Exhibit 10.3
SUPPLEMENTAL RETIREMENT PLAN
FOR SENIOR EXECUTIVES
GEORGETOWN SAVINGS BANK
Georgetown, Massachusetts
Effective June 30, 2008
SUPPLEMENTAL RETIREMENT PLAN FOR SENIOR EXECUTIVES
This Supplemental Retirement Plan for Senior Executives (the "Plan") is
effective June 30, 2008. This Plan formalizes the agreements by and between
GEORGETOWN SAVINGS BANK (the "Bank"), a federally chartered savings bank, and
certain key employees, hereinafter referred to as "Executive(s)", who have been
selected and approved by the Bank to participate in this Plan and who have
evidenced their participation by execution of a Supplemental Retirement Plan
Participation Agreement ("Participation Agreement") in a form provided by the
Bank. This Plan replaces the individual Executive Supplemental Retirement
Agreements between the Bank and certain Executives who are participants herein
and is intended to comply with Internal Revenue Code ("Code") Section 409A and
any regulatory or other guidance issued under such Section. Any reference herein
to the "Company" shall mean GEORGETOWN BANCORP, INC., the stock holding company
of the Bank. The Company has executed this Plan for the sole purpose of
guaranteeing the payment of benefits hereunder.
W I T N E S S E T H :
WHEREAS, Executives are employed by the Bank; and
WHEREAS, the Bank recognizes the valuable services heretofore performed
for it by such Executives and wishes to encourage their continued employment and
to provide them with additional incentive to achieve corporate objectives; and
WHEREAS, the Bank and certain of the Executives previously entered into
Executive Supplemental Retirement Plans pursuant to which the Bank offered
retirement benefits; and
WHEREAS, the Bank desires to replace the individual agreements with
this Plan and to modify the benefit formula under the Plan; and
WHEREAS, the Bank desires to draft the Plan to comply with Section
409A of the Internal Revenue Code ("Code"); and
WHEREAS, the Bank intends this Plan to be considered an unfunded
arrangement, maintained primarily to provide supplemental retirement income for
its Executives, members of a select group of management or highly compensated
employees of the Bank, for tax purposes and for purposes of the Employee
Retirement Income Security Act of 1974, as amended; and
WHEREAS, the Bank has adopted this Plan which controls all issues
relating to Supplemental Benefits as described herein and supersedes the
individual arrangement with certain of the Executives.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises herein contained, the Bank and Executives agree as follows:
SECTION I
DEFINITIONS
When used herein, the following words and phrases shall have the
meanings below unless the context clearly indicates otherwise:
1.1 "Accrued Annuity Benefit" means that portion of the Annuity Benefit
which is expensed and accrued by the Bank under generally accepted
accounting principles (GAAP) at the date of measurement.
1.2 "Act" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
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1.3 "Administrator" means the Bank and/or its Board.
1.4 "Annuity Benefit" means a stream of payments to an Executive payable as
a single life annuity with 20 years certain, commencing on the Annuity
Commencement Date.
1.5 "Annuity Commencement Date" means, unless otherwise set forth herein,
the Executive's Benefit Age.
1.6 "Bank" means GEORGETOWN SAVINGS BANK and any successor thereto.
1.7 "Beneficiary" means the person or persons (and their heirs) designated
as Beneficiary by Executive to whom the deceased Executive's benefits
are payable. Such beneficiary designation shall be made on the form
attached hereto as Exhibit A and filed with the Plan Administrator. If
no Beneficiary is so designated, then Executive's Spouse, if living,
will be deemed the Beneficiary. If Executive's Spouse is not living,
then the Children of Executive will be deemed the Beneficiaries and
will take on a per stirpes basis. If there are no living Children, then
the Estate of Executive will be deemed the Beneficiary.
1.8 "Benefit Age" shall be the birthday on which Executive attains the age
set forth in Executive's Participation Agreement.
1.9 "Board" shall mean the Board of Directors of the Bank, unless
specifically noted otherwise.
1.10 "Cause" shall mean Executive's personal dishonesty, incompetence,
willful misconduct, any breach of fiduciary duty involving personal
profit, material breach of the Bank's Code of Ethics, material
violation of the Xxxxxxxx-Xxxxx requirements for officers of public
companies that in the reasonable opinion of the Chief Executive Officer
("CEO") or the Board will likely cause substantial financial harm or
substantial injury to the reputation of the Bank, intentional failure
to perform stated duties, willful violation of any law, rule, or
regulation (other than minor traffic violations or similar offenses) or
final cease-and-desist order, or material breach of Section 7.14 of
this Plan. In determining incompetence, the acts or omissions shall be
measured against standards generally prevailing in the savings
institutions industry. For purposes of this paragraph, no act or
failure to act on the part of the Executive shall be considered
"willful" unless done, or omitted to be done, by Executive not in good
faith and without reasonable belief that Executive's action or omission
was in the best interest of the Bank. Any act, or failure to act, based
upon authority given pursuant to a resolution duly adopted by the Board
or based upon the advice of counsel for the Bank shall be conclusively
presumed to be done, or omitted to be done, by Executive in good faith
and in the best interests of the Bank. The cessation of employment of
Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-fourths of the
entire membership of the Board of the Bank at a meeting of such Board
called and held for such purpose (after reasonable notice is provided
to Executive and Executive is given an opportunity, together with
counsel, to be heard before such Board), finding that, in the good
faith opinion of such Board, Executive is guilty of the conduct
described above, and specifying the particulars thereof in detail.
1.11 A "Change in Control" of the Bank or the Company shall mean (1) a
change in ownership of the Bank or the Company under paragraph (i)
below, or (2) a change in effective control of the Bank or the Company
under paragraph (ii) below, or (3) a change in the ownership of a
substantial portion of the assets of the Bank or the Company under
paragraph (iii) below:
(i) Change in the ownership of the Bank or the Company. A
change in the ownership of the Bank or the Company
shall occur on the date that any one person, or more
than one
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person acting as a group (as defined in Treasury
Regulation Section 1.409A-3(i)(5)(v)(B)), acquires
ownership of stock of the corporation that, together
with stock held by such person or group, constitutes
more than 50% of the total fair market value or total
voting power of the stock of such corporation.
(ii) Change in the effective control of the Bank or the
Company. A change in the effective control of the
Bank or the Company shall occur on the date that
either (A) any one person, or more than one person
acting as a group (as defined in Treasury Regulation
Section 1.409A-3(i)(5)(v)(B)), acquires (or has
acquired during the 12-month period ending on the
date of the most recent acquisition by such person or
persons) ownership of stock of the Bank or the
Company possessing 30% or more of the total voting
power of the stock of the Bank or the Company; or (B)
a majority of members of the Bank or the Company's
Board of Directors is replaced during any 12-month
period by Directors whose appointment or election is
not endorsed by a majority of the members of the
corporation's Board of Directors prior to the date of
the appointment or election, provided that this
sub-section (B) is inapplicable where a majority
shareholder of the Bank or the Company is another
corporation.
(iii) Change in the ownership of a substantial portion of
the Bank's or the Company's assets. A change in the
ownership of a substantial portion of the Bank's or
the Company's assets shall occur on the date that any
one person, or more than one person acting as a group
(as defined in Treasury Regulation Section
1.409A-3(i)(5)(vii)(C)), acquires (or has acquired
during the 12-month period ending on the date of the
most recent acquisition by such person or persons)
assets from the Bank or the Company that have a total
gross fair market value equal to more than 40% of the
total gross fair market value of all of the assets of
the Bank or the Company immediately prior to such
acquisition. For this purpose, gross fair market
value means the value of the assets of the
corporation, or the value of the assets being
disposed of, determined without regard to any
liabilities associated with such assets.
(iv) For all purposes hereunder, the definition of Change
in Control shall be construed to be consistent with
the requirements of Treasury Regulation Section
1.409A-3(i)(5), except to the extent that such
regulations are superseded by subsequent guidance. A
Change in Control shall not be deemed to have
occurred upon the second-step conversion of the
Company to a fully converted stock company.
1.12 "Children" means Executive's children, or the issue of any deceased
Children, then living at the time payments are due the Children under
this Plan. The term "Children" shall include both natural and adopted
Children.
1.13 "Code" means the Internal Revenue Code of 1986, as amended.
1.14 "Death Benefit" shall mean a Lump Sum payment equal to the Present
Value of the Accrued Annuity Benefit as of the date of death, without
any Pre-Retirement Reductions.
1.15 "Disability Benefit" means a Lump Sum payment, equal to the Annuity
Benefit, payable at Benefit Age, as if Executive had continued to work
until Benefit Age and Executive's base salary increased five percent
(5%) per year for each fiscal year until Executive's Benefit Age.
Alternatively, an Executive may elect in his Participation Agreement to
receive the benefit payment in another form or at another time.
1.16 "Effective Date" of this Plan shall be June 30, 2008.
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1.17 "Estate" means the estate of Executive.
1.18 "Executive" means the executive officer who has been selected and
approved by the Board to participate in the Plan and who has agreed to
participation by completing a Participation Agreement.
1.19 "Final Average Compensation" shall mean the total base salary plus
bonus paid during a fiscal year, including salary deferrals into a
401(k) Plan or cafeteria plan. Final Average Compensation shall be
averaged over the highest three (3) fiscal years of the Executive's
final five (5) fiscal years of employment with the Bank.
1.20 "Good Reason," shall mean (a) failure to elect or reelect or to appoint
or reappoint Executive to his Executive Position (as defined in
Executive's employment agreement), unless consented to by Executive;
(b) a substantial adverse and material change in Executive's function,
duties, or responsibilities; (c) a material reduction to base salary or
benefits of Executive from that being provided as of the Effective Date
(except for any reduction that is part of an employee-wide reduction in
pay or benefits); (d) a liquidation or dissolution of the Bank; (e)
material breach of this Plan by the Bank; or (f) a relocation of
Executive's principal place of employment more than twenty-five (25)
miles from the principal office on the Effective Date.
1.21 "Lump Sum" shall mean payment in a single sum equal to the Present
Value of the Annuity Benefit or Accrued Annuity Benefit, as applicable.
1.22 "Normal Benefit Date" shall be 90 days following Executive's Separation
from Service (other than due to death or Disability). In the event of
Executive's death, the Normal Benefit Date shall mean the first day of
the second month following the month in which Executive's death occurs.
In the event of the Executive's Disability, the Normal Benefit Date
shall be the Benefit Age set forth in Executive's Participation
Agreement, unless the Executive has elected to have the Disability
Benefit commence on the first day of the second month following the
determination of Disability.
1.23 "Normal Benefit Form" means a Lump Sum payment equal to the Present
Value, as of the time of payment, of the Annuity Benefit.
1.24 "Participation Agreement" means the agreement between Executive and the
Bank which sets forth the particulars of Executive's Supplemental
Benefit and/or other benefits to which Executive or Executive's
Beneficiary becomes entitled under the Plan.
1.25 "Plan Year" shall mean July 1 to June 30.
1.26 "Pre-Retirement Reduction" shall mean the reductions in benefit
required under the Plan in the event the Participant Separates from
Service prior to the Participant's Benefit Age. The Pre-Retirement
Reduction in benefit may result from Separation from Service prior to
the occurrence of one or more of the following: (i) the date on which
the Participant's Vesting Rate equals 100%, (ii) the date on which the
Prorate Fraction equals "1" and (iii) the commencement of the
Supplemental Benefit prior to the Participant's attainment of age 62.
1.27 "Present Value" shall mean the actuarial present value (calculated as
of the payment date) of a payment stream. Unless otherwise set forth
herein, the Present Value shall be determined using a six percent (6%)
interest rate and 1994 Group Annuity Reserving Table.
1.28 "Prorate Fraction" shall be a fraction, the numerator of which is the
Executive's years of employment from the Executive's original date of
hire and the denominator of which shall be set forth in the
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Executive's Participation Agreement, provided, however, that the
Prorate Fraction shall never exceed "one".
1.29 "Separation from Service" means Executive's death, retirement or other
termination of employment with the Bank within the meaning of Code
Section 409A. No Separation from Service shall be deemed to occur due
to military leave, sick leave or other bona fide leave of absence if
the period of such leave does not exceed six months or, if longer, so
long as Executive's right to reemployment is provided by law or
contract. If the leave exceeds six months and Executive's right to
reemployment is not provided by law or by contract, then Executive
shall have a Separation from Service on the first date immediately
following such six-month period.
Whether a Separation from Service has occurred is determined based on
whether the facts and circumstances indicate that the Bank and
Executive reasonably anticipated that no further services would be
performed after a certain date or that the level of bona fide services
the employee would perform after such date (whether as an employee or
as an independent contractor) would permanently decrease to no more
than 49% of the average level of bona fide services performed over the
immediately preceding 36 months (or such lesser period of time in which
Executive performed services for the Bank). The determination of
whether Executive has had a Separation from Service shall be made by
applying the presumptions set forth in the Treasury Regulations under
Code Section 409A.
1.30 "Specified Employee" means, in the event the Bank or the Company is or
becomes publicly traded, a "Key Employee" as such term is defined in
Code Section 416(i) without regard to paragraph 5 thereof.
Notwithstanding anything to the contrary herein, in the event Executive
is a Specified Employee and becomes entitled to a payment hereunder due
to Separation from Service for any reason (other than death or
Disability), the payments to such Executive shall not commence until
the first day of the seventh month following such Separation from
Service. Whether and the extent to which a person is a Specified
Employee shall be determined on the "Specified Employee Determination
Date" which shall be December 31 of each calendar year and shall be
applicable commencing on the following April 1, in accordance with the
rules set forth in the Treasury Regulations under Code Section 409A.
1.31 "Spouse" means the individual to whom Executive is legally married at
the time of Executive's death, provided, however, that the term
"Spouse" shall not refer to an individual to whom Executive is legally
married at the time of death if Executive and such individual have
entered into a formal separation agreement (provided that such
separation agreement does not provide otherwise or state that such
individual is entitled to a portion of the benefit hereunder) or
initiated divorce proceedings.
1.32 "Supplemental Benefit" means a benefit (before taking into account
federal and state income taxes) payable to an Executive who satisfies
the conditions to receive a benefit as described in this Plan.
1.33 "Treasury Regulations" means the final regulations promulgated under
Section 409A of the Code.
1.34 "Vesting Rate" shall be the rate set forth in the Executive's
Participation Agreement.
1.35 "Yearly Benefit Amount" means the annual amount contingently payable as
an Annuity Benefit. The Yearly Benefit Amount shall be equal to the
percentage of the Executive's Final Average Compensation set forth in
the Executive's Participation Agreement.
SECTION II
ESTABLISHMENT OF RABBI TRUST
The Bank may establish a rabbi trust into which the Bank may contribute
assets which shall be held therein, subject to the claims of the Bank's
creditors in the event of the Bank's "Insolvency" as defined in the
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agreement which establishes such rabbi trust, until the contributed assets are
paid to Executives and their Beneficiaries in such manner and at such times as
specified in this Plan. Contributions to a rabbi trust would provide the Bank
with a source of funds to assist it in meeting the liabilities of this Plan. To
the extent the language in this Plan is modified by the language in the rabbi
trust agreement, the rabbi trust agreement shall supersede this Plan.
Contributions to the rabbi trust may be made during each Plan Year in accordance
with the rabbi trust agreement. It is expected that the amount of such
contribution(s), if any, would be equal to the full present value of all benefit
accruals under this Plan, if any, less: (i) previous contributions made on
behalf of Executive to the rabbi trust, and (ii) earnings to date on all such
previous contributions. In the event of a Change in Control, the Bank shall
transfer to the rabbi trust within thirty (30) days prior to such Change in
Control, the present value (applying the Interest Factor applicable to a Change
in Control) of an amount sufficient to fully fund the Supplemental Benefit for
each Executive covered by this Plan.
SECTION III
BENEFITS
3.1 Separation from Service On or After Benefit Age. If Executive has a
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Separation from Service on or after Benefit Age, Executive shall be
entitled to a Supplemental Benefit determined in the manner set forth
herein. The Supplemental Benefit shall be determined as an Annuity
Benefit equal to the Yearly Benefit Amount multiplied by the Prorate
Fraction. The Supplemental Benefit shall commence on Executive's Normal
Benefit Date and shall be payable in a Lump Sum, unless Executive has
elected at the time of execution of the Participation Agreement to
receive another form of benefit.
3.2 Separation from Service Prior to Benefit Age. If Executive has a
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voluntary or involuntary Separation from Service (other than due to
Cause, death or Disability) after the Executive has a vested Accrued
Annuity Benefit but prior to the attainment of his or her Benefit Age,
Executive shall be entitled to a Supplemental Benefit, calculated in
the manner set forth in Section 3.1. If applicable, the Supplemental
Benefit shall be multiplied by the Executive's Vesting Rate. In
addition, if Executive is less than age 62 at time of commencement of
the Supplemental Benefit, the Supplemental Benefit will be further
reduced by 5% per year for each year prior to age 62 that the benefit
payment commences. The Supplemental Benefit shall commence on
Executive's Normal Benefit Date and shall be payable in a Lump Sum,
unless Executive has elected at the time of execution of the
Participation Agreement to receive an Annuity Benefit.
3.3 Death Benefit.
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(a) If Executive dies prior to attaining his Benefit Age but while
employed at the Bank, Executive's Beneficiary shall be
entitled to the Death Benefit. The Death Benefit shall
commence on the Normal Benefit Date and shall be payable in
the Normal Benefit Form.
(b) If Executive dies following Separation from Service and after
becoming vested in an Accrued Annuity Benefit but prior to the
commencement of benefit payments, Executive's Beneficiary
shall be entitled to the payment of the amount otherwise
payable to Executive under the applicable Sub-section of this
Section III, commencing on the Normal Benefit Date and payable
in a Lump Sum.
(c) If Executive dies following the commencement of his benefit
payments but prior to receiving the entire Supplemental
Benefit, any remaining benefits shall be paid to Executive's
Beneficiary in the same manner as paid to Executive prior to
his death.
3.4. Benefit Payable Following a Change in Control.
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(a) If a Change in Control occurs and, Executive has a involuntary
Separation from Service or voluntary Separation from Service
for Good Reason within two years following a Change in
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Control, Executive shall be entitled to a Supplemental Benefit
calculated as if Executive had attained Executive's Benefit
Age at the time of the Change in Control, and Executive's base
salary had increased five percent (5%) per year until Benefit
Age. The Supplemental Benefit shall commence on Executive's
Normal Benefit Date and shall be payable in a Lump Sum. For
these purposes, a determination of the Present Value of the
Annuity Benefit shall be determined by applying the applicable
federal interest rate required under Code Sections 280G and
1274(d). Notwithstanding the foregoing, if the Supplemental
Benefit provided under this Section 3.4, either as a
stand-alone benefit or when aggregated with other payments to
or for the benefit of Executive that are contingent on a
Change in Control, would cause Executive to have an "excess
parachute payment" under Code Section 280G, the Supplemental
Benefit and/or such other payments shall be reduced to avoid
this result. In the event a reduction is necessary, Executive
shall be entitled to determine which benefits or payments
shall be reduced or eliminated so the total parachute payments
do not result in an excess parachute payment. If Executive
does not make this determination within ten business days
after receiving a written request form the Bank, the Bank may
make such determination, and shall notify Executive promptly
thereof. In the event it is determined that permitting
Executive or the Bank to make the determination regarding the
form or manner of reduction would violate Code Section 409A,
such reduction shall be made pro rata.
(b) If a Change in Control occurs after the Executive commences
receiving Supplemental Benefit payments under this Plan in the
form of either an annuity or installment payment, the Present
Value of the remaining payments shall be determined and shall
be payable to the Executive in a Lump Sum.
3.5 Termination for Cause. If Executive is terminated for Cause, all
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benefits under this Plan shall be forfeited by Executive and
Executive's participation in this Plan shall become null and void.
3.6 Disability Benefit. Notwithstanding any other provision hereof, if
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Executive becomes Disabled prior to his or her Benefit Age, Executive
shall be entitled to receive the Disability Benefit hereunder.
Executive shall be deemed to be "Disabled" or to have a "Disability" in
any case in which it is determined:
(a) by a duly licensed physician selected by the Bank, that
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
last for a continuous period of not less than 12 months;
(b) by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or last
for a continuous period of not less than 12 months, that the
Executive is receiving income replacement benefits for a
period of not less than three months under an accident and
health plan covering employees of Executive's employer; or
(c) by the Social Security Administration, that Executive is
totally disabled.
The Disability Benefit shall be payable at the Benefit Age set forth in
Executive's Participation Agreement in a Lump Sum, unless Executive has
elected at the time of execution of the Participation Agreement to
receive another form or time of benefit.
3.7 Change in Form or Timing of Benefit. In the event Executive desires to
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change the form or time of payment of the Supplemental Retirement
Benefit, and such alternate form or time is permitted by the applicable
subsection of this Section III, such change in election may be made
provided the following conditions are satisfied:
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(i) any change in the form or timing must be elected at least 12
months before the benefit would otherwise be paid or commence,
and
(ii) any change (in form or timing) must result in a minimum five
year delay in the commencement of the effected payment.
SECTION IV
BENEFICIARY DESIGNATION
Executive shall make an initial designation of primary and secondary
Beneficiaries upon execution of his Participation Agreement and shall have the
right to change such designation, at any subsequent time, by submitting to the
Administrator, in substantially the form attached as Exhibit A, a written
designation of primary and secondary Beneficiaries. Any Beneficiary designation
made subsequent to execution of the Participation Agreement shall become
effective only when receipt thereof is acknowledged in writing by the
Administrator.
SECTION V
EXECUTIVE'S RIGHT TO ASSETS:
ALIENABILITY AND ASSIGNMENT PROHIBITION
At no time shall Executive be deemed to have any lien, right, title or
interest in or to any specific investment or asset of the Bank. The rights of
Executive, any Beneficiary, or any other person claiming through Executive under
this Plan, shall be solely those of an unsecured general creditor of the Bank.
Executive, the Beneficiary, or any other person claiming through Executive,
shall only have the right to receive from the Bank those payments so specified
under this Plan. Neither Executive nor any Beneficiary under this Plan 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 Executive or
his Beneficiary, nor be transferable by operation of law in the event of
bankruptcy, insolvency or otherwise.
SECTION VI
ACT PROVISIONS
6.1 Named Fiduciary and Administrator. The Bank shall be the Named
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Fiduciary and Administrator of this Plan. As Administrator, the Bank
shall be responsible for the management, control and administration of
the Plan as established herein. The Administrator 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.
6.2 Claims Procedure and Arbitration. In the event that benefits under this
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Plan are not paid to Executive (or to his Beneficiary in the case of
Executive's death) and such claimants feel they are entitled to receive
such benefits, then a written claim must be made to the Administrator
within sixty (60) days from the date payments are refused. The
Administrator shall review the written claim and, if the claim is
denied, in whole or in part, they shall provide in writing, within
thirty (30) days of receipt of such claim, their specific reasons for
such denial, reference to the provisions of this Plan or the
Participation Agreement upon which the denial is based, and any
additional material or information necessary to perfect the claim. Such
writing by the Administrator shall further indicate the additional
steps which must be undertaken by claimants if an additional review of
the claim denial is desired.
If claimants desire a second review, they shall notify the
Administrator in writing within thirty (30) days of the first claim
denial. Claimants may review this Plan, the Participation Agreement or
any documents relating thereto and submit any issues and comments, in
writing, they may feel appropriate. In its sole
9
discretion, the Administrator shall then review the second claim and
provide a written decision within thirty (30) days of receipt of such
claim. This decision shall state the specific reasons for the decision
and shall include reference to specific provisions of this Plan or the
Participation Agreement upon which the decision is based.
If claimants continue to dispute the benefit denial based upon
completed performance of this Plan and the Participation Agreement or
the meaning and effect of the terms and conditions thereof, it shall be
settled by arbitration administered by the American Arbitration
Association ("AAA") under its Commercial Arbitration Rules, and
judgment on the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof.
SECTION VII
MISCELLANEOUS
7.1 No Effect on Employment Rights. Nothing contained herein will confer
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upon Executive the right to be retained in the service of the Bank nor
limit the right of the Bank to discharge or otherwise deal with
Executive without regard to the existence of the Plan.
7.2 Governing Law. The Plan is established under, and will be construed
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according to, the laws of the Commonwealth of Massachusetts, to the
extent such laws are not preempted by the Act or the Code and valid
regulations published thereunder.
7.3 Severability and Interpretation of Provisions. In the event that any of
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the provisions of this Plan or portion hereof are held to be
inoperative or invalid by any court of competent jurisdiction, or in
the event that any provision is found to violate Code Section 409A and
would subject Executive to additional taxes and interest on the amounts
deferred hereunder, or in the event that any legislation adopted by any
governmental body having jurisdiction over the Bank would be
retroactively applied to invalidate this Plan or any provision hereof
or cause the benefits hereunder to be taxable, then: (1) insofar as is
reasonable, effect will be given to the intent manifested in the
provisions held invalid or inoperative, and (2) the validity and
enforceability of the remaining provisions will not be affected
thereby. In the event that the intent of any provision shall need to be
construed in a manner to avoid taxability, such construction shall be
made by the Administrator in a manner that would manifest to the
maximum extent possible the original meaning of such provisions.
7.4 Incapacity of Recipient. In the event Executive is declared incompetent
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and a conservator or other person legally charged with the care of his
person or Estate is appointed, any benefits under the Plan to which
such Executive is entitled shall be paid to such conservator or other
person legally charged with the care of his person or Estate.
7.5 Unclaimed Benefit. Executive shall keep the Bank informed of his or her
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current address and the current address of his Beneficiaries. If the
location of Executive is not made known to the Bank, the Bank shall
delay payment of Executive's benefit payment(s) until the location of
Executive is made known to the Bank; however, the Bank shall only be
obligated to hold such benefit payment(s) for Executive until the
expiration of three (3) years. Upon expiration of the three (3) year
period, the Bank may discharge its obligation by payment to Executive's
Beneficiary. If the location of Executive's Beneficiary is not known to
the Bank, Executive and his Beneficiary(ies) shall thereupon forfeit
any rights to the balance, if any, of any benefits provided for such
Executive and/or Beneficiary under this Plan.
7.6 Limitations on Liability. Notwithstanding any of the preceding
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provisions of the Plan, no individual acting as an employee or agent of
the Bank, or as a member of the Board of the Bank shall be personally
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liable to Executive or any other person for any claim, loss, liability
or expense incurred in connection with the Plan.
7.7 Gender. Whenever in this Plan words are used in the masculine or neuter
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gender, they shall be read and construed as in the masculine, feminine
or neuter gender, whenever they should so apply.
7.8 Effect on Other Corporate Benefit Plans. Nothing contained in this Plan
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shall affect the right of Executive to participate in or be covered by
any qualified or nonqualified pension, profit sharing, group, bonus or
other supplemental compensation or fringe benefit agreement
constituting a part of the Bank's existing or future compensation
structure.
7.9 Inurement. This Plan shall be binding upon and shall inure to the
---------
benefit of the Bank, its successors and assigns, and Executive, his
successors, heirs, executors, administrators, and Beneficiaries.
7.10 Acceleration of Payments. Except as specifically permitted herein or in
------------------------
other sections of this Plan, no acceleration of the time or schedule of
any payment may be made hereunder. Notwithstanding the foregoing,
payments may be accelerated hereunder by the Bank, in accordance with
the provisions of Treasury Regulation Section 1.409A-3(j)(4) and any
subsequent guidance issued by the United States Treasury Department.
Accordingly, payments may be accelerated, in accordance with
requirements and conditions of the Treasury Regulations (or subsequent
guidance) in the following circumstances: (i) as a result of certain
domestic relations orders; (ii) in compliance with ethics agreements
with the Federal Government; (iii) in compliance with ethics laws or
conflicts of interest laws; (iv) in limited cash-outs (but not in
excess of the limit under Code Section 402(g)(1)(B)); (v) in the case
of certain distributions to avoid a non-allocation year under Code
Section 409(p); (vi) to apply certain offsets in satisfaction of a debt
of Executive to the Bank; (vii) in satisfaction of certain bona fide
disputes between Executive and the Bank; or (viii) for any other
purpose set forth in the Treasury Regulations and subsequent guidance.
7.11 Headings. Headings and sub-headings in this Plan are inserted for
--------
reference and convenience only and shall not be deemed a part of this
Plan.
7.12 12 U.S.C. ss. 1828(k). Any payments made to Executive pursuant to this
---------------------
Plan or otherwise are subject to and conditioned upon compliance with
12 U.S.C. ss. 1828(k) or any regulations promulgated thereunder.
7.13 Payment of Employment and Code Section 409A Taxes. Any distribution
---------------------------------------------------
under this Plan shall be reduced by the amount of any taxes required to
be withheld from such distribution. This Plan shall permit the
acceleration of the time or schedule of a payment to pay
employment-related taxes as permitted under Treasury Regulation Section
1.409A-3(j) or to pay any taxes that may become due at any time that
the arrangement fails to meet the requirements of Code Section 409A and
the regulations and other guidance promulgated thereunder. In the
latter case, such payments shall not exceed the amount required to be
included in income as the result of the failure to comply with the
requirements of Code Section 409A.
7.14 Non-Competition. The benefits provided to Executives under this Plan
---------------
are specifically conditioned on each Executive's covenant that, for a
period of two (2) years following the Executive's Separation from
Service with the Bank (other than in connection with or following a
Change in Control), that he will not, without the written consent of
the Bank, either directly or indirectly:
(i) solicit, offer employment to, or take any other action
intended (or that a reasonable person acting in like
circumstances would expect) to have the effect of causing any
officer or employee of the Bank or the Company, or any of
their respective subsidiaries or affiliates, to terminate his
or her employment and accept employment or become affiliated
with, or provide services for compensation in any capacity
whatsoever to, any business whatsoever that competes with the
11
business of the Bank or of the Company, or any of their direct
or indirect subsidiaries or affiliates, that has headquarters
or offices within twenty-five (25) miles of the locations in
which the Bank or the Company has business operations or has
filed an application for regulatory approval to establish an
office;
(ii) become an officer, employee, consultant, director, independent
contractor, agent, joint venturer, partner or trustee of any
savings bank, savings and loan association, savings and loan
holding company, credit union, bank or bank holding company,
insurance company or agency, any mortgage or loan broker or
any other entity that competes with the business of the Bank
or the Company or any of their direct or indirect subsidiaries
or affiliates, that has headquarters or offices within
twenty-five (25) miles of the locations in which the Bank or
the Company has business operations or has filed an
application for regulatory approval to establish an office;
provided, however, that this restriction shall not apply if
Executive's employment is terminated following a Change in
Control; or
(iii) solicit, provide any information, advice or recommendation or
take any other action intended (or that a reasonable person
acting in like circumstances would expect) to have the effect
of causing any customer of the Bank to terminate an existing
business or commercial relationship with the Bank.
In the event that the Executive competes in violation of this
provision, all Supplemental Benefits payable to Executive shall cease
and any Supplemental Benefits previously paid shall be reimbursed to
the Bank within thirty (30) days of the Bank's notification to
Executive that this provision has been violated.
7.15 Payment of Benefits. All benefit payments provided pursuant to this
-------------------
Plan shall be timely paid in cash or check from the general funds of
the Bank. Any holding company established by the Bank may accede to
this Plan but only for the purpose of guaranteeing payment of the
benefits due hereunder to a Participant or Beneficiary.
SECTION VIII
AMENDMENT/TERMINATION
8.1 Amendment or Modification. This Plan may be amended or modified at any
-------------------------
time, provided, however, that no such amendment may serve to reduce the
vested Accrued Annuity Benefit of any Executive, and provided further,
that no amendment or modification shall be valid if it violates Code
Section 409A, as in effect at the time of such amendment or
modification.
8.2 Termination of Plan. Subject to the requirements of Code Section 409A,
-------------------
in the event of complete termination of the Plan, the Plan shall cease
to operate and the Bank shall pay out to Executive his benefit as if
Executive had terminated employment as of the effective date of the
complete termination. Such complete termination of the Plan shall occur
only under the following circumstances and conditions:
(a) The Board may terminate the Plan within 12 months of a corporate
dissolution taxed under Code Section 331, or with approval of a
bankruptcy court pursuant to 11 U.S.C. ss.503(b)(1)(A), provided that
the amounts deferred under the Plan (e.g., the Accrued Annuity Benefit)
are included in Executive's gross income in the latest of (i) the
calendar year in which the Plan terminates; (ii) the calendar year in
which the amount is no longer subject to a substantial risk of
forfeiture; or (iii) the first calendar year in which the payment is
administratively practicable.
12
(b) The Board may terminate the Plan by Board action taken within the
30 days preceding a Change in Control (but not following a Change in
Control), provided that the Plan shall only be treated as terminated if
all substantially similar arrangements sponsored by the Bank are
terminated so that Executive and all participants under substantially
similar arrangements are required to receive all amounts of
compensation deferred under the terminated arrangements within 12
months of the date of the termination of the arrangements. Following
the termination of the Plan, the amount payable to Executive shall be
the amount to which Executive is entitled upon a Change in Control, as
set forth in Executive's Participation Agreement.
SECTION IX
EXECUTION
9.1 This Plan sets forth the entire understanding of the parties hereto
with respect to the transactions contemplated hereby, and any previous
agreements or understandings between the parties hereto regarding the
subject matter hereof are merged into and superseded by this Plan.
9.2 This Plan shall be executed in duplicate, each copy of which, when so
executed and delivered, shall be an original, but both copies shall
together constitute one and the same instrument.
[Signature Page Follows]
13
IN WITNESS WHEREOF, the Bank has caused this Plan to be executed on
this 23rd day of June, 2008.
ATTEST: GEORGETOWN SAVINGS BANK
/s/Xxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------ --------------------------
Title: Chairman of the Board
ATTEST: GEORGETOWN BANCORP, INC.
/s/Xxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------ --------------------------
Title: Chairman of the Board
14
SUPPLEMENTAL RETIREMENT PLAN PARTICIPATION AGREEMENT
I, Xxxxxx X. Xxxxxxxx, and GEORGETOWN SAVINGS BANK hereby agree, for
good and valuable consideration, the value of which is hereby acknowledged, that
I shall participate in the Supplemental Retirement Plan for Senior Executives
("Plan") established as of June 30, 2008, by GEORGETOWN SAVINGS BANK, as such
Plan may now exist or hereafter be modified, and do further agree to the terms
and conditions thereof. The Supplemental Retirement Plan replaces and supersedes
the Executive Supplemental Compensation Agreement in which I previously
participated.
I understand that I must execute this Supplemental Retirement Plan
Participation Agreement ("Participation Agreement") as well as notify the
Administrator of such execution in order to participate in the Plan. The
provisions of the Plan are incorporated herein by reference. In the event of an
inconsistency between the terms of this Participation Agreement and the Plan,
the terms of the Plan shall control.
The following provisions relate to a determination of my Supplemental
Benefit under the Plan.
Benefit Age. My Benefit Age is sixty-five (65).
-----------
Final Average Compensation Percentage: Forty Percent (45%).
-------------------------------------
Yearly Benefit Service Prorate Fraction Denominator: twenty-three (23).
---------------------------------------------------
Vesting Rate: 10% per year from original date of hire. Notwithstanding
------------
the foregoing, my Vesting Rate shall be 100% upon the occurrence of my
Involuntary Separation from Service without Cause or Voluntary Separation from
Service for Good Reason, or because of death or Disability.
Separation from Service on or After Benefit Age. I understand that if I
-----------------------------------------------
retire on or after attainment of my Benefit Age, I shall be entitled to the
Supplemental Benefit, calculated in accordance with Section 3.1 and all relevant
provisions of the Plan. Unless I elect otherwise below, my Supplemental Benefit
will be paid in a Lump Sum. Alternatively, I may elect to receive my
Supplemental Benefit in another form by checking the applicable box below:
|_| Annuity (with 20 years certain)
|_| ____% Lump Sum with 20 Annual Installments
|_| Other ________________________________________________________
Separation from Service Prior to Benefit Age. If I have a vested
Accrued Annuity Benefit at the time of my voluntary or involuntary Separation
from Service without Cause (as defined in the Plan) prior to attainment of my
Benefit Age (other than due to death or Disability), I shall be entitled to the
Supplemental Benefit, calculated in accordance with Section 3.2 and all relevant
provisions of the Plan. Unless I elect otherwise below, my Supplemental Benefit
will be paid in a Lump Sum. Alternatively, I may elect to receive my
Supplemental Benefit in another form by checking the applicable box below:
|_| Annuity (with 20 years certain)
|_| ____% Lump Sum with 20 Annual Installments
|_| Other ________________________________________________________
Termination for Cause. I understand that if I have a termination for
----------------------
Cause, my entire benefit under this Plan shall be forfeited.
Death Benefit. In the event of my death prior to Separation from
--------------
Service, my Beneficiary shall be entitled to a Death Benefit, equal to the
amount calculated in accordance with the terms of Sections 1.14 and 3.3 of the
Plan. Such Death Benefit shall be payable in a Lump Sum on the Normal Benefit
Date.
Following a Change in Control.
------------------------------
(a) Change in Control Occurs Before Separation from Service. I
--------------------------------------------------------------
understand that if I Separate from Service within two years following a Change
in Control, I will be entitled to my Supplemental Benefit calculated as set
forth in Section 3.4 of the Plan. Such benefit shall be payable in a Lump Sum on
the Normal Benefit Date.
(b) Change in Control Occurs After Separation from Service. In the
----------------------------------------------------------
event a Change in Control occurs following my Separation from Service, while I
am receiving my Supplemental Benefit in the form of an annuity or installment
payments, I can elect, by checking the box below, to have the Present Value of
my remaining payments paid in the form of a lump sum payment.
|_| I elect to have the Present Value of my remaining payments
paid in a Lump Sum.
Disability While Employed. I understand that in the event of my
---------------------------
Disability prior to my Benefit Age, I will be entitled to the Disability Benefit
calculated as set forth in Section 3.6 of the Plan. My Disability Benefit will
be paid in a Lump Sum unless I elect another form of benefit. I elect to receive
my Disability Benefit in the following form:
|_| Annuity (with 20 years certain)
|_| ____% Lump Sum with 20 Annual Installments
|_| Other ________________________________________________________
My Disability Benefit shall be payable:
|_| Upon the determination of my Disability
|_| Upon the attainment of my Benefit Age
This Participation Agreement shall become effective upon execution
(below) by both Executive and a duly authorized officer of the Bank.
Dated this _____ day of ______________________, 2008.
GEORGETOWN SAVINGS BANK EXECUTIVE
___________________________________ ___________________________
(Bank's duly authorized Officer) Xxxxxx X. Xxxxxxxx
2
SUPPLEMENTAL RETIREMENT PLAN PARTICIPATION AGREEMENT
I, Xxxxxx X. Xxxxxxx, and GEORGETOWN SAVINGS BANK hereby agree, for
good and valuable consideration, the value of which is hereby acknowledged, that
I shall participate in the Supplemental Retirement Plan for Senior Executives
("Plan") established as of June 30, 2008, by GEORGETOWN SAVINGS BANK, as such
Plan may now exist or hereafter be modified, and do further agree to the terms
and conditions thereof. The Supplemental Retirement Plan replaces and supersedes
the Executive Supplemental Compensation Agreement in which I previously
participated.
I understand that I must execute this Supplemental Retirement Plan
Participation Agreement ("Participation Agreement") as well as notify the
Administrator of such execution in order to participate in the Plan. The
provisions of the Plan are incorporated herein by reference. In the event of an
inconsistency between the terms of this Participation Agreement and the Plan,
the terms of the Plan shall control.
The following provisions relate to a determination of my Supplemental
Benefit under the Plan.
Benefit Age. My Benefit Age is sixty-five (65).
-----------
Final Average Compensation Percentage: Forty Percent (45%).
-------------------------------------
Yearly Benefit Service Prorate Fraction Denominator: twenty-three (23).
---------------------------------------------------
Vesting Rate: 10% per year from original date of hire. Notwithstanding
------------
the foregoing, my Vesting Rate shall be 100% upon the occurrence of my
Involuntary Separation from Service without Cause or Voluntary Separation from
Service for Good Reason, or because of death or Disability.
Separation from Service on or After Benefit Age. I understand that if I
-----------------------------------------------
retire on or after attainment of my Benefit Age, I shall be entitled to the
Supplemental Benefit, calculated in accordance with Section 3.1 and all relevant
provisions of the Plan. Unless I elect otherwise below, my Supplemental Benefit
will be paid in a Lump Sum. Alternatively, I may elect to receive my
Supplemental Benefit in another form by checking the applicable box below:
|_| Annuity (with 20 years certain)
|_| ____% Lump Sum with 20 Annual Installments
|_| Other ________________________________________________________
Separation from Service Prior to Benefit Age. If I have a vested
--------------------------------------------------
Accrued Annuity Benefit at the time of my voluntary or involuntary Separation
from Service without Cause (as defined in the Plan) prior to attainment of my
Benefit Age (other than due to death or Disability), I shall be entitled to the
Supplemental Benefit, calculated in accordance with Section 3.2 and all relevant
provisions of the Plan. Unless I elect otherwise below, my Supplemental Benefit
will be paid in a Lump Sum. Alternatively, I may elect to receive my
Supplemental Benefit in another form by checking the applicable box below:
|_| Annuity (with 20 years certain)
|_| ____% Lump Sum with 20 Annual Installments
|_| Other ________________________________________________________
Termination for Cause. I understand that if I have a termination for
----------------------
Cause, my entire benefit under this Plan shall be forfeited.
Death Benefit. In the event of my death prior to Separation from
--------------
Service, my Beneficiary shall be entitled to a Death Benefit, equal to the
amount calculated in accordance with the terms of Sections 1.14 and 3.3 of the
Plan. Such Death Benefit shall be payable in a Lump Sum on the Normal Benefit
Date.
Following a Change in Control.
-----------------------------
(a) Change in Control Occurs Before Separation from Service. I
--------------------------------------------------------------
understand that if I Separate from Service within two years following a Change
in Control I will be entitled to my Supplemental Benefit calculated as set forth
in Section 3.4 of the Plan. Such benefit shall be payable in a Lump Sum on the
Normal Benefit Date.
(b) Change in Control Occurs After Separation from Service. In the
----------------------------------------------------------
event a Change in Control occurs following my Separation from Service, while I
am receiving my Supplemental Benefit in the form of an annuity or installment
payments, I can elect, by checking the box below, to have the Present Value of
my remaining payments paid in the form of a lump sum payment.
|_| I elect to have the Present Value of my remaining payments
paid in a Lump Sum.
Disability While Employed. I understand that in the event of my
---------------------------
Disability prior to my Benefit Age, I will be entitled to the Disability Benefit
calculated as set forth in Section 3.6 of the Plan. My Disability Benefit will
be paid in a Lump Sum unless I elect another form of benefit. I elect to receive
my Disability Benefit in the following form:
|_| Annuity (with 20 years certain)
|_| ____% Lump Sum with 20 Annual Installments
|_| Other ________________________________________________________
My Disability Benefit shall be payable:
|_| Upon the determination of my Disability
|_| Upon the attainment of my Benefit Age
This Participation Agreement shall become effective upon execution
(below) by both Executive and a duly authorized officer of the Bank.
Dated this _____ day of ______________________, 2008.
GEORGETOWN SAVINGS BANK EXECUTIVE
____________________________________ ___________________________
(Bank's duly authorized Officer) Xxxxxx X. Xxxxxxx
2
Exhibit A
SUPPLEMENTAL RETIREMENT PLAN FOR SENIOR EXECUTIVES
BENEFICIARY DESIGNATION
Executive, under the terms of the Supplemental Retirement Plan for
Senior Executives executed by the Bank and effective June 30, 2008, hereby
designates the following Beneficiary to receive any guaranteed payments or death
benefits under such Plan, following his death:
PRIMARY BENEFICIARY:
--------------------------------------------------------------------------------
In the event the Primary Beneficiary set forth above has predeceased me, I
designate the person set forth below as my Secondary Beneficiary.
SECONDARY BENEFICIARY:
--------------------------------------------------------------------------------
This Beneficiary Designation hereby revokes any prior Beneficiary
Designation which may have been in effect. Such Beneficiary Designation
is revocable.
DATE: ___________ _____, 20___.
____________________________________ _______________________________
(WITNESS) EXECUTIVE
____________________________________
(WITNESS)
