June 27, 1997
Xx. Xxxxxxx X. Xxxxx, XX
0000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
In re: Supplemental Retirement Benefits
Dear Xxxx:
The purpose of this letter is to confirm our understanding and agreement about
the supplemental retirement arrangement provided for you in your July 27, 1987
letter agreement in connection with your retirement from NationsBank effective
December 31, 1997.
As you know, the 1987 letter agreement provided you with a "target" annual
retirement benefit from all sources (including The NationsBank Pension Plan, the
NationsBank Supplemental Retirement Plan, your vested Chase retirement benefits
and Social Security) equal to 50% of your final average annual earnings payable
as a joint and 50% survivor benefit if you retired at age 62. You would have
become eligible for this "age 62" benefit if you had remained with NationsBank
until October 1998.
In connection with your retirement, NationsBank has agreed to modify your 1987
letter agreement to provide you with your "age 62" target annual retirement
benefit even though you are leaving before October 1998. The amount of your
target annual retirement benefit will be $830,000, which has been calculated
using your actual compensation from 1994 through 1996 plus (i) your 1997 base
salary of $700,000 and an assumed 1997 bonus of $1.2 million and (ii) assumed
1998 salary and bonus through October 31, 1998 that is equal to five-sixths
(i.e., 10 months) of your 1997 salary and assumed 1997 bonus. Attached to this
letter is a schedule illustrating this calculation. The actual amount of your
1997 bonus will be determined in accordance with the provisions of the
NationsBank Executive Incentive Compensation Plan.
This $830,000 target annual retirement benefit will be reduced dollar-for-dollar
by (i) your December 31, 1997 annual retirement benefit under The NationsBank
Pension Plan and the NationsBank Supplemental Retirement Plan payable as a joint
and 50% survivor annuity and reduced for early commencement under the terms and
actuarial assumptions of those plans, (ii) your annual retirement benefit you
earned at Chase payable as a joint and 50% survivor annuity and reduced for
early commencement under the terms and actuarial assumptions of the Chase plan
and (iii) your annual Social
Security benefit. We will provide you with calculations of these offset benefits
prior to December 31, 1997. The actual timing and form of payment of your
benefits from The
NationsBank Pension Plan, the NationsBank Supplemental Retirement Plan and the
Chase plan will be determined in accordance with the terms and provisions of
those plans.
The excess of your target annual retirement benefit after the reductions
described above will be payable to you as a monthly benefit beginning in January
1998 and continuing for your life, and if you are survived by your wife, she
will receive a survivor benefit equal to 50% of the benefit payable while you
are both alive beginning in the month after your death and continuing monthly
for the remainder of her life. All payments will be subject to applicable
payroll and withholding taxes.
Also, you will be treated as having "retired" for purposes of your outstanding
stock option awards from the NationsBank Key Employee Stock Plan. This means
that your options will become 100% vested as of December 31, 1997 and that you
will have 36 months from that date to exercise those options.
This letter agreement supersedes the provisions of your 1987 letter agreement
with respect to your supplemental retirement benefits. This letter agreement is
conditioned on your executing the attached Noncompetition Agreement. This letter
agreement is also conditioned on its approval by the Compensation and Stock
Option Committees of the NationsBank Board of Directors at their next regularly
scheduled meetings in December. If you are in agreement with this letter, please
sign and date the enclosed copy of this letter and both copies of the
Noncompetition Agreement, and return the signed copy of this letter and one copy
of the Noncompetition Agreement to me.
Sincerely,
/s/ X. X. Xxxxxx
X. X. Xxxxxx
ACCEPTED AND AGREED TO:
/s/ Xxxxxxx X. Xxxxx, XX
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Xxxxxxx X. Xxxxx, XX Date
