EXHIBIT 10.17
STATE STREET BOSTON CORPORATION
STATE STREET BANK AND TRUST COMPANY
SENIOR EXECUTIVE ANNUAL INCENTIVE PLAN
PURPOSE:
The purpose of the Senior Executive Annual Incentive Plan set forth herein (as
the same may from time to time be amended, the "Plan") is to provide additional
incentive and reward to Senior Executives of State Street Boston Corporation
(the "Company") to achieve targeted levels of achievement.
ELIGIBILITY:
Participants in the Plan for any year shall include the Chief Executive Officer
of the Company, the President of the Company, and such other key executives as
may be designated as participants for such year by the Executive Compensation
Committee (the "Committee") of the Board of Directors of the Company.
AWARDS:
The Committee shall annually award grants to those persons who are participants
for the year, and shall establish the goals (which may be specified as ranges)
for such awards.
PERFORMANCE GOALS:
No payment under an award granted under the Plan shall be made unless the
performance goals specified with respect to the award are met or exceeded. For
purposes of the Plan, a "performance goal" means an objectively determinable
target level of achievement based on any or any combination of the following:
(i) earnings per share of the Company's stock, (ii) return on equity of the
Company, (iii) total shareholder return compared total shareholder return of a
generally recognized market reference (e.g., S&P 500, S&P Financial Index); (iv)
revenue growth; (v) operating leverage; and (vi) market share. Performance goals
with respect to an award must be preestablished by the Committee not later than
ninety (90) days after the beginning of the year with respect to which the award
is granted (the "award year") or by such other time as may be required in order
to qualify the award under Section (m)(4)(C) of the Internal Revenue Code (the
"Code"). Once established in accordance with the preceding sentence, performance
goals may not be modified except to reflect extraordinary items (determined in
accordance with generally accepted accounting principles) or changes in the
stock of the Company (such as stock splits, stock dividends or
recapitalizations) and then only to the extent, if any, consistent with
continued qualification of the award under Section 162(m)(4)(C) of the Code.
ADDITIONAL TERMS:
Each award under the Plan shall be subject to the following terms:
A. No more than $2,500,000 shall be payable under an award to any
participant for any award year. The foregoing limit shall be applied
before taking into account any notional earnings on deferrals described
in E. below.
B. Subject to A. above, the Committee may provide for varying levels of
payment under an award depending on whether performance goals have been
met or exceeded. In no event, however, shall any amount be payable
under an award if the performance goals with respect to such award, or
any of them, fails to be achieved.
C. No payment shall be made with respect to an award until and unless the
Committee shall have certified in writing (in such manner as shall be
consistent with regulations under Section 162(m) of the Code) that the
performance goals with respect to such award have been met.
D. Except as provided in this paragraph and in E. below, all payments, if
any, under an award shall be paid in cash as soon as practicable
following certification by the Committee as described above.
Notwithstanding the foregoing, the Committee may provide that some
portion or all of any award payment be made in shares of common stock
of the Company ("Stock") in lieu of cash. Any shares of stock delivered
pursuant to this paragraph shall be issued under the 1997 Equity
Incentive Plan and may include Restricted Stock, Unrestricted Stock or
Deferred Stock (as those terms are defined in the 1997 Equity Incentive
Plan). The number of shares of Stock delivered in lieu of any cash
amount under an award (the "replaced cash portion") shall be that
number which equals the replaced cash portion divided by the fair
market value of a share of Stock (determined without regard to any
restrictions) on the date the Committee certifies under C. above that
the performance goal or goals with respect to the award have been met.
E. Subject to such rules and limitations as the Committee may prescribe
from time to time (the "deferral rules"), a participant may elect to
have all or any portion of an award payment deferred for a fixed term
of years, until retirement, death, disability or other termination of
employment, or until the occurrence of some other event. Any amount so
deferred shall be credited to the participant's account on the books of
the Company and shall represent an unfunded and unsecured liability of
the Company to pay the amount so deferred plus such additional amount,
if any, representing notional earnings on the deferral ("earnings") as
may be prescribed under the deferral rules. The portion of any award
payable in Deferred Stock (as defined in the 1997 Equity Incentive
Plan) shall likewise represent an unfunded and unsecured promise by the
Company to deliver shares in the future pursuant to the terms of the
1997 Equity Incentive Plan. Earnings with 27(e)(2)(iii)(B) (relating to
reasonable rates of interest or other returns based on predetermined
actual investments) and any limitations imposed by the Federal Deposit
Insurance Corporation or similar limitations.
F. To be entitled to payment under an award, a participant must be
employed by the Company or one of its subsidiaries on December 31 of
the award year, except as the Committee may otherwise determine. In
addition, the Committee in its discretion may cause an award to a
participant to be forfeited if the participant, although employed by
the Company or a subsidiary on December 31 of the award year (or on
such other date, if any, as may have been fixed by the Committee), has
ceased to be employed by the Company and its subsidiaries prior to the
date that other awards are (or, but for deferral, would be) paid for
such year.
G. The Committee in its discretion may reduce (including to zero) any
amount otherwise payable under an award, with or without specifying its
reasons for doing so.
ACTIONS BINDING; NO RIGHT TO EMPLOYMENT, ETC.:
The Committee shall have complete discretion to construe and administer the
Plan, to determine eligibility for awards, to determine performance goals, to
determine whether or not any performance goal has been satisfied, to determine
the amount of payment under any award, and otherwise to do all things necessary
or appropriate to carry out the Plan. Actions by the Committee under the Plan
shall be conclusive and binding on all persons.
Nothing in the Plan or in any award shall entitle any participant to continued
employment with the Company and its subsidiaries, and the loss of benefits or
potential benefits under an award shall in no event constitute an element of
damages in any action brought against the Company or its subsidiaries.
AMENDMENT AND TERMINATION:
The Committee may at any time amend the Plan or awards made under the Plan, but
only to the extent consistent with continued qualification of awards under
Section 162(m)(4)(C) of the Code. The Committee may terminate the Plan at any
time.