EXECUTIVE SUPPLEMENTAL BENEFIT AGREEMENT
This agreement, made and entered into this 28th day of October 1997 by
Medford Savings Bank, a banking corporation organized and existing under the
laws of the Commonwealth of Massachusetts hereinafter called the Bank, and
Xxxxxx X. Xxxxxx of Dover, Massachusetts hereinafter called the Executive.
WHEREAS, the Executive has been and is now serving the Bank as Chairman,
President and Chief Executive Officer; and
WHEREAS, it is the opinion of the Board of Directors that the Executive's
services to the Bank constitute an invaluable contribution to the general
welfare of the Bank and in bringing it to its present status of operating
efficiency and its high regard in the banking business; and
WHEREAS, the experience of the Executive, his knowledge of the affairs of
the Bank, his reputation and contacts in the banking industry are so valuable
that assurance of his continued services is essential for the future growth and
profits of the Bank and it is in the best interests of the Bank to arrange terms
of continued employment for the Executive so as to reasonably assure his
remaining in the employment of the Bank during his lifetime or until his age of
retirement; and
WHEREAS, it is the desire of the Bank that the Executive's services be
retained as herein provided; and
WHEREAS, The Executive is willing to continue in the employ of the Bank
provided the Bank agrees to pay to him or is beneficiaries certain benefits in
accordance with the terms and conditions hereinafter set forth;
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:
ARTICLE ONE
1.01 Employment. The Bank agrees to employ the Executive as Chief Executive
Officer. The Executive will continue in the employ of the Bank in such capacity
and with such duties and responsibilities as may be assigned to him, and with
such compensation as may be determined from time to time by the Board of
Directors of the Bank.
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The Executive agrees to devote his full time and attention exclusively to the
business and affairs of the Bank, except during vacation periods and to use his
best efforts to furnish faithful and satisfactory services to the Bank. The
Executive further agrees that during the period of his employment pursuant to
this Agreement, he will not have any other business affiliations without the
approval of the Board of Directors of the Bank.
The supplemental benefits provided by this Agreement are granted by the Bank as
a fringe benefit to the Executive and are not part of any salary reduction plan
or an arrangement deferring a bonus or a salary increase. The Executive has no
option to take any current payment or bonus in lieu of salary continuation
benefits.
ARTICLE TWO
2.01 Retirement Benefit. If the Executive shall continue in the employment of
the Bank until he attains the age of sixty-five (65), which is hereby
established to be September 23, 2000, he may retire from active daily employment
as of the first day of the month next following attainment of age 65, or upon
such later date as may be mutually agreed upon by the Executive and the Bank
The Bank agrees that upon such retirement it will pay to the Executive the sum
of seventy thousand ($70,000.) dollars, hereinafter called the "Annual Payment",
on the first day of the month following such retirement and will pay a like sum
on each annual anniversary of said date to the Executive during his lifetime for
fifteen years until he shall receive fifteen (15) Annual Payments subject to the
conditions and limitations hereinafter set forth.
2.02 Retirement Death Benefit. The Bank agrees that if the Executive shall so
retire, but shall die before receiving the fifteen (15) Annual Payments, it will
continue to make such Annual Payments annually to such individual or individuals
as the Executive shall have designated in a writing, filed with the Bank, until
the expiration of the fifteen (15) years from the date of such retirement. In
the absence of any effective designation of beneficiary any such amounts
becoming due and payable after the death of the Executive shall be paid to his
duly qualified executor or administrator.
ARTICLE THREE
3.01 Consulting Services. It is mutually agreed that during the fifteen (15)
year period following retirement from active daily employment, the Executive
shall, from time to time, at the request of the Bank, be available at reasonable
times and places as are mutually agreed upon, to render services to the senior
executives of the Bank in an advisory or consulting capacity.
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The Executive shall not be required to travel from whatever place he may then be
living or staying for the purposes of such consultation unless all expenses
incurred by him shall forthwith be paid by the Bank.
It shall not be considered a breach of this condition if the Executive is unable
to consult or advise because of a mental or physical disability.
In furnishing such consultative or advisory services, the Executive shall not be
an employee of the Bank, but shall act in the capacity of an independent
contractor.
3.02 Competitive Service. During the said fifteen (15) year period following
retirement from active daily employment, the Executive shall not become a
director, officer or employee of any banking institution within an area of 25
miles from the City of Medford, unless the Bank has first consented thereto in
writing.
3.03 Forfeiture. The payments provided under Article Two are conditioned upon
the Executive fulfilling the Requirements of Article Three and in the event the
Executive shall at any time materially breach the said requirements, the Board
of Directors of the Bank may, by a Resolution at any regular or special meeting,
suspend or eliminate payment during the period of such breach.
ARTICLE FOUR
4.01 Death Prior to Retirement. In the event the Executive should die while
actively employed by the Bank, the Bank will pay each Annual Payment in twelve
equal monthly installments of fifty-eight hundred thirty-four $5834.) dollars
each for a period of fifteen (15) years to such individual or individuals as the
Executive may have designated in a writing, filed with the Bank. The said
monthly payment shall begin the first of the month following the month of the
decease of the Executive. In the absence of any effective designation of
beneficiary any such amounts becoming due and payable upon the death of the
Executive shall be payable to his duly qualified executor or administrator.
ARTICLE FIVE
5.01 Disability Prior to Retirement. In the event the Executive shall, during
the period of active daily employment prior to termination of his employment
with the Bank, become permanently and totally disabled, mentally or physically,
which disability renders him unable to perform his duties in a manner
satisfactory to the Bank, the Bank by a Resolution adopted at any regular or
special meeting of its Board of Directors may terminate the active daily
employment of the Executive.
If the date of the adoption of such Resolution is on or after September 23, 2000
the provisions of Article Two shall immediately be effective. If the date of
such Resolution
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is prior to September 23, 2000 the obligations of the Bank to pay the benefits
provided in Articles Two and Four shall cease. In lieu of the payments provided
in said Articles the Bank shall pay to the Executive one hundred (100%) percent
of his then annual salary payable in equal monthly installments beginning on the
first day of the month following the Board Resolution and continuing for a
period up to September 23, 2000 at which time the provisions of Article Two
shall be effective. The disability payments payable hereunder shall be reduced
by any amounts payable under the Bank's Long Term Disability Income policy. If
the Executive should die after commencement of such disability payments but
prior to September 23, 2000, the provisions of Article Four shall then be
effective.
ARTICLE SIX
6.01 Voluntary Termination of Service or Discharge. In the event that the
Executive shall voluntarily resign or otherwise voluntarily terminate his
employment with the Bank, become totally disabled, die or be discharged for
actions inimical to the Bank's interests, which shall be in the sole discretion
of the Board of Directors,prior to September 23, 2000, the Annual Payments
effective under Article Two, Four and Five shall be reduced in accordance with
the vesting provisions detailed in section 6.03.
6.02 Other Termination of Service. The Bank reserves the right to terminate the
employment of the Executive at any time prior to retirement. In the event that
the employment of the Executive shall terminate prior to September 23, 2000,
other than by his voluntary action, his disability, his death or his discharge
for actions inimical to the Bank's interests, the Annual Payments effective
under Article Two, Four and Five shall be paid in full without the reduction
specified in Section 6.03.
6.03 Vesting Percentage Schedule. The Annual Payments defined under Articles
Two, Four and Five shall be reduced in the event of termination under section
6.01 in accordance with the vesting schedule detailed herein. The Annual Payment
due under such circumstances shall be adjusted by determining the maximum Annual
Payment due with 100% vesting and multiplying this Annual Payment by the
appropriate percentage given the number of completed years of contract service
and Article 6.01.
Vesting Percentage Schedule
Completed Contract Years of Service Percentage Vesting
1 (9/23/98) 33 1/3%
2 (9/23/99) 66 2/3%
3 (9/23/2000) 100%
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ARTICLE SEVEN
7.01 Alienability. Neither the Executive, his widow, nor any other beneficiary
under this Agreement shall have the 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 his beneficiary or any of them, or be
transferable by operation of law in the event of bankruptcy, insolvency, or
otherwise. In the event the Executive or any beneficiary attempts assignment,
commutation, hypothecation, transfer or disposal of the benefits hereunder the
Bank's liabilities hereunder shall forthwith cease and terminate.
ARTICLE EIGHT
8.01 Participation in other Plans. Nothing contained herein shall be construed
to alter, abridge, or in any manner affect the rights and privileges of the
Executive to participate in and be covered by any Pension, Profit Sharing, 401K,
Group insurance, Bonus or any similar employee plans which the Bank may now or
hereafter have.
ARTICLE NINE
9.01 Funding. The Bank reserves the absolute right at its sole and exclusive
discretion, either to fund the obligations of the Bank hereunder or to refrain
from funding the same, and to determine the extent, nature and method of such
funding. Should the Bank elect to fund this Agreement, in whole or in part,
through the medium of life insurance or annuities, or both, the Bank shall be
the owner and beneficiary of any such policies. The Bank reserves the absolute
right, in its sole discretion, to terminate such life insurance or annuities, as
well as any other funding program, at anytime, either in whole or in part. At no
time shall the Executive be deemed to have any right, title or interest in or to
any specified asset or assets of the Bank, including, but not by way of
restriction, any insurance or annuity contract or contracts or the proceeds
therefrom. Any such policy shall not in any way be considered to be security for
the performance of the Bank's obligations hereunder. It shall be, and remain, a
general unpledged, unrestricted asset of the Bank.
If the Bank purchases a life insurance or annuity policy on the life of the
Executive, he agrees to sign any papers that my be required for that purpose and
to undergo any medical examination or tests which may be necessary.
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9.02 This Article shall not be construed as giving the Executive or his
beneficiary any greater rights than those of any other unsecured creditor of the
Bank.
ARTICLE TEN
10.01 Reorganization. The Bank shall not merge or consolidate into or with
another Bank, or reorganize, or sell substantially all of its assets to another
bank, corporation, firm, or person unless and until such succeeding or
continuing bank, corporation, firm or person agrees to assume and discharge all
of the obligations of the Bank hereunder.
ARTICLE ELEVEN
11.01 Benefits and Burdens. This Agreement shall be binding upon and inure to
the benefit of the Executive and his personal representatives, and the Bank, and
any successor organization which shall succeed to substantially all of its
assets and business.
ARTICLE TWELVE
12.01 Communications. Any notice or communication required of either party with
respect to this Agreement shall be made in writing and may either be delivered
personally or sent first class mail to the Bank at 00 Xxxx Xxxxxx, Xxxxxxx, XX
00000 and to the Executive at the address as maintained on the payroll or other
accounting records of the Bank. Each party shall have the right by written
notice to change the place to which notices shall be sent.
ARTICLE THIRTEEN
13.01 Not a Contract of Employment. This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Bank to discharge the Executive, or
restrict the right of the Executive to terminate his employment with the Bank.
ARTICLE FOURTEEN
14.01 Claims Procedure. In the event that benefits under this Agreement are not
paid to the Executive (or his beneficiary in the case of the Executive's death),
and such person feels entitled to receive them, a claim shall be made in writing
to the Plan Administrator within sixty (60) days from the date payments are not
made. Such claim shall be reviewed by the Plan Administrator and the Bank. If
the claim is denied, in full or in part, the Plan Administrator shall provide a
written notice within ninety (90) days setting forth the specific reasons for
denial, specific reference to the provisions of this Agreement upon which the
denial is based, and additional material or information
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necessary to perfect the claim, if any. A claim shall be deemed denied if the
Plan Administrator does not provide the required written notice within the said
ninety (90) day period. Also, such written notice shall indicate the steps to be
taken if a review of the denial is desired.
If a claim is denied and a review is desired, the Executive (or his beneficiary
in the case of the Executive's death), shall notify the Plan Administrator in
writing within sixty (60) days of receipt of the denial or deemed denial. In
requesting a review, the Executive or is beneficiary may review this Agreement
or any document relating to it and submit any written issues and comments he or
she may feel appropriate. The Plan Administrator shall then review the claim and
provide a written decision within sixty (60) days. This decision likewise shall
state the specific reasons for the decision and shall include reference to
specific provisions of this Agreement on which the decision is based.
For purposes of implementing this claims procedure (but not for any other
purpose) the Chief Financial Officer of the Bank is hereby designated as the
Plan Administrator of this Agreement.
ARTICLE FIFTEEN
15.01 Administrative Clause. Any payment required to be made pursuant to this
Agreement to a person who is under a legal disability at the time such payment
is due may be made by the Bank to or for the benefit of such person in such of
the following ways as the Bank shall determine; (a) directly to the person
entitled to the payment; (b) to the legal representative of such person; (c) to
some near relative of such person to be used for the person's benefit; (d)
directly in payment of expenses of support, maintenance or education of such
person. Any such payment of the Bank shall, to the extent thereof, be a complete
discharge of any liability under this Agreement with respect to such payment.
The Bank shall not be required to see to the application by any third party of
any payments made pursuant to this Article.
ARTICLE SIXTEEN
16.01 Marital Deduction Provision. If the Executive designates his spouse to
receive payments to be made hereunder after his death, she shall have the right
to direct that as to the distribution of the sums, if any, payable after her
death the Bank shall pay any such sums to such person or persons or to her own
estate as she appoints and directs by a written direction filed with the Bank
during her lifetime or by her last will and testament specifically referring to
this power of appointment. To the extent that the Executive's spouse does not
effectively exercise the power of appointment any such sums shall upon her death
be distributed to her estate.
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ARTICLE SEVENTEEN
17.01 Arbitration. In the event of any dispute, controversy or misunderstanding
between the parties hereto, which may directly or indirectly concern or involve
any of the terms, covenants or conditions hereof, the parties agree that such
controversy shall be settled by arbitration in the City of Medford in accordance
with the Rules of American Arbitration Association. One arbitrator shall be
named by the each party involved in the dispute and then an additional
arbitrator shall be named by the arbitrators so chosen. Judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. The costs of the arbitration shall be borne by the party or parties
designated by the arbitrators.
IN WITNESS WHEREOF, the Bank has caused this Agreement to be duly executed by
its Chief Financial Officer and its Corporate seal affixed, duly attested by its
Secretary, and the Executive has hereunto set his hand and seal on the day and
year first written above.
Medford Savings Bank
/s/ Xxxxxxx X. Xxxx
--------------------------
Chief Financial Officer
/s/ Xxxxxx X. Xxxxxx
---------------------------
Executive
ATTEST:
/s/ Xxxxxx X. Xxxxxx
-------------------------
Secretary
/s/ Xxxx X. Xxxxxx
-------------------------
Witness
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