FLEETBOSTON FINANCIAL
1996 Long-Term Incentive Plan
(As amended through December 21, 1999)
1. Purpose.
The FleetBoston Financial 1996 Long-Term Incentive Plan (the 'Plan') has
been adopted to create and enhance significant ownership of the Common Stock of
the Corporation by key officers and employees of the Corporation and its
Affiliates. Additional purposes of the Plan include providing a meaningful
incentive to Participants to make substantial contributions to the Corporation's
future success, enhancing the Corporation's ability to attract and retain
persons who will make such contributions, and ensuring that the Corporation has
competitive compensation opportunities for such key officers and employees.
By furthering these objectives, the Plan is intended to benefit the
interests of the stockholders of the Corporation.
2. Definitions.
As used herein, the following words or terms have the meanings set forth
below:
2.1. 'Affiliate' means (a) a corporation or other entity in which the
Corporation owns, directly or indirectly or has the power to vote or cause to be
voted, stock or other ownership interests representing more than 50% of the
total combined voting power of such entity or (b) any other entity in which the
Corporation has a significant equity interest, as determined by the Committee.
Except as determined by the Committee in particular cases, if an entity ceases
to be an Affiliate for any reason (a 'disaffiliation'), the employment of each
individual who was employed by the entity shall be treated as having been
involuntarily terminated by the Corporation and its Affiliates effective upon
such disaffiliation, unless such individual thereafter continues to be employed
by the Corporation or another entity which remains an Affiliate.
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2.2. 'Award' means any Options, Stock Appreciation Rights, Restricted
Stock, Performance Shares or Other Awards granted under the Plan.
2.3. 'Award Documentation' means a writing delivered to a Participant
specifying the terms and conditions of an Award and containing such other terms
and conditions not inconsistent with the provisions of the Plan as the Committee
considers necessary or advisable.
2.4. 'Beneficial Ownership' shall have the meaning defined in Rule 13d-3
promulgated under the Exchange Act.
2.5. 'Board ' means the Board of Directors of the Corporation, except
that, whenever action is to be taken under the Plan with respect to a Reporting
Person, 'Board ' shall mean only such directors who are 'disinterested persons'
or 'non-employee directors,' as applicable, within the meaning of Rule 16b-3
under the Exchange Act or any successor rule.
2.6. 'Business Combination' means a reorganization, merger, consolidation,
sale or other disposition of all or substantially all of the assets of the
Corporation
2.7. A 'Change in Control' shall mean any of the following events:
2.7.1. The acquisition, other than from the Corporation, by any
individual, entity or Group of Beneficial Ownership of 25% or more of the
Outstanding Shares; provided, however, that any acquisition by the Corporation
or its subsidiaries, or any employee benefit plan (or related trust) of the
Corporation or its subsidiaries, of 25% or more of the Outstanding Shares shall
not constitute a Change in Control; and provided, further that any acquisition
by a corporation with respect to which, following such acquisition, more than
50% of the then outstanding shares of common stock of such corporation is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding
Shares immediately prior to such acquisition in substantially the same
proportion as their ownership immediately prior to such acquisition of the
Outstanding Shares, shall not constitute a Change in Control; or
2.7.2. Individuals who constitute the Incumbent Board cease for
any reason to constitute at least a majority of the Board, provided that any
individual becoming a director subsequent to October 1,
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1999 whose election, or nomination for election by the Corporation's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Corporation (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act); or
2.7.3. Consummation of a Business Combination, in each case, with
respect to which all or substantially all of the individuals and entities who
were the beneficial owners of the Outstanding Common Stock immediately prior to
such Business Combination do not, following such Business Combination,
beneficially own, directly or indirectly, more than 50% of the then outstanding
shares of common stock of the corporation resulting from such a Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more subsidiaries); or
2.7.4. Approval by the stockholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
Anything in the Plan to the contrary notwithstanding, if an event
that would, but for this paragraph, constitute a Change in Control results from
or arises out of a purchase or other acquisition of the Corporation, directly or
indirectly, by a corporation or other entity in which a Participant has a
greater than ten percent (10%) direct or indirect equity interest, such event
shall not constitute a Change in Control.
2.8. 'Code' means the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute.
2.9. 'Committee' means the committee appointed by the Board with
authority to administer the Plan. Membership of the Committee shall at all times
be constituted consistent with exemption under Rule 16b-3 under the Exchange Act
(or any successor rule) of those Awards that are intended to be so exempt and
with qualification under the Performance-Based Exception of those Awards that
are intended
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to so qualify. To the extent that the Committee delegates its power to make
Awards as permitted by Section 4.1, all references in the Plan to the
Committee's authority to make Awards and determinations with respect thereto
shall be deemed to include the Committee's delegate or delegates.
2.10. 'Common Stock' or 'Stock' means the Common Stock, par value $.01 per
share, of the Corporation.
2.11. 'Corporation' means Fleet Boston Corporation (doing business as
FleetBoston Financial Corporation), a corporation established under the laws of
the state of Rhode Island.
2.12. 'Designated Beneficiary' means the beneficiary designated by a
Participant, in a manner acceptable to the Committee, to receive amounts due or
exercise rights of the Participant in the event of the Participant's death. In
the absence of an effective designation by a Participant, Designated Beneficiary
shall mean the Participant's estate.
2.13. 'Disability' means a physical or mental condition of such a nature
that it would qualify a Participant for benefits under the long-term disability
insurance plan of the Corporation or any successor plan. The Committee shall
have the authority to determine whether and when, consistent with the foregoing,
a Participant has suffered a Disability for purposes of the Plan.
2.14. 'Exchange Act' means the Securities Exchange Act of 1934, as
amended, or any successor statute.
2.15. '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 Fair Market Value.
2.16. 'Freestanding SAR' means an SAR that is granted independently of any
Options.
2.17. 'Group' shall have the meaning defined in Section 13(d)(3) or
14(d)(2) of the Exchange Act.
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2.18. 'Incentive Stock Option' means an Option, granted to a Participant
pursuant to Section 8, which is intended to satisfy the requirements of Section
422(b) of the Code or any successor provision.
2.19. 'Incumbent Board' means the Board as constituted as of October 1,
1999.
2.20. 'Nonqualified Stock Option' means an Option, granted to a
Participant pursuant to Section 8, which is not intended to qualify as an
Incentive Stock Option.
2.21. 'Option' means an Incentive Stock Option or a Nonqualified Stock
Option.
2.22. 'Other Award' means an Award (other than an Option, SAR, Restricted
Stock or Performance Share) granted to a Participant pursuant to Section 12. An
Other Award may consist of Shares, fixed or variable units valued or based on
Common Stock, fixed or variable units valued or based on measures (including
performance measures) that are unrelated to Common Stock, or any combination of
the foregoing. An Other Award that consists of units other than Shares, whether
or not valued or based on Common Stock, may be made payable in cash or Shares or
a combination of cash and Shares.
2.23. 'Outstanding Shares' means the then outstanding Shares of Common
Stock.
2.24. 'Participant' means an individual selected by the Committee to
receive an Award under the Plan.
2.25. 'Performance-Based Exception' means the performance-based exception
from the deductibility limits set forth in Section 162(m) of the Code and the
Section 162(m) Regulations.
2.26. 'Performance Goals' means, with respect to Awards that are intended
to qualify for the Performance-Based Exception, objectively determinable
performance goals established by the Committee within the time period specified
in the Section 162(m) Regulations and based on any of the following criteria:
(a) earnings, (b) return on equity, (c) return on assets, (d) return on
investment, (e) revenues, (f) expenses; (g) the operating ratio; (h) stock
price; (i) stockholder return; (j) market share; (k) charge-offs, (l) credit
quality, or (m) customer satisfaction measures. Such Performance Goals may be
particular to a Participant or the division, branch, line of business, Affiliate
or other unit in which the Participant works, or may be based on the performance
of the Corporation on a consolidated basis. Notwithstanding the preestablishment
of a Performance Goal with respect to an Award in accordance with the Section
162(m)
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Regulations, nothing herein shall be construed as limiting the Committee's
ability to reduce the amount payable under the Award (including, for this
purpose, reducing the amount of any Award that would otherwise be granted, or
reducing the portion of any Award that would otherwise vest) upon attainment of
such Performance Goal.
2.27. 'Performance Period' means the period of time designated by the
Committee applicable to a Performance Stock Award during which specified
Performance Goals shall be measured.
2.28. 'Performance Share' means an Award granted to a Participant pursuant
to Section 11.
2.29. 'Prior Plan' means the BankBoston Corporation 1991 Long-Term Stock
Incentive Plan.
2.30. 'Reporting Person' means a person required to file reports under
Section 16(a) of the Exchange Act or any successor statute.
2.31. 'Restricted Period' means the period during which the transfer of
shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of Performance Goals or upon the occurrence of other events as
determined by the Committee), and the Shares are subject to a substantial risk
of forfeiture, as provided in Section 10.
2.32. 'Restricted Stock' means an Award granted to a Participant pursuant
to Section 10.
2.33. 'Retirement' means termination of employment with the Corporation or
any Affiliate 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 retirement
program then maintained by the Corporation or the Affiliate, provided that the
Participant does not continue in the employment of the Corporation or any
Affiliate and provided further that such termination does not constitute a
Termination for Cause.
2.34. 'Section 162(m) Regulations' means the regulations promulgated under
Section 162(m) of the Code, as amended from time to time.
2.35. 'Shares' means shares of Common Stock.
2.36. 'Stock Appreciation Right' or 'SAR' means an Award granted to a
Participant, alone or in connection with a related Option, pursuant to Section
9.
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2.37. 'Tandem SAR' means an SAR that is granted in connection with a
related Option, the exercise of which shall require forfeiture of the right to
purchase a share of Common Stock under the related Option (and when a share of
Common Stock is purchased under the related Option, the Tandem SAR shall
similarly be canceled).
2.38. 'Termination for Cause' means the termination of a Participant's
employment due to any act which, in the discretionary judgment of the Committee,
is deemed inimical to the best interests of the Corporation or any Affiliate,
including, but not limited to: (a) willful and gross misconduct in respect of
the Participant's duties for the Corporation or the Affiliate, (b) conviction of
a felony or perpetration of a common law fraud, (c) willful failure to comply
with applicable laws or regulations with respect to the execution of the
Corporation's or the Affiliate's businesses or (d) theft, fraud, embezzlement,
dishonesty or other conduct which has resulted or is likely to result in
material economic or other damage to the Corporation or any Affiliate.
3. Effective Date and Term.
Subject to approval by the Corporation's stockholders, the Plan shall
become effective as of January 1, 1997, and Awards may be granted under the Plan
from and after that date. No Awards may be made under the Plan after December
31, 2006, but Awards theretofore granted may extend beyond that date.
Notwithstanding the foregoing, no Incentive Stock Options shall be granted after
December 20, 2005.
4. Administration.
4.1. The Plan shall be administered by the Committee. Subject to the
provisions set forth herein, the Committee shall have full authority to
determine the provisions of Awards, including, without limitation, vesting
schedules, price, performance standards (including Performance Goals), length of
relevant performance, restriction or option period, dividend rights,
post-retirement and termination rights, payment alternatives such as cash,
stock, contingent awards or other means of payment consistent with the purposes
of the Plan and individual Award Documentation. The Committee also shall have
full authority to interpret the terms of the Plan and of Awards made under the
Plan, to adopt, amend and
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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. To the extent
permitted by applicable law, the Committee may delegate to one or more executive
officers who are also directors of the Corporation the power to make Awards to
Participants who are not Reporting Persons at the time of such Awards and all
determinations under the Plan with respect thereto, provided that the Committee
shall fix the maximum amount of Awards for such Participants as a group.
4.2. Notwithstanding Section 4.1 and subject to the provisions set forth
herein, the Board shall approve or ratify Awards made under the Plan to any
executive officer who is also a director of the Corporation.
4.3. The decision of the Committee on any matter as to which it is given
authority under Section 4.1 above shall be final and binding on all persons
concerned.
5. Shares Subject to the Plan.
5.1. Subject to adjustment in accordance with the provisions of Section
13.8 and subject to Section 5.4, (a) the total number of Shares available for
grants of Awards (including, without limitation, Awards of Restricted Stock and
Performance Shares) in any calendar year shall not exceed one and one-quarter
percent (1.25%) of the outstanding Common Stock as of the first business day of
such calendar year and (b) the total number of Shares available for grants of
Restricted Stock and Performance Shares in any calendar year shall not exceed
one-half of one percent (.5%) of the outstanding Common Stock as of the first
business day of such calendar year. Shares issued under the Plan may consist in
whole or in part of authorized but unissued Shares, Shares held as treasury
stock or previously issued Shares reacquired by the Corporation, including
Shares purchased on the open market. Notwithstanding the foregoing, the maximum
number of Shares that may be issued under Incentive Stock Options awarded under
the Plan, subject to adjustment in accordance with Section 13.8, shall be
10,000,000* Shares.
5.2. Subject to adjustment in accordance with Section 13.8, the total
number of Shares available for grants of Awards in any calendar year to any
Participant shall not exceed the lesser of (a) three-tenths
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* As adjusted for BankBoston Corporation's two-for-one stock split, effective as
of June 22, 1998.
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of one percent (.3%) of the outstanding Common Stock as of the first business
day of such calendar year or (b) 1,200,000* Shares.
5.3. For purposes of calculating the total number of Shares available for
grants of Awards, (a) the grant of a Performance Share shall be deemed to be
equal to the maximum number of Shares which may be issued upon payment of the
Performance Share and (b) where the value of an Award is variable on the date it
is granted, the value shall be deemed to be the maximum limitation of the Award.
Awards payable solely in cash shall not reduce the number of Shares available
for Awards granted under the Plan.
5.4. There shall be carried forward and available for Awards under the
Plan in each succeeding calendar year, in addition to Shares available for grant
under Section 5.1, all of the following: (a) any unused portion of the limit set
forth in Section 5.1 for any preceding calendar years; (b) Shares represented by
Awards which, during that calendar year or any preceding calendar years, have
been canceled, forfeited, surrendered, terminated or expire unexercised (with
the exception of the termination of a Tandem SAR upon the exercise of the
related Option, or the termination of a related Option upon exercise of the
corresponding Tandem SAR), or which are settled in a manner that results in
fewer Shares outstanding than were initially awarded (including, without
limitation, the surrender of Shares as full or partial payment for the Award or
any tax obligation thereon); (c) the excess amount of variable Awards which
become fixed at less than their maximum limitations; (d) authorized Shares as to
which Options, SARs and Restricted Stock were not granted under the Prior Plan
as of December 31, 1996 and (e) Shares granted under the Prior Plan subject to
Options, SARs or Restricted Stock which, during that calendar year or any
preceding calendar years, have been canceled, forfeited, surrendered, terminated
or expire unexercised or which are settled in a manner that results in fewer
Shares outstanding than were initially awarded (including, without limitation,
the surrender of Shares as full or partial payment for the Award or any tax
obligation thereon).
6. Eligibility for Awards. Any officer or employee of the Corporation or its
Affiliates who, in the opinion of the Committee, is in a position to have a
significant effect upon the Corporation's business and consolidated earnings,
shall be eligible to receive an Award under the Plan.
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7. Grant of Awards. 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 Awards (including persons to whom Awards were previously granted) those
persons to whom Awards are to be granted. Such Awards may be granted on a stand
alone, combination or tandem basis. In addition to granting Awards for purposes
of incentive compensation, Awards may also be made in tandem with or in lieu of
other current or deferred employee compensation.
8. Options.
8.1. Grant of Options. Subject to the provisions of the Plan, the
Committee may award Options, alone or in combination with other Awards under the
Plan. Options granted under the Plan may be either Incentive Stock Options or
Nonqualified Stock Options. The terms and conditions of Incentive Stock Options
shall be subject to and comply with Section 422(b) of the Code or any successor
provision, and any regulations thereunder.
8.2. Option Price. The Option price per share of Common Stock, with
respect to each Option, shall not be less than the Fair Market Value per share
at the time the Option is granted.
8.3. Period of Options. An Option shall be exercisable during such period
of time as the Committee shall determine, subject, in the case of Incentive
Stock Options, to any limitation required by the Code. It is contemplated that
the Committee will provide that an Option shall not be exercisable after the
expiration of ten years from the date the Option is granted.
8.4. Exercise of Options. Each Option shall be made exercisable at such
time or times, and shall be subject to such conditions or restrictions, as the
Committee shall determine. It is contemplated that the Committee will normally
provide that the right to exercise an Option will accrue on the first
anniversary of the date of grant with respect to 50 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 on
the second anniversary of the date of grant. However, the Committee may, in its
discretion, in any case provide that the Option will be exercisable immediately
with respect to all
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of 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.
8.5. Payment for and Delivery of Stock. Payment of the Option exercise
price may be made by any of the following methods, as determined by the
Committee at the time the Option is granted: (a) in cash or its equivalent (b)
by delivery of Shares already owned by the Participant, valued at their Fair
Market Value on the date of exercise (provided that any Shares so delivered
shall have been held by the Participant for such period, if any, as the
Committee shall determine), (c) subject to such guidelines as may be promulgated
by the Committee, by delivery of a notice instructing the Corporation to deliver
the Shares being purchased to a broker, subject to the broker's delivery of cash
to the Corporation equal to the purchase price and any applicable withholding
taxes, (d) by delivery of such other lawful consideration as the Committee may
determine or (e) by any combination of the foregoing. The Committee may provide
for the automatic award of an Option upon the delivery of Shares to the
Corporation in payment of the exercise price of another Option for up to the
number of Shares delivered to the Corporation in payment of the exercise price
of such other Option.
8.6. Termination of Employment. Each Participant's Award Documentation
shall set forth the extent to which the Participant or the Participant's legal
representative, guardian or Designated Beneficiary shall have the right to
exercise an Option following the termination of the Participant's employment
with the Corporation and its Affiliates. Such provisions shall be determined in
the sole discretion of the Committee and may reflect distinctions based on the
reasons for termination of employment, including, without limitation,
termination of employment by reason of the Participant's death, Retirement or
Disability.
9. Stock Appreciation Rights.
9.1. Grant of SARs. Subject to the provisions of the Plan, the Committee
may award SARs alone or in combination with other Awards under the Plan.
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9.2. Grant Price. The grant price of a Freestanding SAR shall not be less
than the Fair Market Value of the Common Stock at the time of grant of the SAR.
The grant price of a Tandem SAR shall not be less than the Option exercise price
of the related Option.
9.3. Term of SARs. An SAR shall be exercisable during such period of time
as the Committee shall determine. It is contemplated that the Committee will
provide that an SAR shall not be exercisable after the expiration of ten years
from the date the SAR is granted.
9.4. Exercise of Tandem SARs. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
9.5 Exercise of Freestanding SARs. Freestanding SARs shall be made
exercisable at such time or times, and shall be subject to such conditions or
restrictions, as the Committee shall determine. It is contemplated that the
Committee will normally provide that the right to exercise 50 percent of any
Freestanding SARs granted hereunder will accrue on the first anniversary of the
date of grant and that the right to exercise the balance of such Freestanding
SARs will accrue on the second anniversary of the date of grant. However, the
Committee may, in its discretion, in any case provide that Freestanding SARs
will be exercisable immediately or that the right to exercise Freestanding SARs
will accrue in different installments and at different times from those set
forth above.
9.6. Payment of SARs. Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Corporation in an amount determined by
multiplying (a) the excess, if any, of the Fair Market Value of a share of
Common Stock on the date of exercise over the grant price by (b) the number of
Shares with respect to which the SAR is exercised. SARs may be payable in cash,
Shares or a combination of the two, as provided by the Committee. Shares issued
on the settlement of the exercise of SARs shall be valued at their Fair Market
Value on the date of exercise.
9.7. Termination of Employment. Each Participant's Award Documentation
shall set forth the extent to which the Participant or the Participant's legal
representative, guardian or Designated
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Beneficiary shall have the right to exercise an SAR following the termination of
the Participant's employment with the Corporation and its Affiliates. Such
provisions shall be determined in the sole discretion of the Committee and may
reflect distinctions based on the reasons for termination of employment,
including, without limitation, termination of employment by reason of the
Participant's death, Retirement or Disability.
10. Restricted Stock.
10.1. Grant of Restricted Stock. Subject to the provisions of the Plan,
the Committee may award Restricted Stock alone or in combination with other
Awards under the Plan.
10.2. Terms of Restricted Stock. The Restricted Period and other
provisions of each Restricted Stock Award shall be established by the Committee
and shall be set forth in the Participant's Award Documentation.
10.3. Nontransferability; Other Restrictions. Except as provided in this
Section 10, shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered during the Restricted Period. The Committee may
impose such other conditions and/or restrictions on any shares of Restricted
Stock granted under the Plan as it may deem advisable including, without
limitation, performance-based restrictions (whether or not based upon the
achievement of Performance Goals), employment-based restrictions and/or
restrictions under applicable federal or state securities laws.
10.4. Participants' Rights in Restricted Stock. Shares of Restricted Stock
shall be evidenced in such manner as the Committee may determine. Any
certificates issued in respect of Restricted Stock shall be registered in the
name of the Participant and, except as otherwise determined by the Committee,
shall be delivered to the Participant after the last day of the Restricted
Period. Except as otherwise provided by the Committee, during and after the
Restricted Period, dividends with respect to any Restricted Stock shall be paid
to, and voting rights with respect to any such Shares shall be vested in, the
Participant. To the extent provided by the Committee, Participants may defer the
receipt of any dividends payable during the Restricted Period with respect to
Restricted Stock.
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10.5. Termination of Employment. Each Participant's Award Documentation
shall set forth the extent, if any, to which the Participant or the
Participant's legal representative, guardian or Designated Beneficiary shall
have the right to receive unvested shares of Restricted Stock following the
termination of the Participant's employment with the Corporation and its
Affiliates. Such provisions shall be determined in the sole discretion of the
Committee and may reflect distinctions based on the reasons for termination of
employment, including, without limitation, termination of employment by reason
of the Participant's death, Retirement or Disability.
10.6. Consideration for Restricted Stock. Restricted Stock shall be issued
for no cash consideration or such minimum consideration as may be required under
applicable law.
11. Performance Shares.
11.1. Grant of Performance Shares. Subject to the provisions of the Plan,
the Committee may award Performance Shares alone or in combination with other
Awards under the Plan. The number and/or vesting of Performance Shares granted,
in the Committee's discretion, shall be contingent upon the degree of attainment
of the Performance Goals over the Performance Period.
11.2. Form and Timing of Payment of Performance Shares. During the course
of a Performance Period, the Committee shall determine the number of Performance
Shares as to which the Participant has earned the right to be paid based upon
the attainment of the applicable Performance Goals. The Committee shall pay any
earned Performance Shares as soon as practicable after they are earned in the
form of cash, Shares or a combination thereof (as determined by the Committee)
having an aggregate Fair Market Value equal to the number of Performance Shares
earned multiplied by the Fair Market Value of a share of Common Stock determined
as of the date such Performance Shares were earned. Any Shares used to pay out
earned Performance Shares may be granted subject to any restrictions deemed
appropriate by the Committee. To the extent provided by the Committee,
Participants may defer the receipt of payment of any Performance Shares or other
amounts (e.g., dividend equivalent rights) earned pursuant to the Award
Documentation.
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11.3. Termination of Employment. Each Participant's Award Documentation
shall set forth the extent to which the Participant or the Participant's legal
representative, guardian or Designated Beneficiary shall have the right to
receive unearned Performance Shares following the termination of the
Participant's employment with the Corporation and its Affiliates. Such
provisions shall be determined in the sole discretion of the Committee and may
reflect distinctions based on the reasons for termination of employment,
including, without limitation, termination of employment by reason of the
Participant's death, Retirement or Disability.
12. Other Awards.
12.1. Grant of Other Awards. Subject to the provisions of the Plan, the
Committee may award Other Awards alone or in combination with other Awards under
the Plan.
12.2. Terms of Other Awards. The Committee shall determine the terms and
provisions of Other Awards including, without limitation, any transfer
restrictions, vesting provisions, the value of such Awards and the form and
timing of payment of such Awards.
12.3. Termination of Employment. Each Participant's Award Documentation
shall set forth the extent to which the Participant or the Participant's legal
representative, guardian or Designated Beneficiary shall have the right to
exercise or receive Other Awards following the termination of the Participant's
employment with the Corporation and its Affiliates. Such provisions shall be
determined in the sole discretion of the Committee and may reflect distinctions
based on the reasons for termination of employment, including, without
limitation, termination of employment by reason of the Participant's death,
Retirement or Disability.
13. General Provisions Applicable to Awards.
13.1. Non-transferability of Awards. Subject to the provisions of this
Section, (a) no Award under the Plan 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 Award has been granted, rights under
the Award may be exercised only by the Participant, the Participant's guardian
or legal representative, or by the assignee of the Award
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under a 'qualified domestic relations order.' Notwithstanding the foregoing, the
Committee may provide for greater transferability in the case of any Award,
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 Award
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. Nothing in this Section shall be construed as
restricting the transfer of Shares that have become free of other transfer
restrictions under the Plan or that were awarded free of any such restrictions.
13.3. Committee Discretion. Each type of Award may be made alone, in
addition to or in relation to any other type of Award. The terms of each type of
Award need not be identical, and the Committee need not treat Participants
uniformly. Except as otherwise provided by the Plan or a particular Award, any
determination with respect to an Award may be made by the Committee at the time
of award or at any time thereafter. The Committee may grant Awards hereunder
that are intended to satisfy the Performance-Based Exception and Awards that are
not intended to satisfy that exception. Awards hereunder that are intended to
satisfy the Performance-Based Exception shall be subject to the limitations of
Section 5.2. In no event shall an Award hereunder which is not intended to
satisfy the Performance-Based Exception be conditioned upon an Award hereunder
(to the same Participant) which is intended to satisfy the Performance-Based
Exception.
13.4. Tax Withholding. The Committee shall require, on such terms as it
deems necessary, that the Participant pay to the Corporation, or make other
satisfactory provision for payment of, any federal, state or local taxes
required by law to be withheld in respect of Awards under the Plan. In the
Committee's discretion, a Participant may elect to satisfy all or a portion of
his or her federal, state and local tax withholding requirements by having
Shares withheld from the Shares otherwise issuable in connection with the event
creating the tax obligation, or by delivering to the Corporation previously
owned Shares,
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valued at their Fair Market Value on the date that withholding taxes are
determined. The Corporation and its Affiliates may, to the extent permitted by
law, deduct any such tax obligations from any payment of any kind otherwise due
to the Participant.
13.5. Foreign Nationals. Awards may be made to Participants who are
foreign nationals or employed outside the United States on such terms and
conditions different from those specified in the Plan as the Committee considers
necessary or advisable to achieve the purposes of the Plan or comply with
applicable laws. Notwithstanding the provisions of this Section 13.5, Awards to
any such individuals who are Reporting Persons shall be made in accordance with
the other provisions of the Plan, except as otherwise permitted by Rule 16b-3
under the Exchange Act or any successor rule.
13.6. Amendment of Award. The Committee may amend, modify, terminate or
waive any condition or provision of any outstanding Award, including
substituting therefor another Award of the same or a different type, changing
the date of exercise or realization and converting an Incentive Stock Option to
a Nonqualified Stock Option; provided, however, that the Committee may not
(except in accordance with Section 13.8) increase the number of Shares subject
to any outstanding Award or decrease the Option or award price of the Award. The
Participant's consent to any such action shall be required unless the Committee
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
13.7. Acceleration of Vesting; Waiver of Restrictions. Notwithstanding any
provision of the Plan or any Award Documentation to the contrary, the Committee,
in its sole discretion, shall have the power at any time to (a) accelerate the
vesting or exercisability of any Award granted under the Plan, including,
without limitation, acceleration to such date that would result in such Awards
becoming immediately vested or exercisable, or (b) waive any restrictions of any
Award granted under the Plan.
13.8. Changes in Stock; Adjustment of Awards. In the event of a stock
dividend, stock split or other change in corporate structure or capitalization
affecting the Common Stock or any other transaction (including, without
limitation, an extraordinary cash dividend) which, in the determination of the
Committee, affects the Common Stock such that an adjustment is required in order
to preserve the
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benefits or potential benefits intended to be made available under the Plan,
then the Committee shall equitably adjust any or all of (a) the number and kind
of Shares in respect of which Awards may be made under the Plan, (b) the number
and kind of Shares subject to outstanding Awards, and (c) the Option or grant
price with respect to any of the foregoing, provided that the number of Shares
subject to any Award shall always be a whole number. In the event of any merger,
consolidation, dissolution or liquidation of the Corporation, the Committee, in
its sole discretion, may, as to any outstanding Awards, make such substitution
or adjustment in the aggregate number of Shares reserved for issuance under the
Plan and in the number and purchase price (if any) of Shares subject to such
Awards as it may determine, make outstanding Awards fully exercisable, or amend
or terminate such Awards upon such terms and conditions as it shall provide
(which, in the case of the termination of the vested portion of any Award, shall
require payment or other consideration which the Committee deems equitable in
the circumstances). Notwithstanding the foregoing, in the case of an Award
intended to qualify as an Incentive Stock Option or to qualify for the
Performance-Based Exception, adjustment shall be made under this Section 13.8
only to the extent, if any, consistent with continued qualification of the Award
as an Incentive Stock Option or continued qualification of the award for the
Performance-Based Exception, as the case may be.
13.9. Change In Control. Unless otherwise provided in a Participant's
Award Documentation, upon the occurrence of a Change in Control of the
Corporation, (a) any and all Options and SARs granted hereunder shall become
immediately exercisable, and shall remain exercisable through their entire term;
(b) any Restricted Periods and restrictions imposed on Restricted Stock shall
lapse; and (c) the target payout opportunities attainable under all outstanding
Awards of Restricted Stock and Performance Shares shall be deemed to have been
fully earned for the entire Performance Period(s) as of the effective date of
the Change in Control, and the vesting of all Awards shall be accelerated as of
the effective date of the Change in Control.
13.10. Dividend Equivalent Rights. The Committee may, in its discretion,
provide that any dividends declared on Shares subject to an Award, and which
would have been paid with respect to such
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Shares had they been owned by a Participant, be paid to the Participant in
Shares, cash or a combination of cash and Shares, as specified in the Award
Documentation.
14. Miscellaneous.
14.1. No Right to Employment. No person shall have any claim or right to
be granted an Award, and the grant of an Award shall not be construed as giving
a Participant the right to continued employment. The Corporation and its
Affiliates expressly reserve the right at any time to terminate the employment
of a Participant free from any liability or claim under the Plan, except as may
be expressly provided in the applicable Award. Except as specifically provided
by the Committee in any particular case, the loss of existing or potential
profit in Awards granted under the Plan shall not constitute an element of
damages in the event of termination of employment of a Participant, even if
termination is in violation of an obligation of the Corporation or an Affiliate
to the Participant, by contract or otherwise.
14.2. No Rights as a Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any Shares to be distributed under the Plan
until he or she becomes the holder thereof. A Participant to whom Common Stock
is awarded shall be considered the holder of the stock at the time of the Award
except as otherwise provided in the applicable Award.
14.3. No Fractional Shares. No fractional Shares shall be issued under the
Plan, and cash shall be paid in lieu of any fractional Shares in settlement.
14.4. Unfunded Plan. The Plan shall be unfunded, shall not create (or be
construed to create) a trust or a separate fund or funds, and shall not
establish any fiduciary relationship between the Corporation and any Participant
or other person.
14.5. Successors and Assigns. The Plan shall be binding on all successors
and assigns of the Participant, including without limitation the Participant's
Designated Beneficiary or any receiver or trustee in bankruptcy or
representative of the Participant's creditors.
14.6. Amendment of Plan. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time; provided, however, that no amendment
which requires stockholder approval in order
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for those Awards that are intended to be exempt under Rule 16b-3 under the
Exchange Act (or any successor rule) to be so exempt or for those Awards that
are intended to qualify under the Performance-Based Exception to so qualify
shall be effective unless approved by the requisite vote of the Corporation's
stockholders. The Committee may make non-material amendments to the Plan.
14.7. Governing Law. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of the Commonwealth of Massachusetts.
1996 Long-Term Incentive Plan - FleetBoston Financial Corp.
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