Amended and Restated Supplemental Executive Retirement Agreement Claire S. Bean
Table of Contents
PART 1. DEFINITIONS |
1 | |||
1.1. Actuarial Equivalent |
1 | |||
1.2. Agreed-Upon Methodologies |
1 | |||
1.3. Annual Annuity Equivalent |
2 | |||
1.4. Beneficiary |
2 | |||
1.5. Calendar Year |
2 | |||
1.6. Change in Control |
2 | |||
1.7. Code |
2 | |||
1.8. Compensation |
2 | |||
1.9. Disabled and Disability |
3 | |||
1.10. Effective Date |
3 | |||
1.11. Employer |
3 | |||
1.12. Employment Agreement |
3 | |||
1.13. Final Average Compensation |
3 | |||
1.14. Good Reason |
3 | |||
1.15. Insurance Policy |
3 | |||
1.16. Normal Retirement Age |
3 | |||
1.17. Payment Date |
3 | |||
1.18. Retirement Benefit |
3 | |||
1.19. SBERA |
4 | |||
1.20. Separation from Service |
4 | |||
1.21. Specially-Defined Cause |
5 | |||
1.22. Trustee |
5 | |||
1.23. Vested Portion |
5 | |||
PART 2. BENEFIT AND RELATED MATTERS |
5 | |||
2.1. Timing and Calculation of Payment of Benefit |
5 | |||
2.2. Delay in Certain Payments as Required by Section 409A |
5 | |||
2.3. Rabbi Trust |
5 | |||
2.4. Disability |
6 | |||
2.5. Termination without Specially-Defined Cause or for Good Reason |
6 | |||
2.6. Death |
7 | |||
2.7. No Benefits Upon Discharge for Specially-Defined Cause |
7 | |||
2.8. Optional Form of Benefit |
7 | |||
2.9. Interest |
8 | |||
PART 3. ADDITIONAL PROVISIONS |
8 | |||
3.1. Beneficiary Designation Procedure |
8 | |||
3.2. Assistance in Purchase of Life Insurance |
8 | |||
3.3. Alienability and Assignment Prohibition |
8 | |||
3.4. Binding Obligation of Bank and any Successor in Interest |
9 | |||
3.5. Amendment |
9 | |||
3.6. General |
9 | |||
3.7. Headings |
9 |
3.8. Applicable Law |
9 | |||
3.9. Named Fiduciary and Plan Administrator |
9 | |||
3.10. Claims Procedure |
9 | |||
3.11. Arbitration |
10 | |||
3.12. Non-Competition; Non-Solicitation |
10 | |||
3.13. Entire Agreement |
12 | |||
3.14. Reductions |
12 | |||
3.15. Interpretation |
12 | |||
3.16. Employment |
12 | |||
3.17. Communications |
12 |
Amended and Restated
Supplemental Executive Retirement Agreement
Supplemental Executive Retirement Agreement
This Amended and Restated Supplemental Executive Retirement Agreement is made and entered into
as of March ___, 2008 by and between Xxxxxxxx Xxxxxxxx Bank, a Massachusetts chartered savings bank
with its executive offices in Franklin, Massachusetts (the “Bank”) and a wholly-owned subsidiary of
Xxxxxxxx Xxxxxxxx Bancorp, Inc., a Massachusetts corporation (the “Holding Company”), and Xxxxxx X.
Xxxx, a key employee and executive of the Bank (the “Executive”), amends and restates in its
entirety the Supplemental Executive Retirement Agreement dated as of December 5, 2005 and amended
and restated as of March ___, 2006 (the “2005 Agreement”).
WITNESSETH.
WHEREAS, the Executive is a valuable, key employee of the Bank, serving the Bank as its Chief
Financial Officer; and
WHEREAS, because of the Executive’s experience, knowledge of the affairs of the Bank, and
reputation and contacts in the banking industry, the Bank deems the Executive’s continued
employment with the Bank important for its future growth; and
WHEREAS, it is the desire of the Bank and in its best interest that the Executive’s services
be retained; and
WHEREAS, in order to induce the Executive to continue in the employ of the Bank, the Bank has
previously entered into the 2005 Agreement to provide the Executive or her beneficiaries with
certain benefits in accordance with the terms and conditions hereinafter set forth; and
WHEREAS, the parties have agreed to amend and restate in its entirety the 2005 Agreement;
NOW, THEREFORE, in consideration of services performed in the past and to be performed in the
future as well as of the mutual promises and covenants herein contained, it is agreed as follows:
Part 1. Definitions
1.1. Actuarial Equivalent shall mean a benefit of equivalent current value to the benefit which could otherwise have
been provided to the Executive, calculated with the Agreed-Upon Methodologies.
1.2. Agreed-Upon Methodologies (to be used in making actuarial calculations under this Agreement) shall be the discount
rates, mortality tables and other assumptions expressed in Section 417(e) of the Code, with the
following adjustments: (i) the 1994 Group Annuity Reserving Table shall be used in place of the
50/50 male/female mortality table, and (ii) the applicable discount rate shall be the discount rate
to be utilized under such Section 417(e), as
published for January of the year in which the
calculation is being made (or of the previous year if as of the time of such calculation no January
data has been published for the year in which the calculation is being made).
1.3. Annual Annuity Equivalent for a 401(k) plan or other defined contribution plan shall be equal to the annual benefit that
would be payable pursuant to a single life annuity with equal annual payments, commencing on the
Normal Retirement Age and continuing for the Executive’s life, that could be purchased with the
amount assumed to be available for such purchase pursuant to this Section 1.3. The annual benefit
payable under such annuity shall be determined as of the Payment Date, using the Agreed-Upon
Methodologies. For purposes of this Section 1.3, the amount available for the purchase of said
annuity shall be assumed to be the total of: (i) all amounts actually contributed by the employer
as matching contributions or other contributions to the defined contribution plan on the
Executive’s behalf (which contributions shall not include the so-called “individual contributions”
on the Executive’s behalf (it being understood that such “individual” contributions are made by the
employer pursuant to a salary reduction agreement with the Executive)), plus (ii) earnings on those
contributions. For purposes of calculating any amount of earnings that are to be deemed to have
been earned during any future period, such earnings shall be deemed to be equal to the amount which
would have been earned if the balance in the account as of such date of calculation had been
invested at a 6% rate of interest, compounded annually, until the Normal Retirement Age. Nothing in
this Section 1.3 shall require the Executive to actually purchase an annuity or to actually
surrender any life insurance contract at retirement.
1.4. Beneficiary
shall mean the person or persons designated by the Executive in accordance with Section 3.1
hereof to receive benefits under this Agreement after the death of the Executive.
1.5. Calendar Year
shall mean a calendar year from January 1 to December 31.
1.6. Change in Control
shall have the meaning defined in the Employment Agreement.
1.7. Code
shall mean the Internal Revenue Code of 1986, as amended.
1.8. Compensation
shall mean all compensation reported on the Executive’s Form W-2 (Wages, tips, other
compensation box) for a Calendar Year, including, but not limited to, any bonuses actually paid by
the Bank to the Executive during the Calendar Year, but adding thereto any amount which is
contributed by the Bank on the Executive’s behalf pursuant to a salary reduction agreement and
which is not includable in the Executive’s gross income under Section 125, 132(f), 402(e)(3), or
402(h) of the Code, as well as the amount of any pay reduction contributions to a nonqualified
deferred compensation plan, and excluding therefrom any taxable employee benefits of any kind
(e.g., reimbursements of moving and relocation expenses, insurance premiums, automobile, health,
medical, and dental expenses, the cost of group-term life insurance, compensation arising from the
exercise of a nonqualified stock option, the disqualifying disposition of stock issued pursuant to
an incentive stock option, or from a stock grant, and any fringe benefit which is not excluded from
gross income under Section 132 of the Code).
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1.9. Disabled and Disability
shall have the meaning defined in Section 2.4(b).
1.10. Effective Date. The Effective Date of this Agreement shall be April 4, 2005.
1.11. Employer
shall mean each of the Bank and the Holding Company, individually and collectively.
1.12. Employment Agreement
shall mean that certain Employment Agreement between the Executive and the Holding Company
dated as of April 4, 2005 (as the same may be amended, modified or restated from time to time).
1.13. Final Average Compensation
shall mean the average of the Compensation of the Executive for the three Calendar Years
during her final ten Calendar Years of employment with the Bank during which her Compensation was
the highest.
1.14. Good Reason
shall have the meaning defined in the Employment Agreement and shall also include:
(a) A material breach by the Bank of any of the provisions of this Agreement which failure or
breach shall have continued for thirty (30) days after written notice from the Executive to the
Bank specifying the nature of such failure or breach; or
(b) Any termination of the Executive’s employment with the Bank or the Holding Company that
does not constitute a “Voluntary Termination” under the Employment Agreement; or
(c) The failure of the Bank to obtain a satisfactory agreement from any successor thereof to
assume and agree to perform this Agreement.
In addition, “Good Reason” shall include the following event but only if it shall occur within
three years following a Change in Control:
(d) A reasonable determination by the Executive that, as a result of a Change in Control, she
is unable to exercise the responsibilities, authorities, powers, functions or duties exercised by
the Executive immediately prior to such Change in Control.
1.15. Insurance Policy
shall mean such insurance policy or policies (if any) as the Bank, in its sole and absolute
discretion, may choose to purchase to fund some or all of the benefits payable hereunder.
1.16. Normal Retirement Age
shall mean the date on which the Executive attains age sixty-five (65).
1.17. Payment Date
shall mean the earlier to occur of (x) Separation from Service or (y) Normal Retirement Age.
1.18. Retirement Benefit
shall mean a lump sum payment calculated in the manner described in this Section 1.18. The
lump sum Retirement Benefit payment shall be the Actuarial
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Equivalent of a stream of payments, each
year consisting of twelve equal payments each in an amount equal to one twelfth of the “Yearly
Benefit Amount,” commencing at Normal Retirement Age and continuing for twenty (20) years. The
actuarial equivalent of such stream of payments shall be determined as of the Payment Date, using
the Agreed-Upon Methodologies. The parties have agreed that it shall be assumed that payment of the
Yearly Benefit Amount would commence at Normal Retirement Age (regardless of when the Retirement
Benefit is actually paid) for purposes of calculating the amount of such lump sum Retirement
Benefit, in order to appropriately adjust such Retirement Benefit for the time value of money in
the event that the Retirement Benefit is paid prior to Normal Retirement Age; provided, however,
that in the event of Termination without Specially-Defined Cause or for Good Reason (as described
in Section 2.5) within three years after a Change in Control, payment of the Yearly Benefit Amount
shall be deemed to commence as of the date of Separation from Service for purposes of calculating
such lump sum benefit. The “Yearly Benefit Amount” shall be calculated as of the Payment Date by:
(a) multiplying 65% times the Executive’s Final Average Compensation (as of such Payment
Date); and by
(b) subtracting from such result the following:
(i) one-half of the annual amount payable (before earnings reductions) to the Executive
as a primary Social Security retirement benefit at age 65 (assuming that the Executive had
continued to earn at the same annual rate she was earning during the twelve month period
immediately preceding the date on which the calculation of this amount is being made),
(ii) the Annual Annuity Equivalent (calculated pursuant to Section 1.3 and based only
upon amounts actually contributed by the employer as matching contributions or other
contributions, and not including so-called “individual” contributions) that would be payable
to the Executive as of the Payment Date under any tax qualified defined contribution plans
maintained by the Bank during the Executive’s employment, including the Bank’s 401(k) plan
and Employee Stock Ownership Plan, and
(iii) the Annual Annuity Equivalent that would be payable to the Executive as of the
Payment Date under the Bank’s Benefit Restoration Plan; and then
(c) multiplying such result by the Vested Portion as of the Payment Date.
1.19. SBERA
shall mean the Savings Banks Employees Retirement Association or any successor thereto.
1.20. Separation from Service
shall mean any termination of employment with the Bank and any affiliate of the Bank pursuant
to which the aggregate level of services provided by the Executive to the Bank and any such
affiliate of the Bank (whether as an employee or a consultant) is permanently reduced to a level of
services that is 49% or less than the level of services provided in the immediately preceding 12
months. This definition is intended to comply with Section 409A of the Code and the regulations
issued thereunder.
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1.21. Specially-Defined Cause
shall have the meaning defined in the Employment Agreement.
1.22. Trustee. Trustee shall mean the trustee to be appointed under that certain Trust Agreement (“Trust”)
under the Xxxxxxxx Xxxxxxxx Bank Supplemental Executive Retirement Plan to be entered into by the
Bank.
1.23. Vested Portion. Except as provided in the following sentence, the Vested Portion shall be determined in the
manner provided in Exhibit 1.23 (Vested Portion). The Vested Portion will be 100% from and
after the earliest to occur of any of the following (i) the date on which the Executive becomes
Disabled, (ii) the date on which the Bank terminates the Executive’s employment without
Specially-Defined Cause (as such term is defined in Section 2.7), (iii) the date on which the
Executive resigns for Good Reason, (iv) the date of the Executive’s death, and (v) the date on
which a Change in Control first occurs. The Vested Portion shall never exceed 100%.
Part 2. Benefit and Related Matters
2.1. Timing and Calculation of Payment of Benefit. The Executive shall be entitled to receive a Retirement Benefit under this Agreement as of the
Payment Date. Such Retirement Benefit shall be calculated pursuant to Section 1.18, and shall be
paid not later than 30 days after the Payment Date. The method of calculating and/or the time of
payment of the Retirement Benefit may be adjusted as provided in, as applicable, Section 2.4,
Section 2.5, or Section 2.6. To the extent of any inconsistency between this Section 2.1 and any of
Section 2.4, Section 2.5, or Section 2.6, such Section 2.4, Section 2.5, or Section 2.6, as
applicable, shall be controlling.
2.2. Delay in Certain Payments as Required by Section 409A. Notwithstanding any other provision of this Agreement, to the extent required by applicable law,
if the Retirement Benefit is being paid upon Separation from Service (other than upon Disability or
death), payment of such benefit shall be made six (6) months after the date of Separation from
Service in order to comply with Section 409A of the Code, and interest shall be added to such
payment pursuant to Section 2.9.
2.3. Rabbi Trust. In the event that: (a) a Change in Control occurs before the Payment Date, (b) payment of the
Retirement Benefit is required to be delayed for a period of time after Separation from Service in
order to comply with Section 409A of the Code, or (c) the Payment Date is extended for an
additional period of at least five years pursuant to Section 2.8 in order to comply with Section
409A of the Code, the Bank shall, as soon as possible, but in no event later than 30 days following
the Change in Control (in the event of (a) above), or the date on which it is first determined that
the Payment Date must be extended or delayed (in the event of (b) or (c) above), make an
irrevocable contribution to the Trust. In the event of a Change in Control, the contribution shall
be in an amount that is sufficient, as determined by an actuary appointed by the Trustee, to pay
the Executive or her beneficiary the full benefits to which she would be entitled pursuant to the
terms of this Agreement as of the date on which the Change in Control occurred assuming that the
Payment Date was the date of the Change in Control. In the event that payment is delayed or the
Payment Date is extended in order to comply with Section 409A, the contribution shall be in an
amount equal to the Retirement Benefit, calculated pursuant to
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Section 1.18, plus the interest to
be added to such amount pursuant to Section 2.9. Within the same 30 day period, the Bank shall
make a further irrevocable contribution to the Trust in an amount sufficient to pay for the
Trustee’s fees and for actuarial, accounting, legal and other professional or administrative
services necessary to implement the terms of this Agreement until actual payment of the Retirement
Benefit. Such amount shall be determined by the Trustee’s estimate of its fees (as provided in the
Trust Agreement) and by estimates obtained by the Trustee from the independent actuaries,
accountants, lawyers and other appropriate professional and administrative personnel who provide
such services to the Trust or the Bank (and in the event of a Change in Control it shall be those
personnel who provided such services immediately before the Change in Control).
2.4. Disability.
(a) In the event that the Executive shall become “Disabled” (as defined in Section 2.4(b))
while in the employ of the Bank and prior to her Normal Retirement Age, the
Vested Portion shall be 100% and her Retirement Benefit shall be calculated pursuant to
Section 1.18 as if the Executive’s Compensation had increased by five percent (5%) per year for
each year from the date of Separation from Service due to Disability to Normal Retirement Age. The
Executive shall receive such benefit at Normal Retirement Age. Payments under this Section 2.4
shall be in full satisfaction of any obligations of the Bank to the Executive under this Agreement
but shall be in addition to any payments otherwise payable to the Executive as a result of
disability under any other plans or agreements in effect from time to time.
(b) The Executive shall be considered to be “Disabled” (and to have a “Disability”) if (i) the
Bank’s long term disability insurance policy carrier has determined that the Executive 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 12 months, or (ii) the Executive is, 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 12 months, receiving income replacement
benefits for a period of not less than 3 months under an accident and health plan covering
employees of the Bank.
2.5. Termination without Specially-Defined Cause or for Good Reason. If the Employer shall terminate Executive’s employment prior to the Normal Retirement Age
without “Specially-Defined Cause,” as defined at Section 1.21, other than by reason of death or
Disability (as defined at Section 2.4(b)), or if the Executive terminates employment for “Good
Reason,” as defined at Section 1.14, the Vested Portion shall be 100% and the Executive’s
Retirement Benefit shall be calculated pursuant to Section 1.18 as if the Executive’s Compensation
had increased by five percent (5%) per year for each year from the date of such termination of
employment until the Normal Retirement Age. To the extent required by applicable law, such
Retirement Benefit shall be made six (6) months after the date of Separation from Service in order
to comply with Section 409A of the Code, and interest shall be added to such payment pursuant to
Section 2.9.
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2.6. Death.
(a) In the event that the Executive should die while in the employ of the Bank and prior to
her Normal Retirement Age, the Vested Portion shall be 100% and the Executive’s Beneficiary shall
receive a Retirement Benefit, calculated pursuant to Section 1.18. If the Bank shall have obtained
a Qualifying Insurance Policy (as such term is defined in Section 2.6(b) on a date (“Policy
Deadline Date”) that is both (i) before May 31, 2006 and (ii) before the date of the Executive’s
death, then, for purposes of determining the amount of the Retirement Benefit to be paid to the
Executive’s beneficiary, the Executive’s Compensation shall be deemed to have increased by five
percent (5%) per year for each year from the Executive’s death until Normal Retirement Age. The
Executive’s Beneficiary shall receive such benefit within 30 days of the Executive’s death.
(b) A “Qualifying Insurance Policy” shall mean such Insurance Policy (if any) as the Bank
purchases on the life of the Executive before the Policy Deadline Date to fund some or all of the
benefits payable hereunder. Such Insurance Policy shall not be a Qualifying Insurance
Policy unless (i) it is in an amount deemed sufficient by the Bank’s professional advisors to
fund the enhanced Retirement Benefit described in Section 2.6(a), (ii) such Insurance Policy is in
full force and effect before the Policy Purchase Deadline, (iii) such Insurance Policy has been
issued by an insurance carrier having a financial condition deemed to be appropriate by the Bank,
in its reasonable discretion, and (iv) such Insurance Policy has been issued at rates that are
deemed by the Bank, in it is reasonable discretion, to be reasonable and customary and comparable
to rates otherwise obtainable for life insurance (of a type that would normally be used by the Bank
to fund benefits under a deferred compensation plan) on persons of the Executive’s age who are
insurable and otherwise in good health. The Bank shall use reasonable efforts to secure a
Qualifying Insurance Policy until the Policy Deadline Date, but shall be under no obligation to
(i) obtain such a Qualifying Insurance Policy or (ii) make any efforts to obtain a Qualifying
Insurance Policy after the Policy Deadline Date.
2.7. No Benefits Upon Discharge for Specially-Defined Cause. Should the Executive be discharged for Specially-Defined Cause at any time, all benefits under
Part 2 of this Agreement shall be forfeited. The Executive shall not be considered to have been
terminated for Specially-Defined Cause unless she shall have been terminated for Specially-Defined
Cause in accordance with the procedures set forth in the Employment Agreement. If a dispute arises
as to whether a discharge is for “Specially-Defined Cause,” such dispute shall be resolved by
arbitration as set forth in Section 3.11 of this Agreement.
2.8. Optional Form of Benefit. In lieu of the lump sum Retirement Benefit provided in Section 1.18, upon request the Executive
may obtain an optional form of payment that is the Actuarial Equivalent of such lump sum payment;
provided that such form is a permitted form of benefit under the SBERA Pension Plan, and provided
that such request complies with the provisions of Section 409A of the Code and any regulations or
other Internal Revenue Service guidance promulgated thereunder. Acceptable forms of payment
presently include:
| • | Life Annuity | ||
| • | Joint and 50% Survivor Annuity or Joint and 100% Survivor Annuity. |
The Executive shall have the right within thirty (30) days upon becoming subject to the Plan to
elect the form of payment in which her benefit is to be paid. Prior to the Payment Date, the
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Executive may change the form of payment she has elected, provided, however, that such change must
conform with the provisions of this Agreement and with any applicable requirements of Section 409A
(and any other applicable tax law regarding deferral of income or avoidance of constructive
receipt). As of the date of this Agreement, all such changes (other than those from one form of
life annuity to an actuarially-equivalent form of life annuity) must be made at least one year
before the Payment Date and must extend the Payment Date for an additional period of at least five
(5) years (which means that payment of the benefit under this Agreement shall be made or commence
on a date that is at least five years after the Payment Date).
2.9. Interest. In the event that payment of a Retirement Benefit under this Agreement is required to be made
six (6) months after the date of Separation from Service in order to comply with Section 409A of
the Code, or if the Payment Date is extended for a period of at least five years pursuant to
Section 2.8, interest (calculated at the annual discount rate or rates from time to time in effect
under the Agreed-Upon Methodologies and compounded annually) shall accrue from the
otherwise-applicable, original Payment Date (as determined pursuant to Section 1.17) until the date
of actual payment of the benefit, and shall be paid together with the Retirement Benefit.
Part 3. Additional Provisions
3.1. Beneficiary Designation Procedure. The Executive may designate one or more Beneficiaries to receive specified percentages of any
death benefit payments to be paid hereunder. The Executive shall designate any such Beneficiaries
in writing and shall submit such writing to the Treasurer of the Bank. Only designated
Beneficiaries alive at the Executive’s death shall be entitled to share in the benefit payments.
Absent a contrary specification by the Executive in writing submitted to the Treasurer of the Bank,
each Beneficiary alive at the Executive’s death (or, in the case of the Beneficiary’s death after
the Executive’s death, the Beneficiary’s estate) shall share equally in death benefit payments. If
no designated Beneficiary is alive at the Executive’s death, her surviving spouse shall be entitled
to all death benefit payments. If the Executive dies leaving neither a designated Beneficiary nor
a surviving spouse, her estate shall be entitled to any death benefit payments. Except to the
extent specifically provided in this Section 3.1, the Executive may not, without the written
consent of the Bank, assign to any individual, trust or other organization, any right title or
interest in the Insurance Policy nor any rights, options, privileges or duties created under this
Agreement.
3.2. Assistance in Purchase of Life Insurance. If the Bank elects to invest in an Insurance Policy, the Executive shall assist the Bank by
freely submitting to a physical exam and supplying such additional information necessary to obtain
such insurance or annuities. It is agreed and understood, however, that the Bank is under no
obligation to fund the benefits payable under this Agreement with any form of insurance.
3.3. Alienability and Assignment Prohibition. Neither the Executive, her surviving spouse nor any other Beneficiary under this Agreement shall
have any power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or
otherwise encumber in advance any of the benefits payable hereunder nor shall any of said benefits
be subject to seizure for the payment of any debts, judgments, alimony or separate maintenance owed
by the Executive or her Beneficiary, nor be transferable by operation of law in the event of
bankruptcy, insolvency or
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otherwise. In the event the Executive or any Beneficiary attempts
assignment, commutation, hypothecation, transfer or disposal of the benefits hereunder, the Bank’s
liabilities shall forthwith cease and terminate.
3.4. Binding Obligation of Bank and any Successor in Interest. This Agreement shall bind the Executive and the Bank, their heirs, successors, personal
representatives and assigns. The Bank expressly agrees that it shall not merge or consolidate into
or with another bank or sell substantially all of its assets to another bank, firm or person until
such bank, firm or person expressly agrees, in writing, to assume and discharge the duties and
obligations of the Bank under this Agreement.
3.5. Amendment. During the lifetime of the Executive, this Agreement may be amended only with the mutual written
assent of the Executive and the Bank.
3.6. General. The benefits provided by the Bank to the Executive pursuant to this Agreement are in the nature
of a fringe benefit and shall in no event be construed to affect or limit the Executive’s current
or prospective salary increases, cash bonuses or profit-sharing distributions or credits or her
right to participate in or be covered by any qualified or non-qualified pension, profit-sharing,
group, bonus or other supplemental compensation or fringe benefit plan.
3.7. Headings. Headings and subheadings in this Agreement are inserted for reference and convenience only and
shall not be deemed a part of this Agreement.
3.8. Applicable Law. This Agreement shall be governed by, and construed and enforced in accordance with, the
substantive laws of The Commonwealth of Massachusetts without regard to its principles of conflicts
of laws.
3.9. Named Fiduciary and Plan Administrator. The “Named Fiduciary and Plan Administrator” of this plan shall be Xxxxxxxx Xxxxxxxx Bank until
its removal by the Board. As Named Fiduciary and Plan Administrator, the Bank shall be responsible
for the management, control and administration of the benefits to be provided under this Agreement.
The Named Fiduciary may delegate to others certain aspects of the management and operational
responsibilities of the plan including the employment of advisors and the delegation of ministerial
duties to qualified individuals.
3.10. Claims Procedure. In the event a dispute arises over benefits under this Agreement and benefits are not paid to
the Executive (or to her beneficiary in the case of the Executive’s death) and such claimants feel
they are entitled to receive such benefits, then a written claim must be made to the Plan
Administrator named above within sixty (60) days from the date payments are refused. The Plan
Administrator shall review the written claim and if the claim is denied, in whole or in part, they
shall provide in writing within sixty (60) days of receipt of such claim their specific reasons for
such denial, reference to the provisions of this Agreement upon which the denial is based and
any additional material or information necessary to perfect the claim. Such written notice shall
further indicate the additional steps to be taken by claimants if a further review of the claim
denial is desired. A claim shall be deemed to have been denied if the Plan Administrator fails to
take any action within the aforesaid ninety-day period.
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If claimants desire a second review they shall notify the Plan Administrator in writing within
ninety (90) days of the first claim denial. Claimants may review this Agreement or any documents
relating thereto and submit any written issues and comments they may feel appropriate. In its sole
discretion, the Plan Administrator shall then review the second claim and provide a written
decision within sixty (60) days of receipt of such claim. This decision shall likewise state the
specific reasons for the decision and shall include reference to specific provisions of this
Agreement upon which the decision is based.
3.11. Arbitration. Any controversy or claim arising out of or relating to the Agreement, or the breach thereof, or
any failure to agree where agreement of the parties is necessary pursuant hereto, including the
determination of the scope of this agreement to arbitrate, shall be resolved by the following
procedures:
(a) The parties agree to submit any dispute to final and binding arbitration administered by
the American Arbitration Association (the “AAA”), pursuant to the Commercial Arbitration Rules of
the AAA as in effect at the time of submission. The arbitration shall be held in Boston,
Massachusetts before a single neutral, independent, and impartial arbitrator (the “Arbitrator”).
(b) Unless the parties have agreed upon the selection of the Arbitrator before then, the AAA
shall appoint the Arbitrator within thirty (30) days after the submission to AAA for binding
arbitration. The arbitration hearings shall commence within fifteen (15) days after the selection
of the Arbitrator. Each party shall be limited to two pre-hearing depositions each lasting no
longer than two (2) hours. The parties shall exchange documents to be used at the hearing no later
than ten (10) days prior to the hearing date. Each party shall have no longer than three (3) hours
to present its position, and the entire proceedings before the Arbitrator shall be on no more than
two (2) hearing days within a two week period. The award shall be made no more than ten (10) days
following the close of the proceeding. The Arbitrator’s award shall not include consequential,
exemplary, or punitive damages. The Arbitrator’s award shall be a final and binding determination
of the dispute and shall be fully enforceable in any court of competent jurisdiction. Except in a
proceeding to enforce the results of the arbitration, neither party nor the Arbitrator may disclose
the existence, content, or results of any arbitration hereunder without the prior written consent
of both parties.
(c) In the event that it shall be necessary or desirable for the Executive to retain legal
counsel or incur other costs and expenses in connection with the enforcement or protection of any
or all of the Executive’s rights under this Agreement, the Bank shall pay (or the Executive shall
be entitled to recover from the Bank, as the case may be) the Executive’s reasonable attorneys’
fees and other reasonable costs and expenses in connection with the enforcement or protection of
said rights (including the enforcement of any arbitration award in court) regardless
of the final outcome, unless and to the extent the arbitrators shall determine that under the
circumstances recovery by the Executive of all or a part of any such fees and costs and expenses
would be unjust.
3.12. Non-Competition; Non-Solicitation. For purposes of this Section 3.12, the term “Employer” shall include not only each of the
Holding Company and the Bank, but also every other affiliate of the Holding Company (each, an
“Employer”).
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(a) While Employed. During such time as the Executive is employed by the Bank or the Holding
Company, the Executive will not compete with the banking or any other business conducted by any
Employer during the period of the Executive’s employment, nor will the Executive attempt to hire
any employee of any Employer, assist in such hiring by any other person, encourage any such
employee to terminate his or her relationship with any Employer, or interfere with or damage (or
attempt to interfere with or damage) any relationship between any Employer and any customers of any
Employer or solicit or encourage any customer of any Employer to terminate its relationship with
any Employer or to conduct with any other person any business or activity which such customer
conducts or could conduct with any Employer.
(b) Post-Employment. The provisions of this Section 3.12(b) shall not be binding on the
Executive (and shall become of no further force or effect) after a Change in Control shall have
occurred, or in the event that the Employer has terminated the Executive’s employment without
Specially-Defined Cause. The Executive agrees that during the one-year period following
termination of the Executive’s employment for any reason (the “Noncompetition Period”), the
Executive will not, directly or indirectly, (i) become a director, officer, employee, principal,
agent, consultant or independent contractor of any insured depository institution, trust company or
parent holding company of any such institution or company which has an office in any city or town
in which the Bank maintains an office (a “Competing Business”), provided, however, that this
provision shall not prohibit the Executive from (x) owning bonds, non-voting preferred stock or up
to five percent (5%) of the outstanding common stock of any such entity if such common stock is
publicly traded and (y) being employed by a Competing Business outside of such cities and towns so
long as the Executive is in compliance with the provisions of the remainder of this
Section 3.12(b). During the Noncompetition Period, the Executive will not, directly or indirectly,
(i) solicit or encourage any person who was employed by any Employer on the date of termination of
the Executive’s employment to leave his or her employment at any Employer, or (ii) encourage or
assist any person with whom the Executive has an employment or consulting or other similar
relationship in identifying, recruiting or soliciting any commercial loan officer or relationship
manager who was employed by any Employer on the date of termination of the Executive’s employment
(“Termination Date”), or (iii) assist such person in formulating an employment package for such
officer or manager to the extent such assistance involves the use of confidential information (as
that term is defined in that certain Employment Agreement between the Executive and the Holding
Company). The provisions of this Section 3.12(b) shall not be construed to prohibit any person who
employs the Executive as an employee or consultant from advertising generally for employees in the
markets served by any Employer or from hiring any candidate, whether or not such person was
employed by an Employer, so long as the Executive does not breach the covenants set forth in this
Section 3.12(b). During the Noncompetition Period, the Executive will not, directly or
indirectly, solicit or encourage or assist others to solicit any business from any person or entity
which, together with its affiliates, had commercial loans outstanding from the Bank which in the
aggregate amounted to $1,000,000 or more at any time within the six-month period prior to the
Termination Date (“Commercial Loan Customers”). This Section 3.12(b) shall not be construed to
prohibit any of the Executive’s future employers from making general public announcements to the
effect that the Executive has become affiliated with such new employer or holding receptions to
introduce the Executive to persons other than Commercial Loan Customers. The Executive agrees to
inform any potential new employer of the covenant set forth in this Section 3.12(b) prior to
accepting employment during the Noncompetition Period.
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3.13. Entire Agreement. This Agreement constitutes the entire agreement between the parties pertaining to its subject
matter and supersedes all prior and contemporaneous agreements, understandings, negotiations, prior
draft agreements, and discussions of the parties, whether oral or written. This Agreement
specifically supersedes and replaces the 2005 Agreement in its entirety.
3.14. Reductions. Notwithstanding anything to the contrary contained in this Agreement, any and all payments and
benefits to be provided to the Executive hereunder are subject to reduction to the extent required
by applicable statutes, regulations, rules and directives of federal, state and other governmental
and regulatory bodies having jurisdiction over the Bank or the Holding Company. The Executive
confirms that the Executive is aware of the fact that the Federal Deposit Insurance Corporation has
the power to preclude the Bank from making payments to the Executive under this Agreement under
certain circumstances. The Executive agrees that the Bank shall not be deemed to be in breach of
this Agreement if it is precluded from making a payment otherwise payable hereunder by reason of
regulatory requirements binding on the Bank.
3.15. Interpretation. When a reference is made in this Agreement to Sections or Exhibits, such reference shall be to a
Section of or Exhibit to this Agreement unless otherwise indicated. References to Sections include
subsections, which are part of the related Section (e.g., a section numbered “Section 5.5(a)” would
be part of “Section 5.5” and references to “Section 5.5” would also refer to material contained in
the subsection described as “Section 5.5(a)”). The recitals hereto constitute an integral part of
this Agreement. The headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation”. The phrases “the date of this Agreement”, “the date
hereof” and terms of similar import, unless the context otherwise requires, shall be deemed to
refer to the date set forth in the Preamble to this Agreement.
3.16. Employment. No provision of this Agreement shall be deemed to restrict or limit any existing employment
agreement by and between the Bank and the Executive, nor shall any conditions herein create
specific employment rights to the Executive nor limit the right of the Bank to discharge the
Executive with or without Specially-Defined Cause. In a similar fashion, no provision shall limit
the Executive’s rights to voluntarily terminate her employment at any time. The benefits provided
by this Agreement are not part of any salary reduction plan or any arrangement deferring a bonus or
salary increase. The Executive has no option to take any current payment or bonus in lieu of these
benefits.
3.17. Communications. All notices and other communications hereunder shall be in writing and shall given by hand, sent
by facsimile transmission with confirmation of receipt requested, sent via a reputable overnight
courier service with confirmation of receipt requested, or mailed by registered or certified mail
(postage prepaid and return receipt requested) and shall be addressed to the Executive at the
Executive’s last known address on the books of the Bank or, in the case of the Bank, at its main
office, attention of the Board of Directors. All notices shall be deemed given on the date on which
delivered by hand or otherwise on the date of receipt as confirmed.
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In Witness Whereof, the parties have executed this Agreement as an instrument under
seal, as of the date first written above.
| Xxxxxxxx Xxxxxxxx Bank | ||||
| By: | ||||
Witness
|
Title | |||
| Witness | Xxxxxx X. Xxxx | |||
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Beneficiary Designation Form
Primary Designation:
| Name | Relationship | |
Contingent Designation:
Xxxxxx X. Xxxx
|
Date |
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Exhibit 1.23 — Vested Portion
As of December 31st of each year, the Vested Portion shall be the percentage listed
for such date on the table set forth below (“Table”). Starting on January 1 of each calendar year
the Vested Portion shall be increased ratably over the course of the year so that as of the next
December 31st, the Vested Portion shall have been increased to the percentage set forth
on the Table for such December 31st.
By way of example, the Vested Portion shall be 25.0% on December 31, 2006. As of the date
which is 180 days after such December 31, the Vested Portion shall be determined by adding together
(x) 25.0% (the Vested Portion as of the previous December 31) and (y) the ratable increase in such
Vested Portion for 2007 (the “Applicable Increase”).
The Applicable Increase shall be determined by multiplying 12.5% (the amount by which the
Vested Portion would increase during all of 2007) by the fraction of the year that has then
elapsed. Thus, 12.5% times 180/365 equals 6.16%. Calculations shall be rounded to two significant
digits. Accordingly, the Vested Portion for such date would be 25.0% plus 6.16%, or a total of
31.16%. The Vested Portion shall never be greater than 100%.
| December 31 | Vested Portion | |||
2005 |
10.0 | % | ||
2006 |
25.0 | % | ||
2007 |
37.5 | % | ||
2008 |
50.0 | % | ||
2009 |
60.0 | % | ||
2010 |
70.0 | % | ||
2011 |
80.0 | % | ||
2012 |
87.5 | % | ||
2013 |
92.5 | % | ||
2014 and thereafter |
100.0 | % | ||
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