EXHIBIT 10(a)
Effective January 1, 1984
As amended through October 23, 1997
BANKBOSTON CORPORATION
1982 Stock Option Plan
1. Purpose.
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The purpose of the 1982 Stock Option Plan is to enable BankBoston
Corporation to provide a special incentive to a limited number of senior
executives of the Corporation, the Bank and its other Subsidiaries who are in a
position to have a significant effect upon the Corporation's business and
earnings. In order to accomplish this purpose, the Plan authorizes the grant or
award to such senior executives (i) of options to purchase Common Stock, (ii) of
contingent cash units, as described in Section 6 and Section 10, or (iii) of
both such options and such contingent cash units. Increased ownership of Common
Stock will provide such senior executives with an additional incentive to take
into account the long-term interests of the Corporation.
2. Definitions.
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As used herein, the following words or terms have the meanings set forth
below. The masculine gender is used throughout the Plan but is intended to
apply to members of both sexes.
2.1. "Bank" means BankBoston, N.A., a national banking association.
2.2. "Board of Directors" means the Board of Directors of the Corporation.
2.3. "Code" means the Internal Revenue Code of 1954, as amended from time
to time, or any successor statute.
2.4. "Committee" means the Compensation Committee of the Board of
Directors.
2.5. "Common Stock" means the Common Stock of the Corporation.
2.6. "Corporation" means BankBoston Corporation, a corporation established
under the laws of the Commonwealth of Massachusetts.
2.7. "Earnings Per Share" means Plan Net Income computed on a fully
diluted earnings per share basis.
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2.8. "Earnings Per Share Target" shall mean the goal (whether expressed as
a fixed amount, a percentage, a formula or otherwise) adopted by the Board of
Directors, as described in the Guidelines, for the total of the Earnings Per
Share for the three consecutive fiscal years beginning with the fiscal year in
which a Unit is awarded.
2.9. "Fair Market Value", in the case of a share of Common Stock on a
particular day, means the closing price of the Common Stock for that day as
reported in the "NYSE-Composite Transactions" section of the Eastern Edition of
The Wall Street Journal, or if no prices are quoted for that day, for the last
preceding day on which such prices of Common Stock are so quoted. In the event
"NYSE-Composite Transactions" cease to be reported, the Committee shall adopt
some other appropriate method for determining such Fair Market Value.
2.10. "Guidelines" means the General Guidelines for interpreting and
administering this Plan as approved from time to time by the Committee and
adopted by the Board of Directors.
2.11. "Incentive Stock Option" means a stock option which satisfies the
requirements of section 422A of the Code.
2.12. "Participant" means an individual holding a stock option or stock
options granted to him under the Plan.
2.13. "Performance-Based Exception" means the performance-based exception
from the deductibility limits set forth in Section 162(m) of the Code and the
regulations thereunder.
2.14. "Plan" means the 1982 Stock Option Plan set forth herein.
2.15. "Plan Net Income" means the consolidated annual income after taxes
of the Corporation for the fiscal year determined by the Committee, in its sole
discretion, to reflect the operating results of the Corporation and its
subsidiaries for such fiscal year giving consideration to the appropriate
treatment for this purpose of unusual or non-recurring items of income or
expense.
2.16. "Retirement" means termination of employment with the Corporation or
any Subsidiary if such termination of employment constitutes normal retirement,
early retirement, disability retirement or other retirement as provided for at
the time of such termination of employment under the applicable
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retirement program then maintained by the Corporation or any Subsidiary,
provided that the Participant does not continue in the employment of the
Corporation or any Subsidiary.
2.17. "Return on Equity," when used in reference to the Corporation, means
Plan Net Income for a given fiscal year divided by the average stockholders'
equity of the Corporation for that fiscal year, as determined by the Committee
for such fiscal year to be appropriate to carry out the purpose of the Plan.
2.18. "Subsidiary" or "Subsidiaries" means a corporation or corporations
in which the Corporation owns, directly or indirectly, stock possessing 50
percent or more of the total combined voting power of all classes of stock or
over which the Corporation has effective voting control.
2.19. "Unit" means a contingent cash unit as described in Section 6 and
Section 10.
3. Administration.
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3.1. The Plan shall be administered by the Committee. The members of the
Committee shall not include any person who is at the time he exercises
discretion in administering the Plan (or has been at any time within one year
prior thereto) eligible to participate in the Plan or in any other plan of the
Corporation or any of its affiliates entitling participants therein to acquire
stock, stock options or stock appreciation rights of the Corporation or any of
its affiliates (as defined for purposes of Rule 16b-3 issued by the Securities
and Exchange Commission).
3.2. Subject to the provisions set forth herein, the Committee shall have
full authority to determine the provisions of options and Units to be granted or
awarded under the Plan, to interpret the terms of the Plan and of options and
Units granted or awarded under the Plan, to adopt, amend and rescind rules and
guidelines for the administration of the Plan and for its own acts and
proceedings and to decide all questions and settle all controversies and
disputes which may arise in connection with the Plan.
3.3. Notwithstanding Section 3.2 and subject to the provisions set forth
herein, the Board of Directors shall approve or ratify options granted under the
Plan to any executive officer who is also a director of the Corporation and the
Units awarded in connection therewith.
3.4. The decision of the Committee on any matter as to which it is given
authority under subsection 3.2 above shall be final and binding on all persons
concerned.
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3.5. Nothing in the Plan shall be deemed to give any officer or employee,
or his legal representatives or assigns, any right to participate in the Plan,
except to such extent, if any, as the Committee may have determined or approved
pursuant to the provisions of the Plan.
4. Shares Subject to the Plan.
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4.1. The maximum number of shares of Common Stock which may be delivered
upon the exercise of options granted under the Plan shall be 567,000, subject to
adjustment in accordance with the provisions of Section 11.
4.2. If any option granted under the Plan terminates without having been
exercised in full (including an option which terminates by agreement between the
Corporation and the Participant), the number of shares of Common Stock as to
which such option has not been exercised prior to termination shall be available
for future grants within the limits set forth in subsection 4.1.
4.3. Shares of Common Stock delivered upon the exercise of options shall
consist of shares of authorized and unissued Common Stock, except that the Board
of Directors may from time to time in its discretion determine in any case that
the shares to be so delivered shall consist of shares of authorized and issued
Common Stock reacquired by the Corporation and held in its Treasury. No
fractional shares of Common Stock shall be delivered upon the exercise of an
option.
5. Eligibility for Options.
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Employees eligible to receive options under the Plan shall be those senior
executives of the Corporation, the Bank and the Corporation's other Subsidiaries
who, in the opinion of the Committee, have senior-level management
responsibilities and are in a position to have a significant effect upon the
Corporation's business and consolidated earnings.
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6. Units Awarded under the Plan.
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In connection with the grant of options under the Plan, the Committee may,
in accordance with procedures established by it, make awards to Participants of
Units entitling such Participants to receive certain cash payments upon the
maturity of such Units, as described in Section 10.
7. Eligibility for Units.
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Employees eligible to receive Units under the Plan shall be limited to
those employees who are eligible to receive options.
8. Grant or Award of Options and Units.
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8.1. From time to time while the Plan is in effect the Committee may, in
its absolute discretion, select from among the persons eligible to receive
options (including persons to whom options or Units were previously granted or
awarded) those persons to whom options or Units are to be granted or awarded.
It is contemplated that, in general, options and Units will be granted or
awarded every two years, but the Committee may in its discretion determine that
because of special circumstances options and Units are to be granted or awarded,
at any time fixed by the Committee, to one or more persons eligible to receive
options under the Plan.
8.2. The Committee shall, in its absolute discretion, determine the number
of shares of Common Stock to be subject to each option granted under the Plan
and the number of Units to be awarded to each eligible executive.
8.3. In determining the number of shares of Common Stock to be subject to
any option granted to any person under the Plan, the Committee may, in its
absolute discretion, take into account the desire of such person to receive (i)
an option on a lesser number of shares than tentatively decided on by the
Committee and (ii) a number of Units based on the reduction in the number of
shares to be subject to the option. The terms, limits and procedures related to
such adjustments shall be set forth in the Guidelines.
8.4. No option or Unit may be granted under the Plan after December 23,
1991, but options theretofore granted may extend beyond that date and Units
theretofore awarded may mature after that date.
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9. Provisions of Options.
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9.1 Incentive Stock Options or Other Options. Options granted under the
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Plan may be either Incentive Stock Options or options which do not qualify as
Incentive Stock Options, as the Committee shall determine at the time of each
grant of options hereunder. It is contemplated that the options granted under
the Plan will to the extent possible, but subject to the discretion of the
Committee, qualify as Incentive Stock Options.
9.2. Stock Option Certificates or Agreements. Options granted under the
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Plan shall be evidenced by certificates or agreements in such form as the
Committee shall from time to time approve. Such certificates or agreements
shall comply with the terms and conditions of the Plan and may contain such
other provisions not inconsistent with the terms and conditions of the Plan as
the Committee shall deem advisable. In the case of options intended to qualify
as Incentive Stock Options, the certificates or agreements shall contain such
provisions relating to exercise and other matters as are required of Incentive
Stock Options under the Code.
9.3. Terms and Conditions. All options granted under the Plan shall be
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subject to the following terms and conditions to the extent applicable and to
such other terms and conditions not inconsistent therewith as the Committee
shall determine.
9.3.1. Option Price. The option price per share of Common Stock, with
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respect to each option, shall not be less than the Fair Market Value per
share at the time the option is granted.
9.3.2. Number of Shares of Common Stock Subject to Incentive Stock
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Options. In the case of an option intended to qualify as an Incentive
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Stock Option, the aggregate Fair Market Value (determined as of the time
the option is granted) of the stock with respect to which Incentive Stock
Options granted after December 31, 1986 are exercisable for the first time
by the Participant during any calendar year (under all plans of the
Participant's employer corporation and its parent and subsidiary
corporations) shall not exceed $100,000. The provisions of this Section
9.3.2 shall be construed and applied in accordance with Section 422A (b)(7)
of the Code and the regulations, if any, promulgated thereunder.
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9.3.3. Period of Options. An option shall be exercisable during such
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period of time as the Committee may specify (subject to subsection 9.4
below), but not after the expiration of ten years from the date the option
is granted.
9.3.4. Exercise of Options.
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9.3.4.1. Each option shall be made exercisable at such time or
times as the Committee shall determine, but in all events, subject to the
provisions of Section 9.3.2. It is contemplated that the Committee will
normally provide that the right to exercise an option will accrue
immediately with respect to 25 percent of the number of shares of Common
Stock subject to the option and that the right to exercise the option with
respect to the balance of the shares subject thereto will accrue in
substantially equal installments on the first three anniversaries of the
date of grant. However, the Committee may in any case provide that the
option will be exercisable immediately with respect to all the shares of
Common Stock subject to the option or that the right to exercise the option
will accrue in different installments and at different times from those set
forth above, if, in the opinion of the Committee, such provisions are
appropriate taking into account the age of the Participant and other
relevant circumstances. In the case of an option made exercisable in
installments, the Committee may later determine to accelerate the time at
which one or more of such installments may be exercised.
9.3.4.2. In the case of an option, granted prior to December
31, 1986, intended to qualify as an Incentive Stock Option, the option
shall not be exercisable while there is outstanding (within the meaning of
section 422A(c)(7) of the Code, as in effect prior to the Tax Reform Act of
1986) any Incentive Stock Option which was granted before the granting of
such option to the Participant to purchase stock in his employer
corporation (whether the Corporation or any Subsidiary) or in a corporation
which (at the time of the granting of such option) is a parent or
subsidiary corporation of the employer corporation, or in a predecessor
corporation of any of such corporations (the words "parent or subsidiary
corporation of the employer
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corporation, or in a predecessor corporation of any such corporations" are
meant to have the meaning of such words as used in Section 422A(b)(7) of
the Code).
9.3.4.3. Any exercise of an option shall be in writing signed by
the proper person and delivered or mailed to the Secretary of the
Committee, accompanied by the option certificate or agreement and payment
in full for the number of shares in respect of which the option is
exercised.
9.3.4.4. In the event an option is exercised by the executor or
administrator of a deceased Participant, or by the person or persons to
whom the option has been transferred by the Participant's will or the
applicable laws of descent and distribution, the Corporation shall be under
no obligation to deliver stock thereunder unless and until the Corporation
is satisfied that the person or persons exercising the option is or are the
duly appointed executor or administrator of the deceased Participant or the
person or persons to whom the option has been transferred by the
Participant's will or by the applicable laws of descent and distribution.
9.3.5. Payment for and Delivery of Stock. The shares of stock
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purchased on any exercise of an option granted hereunder shall be paid for
in full in cash or, if permitted by the Committee, in shares of
unrestricted Common Stock at the time of such exercise. A Participant shall
have the rights of a shareholder only as to stock actually issued to him.
9.3.6. Listing of Stock, Withholding and Other Legal Requirements. The
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Corporation shall not be obligated to deliver any stock until all federal
and state laws and regulations which the Corporation may deem applicable
have been complied with, nor, in the event the outstanding Common Stock is
at the time listed upon any stock exchange, until the stock to be delivered
has been listed or authorized to be added to the list upon official notice
of issuance to such exchange. Without limiting the generality of the
foregoing, the Committee shall require, on such terms as it deems
necessary, that the Participant pay to the Corporation, or make other
satisfactory provision for the payment of, any federal, state or local
taxes required by law to be withheld in respect of the exercise of any
option. In the Committee's discretion, a Participant may elect to satisfy
all or
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a portion of his or her federal, state and local tax withholding
requirements or liability, up to the amount calculated by applying the
Participant's maximum marginal tax rate, by having shares of Common Stock
withheld from the shares otherwise issuable upon the exercise of an option,
or by delivering to the Corporation previously owned shares of Common
Stock, valued at their Fair Market Value on the date that withholding taxes
are determined. In addition, if the shares of stock subject to any option
have not been registered in accordance with the Securities Act of 1933, as
amended, the Corporation may require the person or persons who wishes or
wish to exercise such option to make such representation or agreement with
respect to the sale of stock acquired on exercise of the option as will be
sufficient, in the opinion of the Corporation's General Counsel, to avoid
violation of said Act.
9.3.7. Non-transferability of Options. Subject to the provisions of
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this Section, (a) no option shall be transferable otherwise than by will,
by the laws of descent and distribution, or by operation of a "qualified
domestic relations order," as that term is defined in the Code, and (b)
during the lifetime of the Participant to whom an option has been granted,
rights under the option may be exercised only by the Participant, the
Participant's guardian or legal representative, or by the assignee of the
option under a "qualified domestic relations order." Notwithstanding the
foregoing, the Committee may provide for greater transferability in the
case of any option, including, without limitation, transfer to one or more
members of the Participant's family or to a partnership or trust
established for the benefit of one or more members of the Participant's
family. In no event shall Incentive Stock Options awarded under the Plan be
transferable other than as permitted under the rules prescribed in the Code
for incentive stock options. An option that is intended to be exempt under
Rule 16b-3 under the Exchange Act or any successor rule, or that is
intended to qualify for the Performance-Based Exception, shall be
transferable only to the extent consistent with such exemption or
qualification.
9.3.8. Death. If a Participant dies at a time when he is entitled to
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exercise an option (including death during the three-year period under
subsection 9.3.9 or the three-month period
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under subsection 9.3.10(a), then at any time or times within three years
after his death such option may be exercised, as to all or any of the
shares which the Participant was entitled to purchase thereunder
immediately prior to his death, by his executor or administrator or the
person or persons to whom the option is transferred by will or the
applicable laws of descent and distribution, and except as so exercised
such option shall expire at the end of such three-year period. In no
event, however, may any option granted under the Plan be exercised after
the expiration of ten years from the date the option was granted.
9.3.9. Retirement. In the event of a Participant's Retirement at a
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time when he is entitled to exercise an option, then at any time or times
within three years after his Retirement he may exercise such option as to
all or any of the shares which he was entitled to purchase thereunder
immediately prior to his Retirement, and except as so exercised such option
shall expire at the end of such three-year period, subject, however, to the
provisions of subsection 9.3.8. In no event, however, may any option
granted under the Plan be exercised after the expiration of ten years from
the date the option was granted.
9.3.10. Termination of Employment. If the employment of a Participant
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terminates for any reason other than his death or his Retirement, all
options held by the Participant shall thereupon expire subject to the
following provisions:
(a) If such termination of employment occurs by the voluntary act
of the Participant, then at any time or times within three months
after such termination of employment (but not after the expiration of
ten years from the date the option was granted), the Participant may
exercise such option as to all or any of the shares which he was
entitled to purchase thereunder immediately prior to such termination
of employment, and except as so exercised such option shall expire at
the end of such period of three months, subject, however, to the
provisions of subsection 9.3.8; and
(b) If such termination of employment does not occur by the
voluntary act of the Participant, such option may be exercised
following such termination of employment
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only to the extent, if any, approved by the Committee. If the
Committee so decides, an option may provide that a leave of absence
granted by the Corporation or a Subsidiary is not a termination of
employment for the purpose of this subsection 9.3.10, and, in the
absence of such a provision, the Committee may in any particular case
determine that such a leave of absence is not a termination of
employment for such purpose.
9.4. Authority of the Committee. The Committee shall have the authority,
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either generally or in particular instances, to waive compliance by a
Participant with any obligation to be performed by him under an option and to
waive any condition or provision of an option, except that the Committee may not
(i) increase the total number of shares covered by the option (except in
accordance with Section 11), (ii) reduce the option price per share (except in
accordance with Section 11) or (iii) extend the term of the option to more than
ten years, subject, however, to the provisions of Section 13.
10. Provisions of Units.
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10.1. Amount Payable. Each Unit shall be deemed to have an initial value
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equal to the Fair Market Value of a share of Common Stock at the time the Unit
is awarded. As soon as practicable after the maturity (as described below) of a
Unit, the eligible executive to whom the Unit was awarded shall be entitled to
receive an amount of money equal to the applicable percentage, as described in
subsection 10.2, multiplied by the initial value of the Unit. Units shall
mature at the end of the second fiscal year of the Corporation following the
fiscal year in which they are awarded.
10.2. Applicable Percentage. The percentage to be applied to the initial
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value of a Unit in computing the amount payable upon maturity thereof may vary
from 0 to 150 percent and shall be determined from a matrix table recommended by
the Chairman and President, approved by the Committee and adopted by the Board
of Directors. Such matrix shall be made a part of the Guidelines, as in effect
at the time of the award of such Unit. Such percentage shall depend upon the
following factors:
10.2.1. The relationship between (i) the average Return on Equity of
the Corporation for the three years commencing with the fiscal year of the
Corporation in which the Unit is awarded and ending with the fiscal year of
the Corporation in which the Unit matures and (ii) the median
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of the average returns on equity for such three years for a representative
group of large commercial banks or bank holding companies selected from
time to time by the Committee and adopted by the Board of Directors (a list
of which shall be a part of the Guidelines); and
10.2.2. The extent to which the Earnings Per Share of the Corporation
for the three years set forth in subsection 10.2.1 achieves the Earnings
Per Share Target previously fixed by the Board of Directors.
The Committee shall deliver to each Participant to whom Units are awarded a
copy of the matrix table applicable to such award and shall notify such
Participant of the Earnings Per Share target referred to in subsection 10.2.2.
above.
10.3. Nontransferability of Units. No Units may be transferred by the
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Participant otherwise than by will or the laws of descent and distribution.
10.4. Death or Other Termination of Employment. If the employment of a
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Participant terminates for any reason, whether by death, Retirement or
otherwise, all Units held by the Participant shall thereupon terminate unless
the Committee otherwise determines. The Committee may in its discretion
determine that some or all of the Units so held shall continue in effect as if
the Participant's employment had not terminated and that on maturity of such
Units all or a portion of the amount payable in respect of such Units under
subsection 10.1 shall be paid to the Participant or in the event of his death to
his estate or other beneficiary.
11. Changes in Stock.
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In the event of a stock dividend, stock split or other change in corporate
structure or capitalization affecting the Common Stock which becomes effective
after the adoption of the Plan by the Board of Directors, the Committee shall
make appropriate adjustments in (i) the number and kind of shares of stock on
which options may thereafter be granted hereunder, (ii) the number and kind of
shares of stock remaining subject to each option outstanding at the time of such
change and (iii) the option price. The Committee's determination shall be
binding on all persons concerned. Subject to any required action by the
stockholders, if the Corporation shall be the surviving corporation in any
merger or consolidation
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(other than a merger or consolidation in which the Corporation survives but in
which a majority of its outstanding shares are converted into securities of
another corporation or are exchanged for other consideration), any option
granted hereunder shall pertain and apply to the securities which a holder of
the number of shares of stock of the Corporation then subject to the option
would have been entitled to receive, but a dissolution or liquidation of the
Corporation or a merger or consolidation in which the Corporation is not the
surviving corporation or in which a majority of its outstanding shares are so
converted or exchanged shall cause every option hereunder to terminate; provided
that if any such dissolution, liquidation, merger or consolidation is
contemplated, the Corporation shall either arrange for any corporation
succeeding to the business and assets of the Corporation to issue to the
Participants replacement options on such corporation's stock which will to the
extent possible preserve the value of the outstanding options or shall make the
outstanding options fully exercisable, subject to the provisions Section 9.3.2,
at least 20 days before the effective date of any such dissolution, liquidation,
merger or consolidation. The existence of the Plan shall not prevent any such
change or other transaction and no Participant thereunder shall have any right
except as herein expressly set forth.
12. Employment Rights.
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Neither the adoption of the Plan nor any grant of options or award of Units
confers upon any employee of the Corporation or a Subsidiary any right to
continued employment with the Corporation or a Subsidiary, as the case may be,
nor does it interfere in any way with the rights of the Corporation or a
Subsidiary to terminate the employment of any of its employees at any time.
13. Discontinuance, Cancellation, Amendment and Termination.
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The Committee may at any time discontinue granting options or awarding
units under the Plan and, with the consent of the Participant, may at any time
cancel an existing option in whole or in part and grant another option to the
Participant for such number of shares as the Committee specifies. The Board of
Directors may at any time or times amend the Plan for the purpose of satisfying
the requirements of any changes in applicable laws or regulations or for any
other purpose which may at the time be permitted by law or may at any time
terminate the Plan as to any further grants of options, provided that
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no such amendment shall (a) increase the maximum number of shares available
under the Plan except as provided in Section 11, (b) decrease the minimum option
price of options thereafter to be granted to less than the Fair Market Value at
the time the options are granted, or (c) increase the time limits for granting
or exercising options thereafter to be granted. The Committee may make non-
material amendments to the Plan.
14. Effective Date.
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The Plan shall become effective upon its adoption by the Board of
Directors, and options may be granted under the Plan from and after the date of
such adoption; provided, however, that if prior to December 23, 1982 the
stockholders of the Corporation have not approved the Plan, the Plan shall
terminate and all options theretofore granted and Units theretofore awarded
shall terminate and cease to be of any force or effect.