Exhibit 10.3.3
Change of Control
CAPITAL ONE FINANCIAL CORPORATION
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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AGREEMENT by and between CAPITAL ONE FINANCIAL CORPORATION, a Delaware
corporation (the "Company") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "Executive"), dated as
of the 18/th/ day of December 1997.
The Board of Directors of the Company (the "Board"), has determined that it
is in the best interests of the Company 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 of Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of 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 of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company 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 be the first date during the "Change of
Control Period" (as defined in Section 1(b)) on which a Change of Control
occurs. Anything in this Agreement to the contrary notwithstanding, if the
Executive's employment with the Company is terminated or the Executive ceases to
be an officer of the Company prior to the date on which a Change of Control
occurs, and it is reasonably demonstrated that such termination of employment
(i) was at the request of a third party who has taken steps reasonably
calculated to effect the Change of Control or (ii) otherwise arose in connection
with or anticipation of the Change of 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 of Control Period" is the period commencing on the
date hereof and ending on the third anniversary of such date; provided, however,
that commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof is
hereinafter referred to as the "Renewal Date"), the Change of Control Period
shall be automatically extended so as to terminate three years from such Renewal
Date, unless at least 60 days prior to the Renewal Date the Company shall give
notice to the Executive that the Change of Control Period shall not be so
extended.
2. Change of Control. For the purpose of this Agreement, and except as
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hereinafter provided in (e) and (f), a "Change of Control" shall mean:
(a) The acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act
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of 1934, as amended (the "Exchange Act")) 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 the
Company (the "Outstanding Company Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Company
Voting Securities"), provided, however, that any acquisition by (x) the
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Company or any of its subsidiaries, or any employee benefit plan (or
related trust) sponsored or maintained by the Company or any of its
subsidiaries or (y) any corporation with respect to which, following such
acquisition, more than 60% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding Company
Common Stock and Company Voting Securities immediately prior to such
acquisition in substantially the same proportion as their ownership,
immediately prior to such acquisition, of the Outstanding Company Common
Stock and Company Voting Securities, as the case may be, shall not
constitute a Change of Control; or
(b) Individuals who constitute the Board prior to, or at the time of
consummation of, the distribution of the Company's common stock to
shareholders of the Company's parent corporation (the "Distribution") (the
"Incumbent Board") cease for any
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reason to constitute at least a majority of the Board, provided that any
individual becoming a director subsequent to the date of Distribution whose
election or nomination for election by the Company'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 is in connection with an
actual or threatened election contest relating to the election of the
Directors of the Company (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act); or
(c) Approval by the shareholders of the Company of a reorganization,
merger or consolidation (a "Business Combination"), in each case, with
respect to which all or substantially all of the individuals and entities
who were the respective beneficial owners of the Outstanding Company Common
Stock and Company Voting Securities immediately prior to such Business
Combination do not, following such Business Combination, beneficially own,
directly or indirectly, more than 60% 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 in substantially the same proportion as
their ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and Company Voting Securities, as the case
may be; or
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(d) (i) a complete liquidation or dissolution of the Company or (ii)
sale or other disposition of all or substantially all of the assets of the
Company other than to a corporation with respect to which, following such
sale or disposition, more than 60% 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 is then owned beneficially, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Company
Voting Securities immediately prior to such sale or disposition in
substantially the same proportion as their ownership of the Outstanding
Company Common Stock and Company Voting Securities, as the case may be,
immediately prior to such sale or disposition.
(e) Neither the sale of Company common stock in an initial public
offering, nor the distribution of Company common stock by the Company's
parent corporation to its shareholders in a transaction to which Section
355 of the Internal Revenue Code applies, nor any restructuring of the
Company or its Board of Directors in contemplation of or as the result of
either of such events, shall constitute a Change of Control.
(f) Notwithstanding the foregoing, a Change of Control shall not
occur with respect to the Executive by reason of any event which would
otherwise constitute a Change of Control if, immediately after the
occurrence of such event, individuals including such Executive who were
executive officers of the Company immediately prior to the occurrence of
such event, own, directly or indirectly, on a fully diluted basis,
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(i) 15% or more of the then outstanding shares of common stock of the
Company or any acquiror or successor to substantially all of the business
of the Company or (ii) 15% or more of the combined voting power of the then
outstanding voting securities of the Company or any acquiror or successor
to substantially all of the business of the Company entitled to vote
generally in the election of directors.
3. Employment Period. The Company hereby agrees to continue the Executive
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in its employ, and the Executive hereby agrees to remain in the employ of the
Company, for the period commencing on the Effective Date and ending on the third
anniversary of such date (the "Employment Period").
4. Terms of Employment.
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(a) Position and Duties.
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(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate
in all material respects with the most significant of those held,
exercised and assigned at any time during the 90-day period
immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or any office or
location less 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
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reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to
use the Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. 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 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.
(b) Compensation.
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(i) Base Salary. No annual base salary shall be payable to the
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Executive with respect to any portion of the Employment Period
occurring before January 1, 2001. During any portion of the
Employment Period occurring on or after January 1, 2001, 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
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the highest monthly base salary paid or payable to the Executive by
the Company and its affiliated companies in respect of the twelve-
month period immediately preceding the month in which the Effective
Date occurs; provided that, if the Effective Date occurs before
January 1, 2001, such monthly base salary shall be deemed to equal the
amount most recently established by the Board for this purpose before
the Effective Date. During any portion of the Employment Period
occurring on or after January 1, 2001, the Annual Base Salary shall be
reviewed at least annually and shall be increased at any time and from
time to time as shall be substantially consistent with increases in
base salary awarded in the ordinary course of business to other peer
executives of the Company and its affiliated companies. 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 and the term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary
as so increased. As used in this Agreement, the term "affiliated
companies" includes any company controlled by, controlling or under
common control with the Company.
(ii) Annual Bonus. In addition to any Annual Base Salary payable as
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hereinabove provided, the Executive shall be awarded, for each fiscal
year that both (A) begins after December 31, 1999, and (B) begins or
ends during the Employment Period, an annual bonus (the "Annual
Bonus") in cash at least equal to the sum of the target award under
the Company's Executive Annual Cash Incentive Plan and
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any other target awards under any other similar annual incentive plans
(or if no such target award is designated under the Company's
Executive Annual Cash Incentive Plan or any similar plan, the midpoint
between the high and low bonus payable to the Executive under such
plan); provided, however, that such target or midpoint, as the case
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may be, shall not be less than such target or midpoint under such
plans in the year immediately preceding the Change of Control (the
"Recent 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. In addition to any
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Annual Base Salary and Annual Bonus payable as hereinabove provided,
the Executive shall be entitled to participate during the Employment
Period in all incentive, profit-sharing, savings and retirement plans,
practices, policies and programs applicable generally to other peer
executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the
Executive with incentive, savings and retirement benefit
opportunities, in each case, less favorable, in the aggregate, except
as required to comply with statutory requirements of general
application which limit the level of benefit opportunity, than (A) the
most favorable of those provided by the Company and its affiliated
companies for the Executive under such plans, practices, policies and
programs as in effect at any time
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during the 90-day period immediately preceding the Effective Date or
(B) if more favorable to the Executive, those provided at any time
after the Effective Date to other peer executives of the Company and
its affiliated companies; provided that no award shall be granted with
respect to any fiscal year beginning before January 1, 2000 under any
incentive or bonus plan of the Company; and provided further that any
effect on the Executive's participation or benefit level resulting
from the Executive's not receiving an Annual Base Salary prior to
January 1, 2001, shall be governed by the terms of those plans,
practices, policies and programs of general applicability.
(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, practices, policies and programs provided by
the Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, split-dollar life insurance,
accidental death and travel accident insurance plans and programs) to
the extent generally applicable to other peer executives of the
Company and its affiliated companies, but in no event shall such
plans, practices, policies and programs provide the Executive with
benefits which are less favorable, in the aggregate, than (x) the most
favorable of such plans, practices, policies and programs in effect
for the Executive at any time during the 90-day period immediately
preceding the
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Effective Date or (y) if more favorable to the Executive, those
provided at any time after the Effective Date generally to other peer
executives of the Company and its affiliated companies.
(v) Expenses. During the Employment Period, the Executive shall
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be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most
favorable policies, practices and procedures of the Company and its
affiliated companies in effect for the Executive at any time during
the 90-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies.
(vi) Fringe Benefits. During the Employment Period, the Executive
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shall be entitled to fringe benefits in accordance with the most
favorable plans, practices, programs and policies of the Company and
its affiliated companies in effect for the Executive at any time
during the 90-day period immediately preceding the Effective Date or,
if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies.
(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, at least equal to the most favorable
of the foregoing provided to the Executive by the
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Company and its affiliated companies at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable
to the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
(viii) Vacation. During the Employment Period, the Executive shall
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be entitled to vacation (paid vacation on and after January 1, 2001)
in accordance with the most favorable plans, policies, programs and
practices of the Company and its affiliated companies as in effect at
any time during the 90-day period immediately preceding the Effective
Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the
Company and its affiliated companies.
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
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 13(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For
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purposes of this Agreement, "Disability" means the absence of the Executive from
the Executive's duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company
or its insurers and acceptable to the Executive or the Executive's legal
representative (such agreement as to acceptability not to be withheld
unreasonably).
(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"
means (i) an action taken by the Executive involving willful and wanton
malfeasance involving specifically a wholly wrongful and unlawful act, or (ii)
the Executive being convicted of a felony.
(c) Good Reason. The Executive's employment may be terminated during
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the Employment Period by the Executive for Good Reason. For purposes of this
Agreement, "Good Reason" means
(i) The assignment to the Executive of any duties inconsistent in
any respect with the Executive's position (including status, offices,
titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 4(a) of this Agreement, or
any other action by the Company which results in a diminution in such
position, authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action 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 that described 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 the Company to comply with and satisfy
Section 11(c) of this Agreement.
For purposes of this Agreement, any good faith determination of Good
Reason made by the Executive shall be conclusive. Anything in this Agreement to
the contrary notwithstanding, a termination by the Executive for any reason
during the 30-day period immediately following the first anniversary of the
Effective Date shall be deemed to be a termination for Good Reason for all
purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause
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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
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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 (which date shall be not more than fifteen days
after the giving of such notice). In the case of a termination of the
Executive's employment for Cause, a Notice of Termination shall include a copy
of a resolution duly adopted by the affirmative vote of not less than two-thirds
of the entire membership of the Board at a meeting of the Board called and held
for the purpose (after reasonable notice to the Executive and reasonable
opportunity for the Executive, together with the Executive's counsel, to be
heard before the Board prior to such vote), finding that in the good faith
opinion of the Board the Executive was guilty of conduct constituting Cause. No
purported termination of the Executive's employment for Cause shall be effective
without a Notice of Termination. The failure by the Executive to set forth in
the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason shall not waive any right of the Executive hereunder or
preclude the Executive from asserting such fact or circumstance in enforcing the
Executive's rights hereunder.
(e) Date of Termination. "Date of Termination" means the date of
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receipt of the Notice of Termination or any later date specified therein, as the
case may be; provided, however, that (i) if the Executive's employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination and (ii) 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 Disability Effective Date, as the case may be.
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6. Obligations of the Company upon Termination.
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(a) 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
under this Agreement, other than the following obligations: (i) solely with
respect to any portion of the Employment Period occurring on or after January 1,
2001, payment of the Executive's Annual Base Salary through the Date of
Termination to the extent not theretofore paid, (ii) solely with respect to
fiscal years beginning after December 31, 1999, payment of the product of (x)
the greater of (A) the Annual Bonus paid or payable, including by reason of
deferral, (and annualized for any fiscal year consisting of less than twelve
full months or for which the Executive has been employed for less than twelve
full months) for the most recently completed fiscal year during the Employment
Period, if any, and (B) the Recent Annual Bonus (such greater amount hereafter
referred to as the "Highest Annual Bonus") 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 and (iii) payment of any
compensation previously deferred by the Executive (together with any accrued
interest thereon) and not yet paid by the Company and any accrued vacation pay
not yet paid by the Company (the amounts described in paragraphs (i), (ii) and
(iii) are hereafter referred to as "Accrued Obligations"). All 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. In
addition, the Executive's estate or designated beneficiaries shall be entitled
to receive the
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Executive's Annual Base Salary for the balance of any portion of the Employment
Period that occurs on or after January 1, 2001; provided that such payments of
Annual Base Salary shall be reduced by any survivor benefits paid to the
Executive's estate or designated beneficiary under the Company's Cash Balance
Pension Plan (the "Pension Plan"). Anything in this Agreement to the contrary
notwithstanding, the Executive's estate and family shall be entitled to receive
benefits at least equal to the most favorable benefits provided generally by the
Company and any of its affiliated companies to the estates and surviving
families of peer executives of the Company and such affiliated companies under
such plans, programs, practices and policies relating to death benefits, if any,
as in effect generally with respect to other peer executives and their estates
and families at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the Executive's
family, as in effect on the date of the Executive's death generally with respect
to other peer executives of the Company and its affiliated companies and their
families; provided that this sentence shall not apply to benefits under any
incentive or bonus plan with respect to fiscal years beginning before January 1,
2000.
(b) 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 Accrued Obligations. All Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of Termination. In
addition, the Executive shall be entitled to receive the Executive's Annual Base
Salary for the balance of any portion of the Employment Period occurring on or
after January 1, 2001; provided that such payments of Annual Base Salary shall
be reduced by any benefits paid to
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the Executive under the Company's disability plans. Anything in this Agreement
to the contrary notwithstanding, the Executive shall be entitled after the
Disability Effective Date to receive disability and other benefits at least
equal to the most favorable of those generally provided by the Company and its
affiliated companies to disabled executives and/or their families in accordance
with such plans, programs, practices and policies relating to disability, if
any, as in effect generally with respect to other peer executives and their
families at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the Executive's
family, as in effect at any time thereafter generally with respect to other peer
executives of the Company and its affiliated companies and their families;
provided that this sentence shall not apply to benefits under any incentive or
bonus plan with respect to fiscal years beginning before January 1, 2000.
(c) Cause; Other than for Good Reason. If the Executive's employment
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shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (i) with respect to any portion of the Employment Period
that occurs on or after January 1, 2001, Annual Base Salary through the Date of
Termination, plus (ii) the amount of any compensation previously deferred by the
Executive, in each case to the extent theretofore unpaid. If the Executive
terminates employment during the Employment Period other than for Good Reason,
this Agreement shall terminate without further obligations to the Executive,
other than for Accrued Obligations. In such case, all Accrued Obligations shall
be paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination.
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(d) Good Reason; Other Than for Cause or Disability. If, during the
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Employment Period, the Company shall terminate the Executive's employment other
than for Cause or Disability, or if the Executive shall terminate employment
under this Agreement for Good Reason:
(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 the
following amounts:
(A) All Accrued Obligations; and
(B) The product of (x) three and (y) the sum of (i) Annual
Base Salary and (ii) the Highest Annual Bonus; provided that if
Annual Base Salary described in clause (i), above, equals $0
because of the restrictions set forth in Section 4(b)(i) on
Annual Base Salary for periods occurring before January 1, 2001,
for purposes of this Section 6(d)(i)(B), Annual Base Salary shall
equal the amount most recently established by the Board for this
purpose before the Effective Date; and provided further that if
the Highest Annual Bonus described in clause (ii), above, equals
$0 because of the restrictions set forth in Section 4(b)(ii) on
bonuses for fiscal years beginning before January 1, 2000, for
purposes of this Section 6(d)(i)(B), the Highest Annual Bonus
shall equal 75% of the Executive's Annual Base Salary (determined
after taking into account the preceding proviso); and provided
further that the amount taken into account under clauses (i) and
(ii), above,
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shall be multiplied by a fraction, not exceeding 1, the numerator
of which is the number of full calendar months that both (1) fall
in the 36-month period immediately following the Date of
Termination and (2) (a) with respect to clause (i), begin on or
after January 1, 2001, and (b) with respect to clause (ii), begin
on or after January 1, 2000, and the denominator of which is 36;
and
(C) A lump sum retirement benefit equal to the difference
between (1) the actuarial equivalent of the benefit under the
Pension Plan and any supplemental and/or excess retirement plan
providing benefits for the Executive which the Executive would
receive if the Executive's employment continued at the
compensation levels provided for in this Agreement for the
remainder of the Employment Period, assuming for this purpose
that all accrued benefits are fully vested, and (2) the actuarial
equivalent of the Executive's actual benefit (paid or payable),
if any, under the Pension Plan; for purposes of determining the
amount payable pursuant to this Section 6(d)(i)(C) the accrual
formulas and actuarial assumptions utilized shall be no less
favorable than those in effect with respect to the Pension Plan
and the SERP during the 90-day period immediately prior to the
Effective Date; and
(ii) For the remainder of the Employment Period, or such longer
period as any plan, program, practice or policy may provide, the
Company shall continue
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benefits to the Executive and/or the Executive's family at least equal
to those which would have been provided to them in accordance with the
plans, programs, practices and policies described in Section 4(b)(iv)
of this Agreement if the Executive's employment had not been
terminated in accordance with the most favorable plans, practices,
programs or policies of the Company and its affiliated companies
applicable generally to other peer executives and their families
during the 90-day period immediately preceding the Effective Date or,
if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies and their families. For purposes of
determining eligibility of the Executive for retiree benefits pursuant
to such plans, practices, programs and policies, the Executive shall
be considered to have remained employed until the end of the
Employment Period and to have retired on the last day of such period.
In lieu of the benefits provided for in this Section 6(d)(ii), the
Executive may elect within 60 days of the Date of Termination to be
paid an amount in cash equal to the present value of such benefits on
an after-tax basis. In determining present value, a discount rate
equal to the federal mid-term rate under Section 1274(d) of the
Internal Revenue Code of 1986, as amended (the "Code") shall be
utilized. The right to continued benefits granted to the Executive
and/or his family pursuant to this Section 6(d)(ii) shall be in
addition to any right of continued coverage under any of the plans,
programs, practices and policies described in Section 4(b)(iv) of the
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Agreement which the Executive and/or his family may be entitled to
under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") upon any loss of coverage under such plans, programs,
practices and policies.
7. Non-exclusivity of Rights. Except as otherwise specifically provided
-------------------------
in this Agreement, nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any benefit, bonus, incentive
or other plans, programs, policies or practices, provided by the Company or any
of its affiliated companies and for which the Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as the Executive may have
under any other agreements with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of the Company or any of
its affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program except as
explicitly modified by this Agreement.
8. Full Settlement. The 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. 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. The Company
agrees to pay, to the full extent permitted by law, all legal fees and expenses
which the Executive may reasonably incur as a result of any contest (regardless
of the outcome thereof) by the Company, the Executive or
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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
Section 9 of this Agreement), plus in each case interest at the applicable
federal rate provided for in Section 7872(f)(2) of the Code.
9. Certain Additional Payments by the Company.
------------------------------------------
(a) Anything in this Agreement to the contrary notwithstanding, 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 (a
"Payment"), would be subject to the excise tax imposed by Section 4999 of 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 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) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
used in arriving at such determinations, shall be made by the Company's
certified public accounting firm immediately prior to the Effective
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Date (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within fifteen business days
of the Date of Termination, if applicable, or such earlier time as is requested
by the Company. All fees and expenses of the Accounting Firm shall be borne
solely by the Company. The initial Gross-Up Payment, if any, as determined
pursuant to this Section 9(b), shall be paid by the Company to the Executive
within five days of the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with a written opinion that failure to report the
Excise Tax on the Executive's applicable federal income tax return would not
result in the imposition of a negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon the Company and the Executive. 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.
(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 the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten
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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 it 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
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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 ▇▇▇ 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 ▇▇▇ 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
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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 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 or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it. 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.
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11. Successors.
----------
(a) This Agreement is personal to the Executive and without the prior
written consent of the Company 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
the Company and its successors and assigns.
(c) The Company 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 the Company 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, "Company" shall mean the Company 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.
12. Effectiveness of Amended and Restated Agreement. This Amended and
------------------------------------------------
Restated Agreement is subject to Shareholder Approval as defined in the Non-
Statutory Stock Option Agreement by and between the Company and the Executive
dated as of December 18, 1997. If Shareholder Approval is not obtained, (i)
this Amended and Restated Agreement and the amendments set forth in this
Agreement shall be null and void; (ii) the Company and the Executive shall be
bound by the terms of the Agreement by and between the Company and the Executive
dated as of November 1, 1994 and the Amendment to Agreement by and between the
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Company and the Executive dated as of September 15, 1995 (together the "Existing
Agreement") as in effective immediately before the execution of this Amended and
Restated Agreement; and (iii) the Company shall pay to the Executive the amount
of any compensation that, but for the execution of this Amended and Restated
Agreement, would have been paid to the Executive under the terms of the Existing
Agreement as in effect immediately before the execution of this Amended and
Restated Agreement, with interest accruing from the date the compensation
otherwise would have been paid to the Executive until the actual date of
payment, at an annual interest rate of 5.68%.
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 parties hereto or
their respective successors and legal representatives.
(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:
--------------------
To the address shown on the Company's records for tax reporting
purposes.
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If to the Company:
-----------------
Capital One Financial Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Officer-in-Charge,
Human Resources Division
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 or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(e) The Executive's failure to insist upon strict compliance with any
provision hereof or the failure to assert any right the Executive may have
hereunder, including, without limitation, the right to terminate employment for
Good Reason pursuant to Section 5(c)(i)-(v), shall not be deemed to be a waiver
of such provision or right or any other provision or right thereof.
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(f) This Agreement contains the entire understanding of the Company
and the Executive with respect to the subject matter hereof and supercedes in
its entirety the Existing Agreement. Until the Effective Date, subject to the
terms of any other employment agreement between the Executive and the Company,
the Executive shall continue to be an "employee at will".
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
CAPITAL ONE FINANCIAL CORPORATION
By
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chairman, Compensation Committee
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