EXHIBIT A
STATE STREET BOSTON CORPORATION
1994 STOCK OPTION AND PERFORMANCE UNIT PLAN
1. Purpose
The purpose of the 1994 Stock Option and Performance Unit
Plan (the "Plan") is to advance the interests of State Street
Boston Corporation and its Subsidiaries (the "Company") and its
stockholders by authorizing the grant of Stock Options, Stock
Appreciation Rights ("SARs") and Performance Units to certain
Officers of the Company, thereby providing them with an incentive
to devote their full abilities and industry to the success of the
Company's business. Both Options intended to qualify as
incentive stock options (as defined in Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"))
("Incentive Stock Options"), and Options not intended to so
qualify ("Nonqualified Options") may be granted under the Plan.
2. Units Subject to the Plan
The number of shares of the Company's common stock, par
value $1.00 per share (the "Common Stock"), that may be issued
under the Plan shall not exceed three million five hundred
thousand (3,500,000) shares, which is the number of shares to be
reserved for issuance under the Plan. The number of Performance
Units that may be issued under the Plan shall not exceed one
million (1,000,000). To the extent consistent with continued
qualification of the Plan under Section 422 of the Code and the
performance-based remuneration provisions of Section 162(m) of
the Code and the regulations thereunder, if any Option granted
under the Plan shall terminate for any reason without having been
exercised in full, the balance of the shares theretofore subject
thereto shall again be available for the purposes of the Plan,
except that such shares shall not be so available whenever such
Option has been surrendered as a result of the exercise of a
related SAR. To the extent consistent with qualification of the
Plan under the performance based remuneration provisions of
Section 162(m) of the Code and the regulations thereunder, if
payment is not made for any reason with respect to any
Performance Units, the shares theretofore subject to the
performance shall again be available for the purposes of the
Plan. The number of shares of Common Stock and Performance Units
is subject to adjustment in accordance with Paragraph 10.
3. Administration
A. The Committee. The Plan shall be administered by the
Executive Compensation Committee of the Board of Directors of the
Company (the "Committee"). The Committee shall be composed
solely of three or more members of the Board of Directors who are
"outside directors" under Section 162(m)(4)(C)(i) of the Code,
and who are disinterested persons within the meaning of Rule
16b-3 of the Exchange Act.
B. Committee Authority. Subject to the express provisions
of the Plan, the Committee shall have the authority, in its
discretion, to grant Options and SARs to Officers of the Company,
to determine the number of shares covered by each such Option, to
identify whether such Option is intended to qualify as an
Incentive Stock Option, to determine the number of SARs and
Performance Units to be granted, and to determine the terms of
each such grant. In making such determinations, the Committee
shall take into account the nature of the services rendered by
the respective Officers, their present and potential
contributions to the Company's success and such other factors as
the Committee in its discretion shall deem relevant. Subject to
the express provisions of the Plan, the Committee shall also have
authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to its administration, to
determine the terms and provisions of the respective granting
agreements or other documents (which need not be identical in
respect of each Officer) and to make all other determinations
necessary or advisable for the administration of the Plan. The
"non-Officer Directors" of the Board of Directors shall approve
all grants (and the terms thereof) to Officers who are directors
of the Company upon recommendation of the Committee. For
purposes of the Plan, a Director is a non-Officer Director if he
or she is both an "outside director" within the meaning of Code
Section 162(m)(4)(C)(i) and a "disinterested person" within the
meaning of Rule 16b-3 of the Exchange Act.
4. Eligibility and Limitations
Individuals eligible to receive awards under this Plan shall
be such salaried officers as the Committee shall determine are in
positions to contribute importantly to the success of the Company
("Officers"). No Officer shall be entitled to grants of (a)
Options (including related SARs), whether or not exercised, in
excess of an aggregate of five hundred thousand (500,000) shares
over the term of the Plan, or (b) Performance Units intended to
qualify for the performance-based exception to Section 162(m) of
the Code in excess of an aggregate of two hundred fifty thousand
(250,000) units over the term of the Plan, subject in each case
to the provisions of Paragraph 10.
5. Stock Options
A. Option Price. The purchase price of the Common Stock
under each Option shall be determined by the Committee, but shall
be not less than the Fair Market Value as of the date of the
grant of the Option.
B. Exercise of Option. Subject to Paragraphs 8 and 14
hereof, an Option granted under the Plan shall become exercisable
in whole or in part not less than one year after the date of
grant and thereafter may be exercised in whole or in part at any
time before it terminates according to the terms of the Option or
under the provisions of the Plan. The Committee may, in its
discretion, provide in the Option agreement for exercise in
specific installments after the end of one year from the date of
grant. In no case may an Option be exercised as to less than 50
shares at any one time, except when the number of remaining
shares it covers is less than 50. The Committee shall be
authorized to establish the manner and the effective date of the
exercise of an Option. During an Optionee's lifetime, an Option
may be exercised only by the Optionee or the Optionee's guardian
or legal representative.
C. Forms of Payment. In lieu of a cash payment to exercise
an Option in whole or in part, an Optionee may tender shares of
the Common Stock of the Company held for at least six months (or
such other period as the Committee may approve) with a Fair
Market Value equal to the exercise price of the Option being
exercised. Unless the Committee determines otherwise, payment
for any shares subject to an Option may also be made by
delivering a properly executed exercise notice to the Company,
together with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan
proceeds to pay the purchase price, and, if required, the amount
of any federal, state, local or foreign withholding taxes. To
facilitate the foregoing, the Company may enter into agreements
for coordinated procedures with one or more brokerage firms.
D. Termination of Option. No Option may be exercised to
any extent after the Option terminates in any of the following
ways:
1. Each Option shall terminate upon exercise of such
Option or related SAR in the manner provided in the Plan.
2. Each Option shall terminate on the date to be
determined by the Committee, which shall in no event be later
than 10 years from the date of the Option grant.
3. Unless otherwise provided by the Committee, if an
Officer's employment terminates by reason of death, disability
(as determined by the Company), or retirement at or after the
normal or early retirement age under any retirement plan or
supplemental retirement agreement maintained by the Company or
any Subsidiary prior to exercise, expiration, surrender or
cancellation of the Option or any related SAR, the Option and the
related SAR shall remain exercisable after the date of such
termination of employment in accordance with the applicable
Option agreement whether or not such Option was exercisable at
the time of such termination, and the Option or the related SAR
may be exercised by the Officer or the person or persons to whom
the Officer's rights shall pass by will or by the applicable laws
of descent or distribution at such time and to the same extent
that the Option or related SAR would have been exercisable had
the Officer's employment not terminated; provided, however, that,
unless otherwise provided, the Option shall terminate on the
later of (i) one (1) year after the Option first becomes
exercisable (if the Option is exercisable in one installment) and
one (1) year after the last installment first becomes exercisable
(if the Option is exercisable in more than one installment), and
(ii) one (1) year after the termination of employment.
Unless otherwise determined by the Committee, if an
Officer's employment terminates for any reason other than death,
disability (as determined by the Company) or retirement prior to
exercise, expiration, surrender or cancellation of the Option or
the related SAR, (i) each such Option and related SAR not then
exercisable shall terminate, (ii) each Option and the related SAR
that is exercisable on the date of termination of employment
shall terminate three (3) months from the date of such
termination of employment, and (iii) if the Officer dies within
the three-month period described in (ii), the Option and the
related SAR shall expire one (1) year after the date of the
Officer's termination, during which period the Option or the SAR
may be exercised at any time by the person or persons to whom the
Officer's rights shall pass by will or by the applicable laws of
descent or distribution, but only to the extent it was
exercisable on the date of such termination. In no event,
however, may the provisions of this Paragraph 5D(3) cause an
Option or related SAR to be exercised after the expiration date
set out in the applicable Option or SAR agreement.
6. Stock Appreciation Rights
A. Grant of SARs. SARs may be granted under the Plan upon
such terms and conditions as the Committee may prescribe,
provided that a SAR may be granted only in connection with an
Option granted under the Plan. The holder of a SAR shall have a
right to receive the Spread on the date on which the SAR is
exercised.
B. Exercise of SARs.
1. SARs shall be exercisable at such time or times as
may be determined by the Committee and, in each case, at such
time as the related Option is exercisable, provided that a SAR
shall not be exercisable prior to the time the related Option
could be exercised.
2. During an Officer's lifetime, a SAR may be
exercised only by the Officer or the Officer's guardian or legal
representative and only upon surrender of the related Option.
Shares covered by such surrendered Options shall not be available
for granting further Options under the Plan.
3. The Committee may impose other conditions upon the
exercise of a SAR, including but not limited to a condition that
the SAR may be exercised only in accordance with the rules and
regulations adopted by the Committee from time to time. Such
rules and regulations may govern the right to exercise SARs
granted prior to the adoption or amendment of such rules and
regulations as well as SARs granted thereafter. Without limiting
the foregoing, the Committee may specify that SARs may be
exercised by the holder or may be exercised automatically by the
occurrence of an event, by the passage of time, or in any other
way.
C. Forms of Payment for SARs. Upon the exercise of a SAR
and the surrender of the related Option, the Company shall give
to the person exercising such SAR an amount equivalent to the
Spread in cash, in shares of the Company's Common Stock, or in a
combination thereof, as the Committee shall determine.
Determination as to form of payment may be made at the time of
granting the SAR, or any time thereafter, and may be changed from
time to time.
D. Limitation on Payments for SARs. Subject to Paragraph
6C above, the Committee may from time to time recommend, subject
to Board approval, the maximum amount of cash or stock which may
be given upon exercise of SARs in any year. Any such limitation
on payments may be changed by the Committee from time to time
with the approval of the non-Officer Directors of the Board
provided that no such change shall require the holder to return
to the Company any amount theretofore received upon the exercise
of SARs.
E. Termination of SARs. Unless otherwise terminated by the
Committee, a SAR will terminate upon the termination of the
related Option.
F. Amendment, Suspension or Termination of SARs by the
Board. Prior to or other than directly in connection with a
Change of Control, the non-Officer Directors of the Board may at
any time amend, suspend or terminate any SARs theretofore granted
under the Plan, provided that the terms of any SAR after any
amendment shall conform to the provisions of the Plan.
7. Performance Units
A. Grant of Performance Units. Performance Units may be
granted by the Company under the Plan to Officers upon such terms
and conditions as the Committee may determine consistent with
this Paragraph 7. With respect to each grant of Performance
Units, the Committee shall establish in accordance with Code
Section 162(m), if applicable, the following:
1. The total number of Performance Units an Officer
shall have the right to earn during the Performance Period. The
maximum number of Performance Units that may be granted to any
Officer in any grant intended to qualify for the
performance-based exception to Section 162(m) with respect to any
Performance Period shall, subject to the provisions of Paragraph
10, not exceed two hundred fifty thousand (250,000), which is the
total number of Performance Units available to him or her over
the term of the Plan, and in no event shall the total number of
Performance Units awarded to all Officers exceed the aggregate
number of Performance Units available under Paragraph 2.
2. The commencement date and the duration of a
Performance Period. Except as otherwise provided by the
Committee, the Performance Period shall be two fiscal years, and
the last day of the second fiscal year of any Performance Period
shall be the Maturity Date. In no case, however, shall a
Performance Period be shorter than one fiscal year or longer than
five fiscal years.
3. Performance Factors and Targets. An Officer will
earn Performance Units based on the Company's performance during
the Performance Period. Performance shall be measured based on
one or more of the following Factors: (a) return on equity, (b)
earnings per share, and (c) the Company's total shareholder
return during the Performance Period compared to the total
shareholder return of a market reference (e.g., the Standard &
Poors 500, the Standard & Poors Financial Index). In connection
with the grant of Performance Units, the Committee shall
establish in writing specific Performance Targets in respect of
each Factor; the relative weight to be accorded achievement of
each Performance Target, and the market reference that will be
used for purposes of (c) above. To the extent consistent with
Section 162(m), the Committee may provide in the terms of an
award that return on equity and earnings per share be adjusted in
order to eliminate the effect of extraordinary items.
Extraordinary items are those items treated as extraordinary in
accordance with generally accepted accounting principles.
B. Value of Performance Units. The value of one
Performance Unit at Maturity Date shall be equal in value to the
Fair Market Value of one share of Common Stock at said time,
subject to any maximum value specified at the time of the grant.
C. Form of Payment for Performance Units. Payment for
Performance Units shall be made in cash equal to the Fair Market
Value of a share of Common Stock after certification by the
Committee consistent with Section 162(m) of the Code that the
payment conforms to the Performance Targets and any other
material terms of the grant. At the discretion of the Committee,
payment for Performance Units may be made in a lump sum or in
installments. Upon the election of the Officer, made prior to
January 1 of the year in which the Maturity Date occurs, payment
for Performance Units may be deferred upon such terms and
conditions as the Committee may prescribe. Amounts deferred at
the discretion of the Committee or in accordance with an election
by an Officer shall earn interest annually at a rate equal to the
effective yield to maturity on the 360-day Treasury bills with an
issue date initially closest to the March 31st following the
Maturity Date and with issue dates closest to March 31 of each
succeeding year. In no event, however, shall the interest
payable with respect to deferred Performance Unit payments be
greater than the maximum interest rate, if any, permitted by
Section 162(m) of the Code, the regulations thereunder or
interpretations thereof.
D. Termination of Performance Units. Except as provided in
Paragraph 7C or in Paragraph 14, in the event that, prior to the
end of the relevant Performance Period, the employment of an
Officer holding Performance Units terminates for any reason, the
Performance Units held by him or her shall be forfeited in their
entirety, except that such Performance Units may be paid in whole
or in part to such former employee or the person or persons to
whom his or her rights under the Performance Units shall pass by
will or by the applicable laws of descent and distribution, but
only when, if and to the extent that the Committee shall so
determine, consistent with Section 162(m) of the Code, if
applicable; provided, however, that any payment for such
Performance Units, as so determined, may be adjusted to take into
account the time between the date the Officer's employment so
terminated and the end of the Performance Period.
8. Acceleration and Cancellation
With respect to any Option or SAR that has been outstanding
for at least six months, the Committee may, subject to the
approval of the non-Officer Directors of the Board, but not
without the consent of the Officer, (a) authorize the
acceleration of any Option or SAR, and (b) authorize the
cancellation of all or any portion of an Officer's Option
(whether or not the Option is then exercisable) and the payment
to such Officer of the Spread determined on the date of
cancellation, such payment to be made in shares of the Company's
Common Stock valued at the Fair Market Value.
9. Use of Proceeds
Proceeds from the sale of stock pursuant to Options granted
under the Plan shall constitute general funds of the Company.
10. Adjustments Upon Changes in Stock
In the event the outstanding shares of Common Stock shall be
changed into or exchanged for any other class or series of
capital stock or cash, securities or other property pursuant to a
recapitalization, reclassification, merger, consolidation,
combination or similar transaction, then each Option shall
thereafter become exercisable and each Performance Unit adjusted
for the number and/or kind of capital stock and/or the amount of
cash, securities or other property so distributed, into which the
shares of Common Stock subject to the Option would have been
changed or exchanged had the Option been exercised, or the
payment for the Performance Unit would have been made, in full
prior to such transaction, provided that, if the kind or amount
of capital stock or cash, securities or other property received
in such transaction is not the same for each outstanding share of
Common Stock, then the kind or amount of capital stock or cash,
securities or other property for which the Option shall
thereafter become exercisable shall be the kind and amount so
receivable per share by a plurality of the shares of Common
Stock, and provided further that if necessary, the provisions of
the Option or Performance Unit shall be appropriately adjusted so
as to be applicable, as nearly as may be, to any shares of
capital stock, cash, securities or other property thereafter
issuable or deliverable upon exercise of the Option or payment of
the Performance Unit. Appropriate adjustments shall also be made
in the terms of SARs to reflect such changes and to modify any
other terms of outstanding Performance Units on an equitable
basis, including modifications of Performance Targets and changes
in the length of Performance Periods.
11. Non-transferability
Unless otherwise provided by the Committee, Options, SARs or
Performance Units granted under the Plan may not be transferred
except by will or the laws of descent and distribution.
12. Conditions of Grants
In the event that the employment of an employee holding any
unexercised Option or SAR or any unearned Performance Units shall
terminate, the rights of such employee to such Options, SARs or
Performance Units shall be subject to the conditions that until
any such Option or SAR is exercised or any such Performance Unit
is earned, he or she shall (a) not engage, either directly or
indirectly, in any manner or capacity as advisor, principal,
agent, partner, officer, director, employee, member of any
association, or otherwise, in any business or activity which is
at the time competitive with any business or activity conducted
by the Company or any of its direct or indirect subsidiaries, and
(b) be available, unless the participant shall have died, at
reasonable times for consultations at the request of the
Company's management with respect to phases of the business with
which the participant was actively connected during his or her
employment. In the event that either of the above conditions is
not fulfilled, the individual shall forfeit all rights to any
unexercised Option or SAR or any unearned Performance Unit held
as of the date of the breach of condition. Any determination by
the Board of Directors that an individual is, or has, engaged in
a competitive business or activity as aforesaid or has not been
available for consultations as aforesaid shall be conclusive.
Notwithstanding anything herein to the contrary, this Paragraph
12 shall be inapplicable following a Change of Control.
13. No Loans to Holders of Options
The Company may not directly or indirectly lend money to any
individual for the purpose of assisting such individual to
acquire or carry shares of Common Stock issued upon the exercise
of Options granted under the Plan.
14. Change of Control Provisions
A. Impact of Event. Notwithstanding any other provision of
the Plan to the contrary, in the event of a Change of Control:
1. Acceleration of Options and SARs. Any Options and
SARs outstanding as of the date such Change of Control is
determined to have occurred, held by Optionees subject to Section
16 of the Exchange Act and Optionees who are parties to
termination agreements with the Company, and which are not then
exercisable shall become exercisable to the full extent of the
original grant. Holders of Performance Units granted hereunder
as to which the relevant Performance Period has not ended as of
the date such Change of Control is determined to have occurred
who are subject to Section 16 of the Exchange Act and holders who
are parties to termination agreements with the Company shall be
entitled at the time of such Change of Control to receive a cash
payment per Performance Unit equal to the Fair Market Value of a
share of the Company's Common Stock in the manner provided
herein, on a pro rata basis, as measured by (a) the Company's
performance against the Performance Target(s) in effect with
respect to such Performance Unit awards as are outstanding at the
time of the Change of Control and (b) the time elapsed over the
Performance Period.
2. Optional Cash-Out. During the 60-day period from
and after a Change of Control, with respect to an Option that is
unaccompanied by a SAR, an Optionee subject to Section 16 of the
Exchange Act shall, unless the Committee shall determine
otherwise at the time of grant, have the right, in lieu of the
payment of the full Option price of the shares of Common Stock
being purchased under the Option and by giving written notice to
the Company in form satisfactory to the Committee, to elect
(within such 60-day period) to surrender all or part of the
Option to the Company and to receive in cash an amount equal to
the Spread on the date of exercise multiplied by the number of
shares of Common Stock granted under the Option as to which the
right granted by this Paragraph 14A(2) shall have been exercised;
provided, however, that if the Change of Control is within six
months of the date of grant of a particular Option to an Optionee
who is subject to Section 16 of the Exchange Act no such election
shall be made by such Optionee with respect to such Option prior
to six months from the date of grant. However, if the end of
such 60-day period from and after a Change in Control is within
six months of the date of grant of an Option held by an Optionee
who is subject to Section 16 of the Exchange Act and the Optionee
so elects, such Option shall be cancelled in exchange for a cash
payment to the Optionee, effected on the day which is six months
and one day after the date of grant of such Option, as the case
may be, equal to the Spread multiplied by the number of shares of
Common Stock granted under the Option.
3. Requirement of Cash Settlement. A SAR related to
an Option that does not qualify as an Incentive Stock Option
which is exercised during the 60-day period from and after a
Change of Control (i) held by an Optionee subject to Section 16
of the Exchange Act and which was granted at least six months
prior to the date of exercise pursuant hereto, or (ii) held by an
Optionee who is not subject to Section 16 of the Exchange Act
shall be settled solely for cash at the Spread.
4. Restriction on Application of Plan Provisions
Applicable in the Event of Termination of Employment. After a
Change of Control, Options and SARs shall remain exercisable
following a termination of employment other than by reason of
death, disability (as determined by the Company) or retirement
for seven (7) months following such termination or until
expiration of the original terms of the Option or SAR, whichever
period is shorter.
5. Restriction on Amendment. In connection with or
following a Change of Control, neither the Committee nor the
Board may impose additional conditions upon exercise or otherwise
amend or restrict an Option, SAR or Performance Unit, or amend
the terms of the Plan in any manner adverse to the holder
thereof, without the written consent of such holder.
Notwithstanding the foregoing, if any right granted pursuant
to this Paragraph 14A would make a Change of Control transaction
ineligible for pooling of interests accounting under applicable
accounting principles that but for this Paragraph 14A would
otherwise be eligible for such accounting treatment, the
Committee shall have the authority to substitute stock for the
cash which would otherwise be payable pursuant to this Paragraph
14A having a Fair Market Value equal to such cash.
B. Definition of Change of Control. For purposes of the
Plan, a "Change of Control" shall mean the happening of any of
the following events:
1. An acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20%
or more of either (x) the then outstanding shares of common stock
of the Company (the "Outstanding Company Common Stock") or (y)
the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); excluding, however, the following acquisitions of
Outstanding Company Common Stock and Outstanding Company Voting
Securities: (i) any acquisition directly from the Company, (ii)
any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company or
(iv) any acquisition by any Person pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (3)
of this Paragraph 14B; or
2. Individuals who, as of the effective date of the
Plan, constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided,
however, that any individual who becomes a member of the Board
subsequent to such effective date, whose election, or nomination
for election by the Company's stockholders, was approved by a
vote of at least a majority of directors then comprising the
Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board; but, provided further, that
any such individual whose initial assumption of office occurs as
a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board shall not be so considered as a member of
the Incumbent Board; or
3. Consummation by the Company of a reorganization,
merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company ("Business
Combination"); excluding, however, such a Business Combination
pursuant to which (i) all or substantially all of the individuals
and entities who are the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination own,
directly or indirectly, more than 60% of, respectively, the
outstanding shares of common stock, and the combined voting power
of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result
of such transaction owns the Company or all or substantially all
of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (other than any
employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company or
such corporation resulting from such Business Combination) will
beneficially own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the
corporation resulting from such Business Combination or the
combined voting power of the outstanding voting securities of
such corporation entitled to vote generally in the election of
directors except to the extent that such ownership existed with
respect to the Company prior to the Business Combination and
(iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
4. The approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
C. Fair Market Value; Spread. Notwithstanding any
provision herein to the contrary, during the 60-day period from
and after a Change of Control, "Fair Market Value" for purposes
of (i) a SAR which is related to an Option that does not qualify
as an Incentive Stock Option, (ii) a Performance Unit, or (iii)
determinations under Paragraph 14A shall mean the higher of (A)
the highest average of the reported daily high and low prices (as
quoted in The Wall Street Journal or if The Wall Street Journal
shall no longer publish such quotes, a newspaper having a
national circulation) per share of the Common Stock during the
60-day period prior to the first date of actual knowledge by the
Board of Directors of the Company of a Change of Control and (B)
if the Change of Control is the result of a transaction or series
of transactions described in Paragraph 14B(1) or (3), the highest
price per share of the Common Stock paid in such transaction or
series of transactions (which in the case of Paragraph 14B(1)
shall be the highest price per share of the Common Stock as
reflected in a Schedule 13D filed by the person having made the
acquisition); provided, however, that with respect to an Optionee
who is subject to Section 16 of the Exchange Act, if the Change
in Control is within 240 days of the date of grant of an Option
or SAR, then the Fair Market Value shall be in all cases the Fair
Market Value of the Common Stock determined on the date such
Option or SAR is exercised without regard to this Paragraph 14C.
For purposes of the Plan during the 60-day period from and
after a Change of Control, "Spread" means, with respect to a
share of Common Stock, the excess of the Fair Market Value as
defined in this Paragraph 14C over the Option exercise price.
15. Amendment, Suspension and Termination of Plan
The Board of Directors may at any time suspend or terminate
the Plan and may amend it from time to time in such respects as
the Board may deem advisable in order that Options, SARs and
Performance Units granted thereunder shall conform to any change
in, or interpretation of, applicable laws or regulations, or in
any other respect the Board may deem to be in the best interests
of the Company; provided, however, that no such amendment shall,
without stockholder approval either before or after Board action
(i) effectuate any change inconsistent with the qualification of
awards as performance-based under Code Section 162(m) (unless the
Committee determines that awards affected by such changes are not
intended to qualify for the performance-based exception to
Section 162(m) of the Code) or (ii) effectuate any other change
for which stockholder approval is required in order for the Plan
to continue to qualify for the award of Incentive Stock Options
under Section 422 of the Code and to continue to qualify under
Rule 16b-3 promulgated under Section 16 of the Exchange Act.
Unless the Plan shall theretofore have been terminated by the
Board of Directors, no awards may be granted under the Plan after
April 30, 1999 and provided, further, that in connection with or
following a Change of Control the Board of Directors may not
suspend or terminate the Plan or amend the Plan in any manner
adverse to the holder of an Option, SAR or Performance Unit
hereunder without the written consent of such holder. Awards
granted prior to that time may extend beyond that date according
to Plan provisions and award terms. No Option, SAR or
Performance Unit may be granted during any suspension or after
termination of the Plan. No amendment, suspension or termination
of the Plan shall, without the Optionee's consent, adversely
affect the rights or obligations under any Option theretofore
granted to him or her under the Plan. Except as provided above
in Paragraph 14 and this Paragraph 15, any rights or obligations
with respect to SARs or to Performance Units may be suspended or
terminated, and rights or obligations with respect to SARs may be
altered, without the consent of the holder.
16. Definitions and Other General Provisions
A. Board of Directors. The term "Board of Directors" or
"Board" means the Board of Directors of State Street Boston
Corporation.
B. Exchange Act. The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
C. Fair Market Value. For all periods other than during
the 60-day period from and after a Change of Control, the term
"Fair Market Value", when used in connection with Options and
related SARs, means the value of a share of Common Stock equal to
the average of the high and low prices on the date of the grant
or the date of the exercise (whichever date is applicable), and
when used in connection with Performance Units, means the value
of a share of Common Stock equal to the average of the high and
low prices on the ten trading days preceding the commencement of
the Performance Period or the Maturity Date of the Performance
Unit, or the value as determined by any other valuation method
the Committee may establish. During the 60-day period from or
after a Change of Control, "Fair Market Value" shall have the
meaning specified in Paragraph 14.
D. Option. The term "Option" means the right to purchase
a share of the Company's Common Stock under the Plan.
E. Person. "Person" shall mean any individual, group,
corporation, partnership, company or other entity.
F. Spread. For all periods other than during the 60-day
period from and after a Change of Control, the term "Spread"
means the excess of the Fair Market Value of a share of the
Company's Common Stock over the option exercise price specified
in the related Option. During the 60-day period from or after a
Change of Control, "Spread" shall have the meaning specified in
Paragraph 14.
G. Subsidiary. The term "Subsidiary" shall mean any
corporation, domestic or foreign other than the Company, of which
50% or more of the total combined voting power of all classes of
stock is held by the Company or a subsidiary or subsidiaries
thereof.
H. Shares to be Delivered. The Common Stock issued under
the Plan may consist either in whole or in part of shares of the
Company's authorized but unissued Common Stock or shares of the
Company's authorized and issued Common Stock reacquired by the
Company and held in its treasury. No fractional shares of Common
Stock shall be issued, and the Committee shall determine whether
cash shall be given in lieu of such fractional shares or whether
and how such fractional shares shall be eliminated.
I. Employment. Options granted under the Plan shall not
be affected by any change of employment so long as the holder
continues to be an eligible employee of the Company. The Option
agreements may contain such provisions as the Committee shall
approve with reference to the effect of approved leaves of
absence. Nothing in the Plan or in any grant pursuant to the
Plan shall confer on any individual any right to continue in the
employ of the Company or interfere in any way with the right of
the Company to terminate the holder's employment at any time.
J. Grants. Nothing contained in the Plan or in any
resolution adopted by the Board of Directors, the Committee, or
any other committee of the Board, or the holders of Common Stock
of the Company or any action, except the specific granting of
Options, SARs or Performance Units, shall constitute the granting
of any award under the Plan. The granting of an award pursuant
to the Plan shall take place as recommended by the Committee and
approved by the non-Officer Directors of the Board with respect
to Officers who are directors and by the Committee with respect
to other Officers. Awards will be evidenced by written
instruments. Such instruments may be in the form of agreements
to be executed by both the Officer and the Company, or
certificates, letters or similar instruments, which need not be
executed by the Officer but acceptance of which will evidence
agreement to the terms thereof.
K. Rights as a Stockholder. The holder of an Option or a
SAR or a person granted Performance Units shall have none of the
rights of a stockholder with respect to the related stock until
such stock has been issued to the holder.
L. Withholding. The Company will withhold from any cash
payment made pursuant to an award an amount sufficient to satisfy
all federal, state and local withholding tax requirements. In
the case of an award pursuant to which Common Stock may be
delivered, the Committee will have the right to require that the
Officer or other appropriate person remit to the Company an
amount sufficient to satisfy the withholding requirements, or
make other arrangements satisfactory to the Committee with regard
to such requirements, prior to the delivery of any Common Stock.
If and to the extent that such withholding is required, the
Committee may permit the Officer or such other person to elect at
such time and in such manner as the Committee provides to have
the Company hold back from the shares to be delivered, or to
deliver to the Company, Common Stock having a value, taken at
Fair Market Value, calculated to satisfy the withholding
requirement.
If at any time an Incentive Stock Option is exercised the
Committee determines that the Company could be liable for
withholding requirements with respect to a disposition of the
Common Stock received upon exercise, the Committee may require as
a condition of exercise that the person exercising the Incentive
Stock Option agree (i) to inform the Company promptly of any
disposition (within the meaning of Section 424(c) of the Code) of
Common Stock received upon exercise, and (ii) to give such
security as the Committee deems adequate to meet the potential
liability of the Company for the withholding requirements and to
augment such security from time to time in any amount reasonably
deemed necessary by the Committee to preserve the adequacy of
such security.
M. Other Plans. The adoption of the Plan shall not
preclude the adoption by appropriate means of any other stock
option or other incentive plan for employees.
17. Employees Abroad
Options granted hereunder to Officers of the Company, or a
Subsidiary, who reside outside the United States shall, at the
discretion of the Committee, be subject to such additional terms
and conditions as may be necessary or appropriate to qualify as
an approved share option under the applicable laws and
regulations of the country of residence.
18. Effectiveness of the Plan
The effective date of the Plan is December 16, 1993, the
date of its adoption by the full Board subject to stockholder
approval within 12 months after approval by the Board. Options,
SARs and Performance Units may be granted prior to stockholder
approval of the Plan but subject to such approval. If
stockholder approval of the Plan is not obtained within said
period the Plan shall terminate and any Options, SARs and
Performance Units granted shall be null and void.