Exhibit 10.2
BOSTON PRIVATE FINANCIAL
HOLDINGS, INC.
AMENDED AND
RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT
AGREEMENT
This Agreement, made
this 18 th day of December, 2008, by and
between Boston Private Financial Holdings, Inc. (hereinafter
referred to as the “Company”) and Timothy L. Vaill
(hereinafter referred to as the
“Executive”):
WITNESSETH:
WHEREAS, Executive currently
occupies a position of key significance with the Company, and the
Company desires to encourage Executive to remain with the Company
and to continue Executive’s contributions to the
Company’s growth;
WHEREAS, Executive and the Company
have entered into to a Supplemental Executive Retirement Agreement,
dated as of May 1, 2001, and amended effective as of
May 1, 2004 (the “Prior Agreement”);
WHEREAS, the Executive and the
Company desire to amend and restate the Prior Agreement upon the
terms and conditions set forth herein;
NOW, THEREFORE, for and in
consideration of the mutual covenants herein contained, the Company
and Executive agree as follows:
1. NORMAL RETIREMENT
BENEFIT.
(a) AMOUNT OF NORMAL RETIREMENT
BENEFIT. Upon Termination of Employment for any reason other than
death, and subject to Paragraphs 2 and 3 of this Agreement, the
Company shall pay to the Executive an annual benefit obtained by
taking the SERP Benefit determined under this Paragraph 1(a) and
offsetting the resulting amount by the Executive’s SERP
Offset described in Paragraph 1(b) (the annual benefit, so reduced,
is referred to as the “Normal Retirement
Benefit”).
(i) The “SERP Benefit”
shall be expressed as a single life annuity, with an annual benefit
equal to:
3% times “Years of
Service” times “Final Average Pay.”
(ii) “Year of Service”
means each calendar year in which Executive is credited with 1000
or more hours of service with the Company or with any subsidiary
that, together with the Company would be treated as a single
employer within the meaning of Sections 414(b), (c), (m) or
(o) of the Internal Revenue Code of 1986, as amended (the
“Code”). “Hours of service” shall have the
same meaning as in the Boston Private Bank and Trust Company 401(k)
Plan (the “401(k) Plan”). Years of Service shall
include all service with the Company, including years prior to the
effective date of this Agreement, commencing on the first day on
which the Executive first performed an Hour of Service with the
Company and ending on the date on which the Executive’s
Termination of Employment occurs.
(iii) “Final Average
Pay” means the average of the Executive’s base salary
from the Company (or from any subsidiary that together with the
Company would be treated as a single employer within the meaning of
Sections 414(b), (c), (m) or (o) of the Code) and annual
cash bonus under the Annual Executive Incentive Plan (or any
successor plan) paid in the three consecutive calendar year period
ending on December 31, 2008.
(iv) “Termination of
Employment” for purposes of this Agreement means
Executive’s “separation from service” with the
Company (and any subsidiary that, together with the Company, would
be treated as a single employer within the meaning of Sections
414(b), (c), (m) or (o) of the Code, except that in
applying Sections 1563(a)(1), (2) and (3) of the Code,
the language “at least 50 percent” is used instead of
“at least 80 percent”) within the meaning set forth in
Section 409A of the Code, determined in accordance with the
presumptions set forth in Treasury Regulation
Section 1.409A-1(h).
(b) SERP OFFSET. The SERP Offset
shall include the following amounts (1) the annual Social
Security benefit that the Executive is entitled to receive
immediately following Termination of Employment, multiplied by a
fraction, the numerator of which is the number of the
Executive’s Years of Service and the denominator of which is
40, (2) the annual amount payable as a single life annuity
payable over the life of the Executive with a lump sum actuarial
equivalent value equal to the value of the employer-provided
benefits (excluding employee deferrals and allocable investment
earnings on such amounts) under the 401(k) Plan, and (3) the
annual amount payable as a single life annuity payable over the
life of the Executive with a lump sum actuarial equivalent value of
$420,811.10. For this purpose, the SERP Offset and actuarial
equivalence shall be determined at the date his Termination of
Employment occurs. Actuarial equivalence shall be based on the 1994
Group Annuity Reserving Table (with unisex rates projected to 2002)
and applying a discount rate of 6%.
(c) PAYMENT OF NORMAL RETIREMENT
BENEFIT. The Company shall pay the Normal Retirement Benefit to the
Executive in 12 equal monthly installments payable on the first day
of each month commencing with the calendar month following the
Executive’s Termination of Employment. Anything in this
Agreement to the contrary notwithstanding, if at the time of the
Executive’s Termination of Employment, the Company determines
that the Executive is a “specified employee” within the
meaning of Section 409A(a)(2)(B)(i) of the Code, then to the
extent any payment or benefit that the Executive becomes entitled
to hereunder on account of the Executive’s Termination of
Employment would be considered deferred compensation subject to the
20 percent additional tax imposed pursuant to Section 409A(a)
of the Code as a result of the application of
Section 409A(a)(2)(B)(i) of the Code, such payment shall not
be payable and such benefit shall not be provided until the date
that is the earlier of (A) six months and one day after the
Executive’s Termination of Employment, or (B) the
Executive’s death. Any such delayed cash payment shall earn
interest at an annual rate equal to the
2
applicable federal short-term rate
published by the Internal Revenue Service for the month in which
the date of separation from service occurs, from such date of
separation from service until the payment.
2. TERMINATION BENEFIT.
(a) AMOUNT OF TERMINATION BENEFIT.
Upon Termination of Employment prior to Executive attaining age 70
for any reason other than death, and subject to Paragraph 3 of this
Agreement, the Company shall pay to the Executive an amount equal
to the vested portion of the Normal Retirement Benefit in
accordance with the following schedule:
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Age at Termination
of Employment
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Vested Percentage of
Normal Retirement Benefit
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67
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82%
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68
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88%
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69
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94%
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70 and Older
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100%
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(b) PAYMENT OF TERMINATION BENEFIT.
The Company shall pay the annual termination benefit to the
Executive in 12 equal monthly installments payable on the first day
of each month commencing with the month following the
Executive’s Termination of Employment. The benefit shall be
paid each month up to and including the month in which the
Executive dies. Anything in this Agreement to the contrary
notwithstanding, if at
