Exhibit 10.h
CHANGE IN CONTROL
SEVERANCE PAY PROGRAM
In April, 1997, 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"), which were amended by the Board's action.
The amended 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.
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AGREEMENT
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, 1997 and ending on the second anniversary of such date, provided,
however, that commencing on the date one year after February 1, 1997, 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 Renewal
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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 IN
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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
its principal Subsidiary (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
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their ownership, immediately prior to such Business Combination of the
Outstanding 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 (or, in the case of BankAmerica's principal Subsidiary, the
corresponding board of directors) 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 expected, but
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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, (A) the
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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.
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(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 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 Period, the
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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 Executive
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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.
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(iii) Incentive, Savings and Retirement Plans. During the Employment
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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 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 shall be
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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 Executive
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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, the
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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 shall
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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 terminate
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automatically upon the Executive's death during the Employment Period. If the
Executive
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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.
(b) Cause. The Company may terminate the Executive's employment during
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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 by the
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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;
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(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;
(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
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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 the
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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.
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6. Obligations of the Company upon Termination.
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(a) Good Reason; Other Than for Cause, Disability or Death. If the
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Company shall terminate the Executive's employment other than 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:
(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] [two] 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] [two] 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
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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 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 the
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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 reason of
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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.
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(d) Cause; Other than for Good Reason. If the Executive's employment
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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).
(e) Termination as a Result of Divestiture. This Section shall apply if
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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 prevent or
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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
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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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(a) Execution and non-revocation of Release by Executive. The Company's
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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
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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 "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
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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:
(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
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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 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
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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.
(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:
-------------------
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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
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.
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(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.
(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.
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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 ___________________________
_____________________
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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
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and/or connected in any way with my employment relationship within the 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 nondisparagement 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.
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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 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.
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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
34217
