When Merrill Lynch (MER) CEO John Thain signed the employment agreement that made him the S&P 500’s best-paid CEO of 2007, shares of Merrill were trading at more than $55 dollars per share. Now Merrill Lynch has agreed to sell itself to Bank of America ( BAC) for $25 per share — hardly an impressive saga of valuation in the less than 12 months that Thain was at the helm.

But here’s an interesting question: how much will Thain be paid for this romp? The insanely arcane 8-K, arcane even by 8-K standards, tells the story:

"… In the event of a Change in Control (as defined in the Company Stock Plan), (i) (A) 100% of the Tranche 1 Sign-on Options shall automatically vest and become exercisable, (B) 100% of the Tranche 2 Sign-on Options shall vest and become exercisable if the price per share of Company common stock paid in the Change in Control is equal to or greater than the First Price Target and (C) 100% of the Tranche 3 Sign-on Options shall vest and become exercisable if the price per share of Company common stock paid in the Change in Control is equal to or greater than the Second Price Target and (ii) (A) two-thirds of the then unvested Sign-on RSUs shall automatically vest, (B) one-sixth of the then unvested Sign-on RSUs shall vest if the price per share of Company common stock paid in the Change in Control is equal to or greater than the First Price Target and (C) one-sixth of the then unvested Sign-on RSUs shall vest if the price per share of Company common stock paid in the Change in Control is equal to or greater than the Second Price Target."

If that gives you a headache, it can be summarized like this: because the buyout price is so much lower than the price when Thain took the helm, none of those options will be worth anything. In addition, the contract states that Thain "shall not be offered a change in control severance agreement."

The only windfall that Thain appears likely to walk away with is restricted stock — but that was only granted to compensate for the shares he gave up for leaving the New York Stock Exchange.

Thain joined Merrill Lynch optimistic that he could lead a turnaround that would make the company’s shareholders and himself extremely rich. It became apparent that the story wasn’t going to play out like that, and so Thain jumped ship and sold to BofA. But shareholders can take some comfort in the fact that Thain isn’t getting rich off the deal.

Zac Bissonnette

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