AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit
(10)(p)
AMENDMENT
TO EMPLOYMENT AGREEMENT
This Amendment dated
,
2007 (the “Amendment”), to the Employment Agreement
dated
,
, (the “Employment
Agreement”) by and between Wachovia Corporation (the
“Company”) and
(the “Executive”), as subsequently amended.
WHEREAS, certain compensation, benefits and other amounts
payable under the Employment Agreement are subject to
Section 409A of the Internal Revenue Code of 1986, as
amended (“Code Section 409A”);
WHEREAS, the Company and the Executive wish to amend the
Employment Agreement to comply with the requirements of the
final regulations under Code Section 409A;
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is acknowledged hereto, the parties agree as
follows:
1. Section 2(b)(vi) of the
Employment Agreement is amended by deleting the first sentence
of that section, and by deleting the phrase “SERP
Agreement” in the first place where it appears in the
second sentence of that section and substituting the following
phrase in its place:
the Senior Executive Retirement Agreement, dated
October 22, 1999, between the Company (as successor to the
former Wachovia Corporation) and the Executive, as amended (the
“SERP Agreement”)
2. Section 3(a) of the
Employment Agreement is amended to add the following new
sentence to the end of that section:
Notwithstanding any provision of this Agreement to the contrary,
if the Executive’s Disability leave is at least six months,
the Participant shall for purposes of this Agreement be deemed
to have had a termination of employment on the first day
following such six-month period and that date shall be treated
as the Disability Effective Date.
3. Section 4(a)(i) of the
Employment Agreement is amended in its entirety to read as
follows:
(i) the Company shall pay to the
Executive in a lump sum in cash within 30 days after the
Date of Termination the aggregate of (A) the
Executive’s Annual Base Salary through the Date of
Termination to the extent not theretofore paid, and (B) the
product of (1) an Annual Bonus of an amount equal to the
greater of (x) the highest annual cash incentive bonus paid
by the Company to the Executive for the three calendar years
prior to the Date of Termination or (y) the
Executive’s then applicable “target” incentive
bonus under the then applicable cash incentive compensation plan
prior to the Date of Termination (the greater of
clauses (x) or (y) is defined as the “Base
Bonus”), and (2) a fraction, the numerator of which is
the number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination, and the
denominator of which is 365, to the extent no theretofore paid
(the “Pro Rata Bonus”), (C) any unpaid Annual
Bonus for the prior year, and (D) any accrued paid time
off, in each case to the extent not theretofore paid (the sum of
the amounts described in clauses (A), (B), (C), and
(D) shall be hereinafter referred to as the “Accrued
Obligations”).
4. Section 4(a)(ii) of the
Employment Agreement is amended in its entirety to read as
follows:
(ii) for the thirty-six
(36) month period beginning immediately after the
Executive’s Date of Termination and ending on the third
anniversary of that date (the “Compensation Continuance
Period”), the Company shall make cash payments to the
Executive equal in the aggregate to three times the sum of
(A) the Executive’s highest Annual Base Salary during
the twelve months immediately prior to the Date of Termination,
(B) the Base Bonus, and (C) the amount equal to the
highest matching contribution by the Company to the
Executive’s account in the Company’s 401(k) plan for
the five years immediately prior to the Date of Termination (the
payments described in clauses (A), (B) and (C) shall
be hereinafter referred to as the “Compensation Continuance
Payments” and, together with the benefits referred to in
Sections 4(a)(iii), (iv), (v), (vi) and (vii),
shall be hereinafter referred to as the “Compensation
Continuance Benefits”). The Compensation Continuance
Payments shall be made in substantially equal semi-monthly
payments, and the Company shall withhold from the Compensation
Continuance Payments all applicable federal, state and local
taxes.
5. Section 4(a)(iii) of the
Employment Agreement is amended by deleting the last sentence of
that section and by adding the following new sentences in its
place:
The amount of any life insurance benefits provided under the
Wachovia Executive Life Insurance Plan (or any successor or
replacement plan thereto) shall not affect the life insurance
benefits that may be provided under that plan in any other
taxable year, and the right to life insurance benefits under
that plan may not be liquidated or exchanged for any other
benefit. Notwithstanding the foregoing, if the Company
reasonably determines that providing continued coverage under
one or more of its welfare benefit plans contemplated herein
could adversely affect the tax treatment of other participants
covered under such plans, or would otherwise have adverse legal
ramifications, the Company may, in its discretion, provide other
coverage at least as valuable as the continued coverage through
insurance.
6. Section 4(a)(iv) of the
Employment Agreement is amended to delete the last sentence of
that section and to substitute the following new sentence in its
place:
Notwithstanding the termination of the Executive’s
employment with the Company, all stock options granted to the
Executive as of the date of this Agreement and during the
Employment Period will be exercisable until the scheduled
expiration date of such stock options or, if earlier, the tenth
(10th) anniversary of the original date on which the stock
option was granted. In the event any such stock options are
designated as “incentive stock options” pursuant to
section 422 of the Code (as defined herein), such stock
options shall be treated as non-qualified stock options for
purposes of this sentence to the extent that they are exercised
after the period specified in section 422(a)(2) of the Code
(to the extent such provision applies).
7. Section 4(a)(v) of the
Employment Agreement is amended to add the following new
sentences at the end of that section:
The programs in which the Executive shall continue to
participate during the Compensation Continuance Period shall be
the Wachovia Executive Financial Planning Program, the Wachovia
Executive Long-Term Disability Plan, the Wachovia Executive
Physical Program and the Wachovia Estate Preservation Bonus
Plan. Any expense reimbursements payable to the Executive under
such plans and programs shall be paid no later than the end of
the Executive’s taxable year that next follows the taxable
year in which the expense was incurred. The amount of expenses
eligible for reimbursement under such programs and the amount of
any benefits provided under such programs shall not affect the
expenses eligible for reimbursement or the benefits that may be
provided under such programs in any other taxable year, and the
right to expense reimbursement or benefits under such programs
may not be liquidated or exchanged for any other benefit. Any
tax reimbursements paid in connection with such programs shall
be paid no later than the end of the Executive’s taxable
year that next follows the taxable year in which the Executive
pays such tax.
8. Section 4(a)(vii) of the
Employment Agreement is further amended to delete the phrase
“outplacement services” and to substitute the phrase
“reasonable outplacement services” in its place.
9. Section 4(a) (viii) of
the Employment Agreement is deleted in its entirety.
10. Section 4(e) of the Employment
Agreement is amended in its entirety to read as follows:
(e) Cause; Other than for Good
Reason. If the Executive’s employment shall
be terminated by the Company for Cause or by the Executive
without Good Reason (other than for Retirement) during the
Employment Period, this Agreement shall terminate without
further obligations of the Company to the Executive other than
the obligation to pay to the Executive (x) his Annual Base
Salary through the Date of Termination, and (y) Other
Benefits, in each case only to the extent owing and theretofore
unpaid.
11. Section 4(f) of the Employment
Agreement is amended in its entirety to read as follows:
(f) Delayed Payment
Date. Notwithstanding any provision to the
contrary in this Agreement, if the Executive is deemed at the
time to be a “key employee” (as defined below), and
such delayed commencement is otherwise required in order to
avoid a prohibited distribution under Section 409A(a)(2) of
the Code, no payments or benefits to which the Executive
otherwise becomes entitled under this Agreement and that are
subject to Section 409A of the Code shall be made or
provided to the Executive prior to the earlier of (i) the
expiration of the six (6)-month period measured from the date of
the Executive’s “separation from service” (as
such term is defined in Treasury Regulations issued under
Section 409A of the Code) or (ii) the date of the
Executive’s death. Upon the expiration of the applicable
Code Section 409A(a)(2) deferral period referred to in the
preceding sentence, all payments and benefits deferred pursuant
to this Section 4(f) (whether they would have otherwise
been payable in a single sum or in installments in the absence
of such deferral) shall be paid or reimbursed to the Executive
in a lump sum, and any remaining payments and benefits due under
this Agreement shall be paid or provided in accordance with the
normal payment dates specified for them herein. The term
“key employee” shall have the same meaning as assigned
to that term under Section 416(i) of the Code, without
regard to Section 416(i)(5) of the Code, and whether the
Executive is a key employee shall be determined in accordance
with written guidelines adopted by the Company for such purposes.
12. Section 6 of the
Employment Agreement is amended by deleting the fifth sentence
of that section and by adding the following new sentences in its
place:
The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses (“Legal
Costs”) which the Executive may reasonably incur during the
Executive’s lifetime as a result of any contest by the
Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as
a result of any contest by the Executive about the amount of any
payment pursuant to this Agreement). Legal Costs will be paid
within 30 days of when they are incurred and in no event
later than the last day of the Executive’s taxable year
next following the taxable year in which the Legal Costs were
incurred. The Company will pay interest on the amount of any
Legal Costs that are paid more than 30 days after the date
on which such Legal Costs were incurred at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code.
The amount of Legal Costs reimbursable for any calendar year
will not be affected by the amount reimbursed in any other
taxable year, and the Executive’s right to payment of Legal
Costs shall not be subject to liquidation or exchange for
another benefit.
13. Section 7(b)(iii) of the
Employment Agreement is amended to add the following new
sentence to the end of that section:
In no event shall the level of such consulting services exceed
20% of the average level of services performed by the Executive
over the
36-month
period immediately preceding the date on which the
Executive’s employment terminated (or the full period of
services that the Executive performed for the Company if the
Executive provided services for fewer than 36 months).
14. Section 8 of the
Employment Agreement is amended by adding the following new
subsection (f) to the end of that section:
(f) Notwithstanding anything
in this Agreement to the contrary:
(i) Any
Gross-Up
Payment made with respect to an Excise Tax (but excluding for
this purpose any interest or penalties with respect to such
tax), and including (but not limited to) any
Gross-Up
Payment with respect to an Excise Tax that the Company has paid
on behalf of the Executive prior to directing the Executive to
claim a refund and any Underpayment described in
Section 8(b), shall be paid no later than the last day of
the Executive’s taxable year next following the taxable
year in which the Excise Tax in respect to which such
Gross-Up
Payment or Underpayment relates is remitted to the applicable
taxing authority.
(ii) The reimbursement of any
expenses incurred by the Executive in connection with a contest
respecting the existence or amount of any Excise Tax to which
the Executive may be entitled pursuant to this Section 8
shall be made no later than the end of the Executive’s
taxable year next following the taxable year in which the taxes
that are subject to the contest are remitted to the applicable
taxing authority or, if no taxes are remitted, the end of the
Executive’s taxable year next following the taxable year in
which the contest is completed or there is a final and
nonappealable settlement or other resolution of the contest.
(iii) Any other expense
reimbursement to which the Executive may be entitled under this
Section 8 for an expense incurred during the
Executive’s lifetime that is not described above,
including, but not limited to, any
Gross-Up
Payment with respect to the interest or penalty component of an
Excise Tax, shall be made no later than the end of the
Executive’s taxable year next following the taxable year in
which the expense was incurred. The amount of any such expenses
eligible for reimbursement paid during the Executive’s
taxable year shall not affect the expenses eligible for
reimbursement in any other taxable year, and the right to any
such expense reimbursement may not be liquidated or exchanged
for any other benefit.
15. Section 11(g) of the
Employment Agreement is amended to add the following new
sentence to the end of that section:
Notwithstanding the foregoing, no such modification shall be
made to any plan, policy, practice, program, contract or
agreement (the “Other Arrangements”) to the extent
such modification would violate any requirement of
Section 409A of the Code applicable to the Other
Arrangements or to this Agreement.
16. Section 11(k) of the
Employment Agreement is amended to delete the first sentence of
that section and to substitute the following new sentence in its
place:
Section 2(b)(vi) of this Agreement constitutes an amendment
to the SERP Agreement.
17. Section 11 of the
Employment Agreement is further amended to add the following new
subsections:
(k) No Acceleration of
Payments. The Executive shall not be permitted,
and the Company shall not have any discretion, to accelerate the
timing or schedule of any payment or benefit under this
Agreement that is subject to Section 409A of the Code,
except as specifically provided herein or as may be permitted
pursuant Section 409A of the Code and the Treasury
Regulations thereunder
(l) Compliance with
Section 409A of the Code. The parties intend
that any payment under this Agreement shall, to the extent
subject to Section 409A of the Code, be paid in compliance
with Section 409A of the Code and the Treasury Regulations
thereunder, and the parties shall interpret the Agreement in
accordance with Section 409A of the Code and the Treasury
Regulations thereunder. The parties agree to further modify this
Agreement to the extent necessary to comply with
Section 409A of the Code.
18. This Amendment is effective as
of December 31, 2007.
19. This Amendment constitutes an
amendment to the Employment Agreement pursuant to
Section 11(a) of the Employment Agreement. All provisions
of the Employment Agreement not affected by this Amendment shall
remain in full force and effect and shall continue to be binding
obligations of both parties hereto. Capitalized terms used in
this Amendment but not defined herein shall have the meanings
assigned thereto in the Employment Agreement.
IN WITNESS WHEREOF, the Company has caused this Amendment to
be executed by its duly authorized officer, and the Executive
has signed this amendment as of the date set forth below.
WACHOVIA CORPORATION
By:
Name
Title:
AGREED AND ACCEPTED:
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