EXHIBIT 10.1
AMENDMENT TO
STOCK OPTION AGREEMENTS
THIS AMENDMENT TO STOCK OPTION AGREEMENTS, dated and effective as of September
27, 2006 (this "Amendment"), is adopted by Golden West Financial Corporation, a
Delaware corporation ("GDW"), for the benefit of those individuals who are party
to one or more stock option agreements with GDW (each an "Employee").
RECITALS
A. GDW and each of the Employees are parties to one or more stock option
agreements (the "Agreements") evidencing outstanding options to purchase shares
of GDW common stock ("Options") that were granted to each of the Employees
pursuant to the Golden West Financial Corporation Amended and Restated 1996
Stock Option Plan (the "Plan"). The Agreements generally provide that the option
exercise term expires on the earlier of (i) ten years from the date of option
grant or (ii) the date of the Employee's termination of employment with GDW and
its subsidiaries.
B. On May 7, 2006, GDW entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Wachovia Corporation ("WB"), pursuant to which agreement it is
contemplated that GDW and a subsidiary of WB will merge (the "Merger"). For
purposes of this Amendment, "Wachovia" shall mean WB or any of its subsidiaries,
including without limitation any former subsidiary of GDW, employing, without
any break in Employee's service after the Merger, Employee.
C. Section 3.10 of the Merger Agreement provides that at the time the Merger
becomes effective (as determined in accordance with Section 2.03 of the Merger
Agreement and referred to herein as the "Effective Time"), each Option that is
outstanding and unexercised immediately prior thereto shall immediately and
fully vest and be deemed to constitute an option to purchase shares of WB common
stock, subject to the adjustments to the number of shares subject to the Option
and the exercise price thereof as set forth in the Merger Agreement. The
successors to GDW shall remain obligated under and be bound by the terms of the
Agreements as amended herein.
D. The Plan provides the Stock Option Committee of the Board of Directors of GDW
(the "Committee") with the authority to administer the Plan, including making
binding and final determinations and adjustments with respect to outstanding
stock options and waiving any option vesting provisions. The Committee has
determined that the Merger does not constitute a Terminating Transaction as
defined by the Plan and the Agreements and that, as a result, all Options shall
immediately and fully vest only on the terms and conditions described in this
Amendment.
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AMENDED TERMS
NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, GDW hereby amends the terms of each of the outstanding Agreements
as follows:
1. IMMEDIATE VESTING. Immediately prior to the Effective Time, all of Employee's
outstanding and unexercised Options shall immediately and fully vest.
2. EXERCISE OF NONQUALIFIED OPTIONS FOLLOWING TERMINATION OF EMPLOYMENT. After
the Effective Time, in the event Employee's employment with Wachovia (as defined
above) shall terminate for any reason, each nonqualified Option will remain
exercisable until and including the 74th day after such date of termination.
Notwithstanding the preceding sentence, in the event that final regulations
implementing Section 409A of the Internal Revenue Code of 1986, as amended (the
"Final 409A Regulations"), are adopted that would permit a longer
post-termination exercise period, then each nonqualified Option still
outstanding as of the effective date of the Final 409A Regulations will remain
exercisable for the longest period (not to exceed 120 days) that can be applied
equally to all nonqualified Options in compliance with the Final 409A
Regulations. In that case, GDW or its successor will provide, as soon as
practicable, each holder of nonqualified Options with notice of the change in
the applicable exercise period and the effective date of that change, provided
that any such change in the applicable post-termination exercise period will be
effective as of the effective date of the Final 409A Regulations.
Notwithstanding anything to the contrary in this Section 2: (1) in no event
shall any Option be exercisable after the expiration of ten (10) years from the
date on which the Option was originally granted by GDW; and (2) in no event
shall this Amendment operate to reduce any longer post-termination exercise
period provided in a stock option agreement in the event of the Employee's
death. Upon the earlier of (i) the expiration of the applicable post-termination
exercise period, or (ii) the expiration of the original ten-year term of the
Option, any unexercised Option shall automatically terminate and be forfeited.
3. NO OTHER CHANGES. Except as expressly provided above, this Amendment does not
amend, modify or alter any other term or condition set forth in the Plan or the
Agreements or permit any purchase or sale or other acquisition/disposition of
shares of GDW or WB common stock in violation of applicable federal securities
laws. Except to the extent necessary to comply with the Final 409A Regulations
or to provide for a longer permissible post-termination exercise period as
provided in Section 2 above, no provision of this Amendment shall be modified,
waived, discharged or amended unless the modification, waiver, discharge or
amendment is agreed to in writing and signed by Employee and by an authorized
officer of GDW or its successor. This Amendment shall not impose any obligation
upon GDW or any successor to retain Employee in its employ and/or for any
particular service period.
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4. ENFORCEABILITY. This Amendment shall constitute a binding and enforceable
agreement between GDW and its successors and each of the Employees as if they
were a party hereto. This Amendment shall inure to the benefit of and be
enforceable by the Employees and their respective heirs, successors and assigns.
5. CONTINGENT EFFECT/TERMINATION OF THIS AMENDMENT. The provisions set forth in
this Amendment are contingent upon the Merger becoming effective. In the event
that the Merger is not completed, this Amendment shall be of no further force
and effect and shall automatically terminate. This Amendment shall not apply to
any Options to acquire GDW common stock that are held by an individual whose
employment with GDW or its affiliates terminates prior to the Effective Time.
GOLDEN WEST FINANCIAL CORPORATION
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Chief Executive Officer
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