EXHIBIT 10(k)
<PAGE> 1
July 11, 2000
Mr. Robert J. Mueller
The Bank of New York
One Wall Street
New York, New York 10286
Dear Mr. Mueller:
The Bank of New York Company, Inc., a New York corporation (the
"Company"), considers the establishment and maintenance of a sound and vital
management to be essential to protecting and enhancing the best interests of
the Company and its shareholders. In this connection, the Company recognizes
that, as is the case with many publicly held corporations, the possibility of
a change in control may arise and that such possibility, and the uncertainty
and questions which it may raise among management of the Company and its
principal subsidiary, The Bank of New York (the "Bank"), may result in the
departure or distraction of management personnel to the detriment of the
Company and its shareholders. Accordingly, the Board of Directors of the
Company (the "Board") has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of
management of the Company and the Bank to their assigned duties without
distraction in circumstances arising from the possibility of a change in
control of the Company. In particular, the Board believes it important,
should the Company or its shareholders receive a proposal for transfer of
control of the Company, that you be able to assess and advise the Board
whether such proposal would be in the best interests of the Company and its
shareholders and to take such other action regarding such proposal as the
Board might determine to be appropriate, without being influenced by the
uncertainties of your own situation.
In order to induce you to remain in the employ of the Company, this
letter agreement sets forth the severance benefits which the Company agrees
will be provided to you in the event your employment with the Company or the
Bank is terminated subsequent to a "change in control" of the Company under
the circumstances described below.
<PAGE> 2
1. Agreement to Provide Services; Right to
Terminate.
(i) Except as otherwise provided in paragraph (ii) below, the
Company, the Bank or you may terminate your employment at any time, subject to
the Company's providing the benefits hereinafter specified in accordance with
the terms hereof.
(ii) In the event a tender offer or exchange offer is made by a
Person (as hereinafter defined) for more than 25% of the combined voting power
of the Company's outstanding securities ordinarily having the right to vote at
elections of directors ("Voting Securities"), including shares of the common
stock of the Company, you agree that you will not leave the employ of the
Company or the Bank (other than as a result of Disability or upon Retirement,
as such terms are hereinafter defined) and will render the services
contemplated in the recitals to this Agreement until such tender offer or
exchange offer has been abandoned or terminated or a change in control of the
Company, as defined in Section 3 hereof, has occurred. For purposes of this
Agreement, the term "Person" shall mean and include any individual,
corporation, partnership, group, association or other "person", as such term
is used in Section 14(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"), other than the Company, the Bank, any other subsidiary of the Company
or any employee benefit plan(s) sponsored by the Company, the Bank or any
other subsidiary of the Company.
2. Term of Agreement. - This Agreement shall commence on the date
hereof and shall continue in effect until December 31, 2000; provided,
however, that commencing on January 1, 2001 and each January 1 thereafter, the
term of this Agreement shall automatically be extended for one additional year
unless at least 90 days prior to such January 1st date, the Company or you
shall have given notice that this Agreement shall not be extended; and
provided, further, that, notwithstanding the delivery of any such notice, this
Agreement shall continue in effect for a period of twenty-four (24) months
after a change in control of the Company, as defined in Section 3 hereof, if
such change in control shall have occurred during the term of this Agreement,
as it may be extended by the first proviso set forth above. Notwithstanding
anything in this Section 2 to the contrary, this Agreement shall terminate if
you or the Company or the Bank terminate your employment prior to a change in
control of the Company.
<PAGE> 3
3. Change in Control. - For purposes of this Agreement, a "change
in control" of the Company shall be deemed to occur if (A) any "person" (as
such term is defined in Section 3(a)(9) and as used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), excluding the Company or any of its subsidiaries, a trustee or any
fiduciary holding securities under an employee benefit plan of the Company or
any of its subsidiaries, an underwriter temporarily holding securities
pursuant to an offering of such securities or a corporation owned, directly or
indirectly, by stockholders of the Company in substantially the same
proportion as their ownership of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities ("Voting
Securities"); provided, however, that the event described in this clause (A)
shall not be deemed to be a change in control if (x) it involves the
acquisition of the Company's Voting Securities from the Company in connection
with the acquisition by the Company of a business or operations of or
controlled by such person, (y) a majority of the Incumbent Directors (as
defined below) approve a resolution providing expressly that such acquisition
does not constitute a change in control under this Section 3 and (z) such
person does not become the beneficial owner of 35% or more of the Company's
Voting Securities; or (B)during any period of not more than two years,
individuals who constitute the Board as of the beginning of the period (the
"Incumbent Directors") and any new director (other than a director designated
by a person who has entered into an agreement with the Company to effect a
transaction described in clause (A) or (C) of this sentence) whose election by
the Board or nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds of the Incumbent Directors then on
the Board, either by a specific vote or by approval of the proxy statement of
the Company in which such person is named as a nominee for director, without
written objection to such nomination (each such new director shall also be
deemed to be an Incumbent Director) cease for any reason to constitute a
majority of the Board; provided, however, that no individual initially elected
or nominated as a director of the Company as a result of an actual or
threatened election contest with respect to directors, as a result of any
<PAGE> 4
other actual or threatened solicitation of proxies or consents by or on behalf
of any person other than the Board or as a result of an actual or threatened
acquisition of 25% or more of the Company's Voting Securities shall be deemed
to be an Incumbent Director; or (C) there occurs the consummation of a merger,
consolidation, statutory share exchange or similar form of corporate
transaction involving the Company or any of its subsidiaries that requires the
approval of the Company's shareholders, whether for such transaction or the
issuance of securities in the transaction (a "Business Combination"), unless
immediately following such Business Combination: (i) at least 60% of the
total voting power of (x) the corporation resulting from such Business
Combination (the "Surviving Corporation"), or (y) if applicable, the ultimate
parent corporation that directly or indirectly has beneficial ownership of 95%
or more of the voting securities eligible to elect directors of the Surviving
Corporation (the "Parent Corporation"), is represented by the Company's Voting
Securities that were outstanding immediately prior to such Business
Combination (or, if applicable, is represented by shares into which such
Voting Securities were converted pursuant to such Business Combination), and
such voting power among the holders thereof is in substantially the same
proportion as the voting power of the Company's Voting Securities among the
holders thereof immediately prior to the Business Combination and (ii) after
giving effect to the Business Combination, at least (I) a majority of the
members of the board of directors of the Surviving Corporation and of any
corporation that owns 25% or more but less than 50% of the Voting Securities
of the Surviving Corporation or (II) a majority of the members of the board of
directors of any corporation that owns at least 50% of the Voting Securities
of the Surviving Corporation, were Incumbent Directors at the time of the
Board's approval of the execution of the initial agreement providing for such
Business Combination; or (D) the shareholders of the Company approve a plan of
complete liquidation of the Company; or (E) the consummation of the sale or
disposition by the Company of all or substantially all of the Company's
assets.
4. Termination Following Change in Control. - If any of the events
described in Section 3 hereof constituting a change in control of the Company
shall have occurred, you shall be entitled to the benefits provided in Section
5 hereof upon the termination of your employment with the Company or the Bank
within twenty-four (24) months after such event, unless such termination is
<PAGE> 5
(a) because of your death or Retirement, (b) by the Company for Cause or
Disability or (c) by you other than for Good Reason (as all such capitalized
terms are hereinafter defined).
(i) Disability. - Termination by the Company of your employment
based on "Disability" shall mean absence from your duties with the Company on
a full time basis for one hundred eighty (180) consecutive days as a result of
your incapacity due to physical or mental illness, unless within thirty (30)
days after Notice of Termination (as hereinafter defined) is given to you
following such absence you shall have returned to the full time performance of
your duties.
(ii) Retirement. - Termination by you or by the Company of your
employment based on "Retirement" shall mean termination on or after your
attainment of age sixty-five (65).
(iii) Cause. - Termination by the Company or the Bank of your
employment for "Cause" shall mean termination upon (a) the willful and
continued failure by you to perform substantially your duties with the Company
or the Bank (other than any such failure resulting from your incapacity due to
physical or mental illness) after a demand for substantial performance is
delivered to you by the Chairman of the Board or President of the Company or
the Chief Executive Officer of the Bank, as appropriate, which specifically
identifies the manner in which such executive believes that you have not
substantially performed your duties, or (b) the willful engaging by you in
illegal conduct which is materially and demonstrably injurious to the Company
or the Bank. For purposes of this paragraph (iii), no act, or failure to act,
on your part shall be considered "willful" unless done, or omitted to be done,
by you in bad faith and without reasonable belief that your action or omission
was in, or not opposed to, the best interests of the Company or the Bank. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or based upon the advice of counsel for the Company
or the Bank shall be conclusively presumed to be done, or omitted to be done,
by you in good faith and in the best interests of the Company and the Bank.
It is also expressly understood that your attention to matters not directly
related to the business of the Company or the Bank shall not provide a basis
for termination for Cause so long as the Board has approved your engagement in
<PAGE> 6
such activities. Notwithstanding the foregoing, you shall not be deemed to
have been terminated for Cause unless and until there shall have been
delivered to you 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 called and held for the purpose (after reasonable notice
to you and an opportunity for you, together with your counsel, to be heard
before the Board), finding that in the good faith opinion of the Board you
were guilty of the conduct set forth above in (a) or (b) of this paragraph
(iii) and specifying the particulars thereof in detail.
(iv) Good Reason. - Termination by you of your employment for "Good
Reason" shall mean termination based on:
(A) a determination by you, in your reasonable judgment, that there
has been an adverse change in your status or position(s) as an executive
officer of the Company or the Bank as in effect immediately prior to the
change in control, including, without limitation, any adverse change in your
status or position as a result of a diminution in your duties or
responsibilities (other than, if applicable, any such change directly
attributable to the fact that the Company is no longer publicly owned) or the
assignment to you of any duties or responsibilities which are inconsistent
with such status or position(s), or any removal of you from or any failure to
reappoint or reelect you to such position(s) (except in connection with the
termination of your employment for Cause, Disability or Retirement or as a
result of your death or by you other than for Good Reason);
(B) a reduction by the Company or the Bank in your base salary as
in effect immediately prior to the change in control;
(C) the failure by the Company or the Bank to continue in effect
any Plan (as hereinafter defined) in which you are participating at the time
of the change in control of the Company (or Plans providing you with at least
substantially similar benefits) other than as a result of the normal
expiration of any such Plan in accordance with its terms as in effect at the
time of the change in control, or the taking of any action, or the failure to
act, by the Company or the Bank which would adversely affect your continued
<PAGE> 7
participation in any of such Plans on at least as favorable a basis to you as
is the case on the date of the change in control or which would materially
reduce your benefits in the future under any of such Plans or deprive you of
any material benefit enjoyed by you at the time of the change in control;
(D) the failure by the Company or the Bank to provide and credit
you with the number of paid vacation days to which you are then entitled in
accordance with its normal vacation policy as in effect immediately prior to
the change in control;
(E) the requirement by the Company or the Bank that you be based at
an office that is greater than 35 miles from where your office is located
immediately prior to the change in control except for required travel on the
business of the Company or the Bank to an extent substantially consistent with
the business travel obligations which you undertook on behalf of the Company
or the Bank prior to the change in control;
(F) the failure by the Company to obtain from any Successor (as
hereinafter defined) the assent to this Agreement contemplated by Section 6
hereof;
(G) any purported termination by the Company or the Bank of your
employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph (v) below (and, if applicable,
paragraph (iii) above); and for purposes of this Agreement, no such purported
termination shall be effective; or
(H) any refusal by the Company or the Bank to continue to allow you
to attend to matters or engage in activities not directly related to the
business of the Company or the Bank which, prior to the change in control, you
were permitted by the Board to attend to or engage in.
For purposes of this Agreement, "Plan" shall mean any compensation plan such
as an incentive, stock option or restricted stock plan or any employee benefit
plan such as a thrift, pension, profit sharing, medical, disability, accident,
life insurance plan or a relocation plan or policy or any other plan, program
or policy of the Company or the Bank intended to benefit employees.
<PAGE> 8
(v) Notice of Termination. - Any purported termination by the
Company or the Bank or by you following a change in control shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in this Agreement
relied upon.
(vi) Date of Termination. - "Date of Termination" following a
change in control shall mean (a) if your employment is to be terminated for
Disability, thirty (30) days after Notice of Termination is given (provided
that you shall not have returned to the performance of your duties on a full-
time basis during such thirty (30) day period), (b) if your employment is to
be terminated by the Company or the Bank for Cause or by you pursuant to
Sections 4(iv)(F) and 6 hereof or for any other Good Reason, the date
specified in the Notice of Termination, or (c) if your employment is to be
terminated by the Company or the Bank for any reason other than Cause, the
date specified in the Notice of Termination, which in no event shall be a date
earlier than ninety (90) days after the date on which a Notice of Termination
is given, unless an earlier date has been expressly agreed to by you in
writing either in advance of, or after, receiving such Notice of Termination.
In the case of termination by the Company or the Bank of your employment for
Cause, if you have not previously expressly agreed in writing to the
termination, then within thirty (30) days after receipt by you of the Notice
of Termination with respect thereto, you may notify the Company that a dispute
exists concerning the termination, in which event the Date of Termination
shall be the date set either by mutual written agreement of the parties or by
the arbitrators in a proceeding as provided in Section 13 hereof. During the
pendency of any such dispute, the Company or the Bank will continue to pay you
your full compensation in effect just prior to the time the Notice of
Termination is given and until the dispute is resolved in accordance with
Section 13.
5. Compensation Upon Termination or During
Disability; Other Agreements.
<PAGE> 9
(i) During any period following a change in control of the Company
that you fail to perform your duties as a result of incapacity due to physical
or mental illness, you shall continue to receive your salary at the rate then
in effect and any benefits or awards under any Plans shall continue to accrue
during such period, to the extent not inconsistent with such Plans, until your
employment is terminated pursuant to and in accordance with Sections 4(i) and
4(vi) hereof. Thereafter, your benefits shall be determined in accordance
with the Plans then in effect.
(ii) If your employment shall be terminated for Cause following a
change in control of the Company, the Company or the Bank shall pay you your
salary through the Date of Termination at the rate in effect just prior to the
time a Notice of Termination is given plus any benefits or awards (including
both the cash and stock components) which pursuant to the terms of any Plans
have been earned and are otherwise payable, but which have not yet been paid
to you. Thereupon the Company and the Bank shall have no further obligations
to you under this Agreement.
(iii) If, within twenty-four (24) months after a change in control
of the Company shall have occurred, your employment by the Company or the Bank
shall be terminated (a) by the Company or the Bank other than for Cause,
Disability or Retirement or (b) by you for Good Reason, then the Company shall
pay or cause the Bank to pay to you, no later than the fifth business day
following the Date of Termination, without regard to any contrary provisions
of any Plan, the following:
(A) (x) your salary through the Date of Termination at the rate in
effect just prior to the time a Notice of Termination is given, (y) any
benefits or awards (including both the cash and stock components) which
pursuant to the terms of any Plans have been earned and otherwise payable, but
which have not yet been paid to you and (z) a pro rata portion of your annual
bonus for the fiscal year in which the Date of Termination occurs in an amount
equal to the result of multiplying (1) the greater of (I) the bonus payable to
you (without regard to the date of your termination of employment) pursuant to
the terms of the Company's 1994 Management Incentive Compensation Plan (the
<PAGE> 10
"MICP")(or any successor plan) determined based on performance through your
Date of Termination and (II) the bonus payable to you under the MICP (or any
successor plan) for the fiscal year ended prior to your Date of Termination,
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 three hundred sixty-five (365); and
(B) as severance pay a lump sum in cash equal to the sum of the
following amounts:
(1) three times the sum of (x) your annual rate of salary in effect
just prior to the time a Notice of Termination is given or, if higher, the
annual rate of salary in effect immediately prior to the change in control of
the Company and (y) the highest annual bonus earned by you from the Company
and its affiliates during the last three (3) completed fiscal years of the
Company immediately preceding your Date of Termination, annualized in the
event you were not employed by the Company or its affiliates for the whole of
any such fiscal year (the "Bonus Amount"); and
(2) the lump sum actuarial equivalent (utilizing actuarial
assumptions no less favorable to you than those in effect under the Company's
Retirement Plan immediately prior to the change in control) of the excess of
the (A) benefits under the Company's Retirement Plan, Excess Benefit Plan and
Supplemental Executive Retirement Plan (collectively, the "Defined Benefit
Plans") which you would receive if your employment continued for three years
after the Date of Termination (and that your age was increased by three years
from your age at the Date of Termination), assuming for this purpose that (x)
your accrued benefits under the Defined Benefit Plans were fully vested, (y)
in each of the three years you received (a) salary at the annual rate in
effect immediately prior to the change in control and (b) bonus compensation
equal to the Bonus Amount and (z) there were no reduction or offset under the
Defined Benefit Plans for the actuarial value of your account under the
Employee Stock Ownership Plan of The Bank of New York Company, Inc. (the
"ESOP"), over (B) the vested accrued benefits payable under the Defined
Benefit Plans as of the Date of Termination if there were no reduction or
offset thereunder for the actuarial value of your ESOP account.
<PAGE> 11
(iv) If, within twenty-four (24) months after a change in control
of the Company, as defined in Section 3 above, shall have occurred, your
employment by the Company or the Bank shall be terminated (a) by the Company
or the Bank other than for Cause, Disability or Retirement or (b) by you for
Good Reason, then the Company shall maintain or cause the Bank to maintain in
full force and effect, for the continued benefit of you and your dependents
for a period terminating on the earliest of (a) three years after the Date of
Termination, (b) the commencement date of equivalent benefits from a new
employer or (c) your attainment of age sixty-five (65), all insured and self-
insured employee welfare benefit Plans in which you were entitled to
participate immediately prior to the Date of Termination, provided that your
continued participation is possible under the general terms and provisions of
such Plans (and any applicable funding media) and you continue to pay an
amount equal to your regular contribution under such plans for such
participation. If, at the end of three years after the Termination Date, you
have not reached your sixty-fifth birthday and you have not previously
received or are not then receiving equivalent benefits from a new employer,
the Company shall or cause the Bank to arrange, at its sole cost and expense,
to enable you to convert your and your dependents' coverage under such Plans
to individual policies or programs upon the same terms as employees of the
Company and the Bank may apply for such conversions. In the event that your
participation in any such Plan is barred, the Company shall or cause the Bank,
at its sole cost and expense, to arrange to have issued for the benefit of you
and your dependents individual policies of insurance providing benefits
substantially similar (on an after-tax basis) to those which you otherwise
would have been entitled to receive under such Plans pursuant to this
paragraph (iv) or, if such insurance is not available at a reasonable cost to
the Company or the Bank, the Company shall or cause the Bank to otherwise
provide you and your dependents with equivalent benefits (on an after-tax
basis). You shall not be required to pay any premiums or other charges in an
amount greater than that which you would have paid in order to participate in
such Plans.
(v) In the event it shall be determined that any payment, award,
benefit or distribution (or any acceleration of any payment, award, benefit or
<PAGE> 12
distribution) by the Company (or any of its affiliated entities) or any entity
which effectuates a change in control (or any of its affiliated entities) to
or for your benefit, whether pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5 (the "Payments"), 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 you 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
Company shall pay you an additional payment (a "Gross-Up Payment") in an
amount such that after payment by you of all taxes (including any Excise Tax)
imposed upon the Gross-Up Payment, you retain an amount of the Gross-Up
Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and
(y) the product of any deductions disallowed because of the inclusion of the
Gross-up Payment in your adjusted gross income and the highest applicable
marginal rate of federal income taxation for the calendar year in which the
Gross-up Payment is to be made. For purposes of determining the amount of the
Gross-up Payment, you shall be deemed to (i) pay federal income taxes at the
highest marginal rates of federal income taxation for the calendar year in
which the Gross-up Payment is to be made, (ii) pay applicable state and local
income taxes at the highest marginal rate of taxation for the calendar year in
which the Gross-up Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes and (iii) have otherwise allowable deductions for federal income
tax purposes at least equal to those which could be disallowed because of the
inclusion of the Gross-up Payment in the Executive's adjusted gross income.
The Gross-up Payment under this paragraph (v) with respect to any Payment
shall be made no later than thirty (30) days following such Payment.
Notwithstanding the foregoing, if it shall be determined that you
are entitled to a Gross-Up Payment, but that the Payments would not be subject
to the Excise Tax if the Payments were reduced by an amount that is less than
10% of the portion of the Payments that would be treated as "parachute
payments" under Section 280G of the Code, then the amounts payable to you
under this Agreement shall be reduced (but not below zero) to the maximum
amount that could be paid to you without giving rise to the Excise Tax (the
"Safe Harbor Cap"), and no Gross-Up Payment shall be made to you. The
<PAGE> 13
reduction of the amounts payable hereunder, if applicable, shall be made by
reducing first the payments under Section 5(iii)(B)(1), unless an alternative
method of reduction is elected by you. For purposes of reducing the Payments
to the Safe Harbor Cap, only amounts payable under this Agreement (and no
other Payments) shall be reduced. If the reduction of the amounts payable
hereunder would not result in a reduction of the Payments to the Safe Harbor
Cap, no amounts payable under this Agreement shall be reduced pursuant to this
provision.
As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the Determination, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment") or Gross-up Payments are made by the Company which should not
have been made ("Overpayment"), consistent with the calculations required to
be made hereunder. In the event that you are thereafter required to make
payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for
your benefit. In the event the amount of the Gross-up Payment exceeds the
amount necessary to reimburse you for your Excise Tax, the Accounting Firm
shall determine the amount of the Overpayment that has been made and any such
Overpayment (together with interest at the rate provided in Section 1274(b)(2)
of the Code) shall be promptly paid by you (to the extent you have received a
refund if the applicable Excise Tax has been paid to the Internal Revenue
Service) to or for the benefit of the Company. You shall cooperate, to the
extent your expenses are reimbursed by the Company, with any reasonable
requests by the Company in connection with any contests or disputes with the
Internal Revenue Service in connection with the Excise Tax.
(vi) All determinations required to be made under paragraph (v) of
this Section, including whether and when a Gross-Up Payment is required and
the amount of such Gross-Up Payment or the reduction of the Payments to the
Safe Harbor Cap, as well as the assumptions to be utilized in arriving at such
determinations, shall be made by the public accounting firm that is retained
by the Company as of the date immediately prior to the change in control (the
"Accounting Firm") which shall provide detailed supporting calculations both
<PAGE> 14
to the Company and you within fifteen (15) business days of the receipt of
notice from the Company or you that there has been a Payment, or such earlier
time as is requested by the Company (collectively, the "Determination"). In
the event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the change in control, you may appoint
another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company and the Company shall
enter into any agreement requested by the Accounting Firm in connection with
the performance of the services hereunder. If the Accounting Firm determines
that no Excise Tax is payable by you, it shall furnish you with a written
opinion to such effect, and to the effect that failure to report the Excise
Tax, if any, on your applicable federal income tax return will not result in
the imposition of a negligence or similar penalty. In the event the
Accounting Firm determines that the Payments shall be reduced to the Safe
Harbor Cap, it shall furnish you with a written opinion to such effect. The
Determination by the Accounting Firm shall be binding upon the Company and
you.
(vii) Except as specifically provided in paragraph (iv) above, the
amount of any payment provided for in this Section 5 shall not be reduced,
offset or subject to recovery by the Company or the Bank by reason of any
compensation earned by you as the result of employment by another employer
after the Date of Termination, or otherwise.
6. Successors; Binding Agreement.
(i) The Company will seek, by written request at least five
business days prior to the time a Person becomes a Successor (as hereinafter
defined), to have such Person by agreement in form and substance satisfactory
to you, assent to the fulfillment of the Company's obligations under this
Agreement. Failure of such Person to furnish such assent by the later of (A)
three business days prior to the time such Person becomes a Successor or (B)
two business days after such Person receives a written request to so assent
shall constitute Good Reason for termination by you of your employment if a
change in control of the Company occurs or has occurred. For purposes of this
Agreement, "Successor" shall mean any Person that succeeds to, or has the
practical ability to control (either immediately or with the passage of time),
<PAGE> 15
the Company's business directly, by merger or consolidation, or indirectly, by
purchase of the Company's Voting Securities or otherwise.
(ii) This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
you should die while any amount would still be payable to you hereunder if you
had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to your devisee,
legatee or other designee or, if there be no such designee, to your estate.
(iii) For purposes of this Agreement, the "Company" shall include
any corporation or other entity which is the surviving or continuing entity in
respect of any merger, consolidation or form of business combination in which
the Company ceases to exist.
7. Fees, Expenses and Interest; Mitigation.
(i) The Company shall, or cause the Bank to, reimburse you, on a
current basis, for all reasonable legal fees and related expenses incurred by
you in connection with the Agreement following a change in control of the
Company, including, without limitation, (a) all such fees and expenses, if
any, incurred in contesting or disputing any termination of your employment or
incurred by you in seeking advice with respect to the matters set forth in
Section 8 hereof or (b) your seeking to obtain or enforce any right or benefit
provided by this Agreement, in each case, regardless of whether or not your
claim is upheld by a court of competent jurisdiction; provided, however, you
shall be required to repay any such amounts to the Company to the extent that
a court issues a final and non-appealable order setting forth the
determination that the position taken by you was frivolous or advanced by you
in bad faith. In addition to the fees and expenses provided herein, you shall
also be paid interest on any disputed amount ultimately paid to you at the
prime rate announced by the Bank from time to time from the date payment
should have been made until paid in full.
(ii) You shall not be required to mitigate the amount of any
payment the Company or the Bank becomes obligated to make to you in connection
with this Agreement, by seeking other employment or otherwise.
<PAGE> 16
8. Taxes. - All payments to be made to you under this Agreement
will be subject to required withholding of federal, state and local income and
employment taxes.
9. Survival. - The respective obligations of, and benefits afforded
to, the Company and you as provided in Sections 5, 6(ii), 7, 8, 13 and 14 of
this Agreement shall survive termination of this Agreement.
10. Notice. - For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid and
addressed, in the case of the Company, to the address set forth on the first
page of this Agreement or, in the case of the undersigned employee, to the
address set forth below his signature, provided that all notices to the
Company shall be directed to the attention of the Chairman of the Board or
President of the Company, with a copy to the Secretary of the Company, or to
such other address as either party may have furnished to the other in writing
in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
11. Miscellaneous. - No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge
is agreed to in a writing signed by you and the Chairman of the Board or
President of the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or of compliance with, any condition or
provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement.
The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of New York applied without regard
to conflict of laws principles.
12. Validity. - The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
<PAGE> 17
13. Arbitration. - Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
New York City by three arbitrators in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on
the arbitrators' award in any court having jurisdiction; provided, however,
that you shall be entitled to seek specific performance of your right to be
paid until the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement. The Company
shall bear all costs and expenses arising in connection with any arbitration
proceeding pursuant to this Section 13.
14. Employee's Commitment. - You agree that subsequent to your
period of employment with the Company and the Bank, you will not at any time
communicate or disclose to any unauthorized person, without the written
consent of the Company, any proprietary processes of the Company or any
subsidiary or other confidential information concerning their business,
affairs, products, suppliers or customers which, if disclosed, would have a
material adverse effect upon the business or operations of the Company and its
subsidiaries, taken as a whole; it being understood, however, that the
obligations of this Section 14 shall not apply to the extent that the
aforesaid matters (a) are disclosed in circumstances where you are legally
required to do so or (b) become generally known to and available for use by
the public otherwise than by your wrongful act or omission.
15. Related Agreements. - To the extent that any provision of any
other agreement between the Company, the Bank or any of the Company's other
subsidiaries and you shall limit, qualify or be inconsistent with any
provision of this Agreement, then for purposes of this Agreement, while the
same shall remain in force, the provision of this Agreement shall control and
such provision of such other agreement shall be deemed to have been
superseded, and to be of no force or effect, as if such other agreement had
been formally amended to the extent necessary to accomplish such purpose.
16. Counterparts. - This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
<PAGE> 18
If this letter correctly sets forth our agreement on the subject
matter hereof, kindly sign and return to the Company the enclosed copy of this
letter which will then constitute our agreement on this subject and will
supersede our previous letter agreement dated July 8, 1997.
Sincerely,
THE BANK OF NEW YORK COMPANY, INC.
By \s\ Gerald L. Hassell
-------------------------
Name:
Title:
Agreed to this 16th day
Of August, 2000.
\s\ Robert J. Mueller
----------------------
Robert J. Mueller
Address:
