently based at a
location more than fifty miles from the principal office of the Company without
the consent of the Executive, or (d) any reduction without the consent of the
Executive in the Executive's salary below the amount then provided for under
Paragraph 4(a) hereof.
(iii) The term "Without Cause Termination" means a termination of the
Executive's employment by the Company, upon 30 days notice to the
Executive, other than due to Permanent Disability or expiration of the Term
and other than a Termination for Cause.
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(iv) The term "Permanent Disability" means the inability of the Executive to
work for a period of six full calendar months during any eight consecutive
calendar months due to illness or injury of a physical or mental nature,
supported by the completion by the Executive's attending physician of a
medical certification form outlining the disability and treatment.
7. OTHER DUTIES OF EXECUTIVE DURING AND AFTER TERM.
(a) CONFIDENTIAL INFORMATION. The Executive recognizes and acknowledges that
certain information pertaining to the affairs, business, clients, or customers
of the Holding Company or any of its subsidiaries or affiliates (any or all of
such entities hereinafter referred to as the "Business"), as such information
may exist from time to time, is confidential information and is a unique and
valuable asset of the Business, access to and knowledge of which are essential
to the performance of his duties under this Agreement. The Executive shall not,
through the end of the Term or thereafter, except to the extent reasonably
necessary in the performance of his duties under this Agreement, divulge to any
person, firm, association, corporation or governmental agency, any information
concerning the affairs, business clients, or customers of the Business (except
such information as is required by law to be divulged to a government agency or
pursuant to lawful process or such information which is or shall become part of
the public realm through no fault of the Executive), or make use of any such
information for his own purposes or for the benefit of any person, firm,
association or corporation (except the Business) and shall use his reasonable
best efforts to prevent the disclosure of any such information by others. All
records, memoranda, letters, books, papers, reports, accountings or other data,
and other records and documents relating to the Business, whether made by the
Executive or otherwise coming into his possession are, shall be, and shall
remain the property of the Business. No copies thereof shall be made which are
not retained by the Business, and the Executive agrees, on termination of his
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employment, or on demand of the Holding Company, to deliver the same to the
Holding Company.
(b) NON-COMPETE. Through the end of the Term, the Executive shall not without
express prior written approval by order of the Board, directly or indirectly
own or hold any proprietary interest in, or be employed by or receive
remuneration from, any corporation, partnership, sole proprietorship or other
entity engaged in competition with the Company, the Holding Company or any of
their affiliates (a "Competitor"), other than for severance type benefits from
entities constituting prior employers of the Executive. The Executive also
agrees that he will not solicit for the account of any Competitor, any customer
or client of the Company, the Holding Company or their affiliates, or, in the
event of the Executive's termination of employment, any entity or individual
that was such a customer or client during the 12 month period immediately
preceding the Executive's termination of employment. The Executive also agrees
not to act on behalf of any Competitor to interfere with the relationship
between the Company, the Holding Company or their affiliates and their
employees.
For purposes of the preceding sentence, (i) the term, "Proprietary interest",
means direct or indirect legal or equitable ownership, whether through
stockholdings or otherwise, of an equity interest in a business, firm or entity
other than ownership through mutual funds or other similar diversified
vehicles; provided, however, that the Executive shall not be required to divest
any previously acquired equity interest and (ii) an entity shall be considered
to be "engaged in competition" if such entity is a commercial bank located in
Pittsburgh, Pennsylvania or any other major money center commercial bank or
major regional commercial bank, in either case, with principal offices in any
state east of the Mississippi River. Notwithstanding the foregoing, it is
understood that the Executive is subject to all policies and procedures of the
Company and the Holding Company regarding investment in securities of
competitors.
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(c) REMEDIES. The Company's obligation to make payments or provide for or
increase any benefits under this Agreement (except to the extent vested) shall
cease upon any violation of the preceding provisions of this section; provided,
however, that the Executive shall first have the right to appear before the
Board with counsel and that such cessation of payments or benefits shall
require a vote of a majority of the Board members then in office, and provided,
further, that in the event of a violation of the preceding provisions of this
Section following a "change in control" (as defined for purposes of the
severance arrangements for employees of the Company adopted by the Board in a
resolution dated June 15, 1987) the Company's obligations to make payments or
provide for any benefits under this Agreement shall cease only to the extent of
the Executive's remuneration from subsequent employers, or income from self
employment which is subject to FICA taxation, during the period liquidated
damages or severance compensation is to be paid by the Company. The Executive's
agreement as set forth in this Section 7 shall survive the Executive's
termination of employment with the Company.
8. RETIREMENT.
(a) The Executive may elect, upon not less than 12 months' advance written
notice, to retire under this Agreement, if then in effect, on the first day of
any month coincident with or after his attainment of age 62. In the event of
such retirement, the Term and the Company's obligation to make payments under
Section 4 above shall cease as of the retirement date, except for (i) earned
but unpaid Base Salary which shall be payable in full and the target bonus
award (or, if higher, the bonus award the Executive would have received had he
been employed throughout the bonus year), including any restricted stock or
phantom stock units payable in lieu of any portion of the Profit Bonus Plan
award, which shall be payable on a pro-rated basis for the year of retirement,
(ii) vested benefits under Company plans or programs maintained for employees
generally and (iii) the delivery of shares or cash
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upon the exercise of stock options held by the Executive pursuant to the terms
of the Holding Company's stock option plan. In addition, the Company shall pay
a monthly supplemental retirement benefit to the Executive, commencing
immediately and continuing for the remainder of his life, which benefit shall
be payable in the form of a 50% joint and survivor annuity which shall be
unreduced for the actuarial value of the survivor's benefit. If the Executive's
spouse at the time of his death is not more than three years younger than the
Executive, the survivor benefit shall be equal to 50% of the Executive's
benefit and shall be payable for the remainder of the spouse's life. If the
Executive's spouse at the time of his death is more than three years younger
than the Executive, the benefit payable to the survivor shall be reduced to a
benefit having the same actuarial value as the benefit that would have been
payable had the spouse been three years younger than the Executive. The
Executive shall also have the right to elect a 100% joint and survivor annuity,
on an actuarially-reduced basis or a lump-sum payment, on an actuarially-
reduced basis (if the Executive makes a timely lump-sum election which avoids
constructive receipt), or any other form of payment available or provided
under the "Supplemental Plans" defined in this Paragraph. Actuarial reductions
shall be based on the actual ages of the Executive and his spouse at the time
of retirement. In the event that the Executive elects a form of payment other
than the automatic 50% joint and survivor annuity or other than a lump sum
payment, and remarries subsequent to retirement, the benefits payable under
this Section shall be actuarially adjusted at the time of the Executive's
death to reflect the age of the subsequent spouse. If the Executive elects a
lump sum payment at retirement, no further benefits will be payable under this
section. The amount of the monthly retirement benefit as an unreduced 50% joint
and survivor annuity shall be equal to the product of (A) the "Compensation
Percentage" multiplied by (B) the Executive's "Final Average Compensation"
multiplied by (C) the Executive's "Vesting Percentage", with such product
reduced by (D) the total monthly amount of benefit (measured for purposes of
this offset as if the Executive elected a 50% joint and survivor annuity upon
retirement) provided to or in respect of the Executive under
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all tax-qualified retirement plans and related excess benefit and other benefit
restoration plans maintained by the Company or the Holding Company for the
Executive, including the Mellon Bank Benefit Restoration Plan and the Mellon
Bank IRC Section 401(a)(17) Plan (the "Supplemental Plans") and benefits paid
pursuant to Section 4.7 of the Mellon Bank Corporation Elective Deferred
Compensation Plan for Senior Officers, but not including payments of any
compensation previously deferred under any deferred compensation plan of the
Company or the Holding Company, or interest thereon, or payments from the
Mellon Bank Corporation Retirement Savings Plan, a 401 (k) plan.
The Executive owns interest in life insurance policies (the "Policies") as a
participant in the Mellon Bank Senior Executive Life Insurance Plan. The
supplemental retirement benefit payable to the Executive hereunder shall be
further reduced by the Executive's interest in the cash value of the Policies.
This reduction shall be calculated in the same manner as under the Supplemental
Plans.
The Executive shall elect the form of payment of his supplemental retirement
benefit at the same time and subject to the same provisions (including timing
requirements and all reductions and/or penalties for late elections) as
provided under the Supplemental Plans. After retirement, the Executive (or
beneficiary who is receiving payments) may elect to receive his remaining
supplemental retirement benefits which are payable hereunder in a lump sum
payment, calculated in the same manner and subject to the same reductions as
under the Supplemental Plans. In the event that the Executive elects a form of
payment of his supplemental retirement benefits which provides for payments to
continue after his death and the Executive dies without having received all
payments of supplemental retirement benefits that may be payable hereunder,
then the unpaid balance of such benefits shall be paid in accordance with the
form of payment elected by the Executive. Any such remaining payments shall be
made to the Executive's beneficiary
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provided under the Supplemental Plans, subject to any contrary written
instructions from the Executive designating a different beneficiary for such
payments.
(b) The Executive may also elect, upon not less than 12 months' advance written
notice, to retire under this Agreement on the first day of any month coincident
with or after his attainment of age 60. Benefits will be computed on the basis
of the years of service, "Final Average Compensation", "Compensation
Percentage" and "Vesting Percentage" determined at the date of such retirement
prior to age 62 and shall be actuarially reduced from the unreduced full
payment required under this Agreement at age 62 to reflect such early
retirement. In the event of such retirement, the Term and the Company's
obligations to make payments under Section 4 above shall cease as of the
retirement date.
(c) Notwithstanding the foregoing, in no event shall the Executive receive any
payments under this Section 8 or be deemed to be retired from the Company while
the Executive is entitled to payments under Paragraph 6(a).
(d) As used in this Agreement, "Compensation Percentage" means 50% plus 2.5%
for each full year of employment which the Executive has completed under this
Agreement as of the date his active employment with the Company terminates,
plus 2.5% for each full year the Executive receives payments under Paragraph
6(a) hereof (with such percentage pro-rated for the partial contract year in
which such final termination of the Executive's employment occurs or in which
such final payments under Paragraph 6(a) hereof are made, whichever shall be
applicable).
(e) As used in this Agreement, "Final Average Compensation" means the average
monthly amount of the Executive's Base Salary and any bonus award for the 36
consecutive months of the Executive's employment by the Company, under this
Agreement or prior agreements, which produces the highest average amount. The
cash value of any portion of bonus payable as either restricted stock or
phantom
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stock units (in lieu of any portion of the Profit Bonus Plan award) shall be
determined on the date such restricted stock or phantom stock units are granted
for purposes of determining Final Average Compensation. Any portion of the
Executive's Base Salary and bonus award which is deferred by the Executive
under prior agreements with the Company or under any Company or Holding Company
employee benefit plan shall be included for purposes of determining Final
Average Compensation.
(f) As used in this Agreement, the term "Vesting Percentage" shall be
determined from the following vesting schedule on the basis of the number
of full months of employment with the Company which the Executive has completed
under this Agreement as of the date his active employment with the Company
terminates plus the number of months during which the Executive receives
payments under Paragraph 6(a).
VESTING SCHEDULE
----------------
Vesting Interval Vesting Percentage
---------------- ------------------
Less than 11 85%
11 or more 100%
In the event the Executive's employment is terminated during the first 11
months of the Term, the Executive's vesting percentage shall be 85% increased
by a pro rata portion of the remaining 15% determined by dividing the number of
whole months worked during such 11-month period by 11.
In the event the Executive's termination of employment is due to death, prior
to the commencement of the payment of pension benefits under this Section, and
he shall be survived by a spouse, such spouse shall be entitled to receive a
pre-retirement death benefit, payable in the form of a lifetime annuity, equal
in value to the benefit which would have been payable to the Executive
hereunder had he retired
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immediately prior to the date of his death and elected the unreduced 50% joint
and survivor annuity provided under Paragraph (a) of this Section 8. If the
Executive's spouse at the time of his death is more than three years younger
than the Executive, the benefit payable to the survivor shall be reduced to a
benefit having the same actuarial value as the benefit that would have been
payable had the spouse been three years younger than the Executive.
9. LIMITATION AS TO AMOUNTS PAYABLE.
(a) SECTION 280G LIMITATION. In the event that any payment, coverage or benefit
provided under this Agreement would, in the opinion of counsel for the Company,
not be deemed to be deductible in whole or in part in the calculation of the
Federal income tax of the Company, or any other person making such payment or
providing such coverage or benefit, by reason of Section 280G of the Code, the
aggregate payments, coverages or benefits provided hereunder shall be reduced
to the "safe harbor" level under Section 280G of the Code so that no portion of
such amount which is paid to the Executive is not deductible by reason of
Section 280G of the Code. Executive may determine which payments, coverages or
benefits will be reduced in order to satisfy the "safe harbor" level under
Section 280G. Furthermore, the Company shall hold such portions not paid to
the Executive in escrow pending a final determination of whether such amounts
would be deductible if paid to the Executive, and the Company shall use its
best efforts to seek a ruling from the Internal Revenue Service that any
portion of such payments, coverages or benefits not paid to the Executive
pursuant to this Section 9(a) would continue to be deductible if paid to the
Executive and the Company shall pay to the Executive any portion of such
amounts for which such a ruling is received. In the event the IRS will not rule
on such matter, the Company shall pay to the Executive such amounts maintained
in escrow pursuant to this Section 9(a) as shall be determined at some point in
time by a counsel, selected by the Company and the Executive, is likely to be
deductible if paid to the Executive or shall be forfeited by the Executive in
the
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event of a final determination by the IRS that such amounts are not deductible.
For purposes of this Paragraph, the value of any non-cash benefit or coverage
or any deferred or contingent payment or benefit shall be determined by the
independent auditors of the Company in accordance with the principles of
Section 280G of the Code.
(b) OFFSET. Within 90 days following any termination of his employment which
constitutes a Without Cause Termination or Constructive Discharge (as such
terms are defined in Section 6(c)), Executive may elect, by written notice to
Employer, to have the provisions of this Section 9(b) apply to reduce the
aggregate payments, coverages and benefits provided under this Agreement during
the remainder of the Term of this Agreement following his termination of
employment (hereafter the "Applicable Period"). If Executive does not make such
election, this Section 9(b) shall have no application or effect under this
Agreement.
If Executive elects to have this Section 9(b) apply, the aggregate payments,
coverages and benefits provided to Executive under this Agreement during the
Applicable Period following his termination of employment shall be reduced by
"mitigation" (as defined below) to comply with Regulations under Section 280G
of the Code, including, in particular, Question and Answer 42(b). "Mitigation"
shall mean that payments which are made and benefits which are provided by the
Employer during the Applicable Period after termination of Executive's
employment and which are attributable to the Applicable Period and not to any
other period will be reduced by all earned income (within the meaning of
Section 911 (d)(2)(A) of the Code) received by Executive from persons or
entities other than the Employer or from self employment during the Applicable
Period.
Not less frequently than annually (by December 31 of each year) during the
Applicable Period, Executive shall account to the Employer with respect to all
payments and benefits received by Executive from other employment or self
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employment during the Applicable Period which are required by reason of his
duty of "mitigation" hereunder to be offset against payments or benefits
received by Executive from the Employer during the Applicable Period. During
the Applicable Period, if the Employer has paid amounts in excess of those to
which Executive was entitled (after giving effect to the offsets provided
above), Executive shall reimburse the Employer for such excess by December 31
of such year.
If Executive receives earned income from other employment or self employment
during only a portion, but not all, of the Applicable Period, only payments
which are made and benefits which are provided by the Employer that are
attributable to the portion of the Applicable Period during which Executive
receives earned income from other employment or self employment shall be
subject to reduction and offset as provided above.
If Executive elects to have this Section 9(b) apply, Executive may elect, at
any time, to be subject to a greater (but not lesser) duty of "mitigation" than
otherwise provided above in this Section 9(b), if counsel selected by Executive
determines that such greater duty of "mitigation" is advisable in order to
comply with Regulations under Section 280G.
10. LEGAL FEES, RELATED EXPENSES. The Company agrees to promptly reimburse the
Executive for his reasonable legal and consulting fees incurred in the
preparation and negotiation of this Agreement. In addition, in the event of any
litigation or other proceeding between the Company and the Executive with
respect to the subject matter of this Agreement and the enforcement of rights
hereunder, the Company shall reimburse the Executive for his reasonable costs
and expenses relating to such litigation or other proceeding, including
attorneys' fees and expenses, provided that such litigation or proceeding
results in any: (i) settlement requiring the Company to make a payment to the
Executive; or (ii) judgment, order or award in favor of the Executive, unless
such judgment, order or award is subsequently reversed on appeal or in a
collateral proceeding.
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11. WITHHOLDING TAXES. The Company may directly or indirectly withhold from any
payments made under this Agreement all Federal, state, city or other taxes as
shall be required pursuant to any law or governmental regulation or ruling.
12. CONSOLIDATION, MERGER, OR SALE OF ASSETS. Nothing in this Agreement shall
preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation
which assumes this Agreement and all obligations and undertakings of the
Company hereunder. Upon such a consolidation, merger or transfer of assets and
assumption, the term, "Company", as used herein shall mean such other
corporation and this Agreement shall continue in full force and effect.
13. NOTICES. All notices, requests, demands and other communications required
or permitted hereunder shall be given in writing and shall be deemed to have
been duly given if delivered or mailed, postage prepaid, by same day or
overnight mail as follows:
(a) To the Company:
Director-Human Resources Department
Mellon Bank, N.A.
0 Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
(b) To the Executive:
000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
with copies to:
Xxxxx Xxxxxx
Management Compensation Group
000 X. Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxx X. Xxxxxx
00000 Xxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
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or to such other address as either party shall have previously specified in
writing to the other.
14. NO ATTACHMENT. Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation or to
execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect, provided, however, that nothing in this Section
14 shall preclude the assumption of such rights by executors, administrators,
or other legal representatives of the Executive or his estate and their
assigning any rights hereunder to the person or persons entitled thereto.
15. SOURCE OF PAYMENTS. All payments provided for under this Agreement shall be
paid in cash from the general funds of the Company. The Company shall not be
required to establish a special or separate fund or other segregation of assets
to assure such payments, and, if the Company shall make any investments to aid
it in meeting its obligations hereunder, the Executive shall have no right,
title, or interest whatever in or to any such investments except as may
otherwise be expressly provided in a separate written instrument relating to
such investments. Nothing contained in this Agreement, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind, or a fiduciary relationship, between the Company and the Executive or
any other person. To the extent that any person acquires a right to receive
payments from the Company hereunder, such right shall be no greater than the
right of an unsecured creditor of the Company.
16. BINDING AGREEMENT. This Agreement shall be binding upon, and shall inure to
the benefit of, the Executive and the Company and, as permitted by this
Agreement, their respective successors, assigns, heirs, beneficiaries and
representatives.
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17. GOVERNING LAW. The validity, interpretation, performance, and enforcement
of this Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania.
18. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which, when executed, shall be deemed to be an original and both of which
together shall be deemed to one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and
its seal to be affixed hereunto by its officers thereunto duly authorized, and
the Executive has signed this Agreement, all as of the first date above
written.
ATTEST: Mellon Bank, N.A.
Xxxxxx Xxxx Oresti By: D. Xxxxxxx Xxxxx
---------------------- -----------------------
Xxxxxx Xxxx Xxxxxx X. Xxxxxxx Xxxxx
Secretary Head of the Human
Resources Department
Xxxxx X. Xxxxxxx
-----------------------
Xxxxx X. Xxxxxxx
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