EXHIBIT 10(M)
AGREEMENT
---------
THIS AGREEMENT dated as of , 1999, is made by and between BankBoston
Corporation, a Massachusetts corporation (the "Company"), and _________ (the
"Executive").
WHEREAS, the Company considers it essential to the best interests of its
stockholders to foster the continuous employment of key management personnel;
and
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control (as defined in the last Section hereof) exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including the Executive, to their assigned duties with the
Company and/or the Bank, as the case may be, without distraction in the face of
potentially disturbing circumstances arising from the possibility of a Change in
Control;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and for other valuable consideration, the Company and the
Executive hereby agree as follows:
1. Defined Terms. The definitions of capitalized terms used in this
-------------
Agreement are provided in the last Section hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof
-----------------
and shall continue in effect through [last day of month in which occurs 24/th/
month from effective date], 2001, provided that commencing on [following month]
1, 2000 and each [same] 1 thereafter, the term of this Agreement shall
automatically be extended for one additional year unless, not later than the
immediately preceding [3 mo prior to effective date month] 31, the Company or
the Executive shall have given notice not to extend this Agreement or a Change
in Control shall have occurred prior to such [month following effective date
month] 1. If a Change in Control shall have occurred during the term of this
Agreement, however, this Agreement shall continue in effect for a period of not
less than three (3) years beyond the last day of the month in which such Change
in Control occurred. Notwithstanding the foregoing provisions of this Section 2,
this Agreement shall terminate, unless earlier terminated in accordance with
this Agreement, (i) one (1) year after the Executive is notified in accordance
with Section 10 hereof that the Compensation Committee, upon recommendation of
the Company's chief executive officer, has voted to terminate this Agreement or
(ii) if earlier, immediately after the Executive is notified in accordance with
Section 10 hereof that the Compensation Committee has determined that the
Executive's level of responsibility (other than reporting responsibility) has
substantially changed from the Executive's current level of responsibility, in
either case only if the notification occurs prior to a Potential Change in
Control that results in a Change in Control. By way of illustration, if there
were a change in the nature of the Executive's responsibilities (e.g., from
technology to human resources) but the only change in the level of the
Executive's
2
responsibilities were a change in reporting responsibilities, these changes
alone would not provide grounds for the Compensation Committee determination
referred to in clause (ii) above.
3. Company's Covenants Summarized. In order to induce the Executive to
------------------------------
remain in the employ of the Company or the Bank and in consideration of the
Executive's covenants set forth in Section 4 hereof, the Company agrees, under
the conditions described herein, to pay the Executive the Severance Payments
described in Section 6.1 hereof and the other payments and benefits described
herein in the event the Executive's employment with the Company or the Bank is
terminated following a Change in Control and during the term of this Agreement.
No amount or benefit shall be payable under this Agreement unless there shall
have been (or, under the terms hereof, there shall be deemed to have been) a
termination of the Executive's employment with the Company or the Bank following
a Change in Control. This Agreement shall not be construed as creating an
express or implied contract of employment, and except as otherwise agreed in
writing between the Executive and the Company, the Executive shall not have any
right to be retained in the employ of the Company or the Bank.
4. Executive's Covenants.
---------------------
4.1 The Executive agrees that, subject to the terms and conditions of
this Agreement, in the event of a Potential Change in Control during the term of
this Agreement, the Executive will remain in the employ of the Company or the
Bank until the earliest of (i) a date which is six (6) months from the date of
such Potential Change of Control, (ii) the date of a Change in Control, (iii)
the date of termination by the Executive of the Executive's employment for Good
Reason (determined by treating the Potential Change in Control as a Change in
Control
3
in applying the definition of Good Reason), by reason of death, or (iv) the
termination by the Company or the Bank of the Executive's employment for any
reason.
4.2 The Executive agrees that, during the term of this Agreement and for
a period ending on the third anniversary of the Date of Termination, he will not
make or publish any statement which is, or may reasonably be considered to be,
disparaging of the Company, its subsidiaries or affiliates, or directors,
officers, employees or the operations, products or services of the Company or
any of its subsidiaries or affiliates, except in connection with the performance
of his services hereunder to the extent the Executive makes the statement to
employees of the Company or its affiliates in good faith furtherance of the
Company's business. In the event of a claimed breach by the Company of the terms
of this Section 4.2, in addition to its right to institute legal proceedings to
obtain damages for such breach, the Company shall be entitled to enforce the
specific performance of this Section 4.2 and to enjoin any further violation of
this Section 4.2.
5. Compensation Other Than Severance Payments.
------------------------------------------
5.1 Following a Change in Control and during the term of this Agreement,
during any period that the Executive fails to perform the Executive's full-time
duties with the Company as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive's full salary to the Executive at
the rate in effect at the commencement of any such period, together with all
compensation and benefits payable to the Executive under the terms of any
compensation or benefit plan, program or arrangement maintained by the Company
during such period, until the Executive becomes eligible for benefits at least
equal to those to which the Executive would have been entitled under
4
the long-term disability insurance plan of the Company in effect immediately
prior to the Change in Control.
5.2 If the Executive's employment shall be terminated for any reason
following a Change in Control and during the term of this Agreement, the Company
shall pay the Executive's full salary to the Executive through the Date of
Termination at the rate in effect at the time the Notice of Termination is
given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period.
5.3 If the Executive's employment shall be terminated for any reason
following a Change in Control and during the term of this Agreement, the Company
shall pay or make available to the Executive any rights, compensation and
benefits which are vested in the Executive or which the Executive has or is
otherwise entitled to receive under any plan or program of the Company
(including without limitation any retirement plan or any welfare plan providing
post-retirement benefits) to the Executive as such rights, compensation or
benefits become due. Such rights, compensation and benefits shall be determined
under, and paid or made available in accordance with, the Company's applicable
retirement, insurance and other compensation or benefit plans, programs and
arrangements.
6. Severance Payments.
------------------
6.1 Subject to Section 6.2 hereof, the Company shall pay the Executive
the payments described in this Section 6.1 (the "Severance Payments") upon the
termination of the Executive's employment following a Change in Control and
during the term of this Agreement,
5
in addition to the payments and benefits described in Section 5 hereof, unless
such termination is (i) by the Company or the Bank for Cause, (ii) by reason of
death, or (iii) by the Executive without Good Reason. The Executive's employment
shall be deemed to have been terminated following a Change in Control by the
Company without Cause or by the Executive with Good Reason if the (x)
Executive's employment is terminated prior to a Change in Control without Cause
at the direction of a Person who has entered into an agreement with the Company
the consummation of which will constitute a Change in Control, (y) Executive
terminates his employment with Good Reason prior to a Change in Control
(determined by treating a Potential Change in Control as a Change in Control in
applying the definition of Good Reason) if the circumstance or event which
constitutes Good Reason occurs at the direction of such Person, or (z) the
Executive's employment is terminated by the Company without Cause or by the
Executive for Good Reason and such termination or the circumstance or event
which constitutes Good Reason is otherwise in connection with or in anticipation
of a Change in Control; provided, however, in each such case, that a Change in
Control occurs.
(A) In lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination and in lieu of any
severance benefits otherwise payable to the Executive under any then
existing broad-based employee severance plan, the Company shall pay to the
Executive a lump sum severance payment, in cash, equal to three (3) times
the sum of (i) the higher of the Executive's annual base salary in effect
immediately prior to the occurrence of the event or circumstance upon which
the Notice of Termination is based or in effect immediately prior to the
Change in
6
Control and (ii) the highest of the annual amounts paid to, or approved
for, the Executive pursuant to the Performance Recognition Opportunity
Plan, or any successor plan, with respect to the three (3) years (or the
number of years employed, if less) immediately preceding (a) the occurrence
of the event or circumstance upon which the Notice of Termination is based
or (b) the Change in Control.
(B) In lieu of any further life, disability, accident and
health insurance benefits otherwise due to the Executive, the Company shall
pay to the Executive a lump sum amount, in cash, equal to the cost to the
Company (as determined by the Company in good faith with reference to its
most recent actual experience) of providing such benefits, to the extent
that the Executive is eligible to receive such benefits immediately prior
to the Notice of Termination (without giving effect to any reduction in
such benefits subsequent to a Change in Control which reduction constitutes
Good Reason), for a period of three (3) years commencing on the Date of
Termination.
(C) The Executive shall continue to accrue service credit
for a period of three (3) years (for all purposes, including without
limitation benefit accrual and eligibility to receive matching
contributions) under the Pension Plan, Thrift Plan, the Bonus SERP, the
Excess SERP, the Deferred Compensation Plan or any successor plans thereto,
(i) with respect to matching contributions under any such Plan, based on
the highest level of contributions in effect under such Plan with respect
to the Executive during the plan year during which the occurrence of the
event or circumstance upon which the Notice of Termination is based or the
Change in Control occurs, whichever is
7
higher, and (ii) for all other purposes under this Section 6.1(C), at the
compensation level equal to the amount determined in accordance with
Section 6.1(A) hereof. All payments made pursuant to this Section 6.1(C)
may be made, in the Company's discretion, out of the general funds of the
Company.
(D) Notwithstanding any provision of the Performance Recognition
Opportunity Plan or any other cash-based annual or long-term incentive plan
to the contrary, the Company shall pay to the Executive a lump sum amount,
in cash, equal to the sum of (i) any unpaid incentive compensation which
has been allocated or awarded to the Executive for a completed fiscal year
or other measuring period preceding the Date of Termination under any such
plan and which, as of the Date of Termination, is contingent only upon the
continued employment of the Executive to a subsequent date, and (ii) a pro
rata portion to the Date of Termination of the aggregate value of all
contingent incentive compensation awards to the Executive for all then
uncompleted periods under any such plan, calculated as to each such award
by multiplying the award that the Executive would have earned on the last
day of the performance award period, assuming the achievement, based on
performance year-to-date, of the individual and corporate performance goals
established with respect to such award, by the fraction obtained by
dividing the number of full months and any fractional portion of a month
during such performance award period through the Date of Termination by the
total number of months contained in such performance award period.
8
(E) (i) All outstanding equity awards that (x) were granted to
the Executive prior to the date hereof and (y) are not vested and/or
exercisable, as the case may be, as of the Date of Termination shall become
fully vested and/or exercisable, as the case may be, as of the Date of
Termination and (ii) all outstanding equity awards that (x) were granted to
the Executive as of or following the date hereof and (y) are not vested
and/or exercisable, as the case may be, as of the Date of Termination shall
become fully vested and/or exercisable, as the case may be, as of the Date
of Termination or the date on which the Change in Control occurs, whichever
occurs later.
(F) The Company shall provide the Executive with outplacement
services suitable to the Executive's position for a period of three (3)
years or, if earlier, until the first acceptance by the Executive of an
offer of employment.
6.2 (A) Whether or not the Executive becomes entitled to the
Severance Payments, if any payment or benefit received or to be received by the
Executive in connection with a Change in Control or the termination of the
Executive's employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any Person whose actions
result in a Change in Control or any Person affiliated with the Company or such
Person) (all such payments and benefits, excluding the Gross-Up Payment, being
hereinafter called "Total Payments") will be subject (in whole or part) to any
excise tax imposed under section 4999 of the Code (the "Excise Tax"), then,
subject to the provisions of subsection (B) of this Section 6.2, the Company
shall pay to the Executive an additional amount (the "Gross-Up Payment") such
that the net amount retained by the Executive, after deduction of any
9
Excise Tax on the Total Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the
Total Payments. For purposes of determining the amount of the Gross-Up Payment,
the Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the highest
marginal rate of taxation on earned income in the state and locality of the
Executive's residence on the Date of Termination (or if there is no Date of
Termination, then the date on which the Gross-up Payment is calculated for
purposes of this Section 6.2), net of the maximum reduction in federal income
tax which could be obtained from deduction of such state and local taxes.
(B) In the event that, after giving effect to any redeterminations
described in subsection (D) of this Section 6.2, the sum of the Total Payments
and the Gross-Up Payment (in each case after deduction of the net amount of
federal, state and local income and employment taxes and the amount of Excise
Tax to which the Executive would be subject in respect of such Total Payments
and the Gross-Up Payment) does not equal or exceed 110% of the largest amount of
Total Payments that would result in no portion of the Total Payments being
subject to the Excise Tax (after deduction of the net amount of federal, state
and local income and employment taxes on such reduced Total Payments), then
subsection (A) of this Section 6.2 shall not apply and, to the extent necessary
to ensure that no portion of the Total Payments is subject to the Excise Tax,
the cash Severance Payments shall first be reduced (if necessary, to zero), and
the noncash Severance Benefits shall thereafter be reduced (if necessary, to
zero); provided,
--------
10
however, that the Executive may elect to have the noncash Severance Payments
- -------
reduced (or eliminated) prior to any reduction of the cash Severance Payments.
(C) For purposes of determining whether any of the Total Payments
will be subject to the Excise Tax and the amount of such Excise Tax, (i) all of
the Total Payments shall be treated as "parachute payments" within the meaning
of section 280G(b)(2) of the Code, unless in the opinion of tax counsel ("Tax
Counsel") reasonably acceptable to the Executive and selected by the accounting
firm which was, immediately prior to the Change in Control, the Company's
independent auditor (the "Auditor"), such other payments or benefits (in whole
or in part) do not constitute parachute payments, including by reason of section
280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within the
meaning of section 280G(b)(1) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of Tax Counsel, such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of
the Base Amount allocable to such reasonable compensation, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the Auditor in accordance
with the principles of sections 280G(d)(3) and (4) of the Code. Prior to the
payment date set forth in Section 6.3 hereof, the Company shall provide the
Executive with its calculation of the amounts referred to in this Section 6.2(C)
and such supporting materials as are reasonably necessary for the Executive to
evaluate the Company's calculations. If the Executive disputes the Company's
calculations (in whole or in part), the opinion of Tax Counsel with respect to
the matter in dispute shall prevail.
11
(D) In the event that (i) amounts are paid to the Executive pursuant
to subsection (A) of this Section 6.2, (ii) the Excise Tax is finally determined
to be less than the amount taken into account hereunder in calculating the
Gross-Up Payment, and (iii) after giving effect to such redetermination, the
Severance Payments are to be reduced pursuant to subsection (B) of this Section
6.2, the Executive shall repay to the Company, within five (5) business days
following the time that the amount of such reduction in Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable to such reduction
(plus that portion of the Gross-Up Payment attributable to the Excise Tax and
federal, state and local income and employment taxes imposed on the Gross-Up
Payment being repaid by the Executive), to the extent that such repayment
results in no portion of the Total Payments being subject to the Excise Tax plus
interest on the amount of such repayment at 120% of the rate provided in section
1274(b)(2)(B) of the Code. In the event that (x) the Excise Tax is determined to
exceed the amount taken into account hereunder at the time of the termination of
the Executive's employment (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment) and
(y) after giving effect to such redetermination, the Severance Payments should
not have been reduced pursuant to subsection (B) of this Section 6.2, the
Company shall make an additional Gross-Up Payment in respect of such excess and
in respect of any portion of the Excise Tax with respect to which the Company
had not previously made a Gross-Up Payment (plus any interest, penalties or
additions payable by the Executive with respect to such excess and such portion)
within five (5) business days following the time that the amount of such excess
is finally determined.
12
6.3 The payments provided for in Section 6.1 and Section 6.2 hereof
shall be made not later than the fifth day following the Date of Termination or,
if later, the date on which the Change in Control occurs; however, if the
amounts of such payments, and the limitation on such payments set forth in
Section 6.2 hereof, cannot be finally determined on or before such day, the
Company shall pay to the Executive on such day an estimate, as determined by the
Executive, of the minimum amount of such payments to which the Executive is
clearly entitled and shall pay the remainder of such payments (together with
interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon as
the amount thereof can be determined but in no event later than the thirtieth
(30th) day after the Date of Termination. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to the Executive, payable on
the fifth (5th) business day after demand by the Company (together with interest
at the rate provided in section 1274(b)(2)(B) of the Code).
6.4 The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in seeking to obtain or enforce any benefit
or right provided by this Agreement, in accordance with Section 14 hereof
(including without limitation fees and expenses incurred in seeking to secure
the Executive's rights provided by Section 14 hereof). Such payments shall be
made within five (5) business days after delivery of the Executive's written
requests for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require.
13
7. Termination Procedures and Compensation During Dispute.
------------------------------------------------------
7.1 Notice of Termination. After a Change in Control and during the
---------------------
term of this Agreement, any purported termination of the Executive's employment
(other than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in accordance with
Section 10 hereof. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. Further, a Notice of Termination
for Cause is required to include a copy of a resolution duly adopted by the
affirmative vote of not less than three quarters (3/4) of the entire membership
of the Board at a meeting of the Board which was called and held for the purpose
of considering such termination (after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive's counsel, to be
heard before the Board) finding that, in the good faith opinion of the Board,
the Executive was guilty of conduct set forth in clause (i) or (ii) of the
definition of Cause herein, and specifying the particulars thereof in detail.
7.2 Date of Termination. "Date of Termination", with respect to any
-------------------
purported termination of the Executive's employment after a Change in Control
and during the term of this Agreement, shall mean the date specified in the
Notice of Termination (which, in the case of a termination by the Company or the
Bank, shall not be less than thirty (30) days (except in the case of a
termination for Cause) and, in the case of a termination by the Executive, shall
not be
14
less than fifteen (15) days nor more than sixty (60) days, respectively, from
the date such Notice of Termination is given).
7.3 Dispute Concerning Termination. If within fifteen (15) days after
------------------------------
any Notice of Termination is given or, if later, prior to the Date of
Termination (as determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be the date on
which the dispute is finally resolved, either by mutual written agreement of the
parties or by a final judgment, order or decree of a court of competent
jurisdiction provided that the Date of Termination shall be extended by a notice
of dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
7.4 Compensation During Dispute. If a purported termination occurs
---------------------------
following a Change in Control and during the term of this Agreement, and such
termination is disputed in accordance with Section 7.3 hereof, the Company shall
continue to pay the Executive the full compensation in effect when the notice
giving rise to the dispute was given (including without limitation salary) and
continue the Executive as a participant in all compensation, benefit and
insurance plans in which the Executive was participating when the notice giving
rise to the dispute was given, until the dispute is finally resolved in
accordance with Section 7.3 hereof. Amounts paid under this Section 7.4 are in
addition to all other amounts due under this Agreement (other than those due
under Section 5.2 hereof) and shall not be offset against or reduce any other
amounts due under this Agreement.
15
8. No Mitigation. If the Executive's employment by the Company or
-------------
the Bank is terminated during the term of this Agreement, the Executive is not
required to seek other employment or to attempt in any way to reduce any amounts
payable to the Executive by the Company pursuant to Section 6 or Section 7.4
hereof. Further, the amount of any payment or benefit provided for in Section 6
or Section 7.4 hereof shall not be reduced by any compensation earned by the
Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company or the Bank, or otherwise.
9. Successors; Binding Agreement.
-----------------------------
9.1 In addition to any obligations imposed by law upon any
successor to the Company, the Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's employment for Good
Reason after a Change in Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination.
16
9.2 This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall
die while any amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of the Executive)
if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators of the Executive's
estate.
9.3 This Agreement supercedes all prior agreements between the
parties hereto with respect to the subject matter hereof.
10. Notices. For the purpose of this Agreement, notices and all other
-------
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below, or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Company:
BankBoston Corporation 100 Federal Street
Boston, MA 02110
Attention: Executive Vice President,
Human Resources
Copy to: General Counsel and Clerk
17
To the Executive:
__________
__________
__________
11. Miscellaneous. No provision of this Agreement may be modified, waived
-------------
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as may be specifically
designated by the Board. Except as expressly provided herein, no waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the Commonwealth
of Massachusetts, and this Agreement shall be an instrument under seal. All
references to sections of the Exchange Act or the Code shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law and any additional withholding to which the
Executive has agreed. The obligations of the Company and the Executive under
Sections 6, 7, 8 and 14 hereof shall survive the expiration of the term of this
Agreement.
18
12. Validity. The invalidity or unenforceability of any provision of
--------
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. Settlement of Disputes; Arbitration. All claims by the Executive
-----------------------------------
for benefits under this Agreement shall be directed to and determined by the
Board and shall be in writing. Any denial by the Board of a claim for benefits
under this Agreement shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the specific provisions of
this Agreement relied upon. Any further dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by arbitration in
Boston, Massachusetts, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction. The Executive shall, however, be entitled to seek
specific performance of the Executive's right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.
15. Definitions. For purposes of this Agreement, the following terms
-----------
shall have the meanings indicated below:
19
(A) "Bank" shall mean the Company's subsidiary, BankBoston, N.A., or
if applicable, any other direct or indirect subsidiary of the Company by which
the Executive is then employed during the term of this Agreement.
(B) "Beneficial Owner" shall have the meaning defined in Rule 13d-3
under the Exchange Act.
(C) "Board" shall mean the Board of Directors of the Company.
(D) "Bonus SERP" shall mean BankBoston, N.A. Bonus Supplemental
Employee Retirement Plan.
(E) "Cause" for termination by the Company or the Bank of the
Executive's employment, after any Change in Control, shall mean (i) the willful
and continued failure by the Executive to substantially perform the Executive's
duties with the Company or the Bank (other than any such failure resulting from
the Executive's incapacity due to physical or mental illness or any such actual
or anticipated failure after the issuance of a Notice of Termination for Good
Reason by the Executive pursuant to Section 7.1 hereof) after a written demand
for substantial performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties, or (ii) the
willful engaging by the Executive in gross misconduct which is demonstrably and
materially injurious to the Company or any of its subsidiaries, monetarily or
otherwise. For purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on the Executive's part shall be deemed "willful" unless done,
or omitted to be done, by the Executive
20
not in good faith and without reasonable belief that the Executive's act, or
failure to act, was in the best interest of the Company.
(F) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(I) There is an acquisition of control of the Company as
defined in Section 2(a)(2) of the Bank Holding Company Act of 1956, or
any similar successor provision, as in effect at the time of the
acquisition; or
(II) Continuing Directors constitute two-thirds (2/3) or
less of the membership of the Board, whether as the result of a proxy
contest or for any other reason or reasons; or
(III) Any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing
twenty-five percent (25%) or more of the combined voting power of the
Company's then outstanding voting securities; or
(IV) There is consummated a merger or consolidation (or
similar transaction) of the Company or any direct or indirect
subsidiary of the Company with any other corporation, other than (i) a
merger or consolidation (or similar transaction) which would result in
the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving or parent
entity) directly or indirectly sixty percent (60%) or more of the
combined voting
21
power of the voting securities (entitled to vote generally for the
election of directors) of the Company or such surviving or parent
entity outstanding immediately after such merger or consolidation and
which would result in those persons who are Continuing Directors
immediately prior to such merger or consolidation constituting more
than two-thirds (2/3) of the membership of the Board or the board of
such surviving or parent entity immediately after, or subsequently at
any time as contemplated by or as a result of, such merger or
consolidation (or similar transaction) or (ii) a merger or
consolidation effected to implement a recapitalization or
restructuring of the Company or any of its subsidiaries (or similar
transaction) in which no Person acquired twenty-five percent (25%) or
more of the combined voting power of the Company's then outstanding
securities; or
(V) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets (or any transaction having a similar effect), other
than a sale or disposition by the Company of all or substantially all
of the Company's assets to an entity in which the holders of the
voting securities (entitled to vote generally for the election of
directors) of the Company immediately prior to such sale or
disposition continue to own proportionally and beneficially directly
or indirectly sixty percent (60%) or more of the combined voting power
of the voting securities (entitled to vote generally
22
for the election of directors) of such entity outstanding immediately
after such sale or disposition and which would result in those persons
who are Continuing Directors immediately prior to such sale or
disposition constituting more than two-thirds (2/3) of the membership
of the Board or the board of such entity immediately after, or
subsequently at any time as contemplated by or as a result of, such
sale or disposition.
(G) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(H) "Company" shall mean BankBoston Corporation and (except in
determining, under Section 15(F) hereof, whether or not any Change in Control of
the Company has occurred in connection with such succession) any successor to
its business and/or assets which assumes or agrees to perform this Agreement, by
operation of law or otherwise. Payments or benefits from the Company shall
include those from the Bank or other subsidiary of the Company.
(I) "Compensation Committee" shall mean the Compensation Committee of
the Board.
(J) "Continuing Director" shall mean any director (i) who has
continuously been a member of the Board since not later than the date of a
Potential Change in Control or (ii) who is a successor of a director described
in clause (i), if such successor (and any intervening successor) shall have been
recommended or elected to succeed a Continuing Director by a majority of the
then Continuing Directors.
(K) "Date of Termination" shall have the meaning stated in Section
7.2 hereof.
23
(L) "Deferred Compensation Plan" shall mean the Company's Deferred
Compensation Plan.
(M) "Excess SERP" shall mean BankBoston, N.A. Excess Benefit
Supplemental Employee Retirement Plan.
(N) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(O) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(P) "Good Reason" for termination by the Executive of the Executive's
employment shall mean the occurrence (without the Executive's express written
consent) of any one of the following acts by the Company or the Bank, or
failures by the Company or the Bank to act, unless, in the case of any act or
failure to act described in paragraph (I), (V), (VI) or (VII) below, such act or
failure to act is corrected prior to the Date of Termination specified in the
Notice of Termination given in respect thereof or, in the case of paragraph
(III) below, such act is not objected to in writing by the Executive within four
(4) months after notification by the Company to the Executive of the Company's
or the Bank's intention to take the action contemplated by such paragraph (III):
(I) the assignment to the Executive of any duties
inconsistent with the Executive's status as a senior executive officer
of the Company or the Bank or a meaningful alteration, adverse to the
Executive, in the nature or status of the
24
Executive's responsibilities (other than reporting responsibilities)
from those in effect immediately prior to the Change in Control;
(II) a reduction by the Company or the Bank in the
Executive's annual base salary as in effect on the date hereof or as
the same may be increased from time to time except for across-the-
board salary reductions similarly affecting all senior executives of
the Company or the Bank, as the case may be, and all senior executives
of any Person in control of the Company;
(III) the Company's or the Bank's requiring the Executive to
be based anywhere other than the Boston Metropolitan Area (or, if
different, the metropolitan area in which the Company's or the Bank's
principal executive offices are located immediately prior to the
Change in Control) except for required travel on Company or Bank
business to an extent substantially consistent with the Executive's
present business travel obligations;
(IV) the failure by the Company, without the Executive's
consent, to pay to the Executive any portion of the Executive's
current compensation, or to pay to the Executive any portion of an
installment of deferred compensation under any deferred compensation
program of the Company, within fourteen (14) days of the date such
compensation is due;
(V) the failure by the Company to continue in effect any
compensation plan in which the Executive participates immediately
prior to the Change in Control which is material to the Executive's
total compensation,
25
including without limitation the Company's stock award, incentive
compensation and bonus plans, unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been made
with respect to such plan, or the failure by the Company to continue
the Executive's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in
terms of the amount of benefits provided and the level of the
Executive's participation relative to other participants, as existed
at the time of the Change in Control;
(VI) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed by the
Executive under any of the Company's pension, life insurance, medical,
health and accident, or disability plans in which the Executive was
participating at the time of the Change in Control, the taking of any
action by the Company which would directly or indirectly materially
reduce any of such benefits or deprive the Executive of any material
fringe benefit enjoyed by the Executive at the time of the Change in
Control, or the failure by the Company to provide the Executive with
the number of paid vacation days to which the Executive is entitled on
the basis of years of service with the Company in accordance with the
Company's normal vacation policy in effect at the time of the Change
in Control;
(VII) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of Termination
satisfying the
26
requirements of Section 9.1 hereof; for purposes of this Agreement, no
such purported termination shall be effective; or
(VIII) during the 30-day period following the first
anniversary of the consummation of a Change in Control, the Executive
makes a good faith determination that there has been an adverse change
in the nature, terms or conditions of his position with the Company as
a result of the Change in Control.
The Executive's right to terminate the Executive's employment for Good
Reason shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(Q) "Notice of Termination" shall have the meaning stated in Section
7.1 hereof.
(R) "Pension Plan" shall mean the BankBoston Cash Balance Retirement
Plan.
(S) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; however,
a Person shall not include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its subsidiaries, (iii) an underwriter temporarily holding
securities pursuant to a registered offering of such securities in accordance
with an agreement with the Company, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
27
(T) "Potential Change in Control" shall be deemed to have occurred if
the conditions set forth in any one of the following paragraphs shall have been
satisfied:
(I) the Company enters into an agreement, the consummation
of which would result in the occurrence of a Change in Control;
(II) the Company or any Person publicly announces an
intention to take or to consider taking actions which, if consummated,
would constitute a Change in Control; or
(III) any Person becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing fifteen percent
(15%) or more of the combined voting power of the Company's then
outstanding securities (entitled to vote generally for the election of
directors).
(U) "Severance Payments" shall mean those payments described in
Section 6.1 hereof.
(V) "Thrift Plan" shall mean the BankBoston Thrift-Incentive 401(k)
Plan.
(W) "Total Payments" shall mean those payments described in Section
6.2 hereof.
28
IN WITNESS WHEREOF, the Executive and a duly authorized officer of the
Company have executed this Agreement as of the date first written above.
BANKBOSTON CORPORATION
By: __________________________
Name: Helen G. Drinan
Title: Executive Vice President, Human Resources
__________________________
[Executive]
29