SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
FOR XXXXXXX X. XXXXXXX
This Supplemental Executive Retirement Agreement (the "Agreement") is
entered into by and between East Boston Savings Bank, a corporation organized
and existing under the laws of the Commonwealth of Massachusetts (the "Bank" or
"Employer") and Xxxxxxx X. Xxxxxxx (the "Executive"), effective as of January
20, 2009 (the "Effective Time").
PREAMBLE
The purpose of this Agreement is to provide the Executive with supplemental
retirement benefits in order to provide her with a reasonable level of
retirement income which will assist her in maintaining an appropriate standard
of living in retirement. An integral part of the Agreement is to encourage and
induce the Executive to remain as a full-time executive officer of the Bank
until she attains the retirement age of sixty-five (65) and to recognize her
service to the Bank. The parties intend that this Agreement shall at all times
be characterized as a "top hat" plan of deferred compensation maintained for the
Executive who is a highly compensated employee, as described under Sections
201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act
of 1974 (the "ERISA"), and the Agreement shall at all times satisfy Section 409A
of the Internal Revenue Code of 1986, as amended (the "Code"), and as enacted
under the American Jobs Creation Act of 2004. The provisions of the Agreement
shall be construed to effectuate such intentions. The Agreement shall be
unfunded for tax purposes and for purposes of Title I of ERISA.
WITNESSETH:
WHEREAS, the Bank wishes to provide for the employment of the Executive as
of the Effective Time, and the Executive wishes to serve the Bank as of the
Effective Time; and
WHEREAS, in order to induce the Executive to enter the employ of the Bank,
the parties desire to enter into the SERP; and
WHEREAS, to induce the Executive to continue in the Bank's employ to age
sixty-five (65), the Bank proposes to supplement the benefits payable to the
Executive under the Bank's 401(k) plan and employee stock ownership plan;
NOW, THEREFORE, in consideration of the premises and the mutual promises of
the parties hereto, the parties agree as follows:
1. Establishment of Accumulation Account. An Accumulation Account shall be
maintained on the books of the Employer for the Executive with respect to this
Agreement. The Accumulation Account shall be utilized solely as a device for the
measurement and determination of the benefits, if any, payable to the Executive
pursuant to this Agreement.
2. Annual Credits to Accumulation Account. Each calendar year commencing
January 1, 2009 and ending the following December 31st, the Board of Directors
of the Bank shall credit the Executive's Accumulation Account with an amount
equal to $117,858, which is the amount equal to the product of (i) 1/14, times
(ii) $1,650,000. The Accumulation Account shall be credited as of each December
31st, and in the event the Executive terminates employment prior to December
31st, she will be entitled to a pro-rated contribution. The Executive may not
make any contributions under this Agreement.
3. Maximum Amount Credited to Accumulation Account. All amounts credited to
the Accumulation Account shall not exceed $1,650,000. No further additions to
the Accumulation Account will be made when, and if, the Accumulation Account
equals $1,650,000.
4. Payment upon Separation from Service.
(a) Upon a Separation from Service, the Accumulation Account shall be
paid in a single lump sum payment to the Executive on the first day of the
month following the lapse of six months after such Separation from Service.
(b) For purposes hereof, Separation from Service shall mean a
termination of the Executive's services (whether as an employee or as an
independent contractor) to the Company and the Bank for any reason other
than Disability or death. Whether a Separation from Service has occurred
shall be determined in accordance with the requirements of Section 409A of
the Code based on whether the facts and circumstances indicate that the
Company, the Bank and the Executive reasonably anticipated that no further
services would be performed after a certain date or that the level of bona
fide services the Executive would perform after such date (whether as an
employee or as an independent contractor) would permanently decrease to no
more than twenty percent (20%) of the average level of bona fide services
performed (whether as an employee or an independent contractor) over the
immediately preceding thirty-six (36) month period.
5. Payment upon death or Disability.
(a) Upon the death or Disability of the Executive, the Accumulation
Account shall be paid to the Executive, or the Executive's beneficiary in
the event of death, in a single lump sum payment on the first day of the
month following the occurrence of death or Disability.
(b) For purposes hereof, Disability shall mean an Executive (i) is
unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of
not less than twelve months; or (ii) is, by
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reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a
continuous period of not less than twelve months, receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Bank (or would have
received such benefits if the Executive was eligible to participate in such
plan). If any question shall arise as to whether during any period the
Executive is Disabled, the Executive may, and at the request of the Bank
shall, submit to the Bank a certification in reasonable detail by a
physician selected by the Bank to whom the Executive or the Executive's
guardian has no reasonable objection as to whether the Executive is so
Disabled, and such certification shall for the purposes of this Agreement
be conclusive of the issue. The physician shall be board-certified in the
area of medicine applicable to the particular disability involved. The
Executive shall cooperate with any reasonable request of the physician in
connection with such certification. If such question shall arise and the
Executive shall fail to submit such certification (unless the failure
results from matters beyond the control of the Executive), the Bank's
determination will determine the issue of whether the Executive is
Disabled.
6. Payment upon Termination of the Executive Without Cause or by the
Executive for Good Reason in connection with a Change in Control.
(a) Notwithstanding anything in the Agreement to the contrary, in the
event the Executive's employment shall be terminated by the Bank (which
termination shall constitute a Separation from Service), or its successor,
without Cause, as provided in Section 6(b), or by the Executive for Good
Reason, as provided in Section 6(c), concurrently with or within two (2)
years of a Change in Control, as defined in Section 6(d), the Executive's
Accumulation Account shall equal $1,650,000 and shall be paid in a single
lump sum payment to the Executive on the first day of the month following
the lapse of six months after such Separation from Service.
(b) Termination by the Bank without Cause. The Executive's employment
may be terminated by the Bank, or its successor, without Cause (which, for
purposes of clarification, shall not include a termination of Executive's
employment under this Agreement due to Executive's death or Disability)
upon written notice to the Executive. A determination of whether the
Executive's employment shall be terminated without Cause will be made
solely by the Executive Committee of the Board of Directors.
(c) Termination by the Executive for Good Reason. The Executive's
employment may be terminated by the Executive by written notice to the
Board of Directors within sixty (60) days following an event constituting
"Good Reason." The Executive's termination of employment shall become
effective on the thirty-first (31st) day following such notice, provided
the Bank, or its successor, has not remedied the condition giving rise to
the event of "Good Reason." For purposes of this Agreement, "Good Reason"
shall mean:
(i) a material diminution or other substantial adverse change,
not consented to by Executive, in the nature or scope of the
Executive's responsibilities and
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authorities as set forth in the employment agreement between the
Executive and the Bank;
(ii) any demotion of the Executive from her current title of
President and Chief Operating Officer;
(iii) a material reduction in the Executive's base salary except
for across-the-board reductions similarly affecting all or
substantially all officers;
(iv) involuntary relocation of the Bank's offices in which the
Executive is principally employed by more than 50 miles (10 miles in
the event of a Change in Control); or
(v) failure of the Bank to comply with material terms of this
Agreement.
(d) For purposes hereof, "Change in Control" shall mean a change in
the ownership of Meridian Interstate Bancorp, Inc. (the "Company") or the
Bank, a change in the effective control of the Company or the Bank or a
change in the ownership of a substantial portion of the assets of the
Company or the Bank, in each case as provided under Section 409A of the
Code and the regulations thereunder.
7. Accumulation Account. If the Executive has a (i) Separation from
Service, other than pursuant to Section 6 of this Agreement (ii) dies, or (iii)
becomes Disabled prior to attaining the maximum Accumulation Account balance
specified in Section 3 of this Agreement, she will be entitled to only the
Accumulation Account as determined in Section 2 of this Agreement.
8. Designation of Beneficiary. The Executive may from time to time, by
providing a written notification to the Employer, designate any person or
persons (who may be designated concurrently, contingently or successively), her
estate or any trust or trusts created by her to receive benefits which are
payable under this Agreement. Each beneficiary designation shall revoke all
prior designations and will be effective only when filed in writing with the
Employer's Compensation Committee, or any successor thereto (the "Committee").
If the Executive fails to designate a beneficiary or if a beneficiary dies
before the date of the Executive's death and no contingent beneficiary has been
designated, then the benefits which are payable as aforesaid shall be paid to
her estate. If benefits to be paid to a beneficiary commence and such
beneficiary dies before all benefits to which such beneficiary is entitled have
been paid, the remaining benefits shall be paid to the successive beneficiary or
beneficiaries designated by the Executive, if any, and if none to the estate of
such beneficiary.
9. Claims Procedure. The Executive or her designated beneficiary or
beneficiaries may make a claim for benefits under this Agreement by filing a
written request with the Committee. If a claim is wholly or partially denied,
the Committee shall
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furnish the claimant with written notice setting forth in a manner calculated to
be understood by the claimant;
(a) the specific reason or reasons for the denial;
(b) specific reference to the pertinent provisions of this Agreement
on which the denial is based;
(c) a description of any additional material or information necessary
for the claimant to perfect her claim and an explanation why such material
or information is necessary; and
(d) appropriate information as to the steps to be taken if the
claimant wishes to submit her claim for review.
Such notice shall be furnished to the claimant within ninety (90) days
after the receipt of her claim, unless special circumstances require an
extension of time for processing her claim. If an extension of time for
processing is required, the Committee shall, prior to the termination of the
initial ninety (90) day period, furnish the claimant with written notice
indicating the special circumstances requiring an extension and the date by
which the Committee expects to render its decision. In no event shall an
extension exceed a period of ninety (90) days from the end of the initial ninety
(90) day period.
A claimant may request the Committee to review a denied claim. Such request
shall be in writing and must be delivered to the Committee within sixty (60)
days after receipt by the claimant of written notification of denial of claim. A
claimant or her duly authorized representative may:
(a) review pertinent documents, and
(b) submit issues and comments in writing.
The Committee shall notify the claimant of its decision on review not later
than sixty (60) days after receipt of a request for review, unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered as soon as possible, but not later than one hundred
twenty (120) days after receipt of a request for review. If an extension of time
for review is required because of special circumstances, written notice of the
extension must be furnished to the claimant prior to the commencement of the
extension. The Committee's decision on the review shall be in writing and shall
include specific reasons for the decision, as well as specific references to the
pertinent provisions of this Agreement on which the decision is based.
10. Statement of Accumulation Account. Within 90 days after the close of
each calendar year, the Committee shall submit to the Executive a statement in
such form
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as the Committee deems desirable setting forth the balance as of the last day of
the calendar year in the Accumulation Account maintained for the Executive.
11. Withholding. To the extent required by the law in effect at the time
payment of the Accumulation Account is made, the Bank shall withhold from such
payment any taxes or other amounts required by law to be withheld.
12. Unsecured Promise. Nothing contained in this Agreement shall create or
require the Employer to create a trust of any kind to fund the benefits payable
hereunder. To the extent that the Executive or any other person acquires a right
to receive payments from the Employer, such individual shall at all times remain
an unsecured general creditor of the Employer.
13. Assignment. The right of the Executive or any other person to the
payment of benefits under this Agreement shall not be subject to alienation,
assignment, garnishment, attachment, execution or levy of any kind, and any
attempt to cause such benefits to be so subjected shall not be recognized by the
Employer.
14. Employment. Nothing contained herein shall be construed to grant the
Executive the right to be retained in the employ of the Employer or any other
rights or interests other than those specifically set forth.
15. Amendment, Suspension or Termination. This Agreement shall be binding
upon and inure to the benefit of the Employer and the Executive. The Employer
shall have the right to suspend, terminate or amend this Agreement only with the
mutual consent of the Executive; provided, however, no such suspension,
termination or amendment shall adversely affect the rights of the Executive or
any beneficiary to the funds and benefits which have accrued as of the date of
such action.
16. Successors. This Agreement shall be binding upon and inure to the
benefit of the Employer, its successors and assigns and the Executive and her
heirs, executors, administrators, and legal representatives.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
EAST BOSTON SAVINGS BANK
BY: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxx
Chief Executive Officer
EXECUTIVE
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx
This SERP is joined in by Meridian Interstate Bancorp, Inc. for purposes of
fulfilling the obligations of the Bank under the SERP.
MERIDIAN INTERSTATE BANCORP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxx
Director
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