EXHIBIT 10
STATE STREET GLOBAL ADVISORS
EQUITY COMPENSATION PLAN
I. Introduction: Purpose
The purpose of the State Street Global Advisors Equity Compensation
Plan set forth herein (the "Plan") is to increase the financial success of State
Street Global Advisors ("SSgA"), a division of State Street Bank and Trust
Company (the "Bank"), and thereby further the interests of State Street Boston
Corporation (the "Corporation") and its subsidiaries, including the Bank, and
the interests of the Corporation's shareholders by granting to key officers of
SSgA awards ("Awards") based on the common stock of the Corporation ("Stock").
II. Administration
The Plan will be administered by the Executive Compensation
Committee (the "Committee") of the Board of Directors of the Corporation. The
Committee shall have complete authority, subject to the terms of the Plan, to do
any of the following in its discretion: (I) grant Awards in accordance with III.
below; (ii) waive compliance by a holder of an Award with any obligation to be
performed by the holder under the Award and waive any terms or conditions of an
Award; (iii) amend or cancel an existing Award in whole or in part (and if an
Award is canceled, grant another Award in accordance with III. below, with the
same or different terms, in its place), except that no such action shall
adversely affect the rights of a holder of an Award without the holder's
consent; (iv) prescribe and modify the form or forms of all notices, elections,
agreements, or other instruments, if any, to be used under the Plan; (v) adopt,
amend, and rescind rules for the administration of the Plan; and (vi) interpret
the Plan and Awards and decide any questions and settle all controversies and
disputes that may arise in connection with the Plan or any Award. Determinations
and actions by the Committee shall be conclusive and shall bind all parties.
III. Eligibility and participation: Awards
Participation in the plan is limited to the Chief Executive Officer
(CEO) of SSgA and those other senior officers of SSgA whose responsibilities are
expected to have a direct impact on the financial success of SSgA and who are
selected for participation in the Plan by the CEO of SSgA with the prior
approval of the CEO of the Corporation. The initial Awards under the Plan as
approved by the Committee, covering all shares initially available under the
Plan, shall be made to the individuals and for the number of shares specified in
Exhibit A. If additional shares become available under the Plan pursuant to
IV.(b) below, additional Awards may be made as follows: (a) if to the CEO of
SSgA, by the Committee in its discretion; and (b) if to any other officer of
SSgA, by the CEO of SSgA with the prior approval of the CEO of the Corporation.
IV. Terms and conditions
(a) Awards. Except as otherwise specifically provided, each Award
shall consist of an unfunded and unsecured commitment by the Corporation to make
future delivery of shares of Stock in accordance with the terms of the Plan.
(b) Shares Available for Awards. The total number of shares of Stock
reserved for issuance under the Plan is . Except as otherwise specified
by the Committee, all shares delivered under the Plan shall be treasury shares.
In the event of a stock dividend, stock split, recapitalization or similar
change in the capitalization of the Corporation, the Committee shall make
appropriate adjustment in the number and type of shares reserved for issuance
under the Plan. To the extent an Award or any portion thereof is forfeited under
(c) below prior to vesting, the shares of Stock underlying the forfeited portion
of the Award shall again be available for future Awards under the Plan.
(c) Vesting and Distributions.
1. In the event a Participant's employment with SSgA terminates for
any reason, each Award held by the Participant shall be
immediately forfeited (and no payment shall be made with respect
thereto) except to the extent the Award was vested at time of
termination. Except as hereinafter provided, each Award shall be
vested as to 20% of the shares subject to the Award on December
31, 2001 and as to an additional 20% of the shares subject to
the Award on December 31 of each of 2002, 2003, 2004 and 2005.
2. If a Participant's employment with SSgA terminates by reason of
death, permanent disability as determined by the Committee, or
retirement at or after age 55 with at least ten years of service
with the Corporation and its subsidiaries ("retirement"), each
Award then held by the Participant shall be considered vested
immediately prior to such termination for a number of shares
equal to the product of (I) the full number of shares initially
covered by the Award, times (ii) a fraction, the numerator of
which is the full number of years elapsed since January 1, 1996,
and the denominator of which is ten (10). Vesting under this
paragraph shall be in lieu of any vesting under the second
sentence of 1. above.
3. Notwithstanding 1. above, if a Participant ceases to be employed
by SSgA but continues in the employment of the Corporation and
its subsidiaries (a "transfer"), or if a Participant requests a
change from full-time to part-time employment within SSgA or
requests reassignment to another position within SsgA and such
other position involves fewer responsibilities or lower levels of
renumeration (as determined by the Committee in its sole
discretion) and in either case such request is granted (a
"voluntary reduction in position"), the Participant (I) shall
promptly forfeit so much of his or her Awards as would be treated
as not having vested under 2. above had the Participant retired
(as defined under 2. above) on the date of the transfer or
voluntary reduction in position, and (ii) shall forfeit the
remainder of such Awards (the "remaining portion") if and when he
or she suffers a termination of employment with the Corporation
and its subsidiaries (other than by reason of death, permanent
disability as determined by the Committee, or retirement (as
defined at 2. above)) prior to having worked continuously for the
Corporation and its subsidiaries until the date (the "deferred
vesting date") on which, under the second sentence of 1. above,
the Participant, had he or she continued to work continuously in
his or her original position at SSgA, would have vested in a
percentage of his or her Award at least equal to the remaining
portion.
On the deferred vesting date (if the Participant has continued to
work continuously for the Corporation and its subsidiaries until
such date), or in the event of the Participant's earlier death,
permanent disability as determined by the Committee, or
retirement (as defined at 2. above), the Participant shall be
deemed vested in so much of his or her Award as has not been
forfeited.
4. The Committee may prescribe different vesting rules than those
specified in 1., 2., or 3. above in connection with additional
Awards described in III.(a) or III.(b) above or in such other
circumstances as the Committee may determine. A Participant shall
not be deemed to have suffered a termination of employment with
SSgA merely by reason of a bona fide leave of absence, as
determined by the Committee in its discretion.
5. On or as soon as practicable after December 31, 2005 (or such
other date as shall be specified in connection with the grant of
an Award or by the Committee after grant), the Corporation shall
deliver to each Participant or former Participant then holding a
vested Award (or to the beneficiary of a deceased Participant who
died holding an Award vested or deemed vested under 1., 2., or 3.
above) the shares of Stock subject to the vested Award. In the
event of the death, permanent disability or retirement of a
Participant, such shares shall instead be delivered as soon as
practicable after such death, permanent disability or retirement.
(d) Shareholder rights. A Participant shall have no rights as a
shareholder with respect to Stock subject to Awards under the Plan, including
but not limited to rights to dividends or voting rights, until such shares have
been delivered.
(e) Nontransferability of Awards. Awards granted under the Plan and rights
thereunder may not be pledged, encumbered, sold, exchanged or otherwise
transferred or disposed of by a Participant or by any other person, and any
attempt to pledge, encumber, sell, exchange or otherwise transfer or dispose of
an Award or any such interest shall be null and void. Notwithstanding the
foregoing, a Participant may designate a beneficiary or beneficiaries to receive
in accordance with (c)2. or (c)3. above any shares of Stock payable under an
Award held by Participant at time of death. Any beneficiary designation
hereunder shall be made in a form acceptable to the Committee and subject to
such conditions as the Committee may impose. In the absence of an effective
beneficiary designation form, a Participant's estate shall be deemed to be the
Participant's sole designated beneficiary for purposes of the Plan.
V. Miscellaneous provisions
(a) Change in Control. In the event the Corporation sells all or
substantially all of SSgA (a "covered transaction"), as determined by the
Committee, each Participant employed by SSgA immediately prior to consummation
of the covered transaction shall be entitled to the delivery, as soon as
practicable following consummation of the covered transaction, of a number of
shares of Stock equal to the product of (I) the full number of shares subject to
all Awards then held by the Participant, times (ii) a fraction, the numerator of
which is the number of full years elapsed from January 1, 1996 (determined as of
the consummation of the covered transaction) and the denominator of which is ten
(10). A different vesting proration formula may be provided for in connection
with additional Awards described in III.(a) or III.(b) above.
The benefits provided by this paragraph shall be in addition to, and not in lieu
of, benefits provided under any change in control agreement to which the
Participant is a party.
(b) No hire/no solicitation/non-compete agreement. Each Award to a
Participant under the Plan shall be conditioned upon the Participant's execution
of an agreement in form satisfactory to the Committee substantially to the
effect that:
1. The Participant shall hold in a fiduciary capacity for the
benefit of the Corporation all secret or confidential
information, knowledge or data relating to the Corporation or any
of its subsidiaries, and their respective businesses and Clients
(as defined below), which shall have been obtained by the
Participant during the Participant's employment by the
Corporation or any of its affiliated companies and which shall
not be or become public knowledge (other than by acts by the
Participant or representatives of the Participant in violation
hereof). After termination of the Participant's employment, the
Participant shall not, without the prior written consent of the
Corporation or as may otherwise be required by law or legal
process, communicate or divulge any such information, knowledge
or data to anyone other than the Corporation and those designated
by it. The term "Client" means any person or entity that is a
customer or client of the Corporation or any of its subsidiaries.
2. During the term of employment of the Participant and during the
Nonsolicitation Period (as defined below), the Participant shall
not, without the prior written consent of the Corporation,
solicit, directly or indirectly (other than through a general
solicitation of employment not specifically directed to employees
of the Corporation or its subsidiaries), the employment of any
person who within the previous 12 months was an officer of the
Corporation of any of its subsidiaries. The term "Nonsolicitation
Period" means the period beginning on the date of termination of
the Participant's employment with the Corporation and its
subsidiaries (the "Termination Date") and ending eighteen (18)
months after the Termination Date.
3. During the term of employment of Participant and during the
Nonsolicitation Period, the Participant shall not, without the
prior consent of the Corporation, engage in the Solicitation of
Business (as defined below) from any Client on behalf of any
person or entity other than the Corporation and its subsidiaries.
The term "Solicitation of Business" means the attempt through
direct personal contact on the part of the Participant with a
Client with whom the Participant has had significant personal
contact while employed by the Corporation and its subsidiaries to
induce such Client to transfer its business relationship from the
Corporation and its subsidiaries to any other person or entity;
4. For a period of eighteen (18) months following termination of
employment for any reason, the Participant shall 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 Corporation or any of its subsidiaries.
5. In the event of a breach by the Participant of any of the
foregoing, (a) the Participant shall forfeit all rights to any
and all Awards then held by the Participant and shall promptly
refund to the Corporation any and all payments previously
received by him or her under Awards, and (b) the Corporation may
seek injunctive relief in addition to, and not in lieu of, any
other relief to which it may be entitled, including the relief
described at (a) immediately above.
6. Upon and following the occurrence (as determined by the
Committee) of a "covered transaction" as described in V.(a), the
nonsolicitation and noncompetition restrictions described in
paragraphs 2., 3., and 4.above shall cease to apply.
(c) No right to employment. Nothing herein shall entitle any Participant
to continued employment with the Corporation or its subsidiaries, nor shall a
claim of lost profits under any Award be deemed an element of damages in any
claim relating to any termination of employment.
(d) Tax withholding, etc.. No shares of Stock shall be required to be
delivered under any Award until the Participant (or if the Participant has died,
his or her beneficiary(ies) or estate) shall have paid to the Corporation in
cash the full amount of any tax withholding due in connection with such delivery
of shares or shall have made other provisions satisfactory to the Committee for
the payment of such taxes. The Corporation may require that a Participant remit
to the Corporation in cash the full amount of any FICA or similar taxes that may
become due prior to delivery of shares of Stock hereunder, the payment of such
taxes to be a condition to the delivery to the Participant or his or her
beneficiary(ies) of any shares of Stock hereunder.
(e) Successors and assigns; certain mergers, etc. The obligations of the
Corporation under the Plan shall be binding upon any successor to all or
substantially all of the Corporation's assets or business. In the event of a
merger or consolidation involving the Corporations in which the Corporation is
not the surviving entity, or which results in the acquisition of all or
substantially all of the Corporation's outstanding stock by another entity, or
in the event of a sale of all or substantially all of the Corporation's business
or assets or the liquidation of the Corporation, (any of the foregoing, a
"termination event"), the Corporation may arrange for the assumption of Awards
by the successor or for substitute awards to be granted by any successor on
substantially the same terms, taking into account changes in capitalization and
related terms; but if the Corporation does not or cannot provide for such
assumption or substitution, (I) each Award outstanding immediately prior to the
termination event shall be deemed vested for the number of shares for which it
would then have been vested had a change in control of SSgA occurred on the date
of the termination event, and (ii) the Corporation prior to the termination
event (but contingent upon its consummation) shall transfer such shares to the
person holding such Award. Upon consummation of the termination event all Awards
shall terminate unless assumed by a successor.
(f) Amendment and termination. The Committee may at any time terminate the
Plan and may at any time and from time to time prior thereto amend the Plan or
any Award in such manner and to such extent as it may determine; provided, that
no such action shall adversely affect the rights of any person then holding an
Award, without such person's consent; and further provided, that the Committee
may not increase the number of shares of Stock reserved for issuance under the
Plan, other than in accordance with the adjustment provisions of IV.(b) above,
without the approval of the Board of Directors.
(g) Governing law. The Plan and all Awards hereunder shall be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts.