THIS RETIREMENT AGREEMENT (the “Agreement”) is made and entered into as of the 26th day of January, 2005, by and between CHARLES K. GIFFORD (“Executive”) and BANK OF AMERICA CORPORATION, a Delaware corporation (“Bank of America”).
STATEMENT OF PURPOSE
Executive has served as an associate in the position of Chairman of Bank of America’s Board of Directors since the merger of Bank of America and FleetBoston Financial Corporation (“FleetBoston”) effective April 1, 2004. Prior to that, Executive served for a number of years in various senior executive positions for FleetBoston and its predecessor, BankBoston Corp. (“BankBoston”), including as Chairman and Chief Executive Officer of FleetBoston at the time of the closing of the merger with Bank of America. Executive is retiring from his employment with Bank of America as Chairman effective January 31, 2005. Bank of America desires to continue to have the benefit of the advice, counsel and services of Executive following his retirement as described herein. The parties also desire to confirm the payment of certain severance benefits due upon Executive’s retirement under certain predecessor agreements as set forth herein.
NOW, THEREFORE, in consideration of the foregoing Statement of Purpose and the mutual covenants herein contained, Bank of America and Executive agree as follows:
1. Retirement . Effective January 31, 2005, Executive shall retire as an associate in the position of Chairman of Bank of America’s Board of Directors. Executive shall remain on the Board of Directors following January 31, 2005, and senior management of Bank of America shall use its best efforts to support Executive in his election as a member of the Board of Directors of Bank of America at the Spring 2005 annual shareholders meeting, subject to the principles established in the Bank of America Corporate Governance Guidelines as it may be revised from time to time by the Board of Directors.
2. Consulting Services . During the Term (as defined herein), Executive shall stand ready and shall furnish to Bank of America such reasonable services of an advisory or consulting nature with respect to its business and affairs as Bank of America may reasonably call upon him to furnish and his health and other business commitments may permit, including without limitation the following: (i) advice to Bank of America Foundation regarding philanthropic activities in the Northeast and (ii) advice to the Northeast marketing executive regarding Bank of America initiatives. In providing services hereunder, the parties acknowledge and agree that (A) Executive shall be available for the Term upon reasonable notice and at reasonable times for periodic consultations, either in person or by telephone, (B) in performing consulting services hereunder, Executive shall not be an employee of Bank of America but shall act in the capacity of independent contractor, and (C) Executive shall not be required to render such services during reasonable vacation periods or times of illness, disability or other incapacity. Bank of America
shall reimburse Executive for any reasonable out-of-pocket business expenses consistent with Bank of America’s expense reimbursement guidelines as in effect from time to time, including travel, lodging and meals, incurred by Executive in performing the services described in this paragraph 2.
3. Acknowledgement and Release .
(a) Acknowledgement Regarding FleetBoston CIC Agreement . Executive acknowledges that his retirement does not constitute a termination of employment for “Good Reason” under his Agreement with FleetBoston dated October 1, 1999, as subsequently amended.
(b) Release . As further consideration for this Agreement, Executive’s entitlement to the payments and benefits provided under this Agreement following Executive’s retirement shall be conditioned upon Executive’s execution and non-revocation of a general release of claims in the form attached hereto as Addendum 1 .
4. Consideration . In consideration of Executive’s obligation to be available to and to render advisory and consulting services pursuant to the provisions of paragraph 2 and Executive’s agreements set forth in paragraph 3, during the Term (or for such other period as expressly specified below), so long as Executive is complying with the terms and conditions of this Agreement, Bank of America shall provide Executive with the following benefits:
Executive acknowledges that the value of the benefits above shall be taxable to Executive to the extent required by applicable laws, and that Bank of America shall not provide any tax gross-up with respect to such benefits.
5. Confirmation Regarding Certain Incentive Awards . Executive shall be entitled to receive an annual incentive award with respect to performance of services during 2004 not to exceed Eight Million Dollars ($8,000,000), to be determined at the January 2005 meeting of the Compensation Committee of the Bank of America Board of Directors. In addition, Executive shall be entitled to receive an incentive award for services during January 2005 equal to one-twelfth (1/12 th ) of the performance year 2004 incentive award. Both incentive awards shall be payable in cash on or as soon as administratively practicable after Executive’s retirement date. In addition, for purposes of determining the amount of Executive’s benefits under the FleetBoston Supplemental Executive Retirement Plan, (i) the payment of the incentive awards described in this paragraph 5 shall be taken into account in determining Executive’s “Average Annual Compensation” but (ii) the incentive award paid in February 2000 (related to 1999 performance) shall be disregarded for such purpose.
6. Term . The initial term of the Agreement (the “Initial Term”) shall commence as of the effective date of Executive’s retirement from Bank of America and shall continue in effect until the fifth (5 th ) anniversary of such retirement. Unless either party provides the other with at least sixty (60) days’ advance written notice of termination of the Agreement as of the end of the Initial Term, the Agreement shall thereafter be automatically extended for additional one (1) year periods (each a “Renewal Term”) unless, at least sixty (60) days prior to the end of any such Renewal