8-KLeadership ChangesExhibits & Filings

BANK OF AMERICA CORP /DE/ 8-K Report, Executive Changes (Mar 14, 2005)

Filed March 14, 2005For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

This 8-K filing from Bank of America Corporation (BAC) on March 14, 2005, primarily details the retirement of H. Jay Sarles, vice chairman and special advisor to the CEO, effective March 31, 2005. The report outlines the financial implications of his departure, stemming from employment agreements established prior to and following the FleetBoston merger. These agreements stipulate significant severance payments, including deferred cash and restricted stock units, as well as retirement plan benefits and continued welfare coverage. Investors should note the substantial financial commitments associated with Mr. Sarles' retirement, which were largely disclosed in previous filings related to the FleetBoston merger. The total compensation package, including severance, bonuses, retirement contributions, and potential excise tax reimbursements, reflects the terms agreed upon during the merger integration. The company is also providing transitional support in the form of office space and administrative assistance.

Key Highlights

  • 1H. Jay Sarles, Vice Chairman and Special Advisor to the CEO, is retiring effective March 31, 2005.
  • 2Mr. Sarles is entitled to a severance package valued at approximately $7,400,000 from a pre-existing FleetBoston agreement, including deferred cash and restricted stock units.
  • 3Additional benefits from the FleetBoston agreement include approximately $1,700,000 for retirement plan credits and three years of continued welfare benefits.
  • 4A separate Bank of America employment agreement provides Mr. Sarles with a pro rata bonus of approximately $863,000 and a payment of $8,700,000.
  • 5The company may be obligated to make additional payments to Mr. Sarles to cover any excise taxes imposed on these benefits.
  • 6Mr. Sarles will receive an annual life annuity of approximately $1.8 million from the FleetBoston Supplemental Executive Retirement Plan (SERP), subject to offsets.
  • 7Bank of America will provide office space and administrative support to Mr. Sarles until December 31, 2005, to assist with the transition.

Frequently Asked Questions

The primary reason for this 8-K filing is to announce the retirement of H. Jay Sarles, a key executive, and to detail the financial terms and benefits associated with his departure, as stipulated in his employment agreements.

Mr. Sarles is set to receive a significant financial package, including approximately $7.4 million in severance from the FleetBoston agreement (comprising deferred cash and restricted stock units), an additional $1.7 million in retirement plan credits, a pro rata bonus of $863,000, and a payment of $8.7 million from his Bank of America agreement. He is also entitled to a substantial retirement annuity and potential excise tax reimbursements.

Yes, the terms of Mr. Sarles' agreements and the associated benefits were previously disclosed in the joint proxy statement-prospectus related to the FleetBoston merger.

The FleetBoston merger was a significant factor, as Mr. Sarles had employment agreements with both FleetBoston (pre-existing) and Bank of America (effective upon merger completion). His retirement package is a combination of benefits and payments derived from both of these agreements, reflecting the integration process following the merger.