Exhibit 10.3
CHANGE IN CONTROL PROTECTION
AGREEMENT
AGREEMENT effective as of this 28th
day of January, 2009 (“the date of agreement”) by and
between Boston Private Financial Holdings, a Massachusetts
Corporation (the “Company”), and Martha T. Higgins, an
individual (the “Employee”).
WHEREAS, the Company considers it
essential to the best interests of its stockholders to foster the
continuous employment of key management personnel by minimizing the
uncertainty, departures or distractions of management personnel
associated with a Change in Control (as hereinafter
defined);
NOW THEREFORE, the Company and the
Employee, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, agree as
follows:
1. Change in Control . A
“Change in Control” shall be deemed to have occurred in
any one of the following events:
(a) any “person” (as
such term is defined in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the “Act”)) (other than the
Company, any trustee or other fiduciary holding securities under an
employee benefit plan or trust of the Company, or any corporation
owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock
of the Company) becomes a “beneficial owner” (as such
term is defined in Rule 13d-3 promulgated under the Act), directly
or indirectly, of securities of the Company representing at least
50 percent or more of the combined voting power of the
Company’s then outstanding securities;
(b) persons who, as of the date of
the Agreement constituted the Company’s Board (the
“Incumbent Board”) cease for any reason, including
without limitation, as a result of a tender offer, proxy contest,
merger or similar transaction, to constitute at least a majority of
the Board of Directors of the Company, provided that any person
becoming a director of the Company subsequent to the date of
agreement whose election or nomination for election was approved by
at least a majority of the directors then comprising the Incumbent
Board shall, for purposes of this Agreement, be considered a member
of the Incumbent Board; or
(c) the stockholders of the Company
shall approve (i) any consolidation or merger of the Company
or its subsidiaries where the stockholders of the Company,
immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as
such term is defined in Rule 13d-3 under the Act), directly or
indirectly, shares representing in the aggregate 50 percent or more
of the voting shares of the corporation issuing cash or securities
in the consolidation or merger (or of its ultimate parent
corporation, if any), (ii) any sale, lease, exchange or other
transfer (in one transaction or a series of transactions
contemplated or arranged by any party as a single plan) of all or
substantially all of the assets of the Company or (iii) any
plan or proposal for the liquidation or dissolution of the
Company.
2. Terminating Event . A
“Terminating Event” shall mean any of the events
provided in this Section 2 occurring subsequent to a Change in
Control as defined in Section 1:
(a) termination by the Company of
the employment of the Employee with the Company for any reason
other than (i) conviction of the Employee of, or plea of
guilty or nolo contendere by the Employee to, a felony, or
(ii) dishonest acts against the Company or any of its
subsidiaries, or (iii) willful gross misconduct which is
likely to cause financial loss to the Company or any of its
subsidiaries or to cause damage to the business reputation of the
Company or any of its subsidiaries, or (iv) willful and
repeated misconduct or gross neglect constituting bad faith in
performing the Employee’s duties with the Company, or
(v) breach of fiduciary duty involving personal profit to the
Employee or (vi) the failure by the Employee to perform his
full-time duties with the Company by reason of his death,
disability or retirement; provided , however, that a
Terminating Event shall not be deemed to have occurred pursuant to
this Section 2(a) solely as a result of the Employee being an
employee of any direct or indirect successor to the business or
assets of the Company, rather than continuing as an employee of the
Company following a Change in Control. For purposes of
clauses (iv) and (v) of this Section 2(a), no act,
or failure to act, on the Employee’s part shall be deemed
“willful” unless done, or omitted to be done, by the
Employee without reasonable belief that the Employee’s act,
or failure to act, was in the best interest of the Company and any
of its subsidiaries. For purposes of clause (vi) of this
Section 2(a) hereof, “disability” shall mean the
Employee’s incapacity due to physical or mental illness which
has caused the Employee to be unable to carry out the full-time
performance of his duties with the Company. Disagreement regarding
a determination of disability shall be subject to the certification
of a qualified medical doctor agreed to by the Company and the
Employee, or, in the event of the Employee’s incapacity to
designate a doctor, the Employee’s legal representative. In
the absence of an agreement between the Company and the Employee in
designating a doctor, each party shall nominate a qualified medical
doctor, and the two doctors so nominated shall select a third
doctor, who shall make the determination as to the disability of
the Employee. For purposes of clause (vi) of this
Section 2(a) “retirement” shall mean termination
of the Employee’s employment in accordance with the
Company’s retirement policy, not including early retirement,
generally applicable to its salaried employees, as in effect
immediately prior to the Change in Control, or in accordance with
any retirement arrangement established with respect to the Employee
with the Employee’s express written consent;
(b) termination by the Employee of
the Employee’s employment with the Company for Good Reason.
“Good Reason” shall mean the occurrence of any of the
following events (provided that no such “Good Reason”
shall be deemed to have occurred unless the Employee has first
provided written notice to the Company of the occurrence of one of
the events below within 60 days of such occurrence, the Company has
failed to cure such condition within 30 days from receipt of such
notice and the Employee has terminated employment within 60 days
thereafter):
(i) a significant adverse change,
not consented to by the Employee, in the nature or scope of the
Employee’s responsibilities, authorities, powers, title,
functions or duties from the responsibilities, authorities, powers,
title, functions or duties exercised by the Employee immediately
prior to the Change in Control; or
2
(ii) a material reduction in the
Employee’s annual base compensation as in effect on the date
hereof or as the same may be increased from time to time;
or
(iii) an attempt by the Company to
relocate the Employee to, or to require him to perform regular
services, at any location that is more than 50 miles from the
Employee’s employment location on the date hereof;
or
(iv) a material breach of this
Agreement by the Company.
3. Severance Payment . In the
event a Terminating Event occurs within two years after a Change in
Control,
(a) the Company shall pay to the
Employee an amount equal to 2.5 times the total of the current
salary plus the average of the bonus for the three most recent
taxable years preceding a Change in Control . Said amount
shall be paid in one lump sum payment no later than five days
following the date of Employee’s “Separation from
Service” in connection with a Terminating Event. For purposes
of this Agreement, the term “Separation from Service”
shall mean the Employee’s “separation from
service” from the Company, an affiliate or the Company or a
successor entity 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) the Company shall pay to the
Employee a pro-rata bonus for the year in which the Terminating
Event occurs (the “Termination Year”), payable in one
lump sum payment no later than 30 days following the date of
Employee’s Separation from Service in connection with a
Terminating Event, and determined by multiplying the bonus the
Employee received for the year immediately prior to the Termination
Year by a fraction, the numerator of which is the number of days
the Employee was employed during the Termination Year and the
denominator of which is 365;
(c) the Company shall continue the
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