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EXHIBIT 10.1
[NationsBank Letterhead]
September 26, 1996
Xxxxxx X. Xxxxx, III
Chairman and Chief Executive Officer
Boatmen's Bancshares, Inc.
One Boatmen's Plaza
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Dear Xx. Xxxxx:
This letter agreement serves to formalize our agreement with respect to
your future employment with NationsBank Corporation following the proposed
combination of Boatmen's Bancshares and NationsBank pursuant to the Agreement
and Plan of Merger by and between NationsBank Corporation and Boatmen's
Bancshares, Inc. dated as of August 29, 1996 (the "Merger Agreement"). Terms
not otherwise defined herein shall have the meanings ascribed to them in the
Merger Agreement.
Commencing on the Effective Date, you will be elected Chairman of the
Board of Directors of NationsBank Corporation until the annual meeting of
NationsBank in 1998 (the "Term"). During the Term, you will receive a base
salary at an annual rate of $1,000,000, payable in accordance with NationsBank's
payroll practices. For calendar year 1997, you will be paid a bonus equal to
the greater of (x) $2,000,000, or (y) the bonus paid for 1997 to the Chief
Executive Officer of NationsBank. For the portion of 1998 during which you are
an officer of NationsBank you will be paid a bonus of $2,000,000 multiplied by a
fraction, the numerator of which is the number of days from January 1, 1998
until the date of your retirement and the denominator of which is 365 (the
"Proration Fraction"). In the event that the bonus paid for 1998 to the Chief
Executive Officer of NationsBank exceeds $2,000,000, at the time such bonus is
paid you will receive an additional payment equal to the amount of such excess
multiplied by the Proration Fraction.
On the Effective Date, you will be granted 100,000 shares of restricted
stock pursuant to the NationsBank Corporation Key Employee Stock Plan. This
restricted stock
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September 26, 1996
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will vest upon the occurrence of any of the following events: (a) your
retirement as an officer of NationsBank upon the expiration of the Term, (b)
your death prior to your retirement as an officer of NationsBank (c) your
becoming permanently and totally disabled (as defined in NationsBank's Long-Term
Disability Insurance Plan) prior to your retirement as an officer of
NationsBank, or (d) your retirement as an officer of NationsBank prior to the
expiration of the Term resulting from (i) a termination of your employment by
NationsBank for reasons other than Cause as defined in the Employment Agreement
between you and Boatmen's Bancshares, Inc. dated as of January 30, 1996, as
subsequently amended (the "Employment Agreement"), or (ii) a termination of your
employment by you for Good Reason. You will forfeit the restricted stock award
in the case of any other termination of your employment prior to the expiration
of the Term. For purposes of this agreement, "Good Reason" shall mean (a) a
breach of this agreement by NationsBank, or (b) assignment to you of duties or
responsibilities inconsistent with your position as Chairman of NationsBank.
You will be provided with other employee benefits, perquisites and
other terms and conditions of employment commensurate with your position as
Chairman of NationsBank. In that regard, NationsBank will continue during the
Term on the same terms and conditions the executive life insurance program
currently in effect at Boatmen's under which you are insured by a policy of
insurance in the face amount of $3.2 million. Upon the expiration of the Term
you will be accorded the right to take over the policy by assuming the
obligation to make all future premium payments on such policy.
Upon your retirement, if you have satisfied the vesting requirements
described above related to your restricted stock award, you will be entitled to
an annual pension of $1.5 million for your lifetime with a survivor annuity
payable after your death to your current spouse of $1.0 million annually for her
remaining lifetime. The annual amount of such joint and two-thirds survivor
annuity shall be offset by the annual amount of any retirement income benefit to
which you or your spouse are entitled from (i) the Boatmen's Bancshares
Retirement Plan for Employees, (ii) the Boatmen's Bancshares, Inc. Supplemental
Retirement Plan, (iii) the retirement income plan of any of your previous
employers under which you have a vested accrued benefit, (iv) the NationsBank
Pension Plan, (v) the NationsBank Supplemental Retirement Plan, and (vi) Social
Security. The amount of the offset shall be computed as if
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September 26, 1996
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you were to receive your retirement benefits under such plans in the form of a
joint and two-thirds survivor annuity beginning on the date of your retirement
from NationsBank with your current spouse as the contingent annuitant using the
same actuarial assumptions used to arrive at the amounts set forth in the letter
agreement between you and Boatmen's dated May 17, 1996 related to retirement
benefits (the "May Agreement"). The annuity benefit determined under this
paragraph will be payable by the same method of payment as provided in the May
Agreement, and any actuarial equivalence calculation required for that purpose
will be made using the actuarial assumptions used to arrive at the amounts in
the May Agreement.
In the event of your death prior to your retirement, a death benefit
will be paid in a lump sum payment in an amount equal to the amount you would
have received if you had vested in your pension benefits under this agreement
and retired on the day before your death and elected to receive the benefit
described in the preceding paragraph in a lump sum payment. For purposes of
calculating such lump sum death benefit, the offset annuity amounts described in
the preceding paragraph shall be (i) adjusted to reflect only the actual death
benefits payable by such plans on account of your death and (ii) converted to a
single sum value using the actuarial assumptions used to arrive at the amounts
set forth in the May Agreement. The foregoing lump sum death benefit will be
paid to your current spouse if she survives you, or if she does not survive you,
to the Trustees of your Revocable Trust dated July 23, 1993, as amended.
In no event would the total retirement or death benefits payable to you
(or, in event of your death, your current spouse or the Trustees of the
Revocable Trust) from all sources be less than the amount described in the May
Agreement, which amount for purposes of this agreement shall be deemed to be
fully vested, if not previously paid to you, your spouse or the Trustees of your
Revocable Trust, as of the Effective Date. It is understood and agreed that
within thirty days following the Effective Date assets will be set aside in a
trust, dated December 31, 1993 by and between Boatmen's Bancshares Inc. and
United States Trust Company of New York, as amended from time to time
thereafter, to provide for such vested and unpaid benefits under the May
Agreement.
For two years following your retirement, we would like you to continue
to serve as a director of NationsBank
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Corporation for which you would receive customary director's fees.
By signing below, you agree that the provisions of the Employment
Agreement, the May Agreement, and any other plan or agreement which provides
benefits duplicative of those described herein shall be deemed to be replaced
in their entirety as of the Effective Date by the terms of this agreement;
provided, however, the definition of "Cause" in Section 6.5 and the provisions
of Section 7.3, 7.4, 7.5, 9.1, 9.2, 9.3, 11.1, 11.2, 12.7 and 12.9 of the
Employment Agreement shall remain in effect after the Effective Date, with the
sole modification that on and after the Effective Date the term "Company" shall
mean NationsBank Corporation. In that regard, you acknowledge and agree that
NationsBank intends to treat all such benefits under this agreement as
reasonable compensation for your services actually rendered after the Effective
Date.
This letter agreement supersedes all prior correspondence between you
and NationsBank relating to the subject matter hereof.
Sincerely,
/s/ Xxxx X. XxXxxx, Xx.
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Xxxx X. XxXxxx, Xx.
Chairman and Chief Executive Officer
Agreed to:
/s/ Xxxxxx X. Xxxxx, III
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Xxxxxx X. Xxxxx, III
