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Severance Agreement With Eugene B. Shanks

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Sectors: Banking
Governing Law: New York, View New York State Laws
Effective Date: January 23, 1996
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SETTLEMENT AND NON-DISCLOSURE AGREEMENT


EUGENE B. SHANKS, JR., on his own behalf and on behalf of his heirs, executors, administrators, attorneys, successors and assigns (hereinafter collectively referred to as "Shanks"), and BANKERS TRUST NEW YORK CORPORATION, on its own behalf and on behalf of its subsidiaries, divisions, affiliates, successors and assigns, and its and their respective officers, directors, agents, representatives and employees (hereinafter collectively referred to as "Bankers Trust" or the "Company"), have reached the within agreement ("Agreement") in settlement of any and all issues related to Shanks's employment with, and separation from the employ of, Bankers Trust, such Agreement being reached on the following terms and conditions:


1. Shanks has resigned his positions as President and Director of Bankers Trust effective October 19, 1995. Shanks will continue as an employee of Bankers Trust until October 31, 1996, and will receive the compensation and benefits set forth in paragraph 2 below.


2. In full and complete satisfaction of all known and unknown claims against Bankers Trust, and in consideration for


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2 executing this Agreement, Shanks will be entitled to the following:


a. Bankers Trust shall provide Shanks with base salary continuation, payable monthly through Shanks' off-payroll date of October 31, 1996.


b. Bankers Trust will make a lump-sum payment to Shanks of $500,000, payable on or about the eighth day after Shanks executes this Agreement.


c. Bankers Trust shall pay Shanks a bonus for the 1995 performance year, consistent with bonuses for other senior executives of the Company on or about the eighth day after Shanks executes this Agreement.


d. Shanks' outstanding Employee Stock Options shall continue to become exercisable in accordance with their terms and, notwithstanding any provisions of such options to the contrary, shall remain exercisable for the original terms under which they have been granted. That is, options which have previously been granted to Shanks and are currently outstanding may be exercised for the remainder of the original ten year exercise period. Any options remaining unexercised at the end of the respective periods will be forfeited.


Shanks understands that upon approval of this Agreement by the Human Resources Committee, any Incentive Stock


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3 Options outstanding will be deemed "Modified" and thereby lose their tax qualified status.


e. Bankers Trust acknowledges that Shanks has a Restricted Stock award outstanding of 31,000 shares. Shanks' 31,000 shares award, granted on January 17, 1995, will vest and be distributed to him on the first day of January 1996 that executive officers of the Company may sell shares of Bankers Trust stock pursuant to the Company's quarterly "window period" policy.


f. Shanks' shares awarded under the Partnership Equity Plan ("PEP") will continue to be deferred until the fifth anniversary following the end of each related performance year. That is, Shanks' 1992, 1993, 1994 and 1995 Awards will be distributable to him in December of 1997, 1998, 1999 and 2000, respectively. Shares acquired by net EPS reinvestments through Shanks' off-payroll date will immediately vest. For the remainder of their respective deferral periods, shares in Shanks' PEP account will continue to earn and pay out quarterly dividends. The 75% floor protection on the original shares awarded to Shanks (not shares acquired through reinvested net EPS credits) remains intact until distribution.


g. Bankers Trust acknowledges that all salary paid to Shanks through October 31, 1995 (subject to applicable tax limits) qualifies under the formula to compute Shanks' benefits


119 4 under the PartnerShare Plan. In addition, on or about the eighth day after Shanks executes this Agreement, Shanks will receive a cash payment of $15,000 in lieu of Plan contributions based on Shanks' monthly severance allowance.


h. To the extent Shanks receives a bonus for the 1995 performance year, Bankers Trust will make a contribution to Shanks' ADCAP account equal to 10% of such bonus (up to twice Shanks' salary) effective on or about the eighth day after Shanks executes this Agreement. In addition, Bankers Trust will add $1.5 million to Shanks' ADCAP account on or about the eighth day after he executes this Agreement. The amount in Shanks' ADCAP account following the addition of such $1.5 million will be distributed to him promptly following such addition and the balance in his ADCAP account will be distributed to him promptly following the contribution in respect of his bonus for the 1995 performance year.


i. Shanks' ESOP account balance will continue to have dividends reinvested until distribution following his off-payroll date. Shanks' election to receive his PartnerShare account will govern the distribution of his ESOP account. Shanks may receive the value of his ESOP account in either shares of Bankers Trust stock or cash.


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j. All salary paid to Shanks through his off-payroll date (subject to tax limits) will qualify under the formula to compute Shanks' benefit under the terms of the Company's qualified Pension Plan.


k. Shanks shall be eligible to receive additional pension benefits from his grandfathered rights in the Supplemental Retirement Plan, or "SERP", pursuant to the terms of said Plan. Shanks shall receive the actuarial value of his entitlements under the SERP as a lump sum payment of $256,600 on or about the eighth day after he executes this Agreement.


l. Shanks' coverage in the Company's group medical and dental plans shall continue through his off-payroll date. Thereafter, Shanks may voluntarily continue coverage for himself and his eligible dependents at his own expense for a period of up to eighteen (18) months consistent with applicable federal law.


m. Shanks' coverage in the Company's life and disability plans shall continue through October 31, 1996, pursuant to the terms of said plans, and will end on such date.


n. On October 31, 1996, Shanks' off-payroll date, he will receive the cash equivalent of his unused vacation days for the 1995 calendar year.


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Shanks acknowledges that the payments and benefits set forth above shall be subject to applicable federal, state and local taxes, and all other deductions as required by law and Bankers Trust policy. Shanks shall have no duty to seek other employment or to become self-employed to mitigate any payments or benefits to which he is entitled pursuant to this Agreement nor shall there be any offset against such payments or benefits in the event of such employment or self-employment. If Shanks dies prior to the payment of any of the amounts set forth in this paragraph, Shanks' estate or his designated beneficiary shall be paid such amounts.


3. Shanks agrees that he will not publicly or privately disparage Bankers Trust or any of the Company's products, services, divisions, affiliates, related companies or current or former officers, directors, trustees, employees, agents, administrators, representatives or fiduciaries. The Company agrees that it will not publicly or privately disparage Shanks. Notwithstanding the foregoing, neither Shanks nor the Company will be restricted from providing information about the other as required by a court
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