EXHIBIT 10.o.
CHANGE IN CONTROL
SEVERANCE PAY PROGRAM
In February 1996, the BAC Board of Directors adopted a change in control
executive severance pay program covering executive officers ("Executive
Officers"). These Executive Officers are covered by individual change in control
agreements with BAC ("Agreements").
The form of agreement which is in effect between BAC and each of the Executive
Officers covered by the Agreements is substantially in the form attached hereto.
4128766
AGREEMENT (form of)
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AGREEMENT by and between BankAmerica Corporation, a Delaware
corporation ("BANKAMERICA") and __________ _________ (the "EXECUTIVE").
The Executive is currently employed by BankAmerica and/or a direct or
indirect subsidiary of BankAmerica (the "COMPANY"). The Board of Directors of
BankAmerica (the "BOARD"), has determined that it is in the best interests of
BankAmerica and its shareholders to assure that the Company will have the
continued dedication of the Executive, notwithstanding the possibility, threat
or occurrence of a Change in Control (as defined below) of BankAmerica. The
Board believes it is important to diminish the inevitable distraction of the
Executive by virtue of the personal uncertainties and risks created by a pending
or threatened Change in Control and to encourage the Executive's full attention
and dedication to the Company currently and in the event of any threatened or
pending Change in Control, and to provide the Executive with compensation and
benefits arrangements upon a Change in Control which ensure that the
compensation and benefits expectations and claims of the Executive will be
satisfied and released and which are competitive with those of other financial
institutions. Therefore, in order to accomplish these objectives, the Board has
directed BankAmerica to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
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(a) The "EFFECTIVE DATE" shall mean the first date during the
Change in Control Period (as defined in Section 1(b)) on which a Change in
Control (as defined in Section 2) occurs. Anything in this Agreement to the
contrary notwithstanding, if a Change in Control occurs and if the Executive's
employment with the Company is terminated (including termination for Good
Reason, as defined in Section 5(c)) prior to the date on which the Change in
Control occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to affect a Change in Control or (ii) otherwise
arose in connection with or anticipation of a Change in Control, then for all
purposes of this Agreement the "Effective Date" shall mean the date immediately
prior to the date of such termination of employment.
(b) The "CHANGE IN CONTROL PERIOD" shall mean the period
commencing on February 1, 1996 and ending on the second anniversary of such
date, provided, however, that commencing on the date one year after February 1,
1996, and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "RENEWAL DATE"),
unless previously terminated, the Change in Control Period shall be
automatically extended so as to terminate two years from such
4114808.14 -1-
Renewal Date, unless at least 60 days prior to the Renewal Date the Company
shall give notice to the Executive that the Change in Control Period shall not
be so extended.
2. Change in Control. For the purpose of this Agreement, a "CHANGE
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IN CONTROL" shall mean:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (i) the then outstanding shares of common stock of BankAmerica
(the "OUTSTANDING BANKAMERICA COMMON STOCK") or (ii) the combined voting power
of the then outstanding voting securities of BankAmerica entitled to vote
generally in the election of directors (the "Outstanding BankAmerica Voting
Securities"); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition directly from BankAmerica (ii) any acquisition by BankAmerica,
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company or
(iv) any acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; or
(b) Individuals who, as of the date hereof, constitute the Board
(the "INCUMBENT BOARD") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
BankAmerica's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of
BankAmerica or any of its subsidiaries (a "BUSINESS COMBINATION"), in each case,
unless, following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding BankAmerica Common Stock and Outstanding BankAmerica Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 70% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns BankAmerica or all or substantially all of BankAmerica's assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Out-
4114808.14 -2-
standing BankAmerica Common Stock and Outstanding BankAmerica Voting Securities,
as the case may be, (provided, however, that, for the purpose of this clause
(i), any shares of common stock or voting securities of such resulting
corporation received by such beneficial owners in such Business Combination
other than as the result of such beneficial owners' ownership of Outstanding
BankAmerica Common Stock or Outstanding BankAmerica Voting Securities
immediately prior to such Business Combination shall not be considered to be
owned by such beneficial owners for the purposes of calculating their percentage
of ownership of the outstanding common stock and voting power of the resulting
corporation), (ii) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation unless such Person owned 20% or more of the
Outstanding BankAmerica Common Stock or Outstanding BankAmerica Voting
Securities immediately prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the shareholders of BankAmerica of a complete
liquidation or dissolution of BankAmerica.
3. Employment Period. BankAmerica agrees that the Company is
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expected, but not obligated, to continue the Executive in its employ, and, in
return for the consideration provided by this Agreement, the Executive hereby
agrees to remain in the employ of the Company subject to the terms and
conditions of this Agreement, for the period commencing on the Effective Date
and ending on the first anniversary of such date (the "EMPLOYMENT PERIOD").
4. Terms of Employment.
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(a) Position and Duties. (i) During the Employment Period,
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(A) the Company shall not assign the Executive any duties or responsibilities
substantially inconsistent with the Executive's duties or responsibilities with
the Company immediately preceding the Effective Date nor shall the Company
substantially reduce the Executive's duties or responsibilities as they existed
immediately preceding the Effective Date and (B) the Executive's services shall
be performed primarily at the location where the Executive was primarily
employed immediately preceding the Effective Date or primarily at any office or
location no more than 35 miles from such location.
(ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time to the business and affairs of
the Company and to use the Executive's reasonable best efforts to perform
faithfully and efficiently the responsibilities
4114808.14 -3-
and duties assigned to the Executive. During the Employment Period it shall not
be a violation of this Agreement for the Executive to (A) serve on corporate,
civic or charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities comply with policies and guidelines of
the Company in effect generally with respect to peer executives of the Company
and do not significantly interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that to the extent that any
such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company so long as such activities comply with policies
and guidelines of the Company in effect generally with respect to peer
executives of the Company.
(b) Compensation. (i) Base Salary. During the Employment
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Period, the Executive shall receive an annual base salary ("ANNUAL BASE
SALARY"), which shall be paid at a monthly rate, at least equal to twelve times
the highest monthly base salary paid or payable, including any base salary which
has been earned but deferred, to the Executive by the Company during the period
between the initial public disclosure of the potential Change in Control and the
month in which the Effective Date occurs. During the Employment Period, the
Annual Base Salary shall be reviewed at intervals no less frequent than
customary for the Executive prior to the Effective Date. Any increase in Annual
Base Salary shall not serve to limit or reduce any other obligation to the
Executive under this Agreement. Annual Base Salary shall not be reduced after
any such increase during the Employment Period and the term Annual Base Salary
as utilized in this Agreement shall refer to Annual Base Salary as so increased.
(ii) Annual Bonus. In addition to Annual Base Salary, the
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Executive shall have, for each fiscal year ending during the Employment Period,
the opportunity for an annual cash bonus (the "ANNUAL BONUS") equal to that of
other peer executives on the Managing Committee or at Impact Level I as
applicable, but in no event shall such bonus be less than the Executive's lowest
bonus paid to the Executive under the Company's Senior Management Incentive
Plan, or any comparable bonus under any predecessor or successor plan, for the
last three full fiscal years prior to the Effective Date (annualized in the
event that the Executive was not employed by the Company for the whole of such
fiscal year) (the "RECENT LOWEST ANNUAL BONUS"). Each such Annual Bonus shall be
paid no later than the end of the third month of the fiscal year next following
the fiscal year for which the Annual Bonus is awarded, unless the Executive
shall elect to defer the receipt of such Annual Bonus.
(iii) Incentive, Savings and Retirement Plans. During the
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Employment Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, policies and programs applicable
generally to other peer executives of the Company on the Managing Committee or
at Impact Level I, as applicable, including the opportunity for
4114808.14 -4-
cash and stock incentive awards (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such distinction is
applicable) equal to that of peer executives of the Company on the Managing
Committee or at Impact Level I, as applicable.
(iv) Welfare Benefit Plans. During the Employment Period, the
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Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
policies and programs provided by the Company (including, without limitation,
medical, prescription, dental, disability, employee life, group life, accidental
death and travel accident insurance plans and programs) to the extent applicable
generally to other peer executives of the Company on the Managing Committee or
at Impact Level I, as applicable.
(v) Expenses. During the Employment Period, the Executive
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shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the policies and procedures of the
Company in effect generally with respect to other peer executives of the Company
on the Managing Committee or at Impact Level I, as applicable.
(vi) Fringe Benefits. During the Employment Period, the
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Executive shall be entitled to fringe benefits, including, without limitation,
tax and financial planning services, payment of club dues, and, if applicable,
use of an automobile, home security system and payment of related expenses, in
accordance with the plans, programs and policies of the Company in effect
generally with respect to other peer executives of the Company on the Managing
Committee or at Impact Level I, as applicable.
(vii) Office and Support Staff. During the Employment Period,
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the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, as provided generally with respect to other peer executives of
the Company on the Managing Committee or at Impact Level I, as applicable.
(viii) Vacation. During the Employment Period, the Executive
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shall be entitled to paid vacation in accordance with the plans, policies and
programs in effect generally with respect to other peer executives of the
Company on the Managing Committee or at Impact Level I, as applicable.
5. Termination of Employment.
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(a) Death or Disability. The Executive's employment shall
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terminate automatically upon the Executive's death during the Employment Period.
If the Executive suffers a Disability, the Executive's employment may end
pursuant to the policy of Company governing extended medical absences as in
effect on the date of the Change in Control. For purposes of this Agreement,
"DISABILITY" shall mean the absence of the Executive from the Executive's duties
with the Company as a result of incapacity due to mental or physical illness.
4114808.14 -5-
(b) Cause. The Company may terminate the Executive's employment
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during the Employment Period for Cause. For purposes of this Agreement, "CAUSE"
shall mean:
(i) the willful and continued failure of the Executive
to substantially perform the Executive's duties with the Company (other
than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for such performance is delivered to the
Executive by the Board or the Chief Executive Officer of BankAmerica or of
the subsidiary employing the Executive, which specifically identifies the
manner in which the Board or Chief Executive Officer believes that the
Executive has not substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is injurious to the Company.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer or
a senior officer of the Company or based upon the advice of legal counsel for
the Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company. The
cessation of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting of the Board (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity to submit written comments to the Board), finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct described in
subparagraph (i) or (ii) above, and specifying the particulars thereof in
detail.
(c) Good Reason. The Executive's employment may be terminated
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by the Executive for Good Reason during the Employment Period. For purposes of
this Agreement, "GOOD REASON" shall mean:
(i) any failure by the Company to comply with any of
the provisions of Section 4(a) of this Agreement, excluding for this
purpose an isolated, insubstantial and inadvertent failure not taken in bad
faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) any failure by the Company to comply with any of
the provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which
is remedied by the Company promptly after receipt of notice thereof given
by the Executive;
4114808.14 -6-
(iii) the Company's requiring the Executive to be
based at any office or location other than as provided in Section
4(a)(i)(B) hereof.
(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by this
Agreement; or
(v) any failure by BankAmerica to comply with and
satisfy Section 12(c) of this Agreement.
For purposes of this Section 5(c), any determination of "Good Reason" made by
the Executive reasonably and in good faith shall be conclusive.
(d) Notice of Termination. Any termination by the Company for
---------------------
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 13(b) of
this Agreement. For purposes of this Agreement, a "NOTICE OF TERMINATION" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date. The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "DATE OF TERMINATION" means (i) if
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the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
the later date specified therein, as the case may be, but no more than 30 days
after the giving of such notice absent the mutual agreement of the Executive and
the Company, (ii) if the Executive's employment is terminated by the Company
other than for Cause or Disability or on account of death, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination and (iii) if the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of
the Executive or the date employment ends under the Company policy concerning
extended medical absences, as the case may be.
6. Obligations of the Company upon Termination.
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(a) Good Reason; Other Than for Cause, Disability or
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Death. If the Company shall terminate the Executive's employment other than
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for Cause or Disability or on account of the Executive's death or the Executive
shall terminate employment for Good Reason, and the Date of Termination shall
occur within the Employment Period:
4114808.14 -7-
(i) The Company shall pay to the Executive in a lump sum in cash, to
the extent reasonably feasible within 30 days after the Date of Termination
(except for the prorated Annual Bonus described in A.(2)), the aggregate of
the following amounts:
A. The sum of (1) the Executive's Annual Base Salary through the Date
of Termination to the extent not theretofore paid; (2) a prorated Annual
Bonus for the fiscal year in which the Date of Termination occurs equal to
the product of (x) the higher of (I) the Recent Lowest Annual Bonus and
(II) the Annual Bonus paid or payable to peer executives of the Company on
the Managing Committee or at Impact Level I, as applicable, for such fiscal
year if any and (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the Date of Termination, and the
denominator of which is 365, which prorated Annual Bonus shall be payable
at the customary time for the Annual Bonus for the fiscal year; and (3) any
accrued vacation pay, in each case to the extent not theretofore paid (the
sum of the amounts described in clauses (1), (2), and (3) shall be
hereinafter referred to as the "ACCRUED OBLIGATIONS").
B. The amount equal to the product of (1) three and (2) the sum of
(x) the Executive's Annual Base Salary and (y) the average of the actual
annual bonus or bonuses received by the Executive for the period of up to
three consecutive fiscal years, commencing with the 1994 fiscal year,
ending immediately preceding the Effective Date.
C. If the Executive forfeits any benefits under the BankAmerica
401(k) Investment Plan or Pension Plan or under any other qualified
retirement plan of the Company, a payment equal to the amount of such
forfeited benefits. The Executive shall also be 100% vested in any
Supplemental Retirement Plan benefits, which shall be payable pursuant to
the terms of such plan.
D. The amount equal to the product of (1) three and (2) the current
annual contribution provided by the Company for the Executive's medical and
dental, long term disability, life and accidental death and dismemberment
insurance, multiplied by 191% to compensate for the payment being taxable.
(ii) If at the time the Executive's employment with the Company ends, the
Executive qualifies as a retiree under the personnel policy of the Company, the
Executive shall be eligible for benefits pursuant to the plans, programs and
policies in effect from time to time for similarly situated retired peer
executives of the Company on the Managing Committee or at Impact Level I, as
applicable.
(iii) The Company shall, at its sole expense as incurred, provide the
Executive with outplacement services, the provider of which shall be selected by
the Company, and financial counseling services for the calendar year in which
the Date of Termination occurs and for one additional year pursuant to the
financial counseling program in effect for peer Executives on the Managing
Committee or at Impact Level I, as applicable. The Company does not
4114808.14 -8-
warrant that the outplacement services will result in the Executive obtaining
new employment.
(iv) To the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits required to
be paid or provided or which the Executive is entitled to receive under any
plan, program, policy or contract or agreement of the Company, other than
severance pay or separation benefits subject to Section 13(g). (The other
amounts or benefits required to be paid shall be hereinafter referred to as the
"OTHER BENEFITS"). To the fullest extent permitted by law, payment under
Section 6(a)(i)B shall be in lieu of any severance pay or pay in lieu of notice
required under applicable law.
(b) Death. If the Executive's employment is terminated by reason of
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the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives,
other than for payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination to the extent reasonably feasible. With
respect to the provision of Other Benefits, the term Other Benefits as utilized
in this Section 6(b) shall include, without limitation, and the Executive's
estate and/or beneficiaries shall be entitled to receive, benefits equal to
those provided by the Company to the estates and beneficiaries of peer
executives of the Company on the Managing Committee or at Impact Level I, as
applicable, under such plans, programs and policies relating to death benefits,
if any, as in effect at the time of death.
(c) Disability. If the Executive's employment is terminated by
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reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a lump
sum in cash within 30 days of the Date of Termination to the extent reasonably
feasible. With respect to the provision of Other Benefits, the term Other
Benefits as utilized in this Section 6(c) shall include, and the Executive shall
be entitled after the Date of Termination to receive, disability and other
benefits equal to those generally provided by the Company to disabled executives
and/or their families in accordance with such plans, programs and policies
relating to disability, if any, as in effect generally with respect to other
peer executives on the Managing Committee or at Impact Level I, as applicable,
and their families, to the extent the Executive has enrolled in and paid for
such benefits, as applicable.
(d) Cause; Other than for Good Reason. If the Executive's employment
---------------------------------
shall be terminated for Cause during the Employment Period, or if the Executive
voluntarily terminates employment during the Employment Period without Good
Reason, this Agreement shall terminate without further obligations to the
Executive (other than the obligation to pay to the Executive (x) his Annual Base
Salary through the Date of Termination and any accrued vacation pay, and (y)
Other Benefits, in each case to the extent theretofore unpaid).
4114808.14 -9-
(e) Termination as a Result of Divestiture. This Section shall
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apply if the Executive ceases to be employed within the Company as a result of a
sale of assets or stock of a BankAmerica subsidiary during the Employment
Period. For purposes of this Section, a "COMPARABLE JOB" is a position with the
purchaser with (i) at least the same base salary and substantially equivalent
bonus opportunity as the Executive's then current position, (ii) duties and
responsibilities which are not substantially less than, and with no duties or
responsibilities substantially inconsistent with, the Executive's then current
position, (iii) eligibility for benefits received by similarly situated
executives of the purchaser, and (iv) a primary work location no more than 35
miles from the Executive's then current primary work location. If the Executive
receives an offer for a comparable job with the purchaser, the Executive shall
not receive payments or benefits under this Agreement, whether or not the
Executive accepts the offer, other than payment of Accrued Obligations and the
timely payment or provision of Other Benefits. However, if the Executive accepts
the comparable job, and within one year of the effective date of the sale, the
purchaser terminates the Executive's employment without Cause or the Executive
resigns on account of the failure of the purchaser to fulfill the terms of an
offer for a comparable job as defined above, the Executive shall, subject to
Section 8, receive payment under Section 6(a)(i)B of this Agreement, less any
severance payments paid to the Executive by the purchaser, and the Executive
shall also receive associated payments under Section 9 of this Agreement. If the
Executive accepts a position with the purchaser which is not a comparable job,
which position is accepted on or before the effective date of the sale, the
Executive shall not receive payments or benefits under the Agreement other than
payment of Accrued Obligations and the timely payment or provision of Other
Benefits, unless within one year of the date of the sale, the purchaser
terminates the Executive's employment without Cause or the Executive resigns
because the Executive's primary work location is moved more than 35 miles from
the Executive's initial primary work location with the purchaser, in which case
the Executive shall, subject to Section 8, receive payment under Section
6(a)(i)B of this Agreement, less any severance payments paid to the Executive by
the purchaser, and the Executive shall also receive associated payments under
Section 9 of this Agreement. For purposes of this provision, the Executive's
Date of Termination shall be the date the Executive's employment with the
purchaser ends.
7. Non-exclusivity of Rights. Nothing in this Agreement shall
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prevent or limit the Executive's continuing or future participation in any plan,
program, or policy provided by the Company for which the Executive may qualify,
nor, subject to Sections 13(f) and 13(g), shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company. Amounts which are vested benefits, deferred
compensation or which the Executive is otherwise entitled to receive under any
plan, policy, or program of, or any contract or agreement with, the Company at
or subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, or program or contract or agreement except as explicitly
modified by this Agreement.
8. Signing of Release and Full Settlement.
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4114808.14 -10-
(a) Execution and non-revocation of Release by Executive. The
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Company's obligation to make the payments provided for in this Agreement (other
than the obligation to pay to the Executive (x) his Annual Base Salary through
the Date of Termination and any accrued vacation pay, and (y) Other Benefits, in
each case to the extent theretofore unpaid) and otherwise to perform its
obligations hereunder are subject to the Executive's execution, after the Date
of Termination, and delivery to the Company of a general release in the form of
Appendix "A" attached hereto and the delivery to the Company of a statement of
non-revocation in the form of Appendix "B" executed at least 8 days after the
date of execution of the general release.
(b) Right of Set-Off by Company; No Duty to Seek Employment. The
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Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any set-
off, counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others, except that the Company shall
be entitled to deduct from the amounts payable under this Agreement any amounts
outstanding on the Executive's business credit card on the Termination Date
which are not reimbursable under the Expense Guidelines of the Company then in
effect. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and such amounts shall
not be reduced whether or not the Executive obtains other employment.
9. Certain Additional Payments by the Company.
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(a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 9) (a "PAYMENT") would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "CODE"), or any interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the "EXCISE
TAX"), then the Executive shall be entitled to receive an additional payment (a
"GROSS-UP PAYMENT") in an amount such that after payment by the Executive of all
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b)(i) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by Ernst & Young or such other nationally recognized certified public accounting
firm as may be designated by the Company (the
4114808.14 -11-
"ACCOUNTING FIRM") which shall provide detailed supporting calculations both to
the Company and the Executive within 15 business days after the Accounting Firm
has been advised that a Payment was made, or such earlier time as is requested
by the Company. In the event that the Accounting Firm is serving as accountant
or auditor for the individual, entity or group effecting the Change in Control,
the Company shall appoint another nationally recognized accounting firm to make
the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All reasonable fees and expenses
of the Accounting Firm shall be borne solely by the Company. Any Gross-Up
Payment, as determined pursuant to this Section 9, shall be paid by the Company
to the Executive promptly following the receipt of the Accounting Firm's
determination, unless the Company requests further calculations. Any
determination made by the Accounting Firm shall be binding upon the Company and
the Executive, although either party may challenge such a determination through
a legal proceeding. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company, should have been made ("UNDERPAYMENT"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive.
(b)(ii) To the extent the Company overpays any Excise Tax or
Gross-Up Payment, the Executive agrees such overpayment(s) will be immediately
returned to the Company by the Executive. As a condition to receipt of a Gross-
Up Payment or Excise Tax Payment, the Executive consents to jurisdiction and
venue in California in an action by Company to recover any overpayments. The
Executive also agrees to provide Company all financial information and data,
including tax information, reasonably requested by Company to calculate such
overpayments. The Executive agrees that the Executive shall not be entitled to
delay or avoid repayment of overpayments (A) based on other types of tax
disputes the Executive may have with tax authorities, (B) based on a change in
the residence of the Executive following receipt of a Gross-Up Payment or Excise
Tax Payment, (C) based on any claim or claims by the Executive against Company
for additional sums or benefits, or (D) based on any claims or claims for offset
by the Executive against Company.
(c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be paid.
The Executive shall not pay such claim prior to the expiration of the 30-day
period following the date on which the Executive gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:
4114808.14 -12-
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect
to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 9(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of Section 9(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section
4114808.14 -13-
9(c), a determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify the Executive
in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after Company's receipt of such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
10. Confidential Information. The Executive shall hold in a
------------------------
fiduciary capacity for the benefit of the Company all secret, confidential or
non-public information, knowledge or data relating to the Company (including its
employees, officers, directors, agents or representatives), which was obtained
by the Executive during the Executive's employment by the Company, unless such
information, data, or knowledge is disclosed to the public by an authorized
Company representative. (If the data, information, or knowledge is disclosed by
the Executive or by representatives of the Executive in violation of this
Agreement, this shall not constitute authorized public disclosure.) However,
nothing herein preventing the disclosure of such information, knowledge or data
shall preclude the Executive from utilizing the general non-confidential
knowledge or expertise of the Executive acquired while at the Company in any
position which the Executive may hereafter hold with another employer outside of
the Company. In no event shall an asserted violation of the provisions of this
Section 10 constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement. However, breach of this Section
by the Executive is a material breach, and the Company reserves all other
remedies both in law and equity against the Executive for breach of this Section
10.
11. Non-Disparagement. The Executive agrees that the Executive will
-----------------
not publicly (e.g., via an interview or speech or presentation available to the
----
public) criticize, defame, or disparage the Company (including its employees,
officers, directors, representatives or agents), its plans or its actions,
orally or in writing, unless compelled by law to do so. However, if the
Executive is publicly criticized, disparaged, or defamed by a representative of
the Company who is speaking on behalf of the Company, the foregoing contractual
limitations on the Executive's ability to criticize or disparage the Company
shall cease to exist and shall be deemed null and void. In no event shall an
asserted violation of the provisions of this Section 11 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement. However, breach of this Section by the Executive is a material
breach, and the Company reserves all other remedies both in law and equity
against the Executive for breach of this Section 11. In addition, an action to
enforce obligations under this Section by either party and statements made in
such litigation itself shall not be deemed to violate this Section 11.
12. Successors.
----------
(a) This Agreement is personal to the Executive and without
the prior written consent of an authorized representative of BankAmerica shall
not be assignable by the Executive otherwise than by will or the laws of descent
and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
4114808.14 -14-
(b) This Agreement shall inure to the benefit of and be binding
upon BankAmerica and its successors and assigns.
(c) BankAmerica will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of BankAmerica to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "BankAmerica" shall mean
BankAmerica Corporation as hereinbefore defined and any successor to its
business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
13. Miscellaneous.
-------------
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
Executive and BankAmerica (or any successor), signed by the Chief Executive
Officer or Personnel Relations Officer of BankAmerica, except as provided in the
following sentence. If the Executive is the Chief Executive Officer of
BankAmerica, the Chairman of the Executive Personnel and Compensation Committee
of the BankAmerica Board of Directors (or its equivalent successor committee)
shall sign the agreement on behalf of BankAmerica.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
-------------------
If to the Company:
-----------------
BankAmerica Corporation
Office of the General Counsel #3017
P.O. Box 37000
San Francisco, CA 94137
Street address: 000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
4114808.14 -15-
Attention: General Counsel, and a separate copy to the attention of the
BankAmerica Personnel Relations Officer, at:
BankAmerica Corporation
Executive Offices #3001
P.O. Box 37000
San Francisco, CA 94137
Street address: 000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
(f) The Executive and the Company acknowledge that, except as
may otherwise be provided under any other written agreement between the
Executive and an authorized representative of the Company, the employment of the
Executive by the Company is "at-will" and, the Executive's employment may be
terminated by either the Executive or the Company at any time. If such
termination or any other termination of employment occurs prior to the Effective
Date, the Executive shall have no further rights under this Agreement. From and
after the Effective Date this Agreement shall supersede any other agreement
between the parties with respect to the subject matter hereof, although the
employment of the Executive by the Company shall continue to be "at-will" and
may be terminated by the Company or the Executive at any time. If the Executive
is not an employee or officer of BankAmerica, the execution of this Agreement by
BankAmerica shall not cause the Executive to become an employee or officer of
BankAmerica, but rather, the Executive shall remain an employee of the
BankAmerica subsidiary which employs the Executive.
4114808.14 -16-
(g) If the Executive is eligible to receive severance pay under
this Agreement, the Executive agrees that the Executive shall not be eligible
to receive severance pay or separation benefits under any other plan, program,
policy, guideline, or practice of the Company, including any staff reduction
program of the Company then in effect, or under any agreement between the
Executive and the Company.
(h) "Peer" or "peer executives" as used in this Agreement shall
be as reasonably determined by the Chief Executive Officer or Personnel
Relations Officer of BankAmerica.
(i) The Executive shall not have the right to alienate, assign,
encumber, hypothecate, or pledge the Executive's interest in any payments or
benefits under this Agreement, voluntarily or involuntarily, and any attempt to
so dispose of any such interest shall be void.
(j) This document is a complete statement of the Agreement and as
of the date executed by both parties supersedes all prior plans, proposals,
representations, promises, and inducements, written or oral, relating to its
subject matter. The Company will not be bound by or liable to the Executive for
any representation, promise, or inducement made by any person or entity relating
to its subject matter which is not embodied in this Agreement.
IN WITNESS WHEREOF, the Executive has executed this instrument and
BankAmerica, pursuant to the authorization from its Board of Directors, has
caused this instrument to be executed by its duly authorized officer, on the
dates written below.
Date: ____________________ ______________________________
[Executive]
BANKAMERICA CORPORATION
Dated: ___________________ By ___________________________
______________________
4114808.14 -17-
APPENDIX A
GENERAL RELEASE
---------------
PLEASE READ THIS ENTIRE AGREEMENT CAREFULLY.
NOTE THAT IT CONTAINS A RELEASE AND WAIVER OF CLAIMS. YOU ARE ENCOURAGED TO
------------------
CONTACT AN ATTORNEY OF YOUR CHOICE FOR ADVICE CONCERNING ITS TERMS AND LEGAL
SIGNIFICANCE BEFORE SIGNING IT. IF YOU AGREE TO ITS TERMS, SIGN BELOW.
------
I have reviewed the terms of my Agreement with BankAmerica Corporation dated
______________ (the "Agreement") and have had the opportunity to read and
understand its provisions. I received the Agreement together with this General
Release more than 45 days prior to the date I am signing this General Release.
In particular, I understand that to receive separation benefits, including
severance pay, provided under the Agreement, I must agree to the terms of this
General Release and to the terms of the Non-Revocation Form, which I have also
received, and properly complete, sign and return both of these documents to the
Company. I understand the Non-Revocation form may not be signed and returned
any sooner than 8 days after I sign this General Release, and that I can revoke
my agreement to this General Release for seven days after I sign the General
Release. If signed by me, this General Release is my voluntary resignation from
any and all directorships or board memberships or committee memberships I hold
with or within BankAmerica Corporation, including its subsidiaries or its
affiliates (hereinafter collectively the "Company") or on the Company's behalf
or for the Company's benefit. I will promptly complete whatever documentation
is required to effect these resignations.
I also agree to make myself reasonably available, provide information and
otherwise cooperate with the Company or its representatives after my employment
ends in connection with any matter, dispute or the like for which the Company
desires my availability or cooperation, or in connection with any data I possess
which the Company wishes to obtain related to my employment with the Company.
The Company will reimburse me for reasonable documented expenses in accord with
then applicable company expense guidelines.
As consideration and in exchange for my receipt and acceptance of the separation
benefits, including severance pay, provided under the Agreement, and to the
extent permitted by law, I hereby waive, release and fully discharge, and agree
not to pursue, any and all claims, claims for relief and/or causes of action I
have or may have as of the date I sign this General Release against BankAmerica
Corporation, Bank of America NT&SA, and/or its or their current or former,
affiliates, subsidiaries, successors, or predecessors, and/or any of the current
or former, officers, directors, shareholders, employees, attorneys, employee
benefit plans, representatives, successors or agents of the foregoing entities
(Released Parties), arising out of and/or connected in any way with my
employment relationship within the
4114808.14 -1-
Company, and/or the termination of that employment relationship, and/or with
respect to any other claim, matter, or event arising prior to the time I execute
this General Release. I recognize and agree that such released claims, claims
for relief, and/or causes of action include, but are not limited to, age claims
under the federal Age Discrimination in Employment Act, as well as claims under
Title VII of the Civil Rights Act of 1964, Section 1981 of Title 42 of the
United States Code, the Employee Retirement Income Security Act of 1974, the
Racketeer Influenced and Corrupt Organizations Act, the Financial Reform
Recovery and Enforcement Act of 1989, the Americans With Disabilities Act, the
Rehabilitation Act of 1973, the federal Family and Medical Leave Act, the
California Fair Employment and Housing Act, the California Labor Code, the Equal
Pay Act, the Fair Labor Standards Act, and all other laws, whether foreign,
federal, state or local of any jurisdiction. This General Release does not
waive rights or claims based on events that may occur after the date I sign it.
To the extent permitted by law, I further hereby waive all rights under Section
1542 of the California Civil Code or any similar law of any jurisdiction against
the Released Parties. I recognize that Section 1542 provides:
"A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor."
I understand that should any provision of this General Release be determined to
be invalid by a court or government agency of competent jurisdiction or should I
fail to fulfill my obligations under it, the remainder of this General Release
shall, at the Company's option, remain in full force and effect and/or I shall
be required to return, in full or in part, as determined by the Company, any and
all consideration I received in exchange for my agreeing to this General
Release.
I hereby confirm my promise to adhere to the terms of the confidentiality clause
and non-disparagement clause at Sections 10 and 11 of the Agreement and to
fulfill my obligations and agreements relating to any payment under Section 9 of
the Agreement.
Nothing in this General Release constitutes an admission of liability by the
parties. This General Release constitutes the complete understanding of the
parties concerning its subject matter, and supersedes any and all prior
agreements, promises or inducements, written or oral, except as specifically set
forth in the Agreement. No other promises or agreements, or any modifications
to or of this General Release, shall be binding unless reduced to writing and
signed by an authorized representative of the Company and me.
I acknowledge that I have read this General Release, that I fully understand and
appreciate its meaning, and that I had an opportunity to consult my own
attorney.
This General Release does not release any vested rights I may have under the
pension program or savings program, or any claims I may have for indemnification
under applicable
4114808.14 -2-
law or applicable by-laws, any claims I may have for workers compensation,
disability, or unemployment insurance benefits, nor does it release any claims
for breach of the Agreement itself. If I am retiring, this General Release also
does not affect my participation in any benefit program made available to
retirees by the Company.
__________________________________
Signature
__________________________________
Printed Name of Executive
__________________________________
Date
__________________________________
Social Security No.
THIS GENERAL RELEASE MAY NOT BE SIGNED AND RETURNED UNTIL AFTER YOUR DATE OF
TERMINATION.
4114808.14 -3-
APPENDIX B
STATEMENT OF NON-REVOCATION OF GENERAL RELEASE
AS OF THE DATE SHOWN ON THIS FORM
By signing below, I hereby verify that I have chosen not to revoke my
agreement to and execution of the General Release. My signature also confirms
my renewed agreement, as of the date shown below, to the terms of the General
Release, including the release and waiver to the extent permitted by law of any
and all claims I have or may have against BankAmerica Corporation, Bank of
America NT&SA, including its or their subsidiaries and affiliates, and the
officers, employees, directors, representatives and/or agents of any of the
foregoing entities, or any other Released Parties, other than claims
specifically excluded from release by the terms of the General Release itself.
__________________________________
Signature
__________________________________
Printed Name of Executive
__________________________________
Date
__________________________________
Social Security No.
TO BE VALID, THIS DOCUMENT MAY NOT BE SIGNED AND RETURNED UNTIL 8 DAYS OR MORE
AFTER THE DATE THE GENERAL RELEASE IS SIGNED
4114808.14
