Exhibit 10.6.2
CAPITAL ONE FINANCIAL CORPORATION
FIRST AMENDMENT TO THE CHANGE OF CONTROL AGREEMENT BETWEEN
CAPITAL ONE FINANCIAL CORPORATION AND JOHN G. FINNERAN, JR.
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THIS AMENDMENT OF AGREEMENT by and between Capital One Financial
Corporation (the "Company") and John G. Finneran, Jr. (the "Executive"), dated
as of December 18, 1997.
WHEREAS, the Company entered into an Employment Agreement with the
Executive dated as of November 1, 1994 (the "Agreement"), providing the
Executive with compensation and benefit arrangements upon a Change of Control,
as defined therein;
WHEREAS, Section 12(a) of the Agreement provides that the Agreement
may be modified by a written agreement executed by the Company and the
Executive;
WHEREAS, the Company and the Executive have as of the date of this
Amendment of Agreement (the "Amendment") entered into a Nonstatutory Stock
Option Agreement in the form of the Nonstatutory Stock Option Agreement attached
as an exhibit to this Amendment (the "Stock Option Agreement"); and
WHEREAS, the Company and the Executive now wish to amend the Agreement
as provided in this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the agreements
contained herein, the Company and the Executive agree that the Agreement shall
be modified as follows, effective November 1, 1994:
1. Effective as of the date of this Amendment, the Agreement shall be modified
as follows:
(a) The initial phrase of Section 2 of the Agreement is amended to read in
its as follows:
Change of Control. For the purpose of this Agreement, and except as
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hereinafter provided in (e) and (f), a "Change of Control" shall mean:
(b) Section 2 is further amended by adding a new paragraph (f) at the end
of such section which shall read in its entirety as follows
Notwithstanding the foregoing, a Change of Control shall not occur with
respect to the Executive by reason of any event which would otherwise
constitute a Change of Control if, immediately after the occurrence of such
event, individuals including such Executive who were executive officers of
the Company immediately prior to the occurrence of such event, own,
directly or indirectly, on a fully diluted basis, (i) 15% or more of the
then
outstanding shares of common stock of the Company or any acquiror or
successor to substantially all of the business of the Company or (ii) 15%
or more of the combined voting power of the then outstanding voting
securities of the Company or any acquiror or successor to substantially all
of the business of the Company entitled to vote generally in the election
of directors.
(c) Section 4(b)(ii) of the Agreement is amended to read in its entirety
as follows:
In addition to Annual Base Salary, the Executive shall be awarded, for each
fiscal year beginning or ending during the Employment Period, an annual
bonus (the "Annual Bonus") in cash at least equal to the sum of the target
award under the Company's Executive Annual Cash Incentive Plan and any
other target awards under any other similar annual incentive plans (or, if
no such target award is designated under the Company's Executive Annual
Cash Incentive Plan or any similar plan, the midpoint below the high and
low bonus payable to the Executive under such plan); provided, however,
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that such target or midpoint, as the case may be, shall not be less than
such target or midpoint under such plans in the year immediately preceding
the Change of Control (the "Recent Annual Bonus"). Each such Annual Bonus
shall be paid no later than the end of the third month of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded,
unless the Executive shall elect to defer the receipt of such Annual Bonus.
Any payment of the Executive's Annual Bonus made under this Section
4(b)(ii) shall be reduced to the extent provided in an election made by the
Executive to forgo any or all bonus amounts otherwise payable in exchange
for the receipt of stock options from the Company. The Company shall
maintain an account (the "Stock Option Purchase Account"), the balance of
which, as of any date, shall be equal to the aggregate dollar amount of
bonuses that the Executive has agreed to forgo in exchange for the receipt
of such stock options, less the amount of such bonuses or other
compensation (including amounts payable upon termination of employment)
actually forgone.
(d) Section 6(a) of the Agreement is amended to read in its entirety as
follows:
If the Executive's employment is terminated by reason of the Executive's
death during the Employment Period, this Agreement shall terminate without
further obligations to the Executive's legal representatives under this
Agreement, other than the following obligations: (i) payment of the
Executive's Annual Base Salary through the Date of Termination to the
extent not theretofore paid, (ii) payment of the product of (x) the greater
of (A) the Annual Bonus paid or payable, including by reason of deferral
and before any reduction for the amount of such bonus which the Executive
may have agreed to forgo in consideration for the receipt of stock options,
(and annualized for any fiscal year consisting of less than twelve full
months or for which the Executive has been employed for less than twelve
full months) for the
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most recently completed fiscal year during the Employment Period, if any,
and (B) the Recent Annual Bonus (such greater amount hereafter referred to
as the "Highest Annual Bonus") and (y) a fraction, the numerator of which
is the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365 and (iii) payment of any
compensation previously deferred by the Executive (together with any
accrued interest thereon) and not yet paid by the Company and any accrued
vacation pay not yet paid by the Company (the amounts described in
paragraphs (i), (ii) and (iii) are hereafter referred to as "Accrued
Obligations"). The amount of the Company's payment obligations under
paragraph (ii) of the Accrued Obligations shall be reduced by the amount of
any such Annual Bonus that the Executive had elected to forgo in
consideration of the grant of stock options (the "Net Accrued
Obligations"). All Net Accrued Obligations shall be paid to the Executive's
estate or beneficiary, as applicable, in a lump sum in cash within 30 days
of the Date of Termination. In addition, the Executive's estate or
designated beneficiaries shall be entitled to receive the Executive's
Annual Base Salary for the balance of the Employment Period; provided,
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however, that such payments of Annual Base Salary shall be reduced by any
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survivor benefits paid to the Executive's estate or designated beneficiary
under the Company's Cash Balance Pension Plan (the "Pension Plan").
Anything in this Agreement to the contrary notwithstanding, the Executive's
estate and family shall be entitled to receive benefits at least equal to
the most favorable benefits provided generally by the Company and any of
its affiliated companies to the estates and surviving families of peer
executives of the Company and such affiliated companies under such plans,
programs, practices and policies relating to death benefits, if any, as in
effect generally with respect to other peer executives and their estates
and families at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the
Executive's family, as in effect on the date of the Executive's death
generally with respect to other peer executives of the Company and its
affiliated companies and their families.
(e) Section 6(b) of the Agreement is amended to read in its entirety as
follows:
If the Executive's employment is terminated by reason of the Executive's
Disability during the Employment Period, this Agreement shall terminate
without further obligations to the Executive, other than for Net Accrued
Obligations. All Net Accrued Obligations shall be paid to the Executive in
a lump sum in cash within 30 days of the Date of Termination. In addition,
the Executive shall be entitled to receive the Executive's Annual Base
Salary for the balance of the Employment Period; provided, however, that
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such payments of Annual Base Salary shall be reduced by any benefits paid
to the Executive under the Company's disability plans. Anything in this
Agreement to the contrary notwithstanding, the Executive shall be entitled
after the Disability Effective Date to receive disability and other
benefits at least equal to the most favorable of those generally provided
by the Company and
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its affiliated companies to disabled executives and/or their families in
accordance with such plans, programs, practices and policies relating to
disability, if any, as in effect generally with respect to other peer
executives and their families at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to the
Executive and/or the Executive's family, as in effect at any time
thereafter generally with respect to other peer executives of the Company
and its affiliated companies and their families.
(f) Section 6(c) of the Agreement is amended to read in its entirety as
follows:
If the Executive's employment shall be terminated for Cause during the
Employment Period, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to the
Executive Annual Base Salary through the Date of Termination plus the
amount of any compensation previously deferred by the Executive, in each
case to the extent theretofore unpaid. If the Executive terminates
employment during the Employment Period other than for Good Reason, this
Agreement shall terminate without further obligations to the Executive,
other than for Net Accrued Obligations. In such case, all Net Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30
days of the Date of Termination.
(g) Section 6(d)(i)(A) of the Agreement is amended by substituting the
term "Net Accrued Obligations" for the term "Accrued Obligations" therein.
(h) Section 6(d)(ii) is amended by adding the following at the end
thereof:
The right to continued benefits granted to the Executive and/or his family
pursuant to this Section 6(d)(ii) shall be in addition to any right of
continued coverage under any of the plans, programs, practices and policies
described in Section 4(b)(iv) of this Agreement which the Executive and/or
his family may be entitled to under the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA") upon any loss of coverage under such
plans, programs, practices and policies.
(i) Section 6(d) of the Agreement is amended by adding the following as a
new flush sentence at the end thereof:
The amount payable by the Company to the Executive pursuant to Section
6(d)(i)(B) above will be reduced by any remaining balance in the Stock
Option Purchase Account.
2. The amendments to the Agreement set forth in paragraph 1 of this
Amendment, above, are subject to Shareholder Approval as defined in the Stock
Option Agreement. If Shareholder Approval is not obtained, (i) this Amendment
and the amendments set forth in this Amendment
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shall be null and void; and (ii) the Company and the Executive shall be bound by
the terms of the Agreement as in effect immediately before the execution of this
Amendment.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Amendment as of the date first above written.
CAPITAL ONE FINANCIAL CORPORATION
By:
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Richard D. Fairbank
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John G. Finneran, Jr.
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