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Exhibit
10(aa)
FLEET FINANCIAL GROUP,
INC.
DIRECTORS DEFERRED
COMPENSATION AND STOCK UNIT PLAN
(Effective December 17,
1997)
Section 1.
Purpose
Fleet Financial Group, Inc.
(the “ Company ”) has established, pursuant to
resolutions adopted on December 17, 1997, the Directors Deferred
Compensation and Stock Unit Plan (the “ Plan ”)
to assist the Company in recruiting and retaining highly qualified
directors and to strengthen the commonality of interest between
directors and shareholders by enabling eligible members of the
Board of Directors (the “ Board ”) to defer
receipt of certain amounts of compensation, as hereinafter
described. The Plan hereby amends, restates and continues all of
the existing deferred compensation agreements, arrangements and
understandings for its current non-employee directors (the “
Prior Arrangements ”), effective as of December 17,
1997. The Plan supersedes and replaces all Prior
Arrangements.
Section 2. Effective
Date
The effective date of the
Plan is December 17, 1997, except as otherwise provided herein.
Amendments to the Plan, if any, shall become effective when adopted
by the Human Resources and Planning Committee, or any successor
committee, of the Board (the “ Committee ”) in
accordance with the provisions of Section 20.
Section 3.
Definitions
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(a) |
“ Account ” shall have the meaning set forth
in Section 7. |
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(b) |
“ Annual Equity Award ” shall have the
meaning set forth in Section 8(a). |
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(c) |
“ Annual Retainer ” shall mean the amount
that a director is entitled to receive for serving as a director
for a calendar year, as determined from time to time by the
Committee. As of the effective date of this Plan, the Annual
Retainer is set at $40,000. |
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(d) |
“ Beneficiary Form ” shall have the meaning
set forth in Section 12(b). |
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(e) |
“ Board ” shall have the meaning set forth
in Section 1. |
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(f) |
“ Chairman Fees ” shall have the meaning set
forth in Section 8(d). |
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(g) |
“
Change of Control ” shall mean: (a) the acquisition,
other than from the Company, by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”)) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or
more of the then outstanding shares of common stock of the Company
(the “ Outstanding Company Common Stock ”);
provided , however , that any acquisition by the
Company or its
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subsidiaries, or any
employee benefit plan (or related trust) of the Company or its
subsidiaries, of 25% or more of the Outstanding Company Common
Stock shall not constitute a Change of Control; and further
provided , however , that any acquisition by a
corporation with respect to which, following such acquisition, more
than 50% of the then outstanding shares of common stock of such
corporation is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock
immediately prior to such acquisition in substantially the same
proportion as their ownership immediately prior to such acquisition
of the Outstanding Company Common Stock, shall not constitute a
Change of Control; or (b) individuals who, as of the date of this
Plan, constitute the Board (the “ Incumbent Board
”) cease for any reason to constitute at least a majority of
the Board, provided that any individual becoming a director
subsequent to the date of this Plan whose election, or nomination
for election by the Company’s stockholders, was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were
a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office is in
connection with an actual or threatened election contest relating
to the election of the directors of the Company (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or (c) consummation of a reorganization, merger,
consolidation, sale or other disposition of all or substantially
all of the assets of the Company (a “ Business
Combination ”), in each case, with respect to which all
or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Common Stock
immediately prior to such Business Combination do not, following
such Business Combination, beneficially own, directly or
indirectly, more than 50% of the then outstanding shares of common
stock of the corporation resulting from such a Business Combination
(including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of
the Company’s assets either directly or through one or more
subsidiaries); or (d) approval by the stockholders of the Company
of a complete liquidation or dissolution of the Company.
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(h) |
“ Committee ” shall have the meaning set
forth in Section 2. |
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(i) |
“ Common Stock ” shall mean Fleet Financial
Group, Inc. Common Stock, $.01 par value per share: |
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(j) |
“ Company ” shall have the meaning set forth
in Section 1. |
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(k) |
“ Deferral Election ” shall have the meaning
set forth in Section 8(f). |
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(l) |
“ Deferral Election Form ” shall have the
meaning set forth in Section 8(f). |
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(m) |
“ Deferred Compensation ” shall have the
meaning set forth in Section 12(b). |
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(n) |
“ Deferred Stock Units ” shall represent the
right to receive the specified number of Shares from the Company on
the date or dates specified in the applicable Distribution Election
Form. |
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(o) |
“ Delegatee ” shall have the meaning set
forth in Section 4. |
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(p) |
“ Distribution Election ” shall have the
meaning set forth in Section 8(h). |
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(q) |
“ Distribution Election Form ” shall have
the meaning set forth in Section 8(h). |
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(r) |
“ Eligible Director ” shall mean any
director of the Company who is not an officer or employee of the
Company or any subsidiary thereof. |
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(s) |
“ Fair Market Value ” shall mean, with
respect to any date, the closing price of the Common Stock as
reported on the New York Stock Exchange Composite Tape on such date
or, if such date is not a business day of the New York Stock
Exchange, the closing price of the Common Stock as reported on the
New York Stock Exchange Composite Tape on the last completed New
York Stock Exchange business day prior to such date. |
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(t) |
“ Fees ” shall mean, collectively, the
Annual Retainer, the Chairman Fees, and the Meeting
Fees. |
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(u) |
“ Fixed Rate ” shall have the meaning set
forth in Section 10(b). |
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(v) |
“ Fixed Rate Account ” shall have the
meaning set forth in Section 12. |
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(w) |
“ Mandatory Annual Retainer Amount ” shall
have the meaning set forth in Section 8(b). |
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(x) |
“ Meeting Fees ” shall have the meaning set
forth in Section 8(e). |
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(y) |
“ Phantom Stock Account ” shall have the
meaning set forth in Section 9(b). |
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(z) |
“ Phantom Stock Rate ” shall have the
meaning set forth in Section 10(c). |
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(aa) |
“ Plan ” shall have the meaning set forth in
Section 1. |
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(bb) |
“ Plan Year ” shall mean January 1 through
December 31. |
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(cc) |
“ Prior Arrangements ” shall have the
meaning set forth in Section 1. |
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(dd) |
“ Retainer Balance ” shall have the meaning
set forth in Section 8(c). |
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(ee) |
“ Retirement Plans ” shall mean all
retirement or other pension plans of the Company or any subsidiary
thereof in which any Eligible Director is or was a participant and
under which such Eligible Director is or was entitled to receive
any benefit. |
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(ff) |
“ Shares ” shall have the meaning set forth
in Section 6. |
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(gg) |
“ Stock Unit Account ” shall have the
meaning set forth in Section 12. |
Section 4. Administration
and Participant Acknowledgment
The Plan will be administered
by the Committee, whose construction and interpretation of the
terms and provisions of the Plan shall be final and conclusive. No
member of the Committee who is an Eligible Director may vote or
otherwise participate in any decision or act with respect to a
matter relating solely to himself or herself (or to his or her
beneficiaries). Each Eligible Director, by participating in the
Plan, thereby acknowledges that he or she consents to the terms of
the Plan.
The Committee, in its sole
discretion, may delegate by written resolution certain of its
duties, responsibilities and powers (including, without limitation,
its power to amend the Plan) to a senior officer or officers of the
Company, each acting singly (each a “ Delegatee
”). For purposes of the Plan, any action taken by any
Delegatee of the Committee will be considered to have been taken by
the Committee. No Committee member or Delegatee shall be liable for
any action or determination under the Plan made in good faith. The
Company agrees to indemnify and to defend to the fullest possible
extent permitted by law any member of the Committee and any
Delegatee (including any person who formerly served as a member of
the Committee or as a Delegatee) against all liabilities, damages,
costs and expenses (including attorneys’ fees and amounts
paid in settlement of any claims approved by the Company)
occasioned by any act or omission to act in connection with the
Plan, if such act or omission to act is or was made in good
faith.
Section 5.
Eligibility
Any Eligible Director is
eligible to participate in the Plan.
Section 6. Stock Subject
to the Plan
Shares issuable under the
Plan shall be shares of the Company’s Common Stock, which are
held in the Company’s treasury (the “ Shares
”). The Company will maintain a sufficient number of Shares
of Common Stock in its treasury to satisfy its obligations
hereunder.
Section 7. Deferred
Compensation Account; Statement of Account
The Committee will establish
and maintain a separate Account for each Eligible Director
reflecting the amounts due to such Eligible Director under the
Plan. Each Account will consist of up to three subaccounts, the
Stock Unit Account, the Fixed Rate Account, and the Phantom Stock
Account (if any) (collectively, the “ Account
”), to reflect the value of the measuring investments
selected by such Eligible Director pursuant to the Plan. From time
to time, and at least quarterly, the Committee will adjust each
Eligible Director’s Account (i) to credit the amount which
the Eligible Director has elected to defer under the Plan, and (ii)
to reflect increases or decreases in the value of the Account as a
result of the measuring investments described under Section 10. An
Eligible Director’s Account will continue to be adjusted
under this Section 7 until the entire amount has been paid to the
Eligible Director or his or her
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beneficiary. An Eligible
Director’s Account will also be adjusted to reflect benefit
payments and withdrawals made in accordance with the terms of the
Plan. Such adjustments will be made at such time and in such manner
as the Committee shall determine. Statements will be sent to each
Eligible Director promptly following the close of each calendar
quarter as to the estimated value of his or her Account as of the
end of the preceding calendar quarter.
Section 8. Award of
Deferred Stock Units and Deferral Elections
Commencing April 15, 1998,
each Eligible Director shall be eligible to defer certain portions
of his or her compensation (as described in this Section 8) in the
form of Deferred Stock Units or into a Fixed Rate Account. For the
period from December 17, 1997 through (but not including) April 15,
1998, any Fees deferred pursuant to the Plan must be deferred into
a Fixed Rate Account or into a Phantom Stock Account (or a
combination thereof) in accordance with Section 10.
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(a) |
Annual Equity Award . Each Eligible Director shall
receive, on the date of the annual meeting in each year (or such
alternative date as the Committee may approve), Deferred Stock
Units with a value upon grant equal to 50% of the then current
Annual Retainer (the “ Annual Equity Award ”).
The Annual Equity Award is in addition to the Mandatory Annual
Retainer Amount described in Section 8(b) below. |
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(b) |
Mandatory Annual Retainer Amount . Commencing April 15,
1998 with respect to the Annual Retainer payable for the remainder
of 1998 and in each year thereafter with respect to the Annual
Retainer for such year, each Eligible Director shall receive 25% of
his or her Annual Retainer in the form of Deferred Stock Units (the
“ Mandatory Annual Retainer Amount ”) as
provided hereunder. |
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(c) |
Elective Annual Retainer Amount . Commencing April 15,
1998 with respect to the remaining 75% of his or her Annual
Retainer (the “ Retainer Balance ”) payable for
the remainder of 1998 and in each year thereafter with respect to
the Retainer Balance for such year, each Eligible Director may
elect to defer all or a portion of the Retainer Balance in the form
of Deferred Stock Units, into a Fixed Rate Account, or into a
combination thereof, by so specifying on the Deferral Election
Form. |
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(d) |
Elective Chairman Fees Amount . Commencing April 15,
1998 with respect to the fees that he or she receives for serving
as a chairman or co-chairman of a committee of the Board (the
“ Chairman Fees ”) for the remainder of 1998 and
in each year thereafter with respect to the Chairman Fees for such
year, each Eligible Director may elect to defer some or all of the
Chairman Fees in the form of Deferred Stock Units, into a Fixed
Rate Account, or into a combination thereof, by so specifying on
the Deferral Election Form. |
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(e) |
Elective
Meeting Fees Amount . Commencing April 15, 1998 with respect to
the fees that he or she receives for attending meetings of the
Board (the “ Meeting Fees ”), which term shall
include any fees received for attending meetings of one
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or more committees of the
Board, for the remainder of 1998 and in each year thereafter with
respect to the Meeting Fees for such year, each Eligible Director
may elect to defer some or all of the Meeting Fees in the form of
Deferred Stock Units, into a Fixed Rate Account, or into a
combination thereof, by so specifying on the Deferral Election
Form.
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(f) |
Deferral Election . Eligible Directors must complete and
execute an election to defer receipt of Fees (a “ Deferral
Election ”) in the form required by the Committee from
time to time (the “ Deferral Election Form ”)
and deliver it to the Secretary of the Company on or before
December 31 of the year prior to the year for which such Deferral
Election will take effect (or prior to April 15, 1998 solely with
respect to Deferral Elections for the remainder of 1998). The
Deferral Election Form shall specify the portion of the Fees to be
deferred and the subaccount(s) of the Account in which such
deferred Fees will be held. A Deferral Election once made is
irrevocable and may not be changed with respect to the Fees earned
in such year and the choice of subaccount(s) of the Account into
which such deferred Fees will be held. Future Deferral Elections
with respect to Fees to be earned in future years may specify a
different choice of subaccount(s) into which such future
years’ deferred Fees will be held but any such change in an
Eligible Director’s Deferral Election will not effect such
Eligible Director’s previously deferred Fees. |
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(g) |
Deferral Election During a Plan Year . Any Eligible
Director who becomes an Eligible Director during a Plan Year may
make a Deferral Election for the remainder of the Plan Year within
thirty (30) days after taking office in which case the Deferral
Election will be effective for the remainder of the Plan Year. A
nominee for director may make a Deferral Election prior to his or
her election. |
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(h) |
Distribution Election . Eligible Directors must complete
and execute an election form to choose the method of distribution
of the Deferred Compensation held in such Eligible Director’s
Account (the “ Distribution Election ”) in the
form required by the Committee from time to time (the “
Distribution Election Form ”) and deliver it to the
Secretary of the Company within thirty (30) days after becoming an
Eligible Director (or prior to April 15, 1998 for directors who
became Eligible Directors prior to April 15, 1998). The
Distribution Election Form shall specify the method of distributing
such Eligible Director’s Deferred Compensation held in such
Eligible Director’s Account. An Eligible Director may change
his or her Distribution Election at any time up to 12 months prior
to the date of his or her cessation of service as a director of the
Company (including service as a director of any subsidiary of the
Company) by properly completing and delivering to the Secretary of
the Company a new Distribution Election Form bearing a later date,
provided , however , that any Distribution Election
made by an Eligible Director in the 12-month period prior to his or
her cessation of service as a director of the Company (including
service as a director of any subsidiary of the Company) is not
valid and will not be honored. In the event an Eligible Director
has not made a valid Distribution Election in accordance with this
Section 8(h), such Eligible Director’s Account will be fully
distributed in a lump sum in
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January of the year
following the year in such Eligible Director ceases to
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