EXHIBIT 10.3
Supplemental Retirement Income Agreement
AGREEMENT, made as of this 28th of February 1995 by and between BROOKLINE
SAVINGS BANK, a savings bank organized and existing under the laws of the
Commonwealth of Massachusetts (hereinafter referred to as the "Bank"), and
XXXXXXX X. XXXXXXX, XX. (hereinafter referred to as "Employee").
W I T N E S S E T H:
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A. Employee has been employed by the Bank in an Executive capacity for many
years and the Bank wishes to retain Employee in such capacity.
B. The Bank is willing to provide certain retirement/death/disability benefits
to Employee in addition to those that may be available to Employee under the
Bank's current retirement and pension plans (the "Current Plans").
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Definitions. For purposes hereof the following terms shall have the
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meanings ascribed to them below:
"Average Compensation" shall mean the average of the compensation, received
by the Employee in the 3 calendar years in the 10 calendar-year period prior to
the Employee's retirement which produces the highest rate of compensation.
"Beneficiary" shall mean that person designated, in the most recent writing
submitted by Employee to the Bank (the "Beneficiary Designation"), as the
Beneficiary under this Supplemental Retirement Income Agreement. In the event
that Employee dies without having so named a person surviving him as the
Beneficiary hereunder, the Beneficiary hereunder shall be the Employee's estate.
In the event the Beneficiary survives the Employee but dies before the
expiration of the Benefit Period, those persons, if any, named as alternate
beneficiaries in the Beneficiary Designation (the "Alternates") shall thereafter
be deemed to be the Beneficiary hereunder, provided however, that if the
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Alternates are deemed to be the Beneficiary hereunder but all of such Alternates
die before the expiration of the Benefit Period, the Employee's estate shall be
deemed to be the Beneficiary hereunder.
"Benefit" shall mean the Monthly Benefit or Lump-Sum Benefit, as the case
may be.
"Benefit Accruals" shall mean the aggregate accruals made by the Bank on
its books, in order to fully reflect the costs of the Normal Retirement Benefit
to be paid hereunder, based upon an assumed Retirement at age 65.
"Benefit Period" shall mean, in the case where Employee Retires prior to
death, the period commencing on the date the Employee Retires and ending on the
later to occur of (i) said Employee's death or (ii) the expiration of 240 months
from the Employee's Retirement; and, in the case where the Employee dies while
still employed by the Bank, the period commencing on the date of the Employee's
death and ending on the earlier to occur of (i) the expiration of 240 months
from the Employee's death and (ii) the date upon which Employee would have
attained (if he had survived to such date) the Life Expectancy Age.
"Board" shall mean the Board of Trustees of the Bank.
"Change of Control" shall be deemed to occur (a) if a law or regulation is
enacted, established or amended that changes the method of election of the
Bank's Trustees and/or corporators, (b) if the Bank becomes insolvent, (c) if
the Bank converts to stock form other than as a subsidiary of a successor mutual
holding company, sells a majority of its assets or enters into a transaction in
which another entity assumes a majority of the liabilities of the Bank, (d) if
the mutual holding company of the Bank converts to stock form, or (e) if a
liquidation or dissolution or merger of the Bank or the sale of all or
substantially all of the Bank's assets occurs. A "Change of Control" shall also
be deemed to occur if the Bank's Tier 1 or primary capital falls below 6%, or in
the event a mutual holding company is formed, the combined capital ratio of the
mutual holding company and the subsidiary bank falls below 6%.
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"Committee" shall mean the Bond and Salary Committee of the Bank, or such
other Committee of the Bank as the Board, from time to time, may designate to
oversee and administer the terms of this Agreement.
"Compensation" shall mean the total annual compensation which is subject to
withholding of income taxes by the Bank plus any compensation for the same year
which is to be received as part of a deferred compensation plan of the Bank.
"Early Retirement Benefit" shall mean the amount (determined as of the date
of Retirement) that would completely amortize the Benefit Accruals made through
such Retirement, assuming:
(i) such amount is to be paid each month of the Benefit Period; and
(ii) the Benefit Period will last the longest possible time.
"Life Expectancy Age" shall mean the age determined by adding to the
Employee's age at death the standard life expectancy based upon mortality tables
utilized by the Savings Bank Employees Retirement Association to calculate
pension benefits of a healthy male of the Employee's age at death, determined as
of the date of Employee's death.
"Lump-Sum Benefit" shall mean a one time payment equal to the actuarial
equivalent, on the date of such payment, of the Monthly Benefits remaining
payable hereunder. In the event of a "Change of Control" of the Bank, the
Employee, or if he is then deceased, the Beneficiary, shall have an irrevocable
right to elect to receive a lump sum payment.
"Monthly Benefit" shall mean in the case of Retirement on or after the
Employee's 65th birthday, one-twelfth (1/12) of the Normal Retirement Benefit;
and in the case of Retirement prior to Employee's 65th birthday, the Early
Retirement Benefit.
"Normal Retirement Benefit" shall mean an annual sum which is equal to
seventy (70%) of Average Compensation reduced by any distribution which the
Employee, his beneficiaries or his estate are entitled to receive from the
Savings Bank Employees Retirement Association Pension Plan derived from Bank
contributions and one-half of any Social Security benefits. If a lump sum
distribution is paid to the Employee, his beneficiaries or his estate by the
Savings Bank Employees Retirement Association Pension Plan the Normal Retirement
Benefit shall be reduced by an amount equal to a life only actuarial equivalent
of
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the lump sum distribution. All calculations of benefits or actuarial equivalents
in this agreement shall be made using the mortality tables and interest
assumptions utilized by the Savings Banks Employees Retirement Association
Pension Plan to calculate benefits and actuarial equivalents.
"Retirement" or "Retires" shall mean the termination (by Employee or by the
Bank) of Employee's employment with the Bank, whether voluntary or involuntary
and including termination due to the death or total disability of the Employee,
while employed by the Bank.
"Total Disability" or "Totally Disabled" shall mean Employee's becoming so
incapacitated (either physically or mentally) that he is unable to fulfill all
of his duties as an executive employee of the Bank. The determination of Total
Disability shall be made, in the case of Employee's voluntary Retirement, by a
physician mutually acceptable to the Employee and the Bank and in the case of
termination pursuant to Section 6 hereof, by the Committee in accordance with
Section 6.
2. Employment. Employee agrees to continue to serve the Bank, devoting
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his normal working time to the interests and activities of the Bank, in the
capacity of President or such other executive capacity as the Board from time to
time may assign to him.
3. Salary, Etc. Payments hereunder shall be supplemental and in addition
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to all other payments of salary, pension amounts or profit sharing payments made
by the Bank to or for the benefit of the Employee.
4. Supplemental Income upon Retirement. (a) Except as provided in Section
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6 hereof, commencing on the first day of the first month after Employee's
Retirement, and on the first day of each month thereafter until the expiration
of the Benefit Period, the Bank shall pay to Employee (or to the Beneficiary if
the Employee is not then living) an amount equal to the Monthly Benefit.
Alternatively, and at any time, in lieu of future Monthly Benefits due
hereunder, the Bank may elect to make a Lump-Sum Benefit payment to Employee or
the Beneficiary, as the case may be.
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(b) The Bank reserves the right to withhold from payment of Benefits
hereunder such amount of income, payroll, and other taxes as the Bank deems
advisable.
(c) Notwithstanding any provisions hereof to the contrary, if the Employee
Retires on or after his 65th birthday: (i) the Committee shall determine the
Early Retirement Benefit as of the date of such Retirement (the "Minimum
Benefit"), and (ii) if the Minimum Benefit exceeds the Monthly Benefit
calculated hereunder, then the Monthly Benefit for all purposes hereunder shall
be increased to equal said Minimum Benefit.
5. Benefits Unsecured. All Benefits hereunder shall be paid from the
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general funds of the Bank and no special or separate fund shall necessarily be
established and no other segregation of assets shall necessarily by made to
assure the payment of the Benefits. Neither the Employee nor any Beneficiary
nor their estates shall have any right title or interest whatever in or to any
investments, including any insurance policy which the Employer may take out to
aid it in meeting its obligations hereunder. To the extent that the Employee or
any Beneficiary acquires the right to receive Benefits hereunder such rights
shall be no greater than the right of an unsecured creditor of the Bank.
Notwithstanding the foregoing, nothing herein contained shall preclude the Bank
from contributing to or making Benefit payments from a Rabbi Trust.
6. Disability. In the event that, prior to the termination of the
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Employee's employment with the Bank, the Committee shall determine that the
Employee has become Totally Disabled, the Committee may terminate the Employee's
employment by duly adopting (by a vote of a majority of the entire Committee)
and recording in its minutes a resolution to that effect and mailing a copy
thereof to the Employee at his regular post office address. Such termination
shall be effective on the date of the adoption of such resolution or upon such
later
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date as may be specified therein, but only if the Employee shall be living on
such date. Such termination shall for purposes of this Agreement be deemed a
Retirement at age 65 as of the effective date of such termination.
7. Termination. (a) Notwithstanding any provisions hereof to the
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contrary, this Agreement shall terminate and be of no further force or effect in
the event that (i) the Employee is discharged by the Bank for Cause, or (ii) the
Employee breaches any of the covenants contained in Section 8 hereof (said
termination to be effective even in the event that a court should find any of
the provisions of said Section 8 to be unenforceable; it being the intention of
the parties that this Agreement shall terminate if the Employee breaches any of
the original terms of Section 8 without regard to any judicial modification
pursuant to Section 8(b) hereof).
(b) For purposes of this Agreement, a discharge shall be for Cause if the
Committee shall determine (upon the unanimous vote of the entire Committee) that
any one or more of the following has occurred:
(i) The Employee shall have committed fraud, embezzlement,
misappropriation or breach of fiduciary duty against the Bank or against
any customer or depositor thereof, or shall have committed any such action
against any other person or entity and such action materially and adversely
reflects upon the business affairs or reputation of the Bank or upon the
Employee's ability to perform his duties hereunder; or
(ii) The Employee shall have been convicted by a court of competent
jurisdiction of, or pleaded guilty or nolo contendere to, any crime
involving moral turpitude;
(iii) The Employee shall have (A) materially failed to perform or
neglected his duties as President of the Bank on a regular basis or (B)
refused to carry out the duties assigned to him by the Board in accordance
with Section 2 hereof.
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8. Non-Competition. Etc. (a) Employee hereby agrees that he for a period
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of 5 years from the date of Retirement will not directly or indirectly:
(i) as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, or in any other
capacity whatsoever (other than as the holder of not more than one percent
(1%) of the total outstanding stock of a publicly held company), anywhere
in or within 75 miles of Brookline, Massachusetts, engage in the banking
business;
(ii) recruit, solicit or induce, or attempt to induce, any employee
or employees of the Bank to terminate their employment with, or otherwise
cease their relationship with, the Bank; or
(iii) solicit, divert or take away, or attempt to divert or to take
away, the business or patronage of any of the depositors, borrowers, or
customers of the Bank.
(b) If any restriction set forth in Section 8(a) is found by any court of
competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time; range of activities or geographic area as to which it may be
enforceable.
(c) The restrictions contained in this Section 8 are necessary for the
protection of the business and goodwill of the Bank and are considered by
Employee to be reasonable for such purpose. Employee acknowledges, understands
and agrees that (i) the Bank operates a banking business in Brookline,
Massachusetts and its vicinity, and therefore the geographic coverage of the
restrictions contained herein are necessary for the protection of the Bank and
are reasonable and (ii) Employee's experience and capabilities are such that the
provisions of this Section 8 will not prevent Employee from earning a
livelihood.
9. Other Benefits. Nothing contained herein shall be deemed to exclude
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the Employee from any supplemental compensation, bonus, pension, insurance,
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severance pay or other benefit (including payments under the Current Plans) to
which otherwise he might be or might become entitled as an employee of the Bank.
10. The Supplemental Retirement Income Agreement entered into by the
Employee and the Bank on December 20, 1990 shall become null and void upon
execution of this agreement by the parties.
11. Additional Provisions. (a) This Agreement is a personal agreement and
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the rights and interests hereunder (except those of the Bank) may not be sold,
transferred, assigned, pledged or hypothecated. Benefits hereunder are not
subject to alienation, anticipation or assignment by Employee or any Beneficiary
and are not subject to being attached or reached and applied by any creditor.
This Agreement shall be binding on the heirs, executors and administrators of
the Employee and on the successors and assigns of the Bank. During the
Employee's lifetime the parties hereto by mutual agreement may amend, modify or
rescind this Agreement without the consent of any other person.
(b) This Agreement is intended to be unfunded and entered into by the Bank
primarily for the purpose of providing supplemental retirement income for the
Employee as one of a select group of management or highly compensated employees
within the meaning of Section 201(2) of the Employee Retirement Income Security
Act of 1974 as amended ("ERISA"). Benefits are intended not to be taxable to
Employee under the Internal Revenue Code of 1986, as amended (the "Code") until
paid. This Agreement shall be construed and interpreted in a manner consistent
with the foregoing intentions.
(c) This Agreement shall not constitute an express or implied contract of
employment between the Bank and the Employee.
12. Arbitration. Any controversy or claim arising out of or relating to
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this Agreement or the breach thereof shall be settled by arbitration in the Town
of Brookline, Massachusetts in accordance with the rules then obtaining of the
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American Arbitration Association, and a judgment upon the award may be entered
in any court having jurisdiction thereof.
13. Governing Law. This Agreement shall be governed by the laws of the
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Commonwealth of Massachusetts.
BROOKLINE SAVINGS BANK
BY: /s/ Xxxxxxxx Xxxxx, Xx.
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For Bond and Salary Committee
/s/ Xxxxxxx X. Xxxxxxx, Xx.
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Employee
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