Exhibit 10.1
November 23, 2005
Mr. Frank Bisignano
51 Jared Court
Watchung, NJ 07069
Dear Mr. Bisignano:
I am pleased to confirm our offer for you to join JPMorgan Chase
& Co. ("JPMC"). The following is a review of the offer and
should coincide with our discussions. This offer letter supersedes
any prior oral or written communications in conjunction with your
offer of employment.
Position
Your position will be Chief Administrative Officer, responsible
for Operations, Technology, Corporate Real Estate and General
Services, reporting to me. You also will be a member of the
JPMorgan Chase Operating Committee.
Base Salary
Your annual base salary for this position will be $500,000,
earned and payable on a semi-monthly basis.
Hiring Awards
Upon joining JPMC as an employee, you will be granted stock
appreciation rights settled only in shares covering 600,000 shares
of JPMC common stock. The exercise price will be equal to the "Fair
Market Value" (i.e. the average high and low selling price on the
NYSE composite tape) on your hire date. One third of this award
will become exercisable on the third, fourth and fifth
anniversaries of the grant date. Shares resulting from exercise
prior to the fifth anniversary of the award must be held until that
date. These stock appreciation rights will have a ten year term
based on your continued employment with JPMC.
In addition, you will be granted a one time award of 167,000 JPMC
restricted stock units ("RSUs"). This award will vest in two equal
installments on the quarterly vesting date closest to but not later
than the second and third anniversaries of the grant date, subject
to your continued employment through the relevant vesting dates.
During the restriction period, you will be paid the equivalent of
any declared dividends, less applicable withholding taxes, of your
JPMC RSUs that are outstanding on the dividend record date.
Stock appreciation awards and restricted stock units are earned
over a future vesting period and are subject to the terms of the
JPMorgan Chase & Co. 2005 Long-Term Incentive Plan. Following
your grant date, you will receive detailed information on the terms
and conditions of your hiring awards which will include certain
non-hire/non solicitation, non-disparagement, non-disclosure and
non-compete covenants.
Incentive Compensation
Because you will be forfeiting your 2005 incentive award from
your former employer, we have agreed to provide you with guaranteed
incentive compensation for 2005 in the amount of $6 million payable
in two equal installments in January 2006 and June 2006 .
Approximately 65% of this award (i.e. $3,900,000) will be paid in
cash and approximately 35% will be paid in the form of RSUs. The
number of restricted stock units will be determined by dividing
$2,100,000 by the Fair Market Value of a share of JPMC common stock
on January 19, 2006 and will be granted as part of the first
installment. The remaining $900,000 of the first installment will
be paid to you in cash, less applicable withholding taxes
