EXHIBIT 10.1.2
AMENDMENT TO OFFER LETTER
EXECUTIVE
OFFICER
CHANGE IN CONTROL AGREEMENT
This Agreement (this “
Agreement ”) is entered into as of the 18th day of
May , 2009, by and between the FEDERAL HOME LOAN BANK OF
BOSTON, a corporation organized under the laws of the United States
(the “ Bank ”) and Edward A. Hjerpe, III
(the “ Executive ”).
WHEREAS, the Executive is expected
to commence employment as the President and Chief Executive Officer
of the Bank, effective June 30, 2009, or before ,
2009, and the Bank desires to provide the Executive with certain
severance benefits in the event of a Reorganization (as defined
below) of the Bank.
NOW, THEREFORE, in consideration of
the promises and the mutual agreements herein contained, the Bank
and the Executive hereby agree as follows:
1.
Definitions
.
(a)
“
Bank ” shall mean the Federal Home Loan Bank of Boston
and any other entity within the definition of “Bank” in
Section 5(a) hereof.
(b)
“
Cause ” shall mean (i) the continued failure of
the Executive to perform his duties with the Bank (other than any
such failure resulting from disability (within the meaning of the
Bank’s long-term disability plan), after a demand for
performance, pursuant to a resolution of the Bank’s Board of
Directors, is delivered to the Executive by the Chair of the Board
of Directors of the Bank, which specifically identifies the manner
in which the Executive has not performed his duties; (ii) the
personal dishonesty, incompetence, willful misconduct, gross
negligence, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, or willful violation
of any law, rule or regulation (other than routine traffic
violations or similar offenses); or (iii) the removal of the
Executive for cause by the Federal Housing Finance Agency or any
successor thereto (the “ Finance Agency ”)
pursuant to 12 U.S.C. 1422b(a)(2) or regulations promulgated
thereunder, any successor or similar statute to 12 U.S.C.
1422b(a)(2) or regulations promulgated thereunder.
(c)
“
Covered Termination ” shall have the meaning set forth
in Section 2(a).
(d)
“
Covered Termination Period ” means the period
commencing with the execution by the Bank of a Reorganization
Agreement, and ending on the earlier of (i) twelve
(12) months after the effective date of the related
Reorganization or (ii) the date the Bank formally withdraws
from the related Reorganization.
(e)
“ Good
Reason ” shall mean the occurrence of any of the
following events during the Covered Termination Period:
(i)
(A) a
material diminution in the Executive’s base compensation as
in effect immediately prior to the beginning of the period or as
the same may
be increased
from time to time thereafter or (B) a material diminution in
the Executive’s authority, duties or responsibilities as in
effect immediately prior to the beginning of the
period;
(ii)
any material
breach of this Agreement by the Bank; or
(iii)
any change in the
geographic location of the Bank or any successor entity to the Bank
by more than fifty (50) miles.
(f)
“
Reorganization ” of the Bank shall mean the occurrence
at any time of any of the following events:
(i)
The Bank is
merged or consolidated with or reorganized into or with another
bank or other entity and the Bank is not the surviving
entity;
(ii)
The Bank sells or
transfers all, or substantially all of its business and/or assets
to another entity; or
(iii)
The liquidation
or dissolution of the Bank;
provided, that the term
“Reorganization” shall include any Reorganization that
is mandated by federal statute, rule, regulation or directive and
shall exclude any Reorganization that is the result of Finance
Agency supervisory guidance or enforcement action taken pursuant to
12 C.F.R. Part 908 or any successor regulation
thereto.
(g)
“
Reorganization Agreement ” means a definitive
agreement, the full performance of which would result in a
Reorganization of the Bank.
(h)
“
Release Agreement ” shall mean the Bank’s
standard release of claims agreement executed by the Bank and the
Executive under which the Executive releases the Bank from any and
all claims based on losses, damages, liabilities, actions, suits,
costs, expenses, disbursements, taxes and penalties of any kind and
nature whatsoever arising due to the Executive’s employment
with the Bank.
(i)
“
Termination of Employment ” shall mean means the
severing of employment with the Bank, voluntarily or involuntarily,
for any reason whatsoever, determined in accordance with the
provisions of Internal Revenue Code Section 409A.
2.
Covered Termination
.
(a)
Covered
Termination . For purposes of this
Agreement, a “Covered Termination” means a Termination
of Employment during the Covered Termination Period:
(i)
By the Executive
for a Good Reason that is not remedied within the cure periods
described in this Section 2(a); or
2
(ii)
By the Bank, or
by its successor in a Reorganization, without Cause;
provided, that
in the case of a Termination of Employment by the Executive for
Good Reason, the Executive must first provide written notice to the
Bank within ninety (90) days of the initial existence of Good
Reason describing the existence of such Good Reason, and the Bank
shall thereafter have the right to remedy the Good Reason within
thirty (30) days of the Bank’s receipt of such written
notice. If the Bank remedies the condition within such thirty
(30) day cure period, then no Good Reason shall be deemed to
exist with respect to such condition. If the Bank does not remedy
the condition within such thirty (30) day cure period, then
the Executive may deliver a Notice of Termination for Good Reason
at any time within sixty (60) days following the expiration of
such cure period.
(b)
Non-Covered
Termination . For the avoidance of doubt,
none of the following events shall result in any payment to the
Executive for a Covered Termination under
Section 3(a):
(i)
A Termination of
Employment by the Executive without Good Reason;
(ii)
A Termination of
Employment for Cause by the Bank or its successor in a
Reorganization;
(iii)
A Termination of
Employment without Cause that does not occur within the
Covered Termination Period; or
(iv)
A Termination of
Employment due to death, disability (within the meaning of the
Bank’s long-term disability plan) or a voluntary
retirement.
3.
Payment for Covered
Termination .
(a)
In the event of a
Covered Termination, subject to the Executive’s execution of
a Release Agreement no later than twenty-one (21) days (or, at the
discretion of the Bank, up to forty-five (45) days) after the
Executive’s Termination of Employment and non-revocation of
such Release Agreement, the Bank shall pay the Executive an amount
equal to one (1) times the annualized base salary of the
Executive at the time of the Executive’s Termination of
Employment with the Bank (or, if higher, upon an ev
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