Employee Benefits Agreement

EXHIBIT 10(c)


EMPLOYEE BENEFITS AGREEMENT


EMPLOYEE BENEFITS AGREEMENT, dated as of August 27, 1995 (this "Agreement"), between CHEMICAL BANKING CORPORATION ("Chemical"), a Delaware corporation, and THE CHASE MANHATTAN CORPORATION ("Chase"), a Delaware corporation.


WHEREAS, Chemical and Chase are entering into an Agreement and Plan of Merger (the "Merger Agreement") dated as of the date hereof providing for the merger of Chase into Chemical;


WHEREAS, concurrently therewith Chemical and Chase are entering into this Agreement in order to cover various employee benefit matters relating to the Merger; and


WHEREAS, Chemical and Chase wish to achieve consistency, where appropriate, between the treatment of Chemical and Chase employees and Chase wishes to give effect to its intent, in the context of an approved change in control (as further described herein) to amend or interpret its plans so that the merger does not, of itself, result in the acceleration of vesting and payments thereunder, to the extent permitted by the applicable employee plans or arrangements, or by law;


NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained herein and in the Merger Agreement, the parties hereto agree as follows:


1. Definitions.


All capitalized terms in this Agreement shall have the same meanings as set forth therefor in the Merger Agreement unless otherwise specified herein.


2. Executive Agreements.


Promptly after the execution and delivery of the Merger Agreement, Chase shall offer to its officers who are parties to individual agreements (the "Chase Executive Agreements") with Chase concerning their termination of employment after the occurrence of a Change in Control (as defined therein) to modify such Chase Executive Agreements in the manner agreed upon between Chemical and Chase. Such modified Agreements shall be referred to hereafter as the "Revised Chase Executive Agreements."


If any such officer of Chase whose individual agreement expires on December 31, 1995 does not accept the offer described above, then prior to September 30, 1995, Chase shall provide such officer a notice pursuant to Section 2 of his or her Chase Executive Agreement that the term of such Chase Executive


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Agreement shall not be extended beyond December 31, 1995 except as otherwise provided in Section 2 of such agreement.


Promptly after the execution and delivery of the Merger Agreement, Chemical will offer to approximately 40 executives of Chemical, at the Executive Vice-President level or higher, to enter into agreements with them (the "Chemical Executive Agreements") concerning their termination of employment after the occurrence of the shareholder approval of the Merger in a form agreed upon between Chemical and Chase and providing for benefits equivalent or comparable to those in the Revised Chase Executive Agreements, with appropriate adjustments to reflect differences in existing benefit and compensation plans between Chemical and Chase. Any existing individual contracts between Chemical and its executives will not be renewed or modified by Chemical to extend their terms.


3. Special Severance Plan.


Chase hereby represents to Chemical that, prior to a "Potential Change in Control," as defined in such Plan, Chase amended its Special Severance Plan for certain key management personnel (the "Chase Special Severance Plan") to provide that with respect to any Approved Change in Control (as defined therein), the term "Good Reason," as used in such Plan, shall be defined as set forth in Exhibit A hereto, and the severance payment schedule in the event of an eligible termination of employment shall be amended as set forth in Exhibit B. This Plan, as amended, shall apply to eligible terminations occurring on or after the date of this Agreement.


Chemical hereby represents to Chase that it has adopted or may adopt a special severance plan for approximately 385 key management personnel of Chemical at or above Chemical's salary grade 380 providing for severance benefits equivalent to those afforded by Chase to its key management personnel under the Chase Special Severance Plan, as amended pursuant to the preceding paragraph. This Plan shall apply to eligible terminations occurring on or after the date of this Agreement.


4. General Severance Plans.


Chemical and Chase hereby represent and agree that the severance pay to be provided to all employees of Chemical and Chase (and their respective subsidiaries) under their respective current severance or salary continuation plans whose positions are eliminated between the date of this Agreement and the second anniversary of the effective date of the Merger, and who are not covered by the arrangements referred to in Sections 2 and 3 of this Agreement, shall be as set forth in Exhibit C hereto.


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5. Long Term Incentive Plans.


Chase hereby represents that, prior to the execution and delivery of the Merger Agreement (and prior, where applicable, to a "Potential Change in Control," as defined in a plan subject to this Section 5), as Chase always contemplated in the case of a strategic business combination of the kind contemplated by the Merger Agreement, it amended its 1987/1982 Long-Term Incentive Plan and the Compensation Committee of its Board of Directors (the "Chase Compensation Committee") amended its 1994 Long-Term Incentive Plan so that:


(a) there shall be no acceleration of vesting of restricted
stock, restricted stock units, performance share units or other equity
interests granted under any of the Long-Term Incentive Plans
(collectively, the "Equity Awards") or acceleration of exercisability
of options or stock appreciation rights (collectively, the "Options")
granted thereunder, upon the occurrence of an Approved Change in
Control;


(b) any unvested Equity Awards, and any Options that are not
yet exercisable, granted to an employee of Chase and/or a subsidiary of
Chase prior to the date hereof shall become vested or exercisable, as
the case may be, upon a termination of such employee's employment after
an Approved Change in Control for any reason other than by Chase (and
its subsidiaries) or by the Surviving Corporation (and its
subsidiaries) for "Cause" or by such employee for other than for "Good
Reason," (as such terms are defined in the participant's Revised Chase
Executive Agreement, the amended Chase Manhattan Corporation Special
Severance Plan or the amended Chase Manhattan 1994 Long Term Incentive
Plan, as applicable to such employee) at any time after the Approved
Change in Control; and


(c) the definition of Good Reason in each such Long Term
Incentive Plan shall contain no reference to the participant's job
status or responsibilities.


In addition, as otherwise provided in the applicable Long-Term Incentive Plan, in the event of a termination described in (b) above the Options shall remain exercisable for two years from the date of such employee's termination unless they expire prior to such two-year period in accordance with their original terms.


Chemical hereby represents that it will continue its practice of providing for acceleration of vesting of restricted stock and restricted stock units, (except those relating to its outstanding grants of Performance Accelerated Restricted Stock ("PARS"), which are provided for in Section 11 below) and accelerated exercisability of stock options granted under such plans, as well as providing for a two-year exercise period for


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such accelerated options, in the event of a job elimination, and that it will utilize the same ...