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Exhibit 10.1
EXECUTION VERSION
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement (the "
Agreement ") shall be effective as of December 31,
2008, by and between Boston Private Financial Holdings, Inc., a
duly organized Massachusetts corporation with its principal place
of business at Ten Post Office Square, Boston, Massachusetts (the "
Company "), and Timothy L. Vaill of Andover, Massachusetts
(the " Executive "), hereinafter collectively the "
Parties ."
WHEREAS, the operations of the Company and its affiliates are a
complex matter requiring leadership and direction in a variety of
areas, including financial, strategic planning, regulatory,
personnel development, community relations and others;
WHEREAS, the Executive is currently serving as Chairman and
Chief Executive Officer of the Company pursuant to the Executive
Employment Agreement, dated as of January 1, 2004 by and
between the Parties (the " Prior Agreement ")
WHEREAS, the Executive is possessed of certain experience and
expertise that qualify him to provide the leadership and direction
required by the Company and its affiliates and to play a material
role in ensuring a timely and successful transition of executive
responsibilities; and
WHEREAS, the Company desires to retain the Executive subject to
the terms and conditions hereinafter set forth (which shall amend
and restate the Prior Agreement), and the Executive wishes to
accept such continuing employment.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual promises, terms, provisions and conditions set forth in
this Agreement, the Parties hereby agree as follows:
1. Employment . Subject to the terms and conditions set
forth in this Agreement, the Company agrees to continue to employ
the Executive, and the Executive agrees to continue to be employed
by the Company, for the Term set forth in Paragraph 2 below, in the
positions and with the duties and responsibilities set forth in
Paragraph 3 below.
2. Term . This Agreement shall become effective as of the
date first set forth above (the " Effective Date "), and, as
of that date, shall replace any preceding agreement with respect to
periods of employment on and after the Effective Date. Subject to
earlier termination as hereinafter provided, the Executive’s
employment hereunder shall commence on the Effective Date hereof
and continue through the close of business on the earlier of
(i) December 31, 2010, and (ii) the date that is 90
days after the designation by the Board of Directors of the Company
(the " Board ") of an individual to succeed the Executive as
Chief Executive Officer of the Company (the " Term "),
provided, however, that in no event shall the Term end prior to
December 31, 2009. For purposes of the preceding sentence the
Board’s designation shall be effective on the date notice of
such designation is issued to the Executive in writing by the
Board’s lead director, acting within authorization from the
Board.
EXECUTION VERSION
3. Capacity and Performance .
3.1 The Executive shall be employed during the Term as Chairman
and Chief Executive Officer of the Company, and shall perform such
duties and responsibilities on behalf of the Company as may
reasonably be assigned to him by the Board consistent with
Executive’s position, it being the express understanding of
the Parties that a primary duty and responsibility of the Executive
shall be to assist the Board in securing the engagement during the
Term of a qualified individual (as determined by the Board in its
sole discretion) to succeed the Executive as Chief Executive
Officer of the Company. As Chairman and Chief Executive Officer,
the Executive shall exercise general supervision over the property,
business and overall affairs of the Company and its subsidiaries
and affiliates. The Executive shall report and be responsible to
the Board.
3.2 During the Term, and excluding any periods of vacation and
leave to which the Executive is entitled, the Executive agrees to
devote substantially all of his working time and best efforts to
the performance of his duties and responsibilities under this
Agreement; provided, however, it shall not be a violation of this
Agreement for the Executive (i) to serve on the boards of
directors of a reasonable number of other corporations, trade
associations and/or charitable organizations, (ii) to engage
in charitable and community affairs, and/or (iii) to manage
his personal investments and affairs, so long as such activities do
not materially interfere with the proper performance of his duties
and responsibilities as Chairman and Chief Executive Officer of the
Company. It is expressly agreed and understood that, to the extent
that any such activities have been conducted by the Executive prior
to a Change in Control (as defined in Paragraph 6.4 below), the
continued conduct of such activities following a Change in Control
shall not be deemed to interfere materially with the performance of
the Executive’s duties and responsibilities to the
Company.
3.3 If the Executive is suspended and/or temporarily prohibited
from participating in the affairs of the Company by a notice served
by state or federal banking regulators, the obligations of the
Company hereunder shall be suspended as of the date of service,
unless stayed by appropriate legal proceedings. If the charges in
the notice are dismissed without a finding or acknowledgment of
wrongdoing on the part of the Executive, the Company shall pay to
the Executive all of the compensation under Paragraph 4 withheld
while such obligations were suspended, and shall promptly reinstate
going forward all of the obligations that had been so
suspended.
4. Compensation . For all services rendered by the
Executive in any capacity required hereunder during the Term,
including, without limitation, service as an executive, officer,
director, or member of any committee of the Company, or any
subsidiary or affiliate thereof, the Executive shall be compensated
as set forth below.
4.1 Base Salary . The Executive shall be paid a base
salary at an annual rate of $650,000, payable in accordance with
the regular payroll practices of the Company and subject to
increase from time to time by the Board, in its sole discretion.
Such base salary, as from time to time increased, is hereinafter
referred to as " Base Salary ." The Executive’s Base
Salary shall be reviewed not later than December 31, 2009 for
increase, in the sole discretion of the Board. Base Salary shall in
no event be subject to decrease from its then-existing level during
the Term.
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EXECUTION VERSION
4.2 Bonus . The Executive shall
participate in the Annual Executive Incentive Plan (or a
substantially similar or successor plan), pursuant to which the
Executive shall be considered annually for an incentive bonus based
on an agreed percentage of Base Salary (" Bonus "). The
amount of the annual Bonus shall be determined by the Board, based
on its assessment of the Executive’s performance and that of
the Company against appropriate and reasonably achievable goals
established by the Compensation Committee of the Board after
consultation with the Executive, which Bonus, if any, shall be
payable between January 1 and March 15 of the year
following the fiscal year for which the Bonus was earned. Any Bonus
or incentive compensation paid to the Executive shall be in
addition to Base Salary. In the event that, pursuant to Paragraph 2
hereof, the Term expires between December 31, 2009 and
December 31, 2010, the Executive shall, subject to the
requirements of this Paragraph 4.2, be paid a pro-rata Bonus for
the fiscal year ending December 31, 2010, which Bonus shall be
payable between January 1, 2011 and March 15,
2011.
4.3 Long-Term Incentive Compensation . The Executive
shall participate in the 2004 Stock and Incentive (or any successor
plan) (the " Stock Plan ") and all other similar plans that
the Board may adopt, or has adopted, from time to time on such
terms and conditions as the Board shall determine.
5. Benefits .
5.1 Employee Benefit Programs . During the Term, and
subject to any contribution therefor generally required of
executives of the Company, the Executive shall be entitled to
participate in any and all employee pension and welfare benefit
plans, programs and arrangements of the Company, as in effect from
time to time, to the same extent that other senior executives of
the Company are eligible to so participate. Such participation
shall be subject to the terms of the governing plan documents and
generally applicable Company policies.
5.2 Supplemental Executive Retirement Plan . The
Supplemental Executive Retirement Agreement, as amended and
restated effective as of the Effective Date (and as may be further
amended from time to time), shall continue in effect until amended
or terminated by agreement of the parties (as amended, the "
SERP ").
5.3 Fringe Benefits . During the Term, the Executive
shall be eligible to participate in any and all of the
Company’s executive fringe benefits, subject to and in
accordance with the terms and conditions of such arrangements as
are in effect from time to time for the senior executives of the
Company. Notwithstanding any changes to the fringe benefits
available to senior executives of the Company, the Executive shall
be entitled during the Term to either direct payment or
reimbursement (at the Executive’s option) of reasonable costs
and expenses in an amount not to exceed $100,000 annually for
(i) an annual physical examination and any medical testing
related thereto, (ii) annual tax planning and tax return
preparation services, (iii) periodic estate planning and will
preparation services, and (iv) personal legal services
approved by the Board and arising from Company-related activities.
Any reimbursements with respect to the services described above
shall be made by the Company as soon as is reasonably practicable
and in no event later than December 31 of the calendar year
following the year in which such expenses were incurred. The
payment for tax return preparation and legal services, as provided
hereinabove, shall be extended for the benefit of the
Executive’s estate for a period of one year following the
Executive’s death during the Term.
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EXECUTION VERSION
5.4 Vacation . During the Term, the
Executive shall be entitled to (i) four (4) weeks of paid
vacation during the course of each 12-month period of employment,
and (ii) a pro-rata period of vacation during any shorter
period of employment. Vacation shall be taken at such times and
intervals as shall be determined by the Executive, in his
reasonable judgment, subject to the operating and business needs of
the Company.
5.5 Insurance .
(a) The Company shall purchase and maintain in effect by prompt
payment of the premiums due thereon a policy (1) covering
officers’ and directors’ liability in compliance with
applicable federal banking rules and regulations, and
(2) fiduciary liability relating to the Employee Retirement
Income Security Act of 1974, as amended.
(b) In addition to the insurance coverage provided to employees
of the Company generally, the Company shall provide to the
Executive Company-paid term life insurance with a gross death
benefit of no less than $2,000,000.
(c) The Company shall pay to Executive annually on
January 1 a bonus, grossed up for applicable taxes, in such
amounts as are necessary to pay the Executive’s premium for
such year for a split dollar life insurance policy issued by Mass
Mutual on March 22, 1996 and owned by the Vaill Insurance
Trust 1995-B.P.B.T.C.-trustee. Upon termination of employment, the
Company shall have no further responsibility for premium
payments.
5.6 Expense Reimbursement . During the Term, the
Executive shall be entitled to receive reimbursement for all
reasonable out-of-pocket expenses incurred by him in performing
services hereunder, in accordance with the prevailing policies and
procedures established by the Company for its senior executive
officers.
6. Termination of Employment . Notwithstanding the
provisions of Paragraph 2 hereof, if the Executive’s
employment hereunder shall terminate prior to the expiration of the
Term under the following circumstances, the following consequences
shall result:
6.1 Death . In the event of the Executive’s death
during the Term, the Executive’s employment hereunder shall
automatically terminate. In such event, the Company shall promptly
pay to the Executive’s designated beneficiary or, if no
beneficiary has been designated by the Executive, to his estate or
other legal representative:
(a) A lump-sum payment equal to 12 months of the
Executive’s Base Salary, payable within 30 days following the
Executive’s death;
(b) pro-rata Bonus for the fiscal year of the Executive’s
death, payable when such Bonus would otherwise be paid to the
Executive pursuant to Paragraph 4.2;
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EXECUTION VERSION
(c) rights to exercise stock options, as provided
under the terms of the Executive’s stock option grants and
agreements with the Company;
(d) any rights, benefits and/or coverages available for the
benefit of deceased participants under the terms of the plans,
programs and arrangements for the Executive set forth in Paragraphs
4.3, 5.1, 5.2, 5.3 and 5.5 hereof; and
(e) payment of any accrued but unpaid Base Salary, unused
vacation, unreimbursed business expenses, and unpaid Bonus for the
prior Performance Year, together with any other vested rights and
entitlements remaining unpaid at the Executive’s death,
payable within 30 days following the Executive’s death.
6.2 Disability . In the event the Executive’s
Separation from Service (defined below) with the Company occurs for
reason of disability, the Company shall promptly pay to the
Executive:
(a) Base Salary until the later of the end of the Term or the
commencement of payments under a long-term disability insurance
policy of the Company replacing at least sixty-six and two-thirds
percent (66 2 / 3 %) of the
Executive’s Base Salary as in effect immediately prior to the
termination of the Executive’s employment;
(b) pro-rata Bonus for the fiscal year in which
Executive’s employment terminated, payable when such Bonus
would otherwise be paid to the Executive pursuant to Paragraph
4.2;
(c) rights to exercise stock options, as provided under the
terms of the Executive’s stock option grants and agreements
with the Company;
(d) any rights, benefits and/or coverages available to former
employees who separate from service based on disability under the
terms of the plans, programs and arrangements for the Executive set
forth in Paragraphs 4.3, 5.1, 5.2, 5.3 and 5.5 hereof; and
(e) payment of any accrued but unpaid Base Salary, unused
vacation, unreimbursed business expenses, and unpaid Bonus for the
prior performance year, together with any other vested rights and
entitlements remaining unpaid at the Executive’s termination
of employment, payable within 30 days following the
Executive’s Separation from Service. In the event such 30-day
period extends over two tax years, the Executive shall not be
permitted, directly or indirectly, to designate the tax year in
which such payment is made.
For purposes of this Agreement, " disability " shall mean
the Executive’s incapacity due to a physical or mental
illness which has caused the Executive to be unable to carry out
the essential functions of his position at the Company, either with
or without reasonable accommodation, for 90 days during any period
of 365 consecutive calendar days.
Disagreement regarding a determination of disability shall be
subject to the certification of a qualified medical doctor mutually
agreed to by the Company and the Executive, or, in the
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EXECUTION VERSION
event of the Executive’s incapacity to
designate a doctor, the Executive’s legal representative or
guardian. In the absence of an agreement between the Company and
the Executive (or his legal proxy) in designating a doctor, each
party shall nominate a qualified medical doctor, and the two
doctors so nominated shall select a third doctor, which third
doctor shall make the conclusive determination as to the disability
of the Executive.
For purposes of this Agreement, the term " Separation from
Service " shall mean the Executive’s "separation from
service" from the Company, an affiliate of 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 l.409A-l(h).
6.3 Termination By the Company For Cause . The Company
may terminate the Executive’s employment hereunder for "
Cause ," at any time upon written notice to the Executive
setting forth in reasonable detail the nature of such Cause. The
following shall constitute Cause for termination:
(a) conviction of the Executive of, or plea of guilty or nolo
contendere by the Executive to, a felony; or
(b) willfully dishonest acts against the Company that are
materially injurious to it or any of its affiliated entities;
or
(c) gross and willful misconduct which causes or is likely to
cause substantial financial loss to the Company or any of its
affiliated entities, or to cause significant damage to the business
reputation of the Company or any of its affiliated entities; or
(d) willful and persistent misconduct constituting bad faith in
the performance of the Executive’s obligations under this
Agreement; or
(e) willful breach of fiduciary duty involving personal profit
to the Executive;
provided, however, the Executive’s employment shall not be
terminated for Cause, with the exception of the events described in
Subparagraph (a) above, unless the
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