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Form Of Severance Agreement W/ Officers

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Sectors: Banking
Governing Law: Massachusetts, View Massachusetts State Laws
Effective Date: August 05, 1994
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EXHIBIT 10(n)
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AGREEMENT
---------


THIS AGREEMENT dated as of August 5, 1994, 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 August 31, 1997, provided that commencing on September 1, 1996 and each September 1 thereafter, the term of this Agreement shall automatically be extended for one additional year unless, not later than May 31 of the preceding year, 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 September 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 two (2) years beyond the last day of the month in


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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 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.


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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. 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


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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 in applying the definition of Good Reason), by reason of death or Retirement, or (iv) the termination by the Company or the Bank of the Executive's employment for any reason.


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 the long- term disability


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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


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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, 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 Retirement, 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 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 or if the 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 circum-


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stance or event which constitutes Good Reason occurs at the direction of such Person.


(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 two (2) 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
Control and (ii) the higher of the average 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 occur rence 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


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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 two (2) years commencing on the Date of
Termination.


(C) The Executive shall continue to accrue service credit (for all
purposes, including without limitation benefit accrual) under the Pension
Plan, Thrift Plan, the Bonus SERP, the Excess SERP or any successor plans
thereto, at the compensation level equal to the amount determined in
accordance with Section 6.1(A) hereof for a period of two (2) years.


6.2 Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit received or to be received by the Executive in connection with a Change in Control or the termination of the


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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, including the Severance Payments, being hereinafter called "Total Payments") would be subject (in whole or part) to the Excise Tax, then the Severance Payments shall be reduced to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax (after taking into account any reduction in the Total Payments provided by reason of section 280G of the Code in such other plan, arrangement or agreement) if (A) the net amount of such Total Payments, as so reduced (and after deduction of the net amount of federal, state and local income tax on such reduced Total Payments), is greater than (B) the excess of (i) the net amount of such Total Payments, without reduction (but after deduction of the net amount of federal, state and local income tax on such Total Payments) over (ii) the amount of Excise Tax to which the Executive would be subject in respect of such Total Payments. For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total


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Payments the receipt or enjoyment of which the Executive shall have effectively waived in writing prior to the Date of Termination shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which, in the opinion of tax counsel selected by the Company's independent auditors and reasonably acceptable to the Executive, does not constitute a "parachute payment" within the meaning of section 280G(b)(2) of the Code, (including by reason of section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which constitutes 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, and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Company 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
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