BankBoston awards performance-based stock options to 22,000 employees world-wide; Award supports managing for value strategy; Is key component of new comprehensive Rewards program.

BOSTON--(BUSINESS WIRE)--Sept. 27, 1996--BankBoston CEO Chad Gifford announced today an employee stock option award whereby 22,000 full and part-time BankBoston employees worldwide will be granted stock options. The option will be granted at BankBoston's closing stock price on October 1 to employees who have not previously received a stock award in 1996. The number of options awarded to each employee will be either 10 percent of their base pay dividend by October 1's closing stock price or 100 shares (50 shares for part-time employees) -- whichever is greater.

The performance-based grant allows BankBoston employees to exercise 75 percent of their options after the corporation's stock price reaches either $60 or $65 per share -- depending on October 1's closing price. (If the corporation's closing per share price on October 1 is less than $55, employees will be able to exercise their options after the price reaches $60. If the October 1 price is equal to or greater than $55, options may be exercised only after the price reaches $65.) The remaining 25 percent of the options may be exercised after the stock price moves $10 a share higher. Employees may also exercise their options after five years -- even if share price targets are not reached.

"I can think of no better to promote our managing-for-value strategy than to reward and incent employees with performance-based stock-options," said Gifford. "On the one hand, this is a way to say `thanks' to all of our employees, each of whom has helped us to produce record results for our shareholders. But it's also a way to ensure that this momentum continues, as employees feel a sense of common ownership and purpose, and have their interests aligned with shareholders."

While stock-based incentives are a common form of compensation for upper management, few companies have implemented such programs for all of their employees. BankBoston is one of only a handful of banks nationwide with such a program.

Stock options for employees are a key feature of Rewards, BankBoston's new approach to benefits, compensation and recognition for its employees in the United States. Over the next couple of weeks, bank employees will hear about other features of the new Rewards program. Highlights include more 401(k) investment choices and the ability to choose from a menu of flexible benefits; dental coverage; increased disability income protection; and the right to waive certain coverage in exchange for extra pay.

BankBoston Director of Human Resources Helen Drinan said that the Rewards program was packaged to respond to feedback from employees who have been seeking more flexibility and choice in the benefits available to them. "In asking our employees to exceed the expectations of our customers, we know we're asking a lot," said Drinan. "But everything we know about our business tells us that if we take good care of our employees, they'll take good care of our customers."

BankBoston (NYSE:BKB), with assets of $62.4 billion as of June 30, 1996, was founded in 1784 and is the 15th-largest bank holding company in the United States. A focused financial institution, BankBoston is engaged primarily in commercial and consumer banking in southern New England, providing financing to selected corporations nationally and internationally, and full-service banking in key Latin American markets. New England's only global bank, the corporation and its subsidiaries operate through a network of 650 offices in the United States and through more than 100 offices in 23 countries in Latin America, Europe and Asia, the third-largest overseas network of any U.S. bank. The corporation's common and preferred stocks are listed on the New York and Boston stock exchanges.

CONTACT: BankBoston

Karen Schwartzman, 617/434-7594