-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WXIlBNWh/qyAIxfMk4UgQ5N7vqggDTNVGxAIcF9hpyWkoEZ8KIS2Vsnn0TAevQBv zgYdz4p8h27/BV2ZGl+ybw== 0000909654-07-002951.txt : 20071221 0000909654-07-002951.hdr.sgml : 20071221 20071221163603 ACCESSION NUMBER: 0000909654-07-002951 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20071220 ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071221 DATE AS OF CHANGE: 20071221 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL BANCORP INC /MA/ CENTRAL INDEX KEY: 0001076394 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 043447594 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25251 FILM NUMBER: 071323646 BUSINESS ADDRESS: STREET 1: 399 HIGHLAND AVENUE CITY: SOMERVILLE STATE: MA ZIP: 02144 BUSINESS PHONE: 6176284000 MAIL ADDRESS: STREET 1: 399 HIGHLAND AVENUE CITY: SOMERVILLE STATE: MA ZIP: 02144 8-K 1 central8kdec20-07.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): December 20, 2007 CENTRAL BANCORP, INC. ----------------------------------------------------------- (Exact Name Of Registrant As Specified In Charter) MASSACHUSETTS 0-25251 04-3447594 - -------------------------------- ------------------- ------------- (State Or Other Jurisdiction (Commission (IRS Employer Of Incorporation) File Number) Identification No.) 399 HIGHLAND AVENUE, SOMERVILLE, MASSACHUSETTS 02144 - -------------------------------------------------------------------------------- (Address Of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (617) 628-4000 -------------- NOT APPLICABLE ------------------------------------------------------------- (Former Name Or Former Address, If Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 5.02 COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS --------------------------------------------- On December 20, 2007, Central Cooperative Bank (the "Bank"), the wholly-owned subsidiary of Central Bancorp, Inc., entered into employment agreements, executive salary continuation agreements, as amended, and executive health insurance plan agreements (each an "Agreement" and collectively, the "Agreements") with each of John D. Doherty, President and Chief Executive Officer of the Bank and William P. Morrissey, Executive Vice President and Chief Operating Officer of the Bank (the "Executives"). On December 20, 2007, the Bank also entered into a life insurance endorsement method split dollar plan agreement ("Agreement") for the benefit of Mr. Morrissey. Employment Agreements - --------------------- The Agreements each provide for a five-year term, with an automatic extension for one additional year on each anniversary unless written notice stating the agreement shall not be extended is received. Under the Agreements, Mr. Doherty and Mr. Morrissey are entitled to an annual base salary of $400,003.76 and $220,000.04, respectively. Each Agreement requires that such salary be reviewed at least annually by the Board of Directors (the "Board"), which may use its discretion in making decisions about salary increases. The Agreements also provide for the Executives' participation in discretionary bonuses as authorized and declared by the Board, as well as participation in retirement and medical plans of the Bank for the benefit of its employees and other fringe benefits, which may be or become applicable to executive employees. In the event that the Executive is terminated without Just Cause, each Agreement provides that the Bank will continue to pay the Executive's salary for the remainder of the Agreement's term, provided such payments are in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"). Under the Agreements, if Mr. Doherty or Mr. Morrissey are terminated by the Bank, without prior written consent, in connection with or within three years after any change in control, as defined in the Agreements, each are entitled to 2.99 times his "base amount" as defined in Section 280G(b)(3) of the Code and regulations promulgated thereunder. Each Agreement also provides that if the Executive receives any benefits from the Bank that are subject to an excise tax under Section 4999 of the Code, the Bank will pay the Executive an additional "gross-up payment" to ensure the Executive remains in the same financial position had the excise tax not been imposed. The Agreements replace a previous employment agreement by and between the Bank and Mr. Doherty and a severance agreement by and between the Bank and Mr. Morrissey in connection with a change in control. Executive Salary Continuation Agreements , As Amended - ----------------------------------------------------- Under the Agreements, upon the retirement date, as defined under each Agreement, the Executive is entitled to an annual benefit payable in monthly installments until death equal to 50% for Mr. Doherty and 40% for Mr. Morrissey, of the average high three years of his base salary, offset by: (i) the amount available to the Executive under the Bank's pension plan; (ii) the Bank's annuitized 401(k) plan contribution to the Executive; and (iii) 50% of the Executive's age 65 social security benefit for Mr. Doherty and a $9,480 social security benefit for Mr. Morrissey. The Agreements each provide for a three percent annual cost of living increase. Under each Agreement, in the event of the Executive's death, his beneficiary is entitled to a pre-retirement death benefit of an amount equal to the Executive's Accrued Liability Retirement Account, as defined under each Agreement, and in the event the Executive dies before 180 monthly installments have been paid, the Bank will continue payments of the installments until 180 installments have been paid. If the Executive terminates prior to the retirement date voluntarily or is discharged without cause, the Executive is entitled to a benefit equal to the balance of his Accrued Liability Retirement Account on the date of termination, which shall be paid in one lump sum. In the event of a change in control, the Executive is entitled to 100% of the Accrued Liability Retirement Account, which shall be paid in one lump sum. Under each Agreement, the Executive forfeits entitlement to all benefits under the Agreement if his employment with the Bank is terminated for cause as specified in the Agreement. Executive Health Insurance Plan Agreement - ----------------------------------------- Under the terms of each Agreement, the Bank will make an annual contribution of $10,000 for Mr. Doherty and $25,000 for Mr. Morrissey into each Executive's Liability Reserve Account, as defined under each Agreement. Provided the Executives remain employed by the Bank until the age of 65 for Mr. Doherty and the age of 85 for Mr. Morrissey, each will be entitled to the use of his post-retirement health care account until the Liability Reserve Account for each Executive reaches a balance of zero dollars. Each Agreement also provides that if the Executive is terminated, voluntarily or involuntarily, he is entitled to the use of his health care account until the Liability Reserve Account reaches a balance of zero dollars, and that if the Executive should die after such termination, the Executive's spouse is entitled to the use of the health care account until the Liability Reserve Account reaches a balance of zero dollars. Under the Agreement, the Executive forfeits his benefits if he is discharged for cause as specified in the Agreement. Life Insurance Endorsement Method Split Dollar Plan Agreement - ------------------------------------------------------------- Under the terms of the Agreement, the Bank is the owner of the life insurance policy under which William P. Morrissey and Donna C. Morrissey are insureds. The Bank pays an amount equal to the planned premiums and any other premium payments that may be necessary to keep the policy in force. Upon the death of the second to die, Mr. Morrissey's designated beneficiary is entitled to one million dollars and the Bank is entitled to the remainder of the death proceeds. Under the Agreement, at all times, the Bank is entitled to the cash value of the life insurance policy, as defined in the policy, offset by any policy loans, unpaid interest, previous cash withdrawals and surrender charges. The Executive forfeits his entitlement to all benefits under the Agreement if his employment with the Bank is terminated for cause as specified in his Agreement. The foregoing summary of the Agreements is not complete and is qualified in its entirety by reference to the complete text of the Agreements which are filed as Exhibits 10.1 through 10.7 to this Form 8-K and which are incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS --------------------------------- (d) Exhibits Number Description ------ ----------- 10.1 Employment Agreement by and between Central Cooperative Bank and John D. Doherty 10.2 Employment Agreement by and between Central Cooperative Bank and William P. Morrissey 10.3 Executive Salary Continuation Agreement by and between Central Cooperative Bank and John D. Doherty, As Amended 10.4 Executive Salary Continuation Agreement by and between Central Cooperative Bank and William P. Morrissey, As Amended 10.5 Life Insurance Endorsement Method Split Dollar Plan Agreement 10.6 Executive Health Insurance Plan Agreement by and between Central Cooperative Bank and John D. Doherty 10.7 Executive Health Insurance Plan Agreement by and between Central Cooperative Bank and William P. Morrissey
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. Date: December 21, 2007 By: /s/ John D. Doherty --------------------------------------- John D. Doherty President and Chief Executive Officer EX-10.1 2 central8kdec2007ex10-1.txt EXHIBIT 10.1 EMPLOYMENT AGREEMENT THIS AGREEMENT, as amended and restated, is entered into this 20th day of December, 2007 (the "Effective Date"), by and between CENTRAL COOPERATIVE BANK, Somerville, Massachusetts (hereinafter referred to as the "Bank") and JOHN D. DOHERTY (hereafter referred to as the "Employee"). WHEREAS, the Employee has heretofore been employed by the Bank as President and Chief Executive Officer; and WHEREAS, the parties desire by this writing to set forth the continued employment relationship of the Bank and the Employee. NOW, THEREFORE, it is AGREED as follows: 1. EMPLOYMENT. The Employee is employed as the President and Chief Executive Officer of the Bank. The Employee shall render administrative and management services to the Bank such as are customarily performed by persons situated in a similar executive capacity. He shall also promote, by entertainment or otherwise, as and to the extent permitted by law, the business of the Bank. The Employee's other duties shall be such as the Board of Directors may from time to time reasonably direct, including normal duties as an officer of the Bank. 2. BASE COMPENSATION. The Bank agrees to pay the Employee during the term of this Agreement a salary at the rate of $400,003.76 per annum, payable in cash not less frequently than monthly; provided, that the rate of such salary shall be reviewed by the Board of Directors of the Bank not less often than annually. Such rate of salary, or increased rate of salary, as the case may be, may be further increased (but not decreased) from time to time in such amounts as the Board of Directors in its discretion may decide. 3. DISCRETIONARY BONUSES. The Employee shall be entitled to participate in an equitable manner with all other key management personnel of the Bank in discretionary bonuses authorized and declared by the Board of Directors of the Bank to its key management employees. No other compensation provided for in this Agreement shall be deemed a substitute for the Employee's right to participate in such discretionary bonuses when and as declared by the Board of Directors. 4. (a) PARTICIPATION IN RETIREMENT AND MEDICAL PLANS. The Employee shall be entitled to participate in any Plan of the Bank relating to pension, profit-sharing, or other retirement benefits and medical coverage or reimbursement plans that the Bank may adopt for the benefit of its employees. (b) EMPLOYEE BENEFITS; EXPENSES. The Employee shall be eligible to participate in any fringe benefits which may be or become applicable to the Bank's executive employees including participation in any stock option or incentive plans adopted by the Board of Directors, the use of an automobile, club memberships, a reasonable expense account, and any other benefits which are commensurate with the responsibilities and functions to be performed by the Employee under this Agreement. The Bank shall reimburse Employee for all out-of-pocket expenses which Employee shall incur in connection with his services for the Bank. 5. TERM. The initial term of employment under this Agreement shall be for the period commencing on the Effective Date, and ending and the fifth anniversary of the Effective Date. Additionally, on each annual anniversary date from the Effective Date the term of employment shall automatically be extended for an additional one-year period beyond the then effective expiration date unless written notice from the Bank or the Employee is received prior to an anniversary date advising the other party that this agreement shall not be further extended. Any such written notice shall not effect any prior extensions of the term of employment hereunder. 6. LOYALTY; NONCOMPETITION. (a) The Employee shall devote his full time to the performance of his employment under this Agreement. During the term of Employee's employment under this Agreement, the Employee shall not engage in any business or activity contrary to the business affairs or interests of the Bank. (b) Nothing contained in this Paragraph 6 shall be deemed to prevent or limit the right of Employee to invest in the capital stock or other securities of any business dissimilar from that of Employer, or, solely as a passive or minority investor, in any business. 7. STANDARDS. The Employee shall perform his duties under this Agreement in accordance with such reasonable standards expected of employees with comparable positions in comparable organizations and as may be established from time to time by the Bank's Board of Directors. The Bank will provide Employee with the working facilities and staff customary for similar executives and necessary for him to perform his duties. 8. VACATION AND SICK LEAVE. At such reasonable times as the Board of Directors shall in its discretion permit, the Employee shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment under this Agreement, all such voluntary absences to count as vacation time; provided that: (a) The Employee shall be entitled to an annual vacation in accordance with the policies as periodically established by the Board of Directors for senior management officials of the Bank. (b) The timing of vacations shall be scheduled in a reasonable manner by the Board of Directors. The Employee shall not be entitled to receive any additional compensation from the Bank on account of his failure to take a vacation; nor shall he be entitled to accumulate unused vacation from one fiscal year to the next except to the extent authorized by the Board of Directors for senior management officials of the Bank. (c) In addition to the aforesaid paid vacations, the Employee shall be entitled without loss of pay, to absent himself voluntarily from the performance of his employment with the Bank for such additional periods of time and for such valid and legitimate reasons as the Board of Directors in its discretion may determine. Further, the Board of Directors shall be entitled to grant to the Employee a leave or leaves of absence with or without pay at such time or times and upon such terms and conditions as the Board in its discretion may determine. 2 (d) In addition, the Employee shall be entitled to an annual sick leave as established by the Board of Directors for senior management officials of the Bank. In the event any sick leave time shall not have been used during any year, such leave shall accrue to subsequent years only to the extent authorized by the Board of Directors. Upon termination of his employment, the Employee shall not be entitled to receive any additional compensation from the Bank for unused sick leave. 9. TERMINATION AND TERMINATION PAY. The Employee's employment under this Agreement shall be terminated upon the following occurrences: (a) The death of the Employee during the term of this Agreement, in which event the Employee's estate shall be entitled to receive the compensation due the Employee through the last day of the calendar month in which his death shall have occurred. (b) The Employee's employment under this Agreement may be terminated at any time by a decision of the Board of Directors of the Bank for conduct not constituting termination for Just Cause, or by the Employee upon ninety (90) days written notice, to the Employee or Bank, as the case may be. In the event the Employee's employment under this Agreement is terminated by the Board of Directors without Just Cause, the Bank shall be obligated to continue to pay the Employee his salary, up to the date of termination of the term (including any renewal term) of this Agreement. In the event the Employee is a "Specified Employee" (as defined herein) no payment shall be made to the Employee under this Agreement prior to the first day of the seventh month following his termination of employment in excess of the "permitted amount" under Section 409A of the Code. For these purposes the "permitted amount" shall be an amount that does not exceed two times the lesser of: (A) the sum of the Employee's annualized compensation based upon the annual rate of pay for services provided to the Bank for the calendar year preceding the year in which the Employee terminates employment, or (B) the maximum amount that may be taken into account under a tax-qualified plan pursuant to Section 401(a)(17) of the Code for the calendar year in which occurs the termination of employment. The payment of the "permitted amount" shall be made within sixty (60) days of the occurrence of the termination of employment. Any payment in excess of the permitted amount shall be made to the Employee on the first day of the seventh month following the termination of employment. "Specified Employee" shall be interpreted to comply with Section 409A of the Code and shall mean a key employee within the meaning of Section 416(i) of the Code (without regard to paragraph 5 thereof), but the Employee shall be a "Specified Employee" only if the Bank is a publicly-traded institution or the subsidiary of a public-traded holding company. 3 (c) The Bank reserves the right to terminate this Agreement at any time for Just Cause. Termination for "Just Cause" shall mean termination for conviction of a felony involving a crime of moral turpitude, deliberate dishonesty to the Bank involving personal profit, or gross and willful failure to perform stated duties after written notice from the Board of Directors. Subject to the provisions of Section 11 hereof, in the event this Agreement is terminated for Just Cause, the Bank shall only be obligated to continue to pay the Employee his salary up to the date of termination. 10. DISABILITY. If the Employee shall suffer a Disability, he shall nevertheless continue to receive 100% of his compensation, inclusive of any benefits which may be payable to Employee under the provisions of disability insurance coverage in effect for Bank employees, under Paragraph 2 of this Agreement for the first 12 months following the date of such disability. Upon returning to active full-time employment, the Employee's full compensation as set forth in this Agreement shall be reinstated. In the event that said Employee returns to active employment on other than a full-time basis, then his compensation (as set forth in Paragraph 2 of this Agreement) shall be reduced in proportion to the time spent in said employment, or as shall otherwise be agreed to by the parties. For purposes of this provision, "Disability" shall mean the Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. 11. CHANGE IN CONTROL. (a) Notwithstanding any provision herein to the contrary, if the Employee's employment is terminated by the Bank, without the Employee's prior written consent, in connection with or within three (3) years after any change in control (as herein defined) of the Bank or Central Bancorp, Inc. (the "Company"), the Employee shall be paid an amount equal to 2.99 times his "base amount" as defined in Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations promulgated thereunder. Said sum shall be paid in one lump sum within ten (10) days after such termination. The term "change in control" shall mean (1) the ownership, holding or power to vote more than 25% of the voting stock of the Bank or the Company, (2) the control of the election of a majority of the Bank's or the Company's directors, (3) the exercise of a controlling influence over the management or policies of the Bank or the Company by any person or by persons acting as a "group" (within the meaning of Section 13(d) of the Securities Exchange Act of 1934), or (4) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Bank or the Company (the "Company Board") (the "Continuing Directors") cease for any reason to constitute at least two-thirds thereof, provided that any individual whose election or nomination for election as a member of the Company Board was approved by a vote of at least two-thirds of the Continuing Directors then in office shall be considered a Continuing Director. The term "person" means an individual other than the Employee, or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed herein. 4 (b) Notwithstanding any other provision herein to the contrary, the Employee may voluntarily terminate his employment under this Agreement within three (3) years following a change in control of the Bank or the Company, and the Employee shall thereupon be entitled to receive the payment described in Section 11(a) of this Agreement, upon the occurrence of any of the following events, or within ninety (90) days thereafter, which have not been consented to in advance by the Employee in writing: (i) the requirement that the Employee perform his principal executive functions, more than 35 miles from his primary office as of the Effective Date of this Agreement; (ii) a material reduction in the Employee's base compensation as in effect immediately prior to the Change in Control; (iii) the failure by the Bank to continue to provide the Employee with compensation and benefits substantially similar to those provided to him at the time of the change in control under any of the employee benefit plans in which the Employee becomes a participant, or the taking of any action by the Bank which would directly or indirectly materially reduce any of such benefits or deprive the Employee of any material fringe benefit enjoyed by him at the time of the Change in Control; (iv) the assignment to the employee of material duties and responsibilities other than those normally associated with his position as referenced in the recitals above; or (v) a material diminution or reduction in the Employee's responsibilities or authority (including reporting responsibilities) in connection with his employment with the Bank. Notwithstanding the foregoing, upon the occurrence of any event described in this paragraph, the Employee shall have the right to elect to terminate his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that the Employee actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, the Employee, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his rights solely under this Agreement by virtue of the fact that the Employee has submitted his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in this paragraph. (c) The parties to this Agreement intend for the payments pursuant to this Section 11 to satisfy the short-term deferral exception under Section 409A of the Code. However, notwithstanding anything to the contrary in this Agreement, to the extent payments do not meet the short-term deferral exception of Section 409A of the Code and, in the event the Employee is a "Specified Employee" (as defined in Section 9(b) of this Agreement) no payment shall be made to the Employee under this Agreement prior to the first day of the seventh month following his termination of employment in excess of the "permitted amount" under Section 409A of the Code. For these purposes the "permitted amount" shall be an amount that does not exceed two times the lesser of: (A) the sum of the Employee's annualized compensation based upon the annual rate of pay for services provided to the Bank for the calendar year preceding the year in which the Employee terminates employment, or (B) the maximum amount that may be taken into account under a tax-qualified plan pursuant to Section 401(a)(17) of the Code for the calendar year in which occurs the termination of employment. The payment of the "permitted amount" shall be made within sixty (60) days of the occurrence of the termination of employment. Any payment in excess of the permitted amount shall be made to the Employee on the first day of the seventh month following the termination of employment. 5 12. EXCISE TAXES. (a) COVERED BENEFITS. "Covered Benefits" shall mean any payment or benefit paid or provided to the Employee by the Bank or any affiliate or any successor in interest to the Bank (whether pursuant to this Agreement or otherwise) that will be (or in the opinion of Tax Counsel (as defined below) might reasonably be expected to be) subject to any excise tax (the "Excise Tax") imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"). In the event that at any time during or after the Term of Employment the Employee shall receive any Covered Benefits, the Bank shall pay to the Employee an additional amount (the "Gross-Up Payment") such that the net amount retained by the Employee from the Gross-Up Payment, after deduction of any federal, state and local income taxes, Excise Tax, and FICA and Medicare withholding taxes on the Gross-Up Payment, shall be equal to the Excise Tax on the Covered Benefits. For purposes of determining the amount of such Excise Tax on the Covered Benefits, the amount of the Covered Benefits that shall be taken into account in calculating the Excise Tax shall be equal to (i) the Covered Benefits, less (ii) the amount of such Covered Benefits that, in the opinion of tax counsel selected by the Bank and reasonably acceptable to the Employee ("Tax Counsel"), are not parachute payments (within the meaning of Section 280G(b)(1) of the Code). (b) CERTAIN ASSUMPTIONS. For purposes of this Section 12, the Employee shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Excise Tax is payable and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Employee's residence on the effective date of the Employee's termination, net of the reduction in federal income taxes which could be obtained from deduction of such state and local taxes. Except as otherwise provided herein, all determinations required to be made under this Section 12 shall be made by Tax Counsel, which determinations shall be conclusive and binding on the Employee and the Bank, absent manifest error. (c) TAX INDEMNIFICATION. The Bank shall indemnify and hold the Employee harmless from any and all losses, costs and expenses (including without limitation, reasonable attorney's fees, reasonable accountant's fees, interest, fines and penalties of any kind) which the Employee incurs as a result of any administrative or judicial review of the Employee's liability under Section 4999 of the Code by the Internal Revenue Service or any comparable state agency through and including a final judicial determination or final administrative settlement of any dispute arising out of the Employee's liability for the Excise Tax or otherwise relating to the classification for purposes of Section 280G of the Code of any of the Covered Benefits or other payment or benefit in the nature of compensation made or provided to the Employee by the Bank or any affiliate. The Employee shall promptly notify the Bank in writing whenever the Employee receives notice of the commencement of any judicial or administrative proceeding, formal or informal, in which the federal tax treatment under Section 4999 of the Code of any amount paid or payable under this Agreement or otherwise is being reviewed or is in dispute (including a notice of audit or other inquiry concerning the reporting of the Employee's liability under Section 4999). The Bank may assume control at its expense over all legal and accounting matters pertaining to such federal or state tax treatment (except to the extent necessary or appropriate for the Employee to resolve any such proceeding with respect to any matter unrelated to the Covered Benefits or other payment or benefit in the nature of compensation made or provided to the Employee by the Bank) and the Employee shall cooperate fully with the Bank in any such proceeding. The Employee shall not enter into any compromise or settlement or otherwise prejudice any rights the Bank may have in connection therewith without prior consent of the Bank. In the event that the Bank elects not to assume control over such matters, the Bank shall promptly reimburse the Employee for all expenses related thereto as and when incurred upon presentation of appropriate documentation relating thereto. 6 13. MISCELLANEOUS PROVISIONS. (a) The Employee shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to the Employee in any subsequent employment. (b) In the event that any dispute arises between the Employee and the Bank as to the terms or interpretation of this Agreement, whether instituted by formal legal proceedings or otherwise, including any action that the Employee takes to enforce the terms of this Agreement or to defend against any action taken by the Bank, the Employee shall be reimbursed for all costs and expenses, including reasonable attorneys' fees, arising from such dispute, proceedings or actions. Such reimbursement shall be paid within ten (10) days after the Employee furnishes to the Bank written evidence, which may be in the form, among other things, of a cancelled check or receipt, of any costs or expenses incurred by the Employee. (c) Any payments made to the Employee under this Agreement are subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder. (d) This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties with respect to any related subject matter, including all prior employment agreements or other arrangements providing for severance benefits upon termination of employment. 14. SUCCESSORS AND ASSIGNS. (a) This Employment Agreement shall inure to the benefit of and be binding upon any corporate or other successor of the Bank which shall acquire, directly or indirectly, by merger, consolidation, purchase or otherwise, all or substantially all of the assets of the Bank. (b) Since the Bank is contracting for the unique and personal skills of the Employee, the Employee shall be precluded from assigning or delegating his rights or duties hereunder without first obtaining the written consent of the Bank. 15. AMENDMENTS. No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided. 7 16. APPLICABLE LAW. This Agreement shall be governed by all respects whether as to validity, construction, capacity, performance or otherwise, by the laws of Massachusetts. 17. SEVERABILITY. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 8 IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first hereinabove written. ATTEST: CENTRAL COOPERATIVE BANK /s/ Edward F. Sweeney, Jr. By /s/ Richard E. Stevens - ----------------------------------- ------------------------------------- WITNESS: /s/ John D. Doherty ---------------------------------------- EMPLOYEE /s/ Rhoda K. Astone - ------------------------------------ 9 EX-10.2 3 central8kdec2007ex10-2.txt EXHIBIT 10.2 EMPLOYMENT AGREEMENT THIS AGREEMENT, is entered into this 20th day of December, 2007 (the "Effective Date"), by and between CENTRAL COOPERATIVE BANK, Somerville, Massachusetts (hereinafter referred to as the "Bank") and WILLAM P. MORRISSEY (hereafter referred to as the "Employee"). WHEREAS, the Employee has heretofore been employed by the Bank as Executive Vice President and Chief Operating Officer; and WHEREAS, the parties desire by this writing to set forth the continued employment relationship of the Bank and the Employee. NOW, THEREFORE, it is AGREED as follows: 1. EMPLOYMENT. The Employee is employed as the Executive Vice President and Chief Operating Officer of the Bank. The Employee shall render administrative and management services to the Bank such as are customarily performed by persons situated in a similar executive capacity. He shall also promote, by entertainment or otherwise, as and to the extent permitted by law, the business of the Bank. The Employee's other duties shall be such as the Board of Directors may from time to time reasonably direct, including normal duties as an officer of the Bank. 2. BASE COMPENSATION. The Bank agrees to pay the Employee during the term of this Agreement a salary at the rate of $220,000.04 per annum, payable in cash not less frequently than monthly; provided, that the rate of such salary shall be reviewed by the Board of Directors of the Bank not less often than annually. Such rate of salary, or increased rate of salary, as the case may be, may be further increased (but not decreased) from time to time in such amounts as the Board of Directors in its discretion may decide. 3. DISCRETIONARY BONUSES. The Employee shall be entitled to participate in an equitable manner with all other key management personnel of the Bank in discretionary bonuses authorized and declared by the Board of Directors of the Bank to its key management employees. No other compensation provided for in this Agreement shall be deemed a substitute for the Employee's right to participate in such discretionary bonuses when and as declared by the Board of Directors. 4. (a) PARTICIPATION IN RETIREMENT AND MEDICAL PLANS. The Employee shall be entitled to participate in any Plan of the Bank relating to pension, profit-sharing, or other retirement benefits and medical coverage or reimbursement plans that the Bank may adopt for the benefit of its employees. (b) EMPLOYEE BENEFITS; EXPENSES. The Employee shall be eligible to participate in any fringe benefits which may be or become applicable to the Bank's executive employees including participation in any stock option or incentive plans adopted by the Board of Directors, the use of an automobile, club memberships, a reasonable expense account, and any other benefits which are commensurate with the responsibilities and functions to be performed by the Employee under this Agreement. The Bank shall reimburse Employee for all out-of-pocket expenses which Employee shall incur in connection with his services for the Bank. 5. TERM. The initial term of employment under this Agreement shall be for the period commencing on the Effective Date, and ending and the fifth anniversary of the Effective Date. Additionally, on each annual anniversary date from the Effective Date the term of employment shall automatically be extended for an additional one-year period beyond the then effective expiration date unless written notice from the Bank or the Employee is received prior to an anniversary date advising the other party that this agreement shall not be further extended. Any such written notice shall not effect any prior extensions of the term of employment hereunder. 6. LOYALTY; NONCOMPETITION. (a) The Employee shall devote his full time to the performance of his employment under this Agreement. During the term of Employee's employment under this Agreement, the Employee shall not engage in any business or activity contrary to the business affairs or interests of the Bank. (b) Nothing contained in this Paragraph 6 shall be deemed to prevent or limit the right of Employee to invest in the capital stock or other securities of any business dissimilar from that of Employer, or, solely as a passive or minority investor, in any business. 7. STANDARDS. The Employee shall perform his duties under this Agreement in accordance with such reasonable standards expected of employees with comparable positions in comparable organizations and as may be established from time to time by the Bank's Board of Directors. The Bank will provide Employee with the working facilities and staff customary for similar executives and necessary for him to perform his duties. 8. VACATION AND SICK LEAVE. At such reasonable times as the Board of Directors shall in its discretion permit, the Employee shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment under this Agreement, all such voluntary absences to count as vacation time; provided that: (a) The Employee shall be entitled to an annual vacation in accordance with the policies as periodically established by the Board of Directors for senior management officials of the Bank. (b) The timing of vacations shall be scheduled in a reasonable manner by the Board of Directors. The Employee shall not be entitled to receive any additional compensation from the Bank on account of his failure to take a vacation; nor shall he be entitled to accumulate unused vacation from one fiscal year to the next except to the extent authorized by the Board of Directors for senior management officials of the Bank. (c) In addition to the aforesaid paid vacations, the Employee shall be entitled without loss of pay, to absent himself voluntarily from the performance of his employment with the Bank for such additional periods of time and for such valid and legitimate reasons as the Board of Directors in its discretion may determine. Further, the Board of Directors shall be entitled to grant to the Employee a leave or leaves of absence with or without pay at such time or times and upon such terms and conditions as the Board in its discretion may determine. 2 (d) In addition, the Employee shall be entitled to an annual sick leave as established by the Board of Directors for senior management officials of the Bank. In the event any sick leave time shall not have been used during any year, such leave shall accrue to subsequent years only to the extent authorized by the Board of Directors. Upon termination of his employment, the Employee shall not be entitled to receive any additional compensation from the Bank for unused sick leave. 9. TERMINATION AND TERMINATION PAY. The Employee's employment under this Agreement shall be terminated upon the following occurrences: (a) The death of the Employee during the term of this Agreement, in which event the Employee's estate shall be entitled to receive the compensation due the Employee through the last day of the calendar month in which his death shall have occurred. (b) The Employee's employment under this Agreement may be terminated at any time by a decision of the Board of Directors of the Bank for conduct not constituting termination for Just Cause, or by the Employee upon ninety (90) days written notice, to the Employee or Bank, as the case may be. In the event the Employee's employment under this Agreement is terminated by the Board of Directors without Just Cause, the Bank shall be obligated to continue to pay the Employee his salary, up to the date of termination of the term (including any renewal term) of this Agreement. In the event the Employee is a "Specified Employee" (as defined herein) no payment shall be made to the Employee under this Agreement prior to the first day of the seventh month following his termination of employment in excess of the "permitted amount" under Section 409A of the Code. For these purposes the "permitted amount" shall be an amount that does not exceed two times the lesser of: (A) the sum of the Employee's annualized compensation based upon the annual rate of pay for services provided to the Bank for the calendar year preceding the year in which the Employee terminates employment, or (B) the maximum amount that may be taken into account under a tax-qualified plan pursuant to Section 401(a)(17) of the Code for the calendar year in which occurs the termination of employment. The payment of the "permitted amount" shall be made within sixty (60) days of the occurrence of the termination of employment. Any payment in excess of the permitted amount shall be made to the Employee on the first day of the seventh month following the termination of employment. "Specified Employee" shall be interpreted to comply with Section 409A of the Code and shall mean a key employee within the meaning of Section 416(i) of the Code (without regard to paragraph 5 thereof), but the Employee shall be a "Specified Employee" only if the Bank is a publicly-traded institution or the subsidiary of a public-traded holding company. 3 (c) The Bank reserves the right to terminate this Agreement at any time for Just Cause. Termination for "Just Cause" shall mean termination for conviction of a felony involving a crime of moral turpitude, deliberate dishonesty to the Bank involving personal profit, or gross and willful failure to perform stated duties after written notice from the Board of Directors. Subject to the provisions of Section 11 hereof, in the event this Agreement is terminated for Just Cause, the Bank shall only be obligated to continue to pay the Employee his salary up to the date of termination. 10. DISABILITY. If the Employee shall suffer a Disability, he shall nevertheless continue to receive 100% of his compensation, inclusive of any benefits which may be payable to Employee under the provisions of disability insurance coverage in effect for Bank employees, under Paragraph 2 of this Agreement for the first 12 months following the date of such disability. Upon returning to active full-time employment, the Employee's full compensation as set forth in this Agreement shall be reinstated. In the event that said Employee returns to active employment on other than a full-time basis, then his compensation (as set forth in Paragraph 2 of this Agreement) shall be reduced in proportion to the time spent in said employment, or as shall otherwise be agreed to by the parties. For purposes of this provision, "Disability" shall mean the Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. 11. CHANGE IN CONTROL. (a) Notwithstanding any provision herein to the contrary, if the Employee's employment is terminated by the Bank, without the Employee's prior written consent, in connection with or within three (3) years after any change in control (as herein defined) of the Bank or Central Bancorp, Inc. (the "Company"), the Employee shall be paid an amount equal to 2.99 times his "base amount" as defined in Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations promulgated thereunder. Said sum shall be paid in one lump sum within ten (10) days after such termination. The term "change in control" shall mean (1) the ownership, holding or power to vote more than 25% of the voting stock of the Bank or the Company, (2) the control of the election of a majority of the Bank's or the Company's directors, (3) the exercise of a controlling influence over the management or policies of the Bank or the Company by any person or by persons acting as a "group" (within the meaning of Section 13(d) of the Securities Exchange Act of 1934), or (4) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Bank or the Company (the "Company Board") (the "Continuing Directors") cease for any reason to constitute at least two-thirds thereof, provided that any individual whose election or nomination for election as a member of the Company Board was approved by a vote of at least two-thirds of the Continuing Directors then in office shall be considered a Continuing Director. The term "person" means an individual other than the Employee, or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed herein. 4 (b) Notwithstanding any other provision herein to the contrary, the Employee may voluntarily terminate his employment under this Agreement within three (3) years following a change in control of the Bank or the Company, and the Employee shall thereupon be entitled to receive the payment described in Section 11(a) of this Agreement, upon the occurrence of any of the following events, or within ninety (90) days thereafter, which have not been consented to in advance by the Employee in writing: (i) the requirement that the Employee perform his principal executive functions, more than 35 miles from his primary office as of the Effective Date of this Agreement; (ii) a material reduction in the Employee's base compensation as in effect immediately prior to the Change in Control; (iii) the failure by the Bank to continue to provide the Employee with compensation and benefits substantially similar to those provided to him at the time of the change in control under any of the employee benefit plans in which the Employee becomes a participant, or the taking of any action by the Bank which would directly or indirectly materially reduce any of such benefits or deprive the Employee of any material fringe benefit enjoyed by him at the time of the Change in Control; (iv) the assignment to the employee of material duties and responsibilities other than those normally associated with his position as referenced in the recitals above; or (v) a material diminution or reduction in the Employee's responsibilities or authority (including reporting responsibilities) in connection with his employment with the Bank. Notwithstanding the foregoing, upon the occurrence of any event described in this paragraph, the Employee shall have the right to elect to terminate his employment under this Agreement by resignation upon sixty (60) days prior written notice given within a reasonable period of time not to exceed ninety (90) days after the initial event giving rise to said right to elect; provided, however that the Bank shall have at least thirty (30) days to cure such condition and provided that the Employee actually terminates employment within two years after the initial occurrence of such event. Notwithstanding the preceding sentence, in the event of a continuing breach of this Agreement by the Bank, the Employee, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his rights solely under this Agreement by virtue of the fact that the Employee has submitted his resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve any occurrence of an event described in this paragraph. (c) The parties to this Agreement intend for the payments pursuant to this Section 11 to satisfy the short-term deferral exception under Section 409A of the Code. However, notwithstanding anything to the contrary in this Agreement, to the extent payments do not meet the short-term deferral exception of Section 409A of the Code and, in the event the Employee is a "Specified Employee" (as defined in Section 9(b) of this Agreement) no payment shall be made to the Employee under this Agreement prior to the first day of the seventh month following his termination of employment in excess of the "permitted amount" under Section 409A of the Code. For these purposes the "permitted amount" shall be an amount that does not exceed two times the lesser of: (A) the sum of the Employee's annualized compensation based upon the annual rate of pay for services provided to the Bank for the calendar year preceding the year in which the Employee terminates employment, or (B) the maximum amount that may be taken into account under a tax-qualified plan pursuant to Section 401(a)(17) of the Code for the calendar year in which occurs the termination of employment. The payment of the "permitted amount" shall be made within sixty (60) days of the occurrence of the termination of employment. Any payment in excess of the permitted amount shall be made to the Employee on the first day of the seventh month following the termination of employment. 5 12. EXCISE TAXES. (a) COVERED BENEFITS. "Covered Benefits" shall mean any payment or benefit paid or provided to the Employee by the Bank or any affiliate or any successor in interest to the Bank (whether pursuant to this Agreement or otherwise) that will be (or in the opinion of Tax Counsel (as defined below) might reasonably be expected to be) subject to any excise tax (the "Excise Tax") imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"). In the event that at any time during or after the Term of Employment the Employee shall receive any Covered Benefits, the Bank shall pay to the Employee an additional amount (the "Gross-Up Payment") such that the net amount retained by the Employee from the Gross-Up Payment, after deduction of any federal, state and local income taxes, Excise Tax, and FICA and Medicare withholding taxes on the Gross-Up Payment, shall be equal to the Excise Tax on the Covered Benefits. For purposes of determining the amount of such Excise Tax on the Covered Benefits, the amount of the Covered Benefits that shall be taken into account in calculating the Excise Tax shall be equal to (i) the Covered Benefits, less (ii) the amount of such Covered Benefits that, in the opinion of tax counsel selected by the Bank and reasonably acceptable to the Employee ("Tax Counsel"), are not parachute payments (within the meaning of Section 280G(b)(1) of the Code). (b) CERTAIN ASSUMPTIONS. For purposes of this Section 12, the Employee shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Excise Tax is payable and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Employee's residence on the effective date of the Employee's termination, net of the reduction in federal income taxes which could be obtained from deduction of such state and local taxes. Except as otherwise provided herein, all determinations required to be made under this Section 12 shall be made by Tax Counsel, which determinations shall be conclusive and binding on the Employee and the Bank, absent manifest error. (c) TAX INDEMNIFICATION. The Bank shall indemnify and hold the Employee harmless from any and all losses, costs and expenses (including without limitation, reasonable attorney's fees, reasonable accountant's fees, interest, fines and penalties of any kind) which the Employee incurs as a result of any administrative or judicial review of the Employee's liability under Section 4999 of the Code by the Internal Revenue Service or any comparable state agency through and including a final judicial determination or final administrative settlement of any dispute arising out of the Employee's liability for the Excise Tax or otherwise relating to the classification for purposes of Section 280G of the Code of any of the Covered Benefits or other payment or benefit in the nature of compensation made or provided to the Employee by the Bank or any affiliate. The Employee shall promptly notify the Bank in writing whenever the Employee receives notice of the commencement of any judicial or administrative proceeding, formal or informal, in which the federal tax treatment under Section 4999 of the Code of any amount paid or payable under this Agreement or otherwise is being reviewed or is in dispute (including a notice of audit or other inquiry concerning the reporting of the Employee's liability under Section 4999). The Bank may assume control at its expense over all legal and accounting matters pertaining to such federal or state tax treatment (except to the extent necessary or appropriate for the Employee to resolve any such proceeding with respect to any matter unrelated to the Covered Benefits or other payment or benefit in the nature of compensation made or provided to the Employee by the Bank) and the Employee shall cooperate fully with the Bank in any such proceeding. The Employee shall not enter into any compromise or settlement or otherwise prejudice any rights the Bank may have in connection therewith without prior consent of the Bank. In the event that the Bank elects not to assume control over such matters, the Bank shall promptly reimburse the Employee for all expenses related thereto as and when incurred upon presentation of appropriate documentation relating thereto. 6 13. MISCELLANEOUS PROVISIONS. (a) The Employee shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to the Employee in any subsequent employment. (b) In the event that any dispute arises between the Employee and the Bank as to the terms or interpretation of this Agreement, whether instituted by formal legal proceedings or otherwise, including any action that the Employee takes to enforce the terms of this Agreement or to defend against any action taken by the Bank, the Employee shall be reimbursed for all costs and expenses, including reasonable attorneys' fees, arising from such dispute, proceedings or actions. Such reimbursement shall be paid within ten (10) days after the Employee furnishes to the Bank written evidence, which may be in the form, among other things, of a cancelled check or receipt, of any costs or expenses incurred by the Employee. (c) Any payments made to the Employee under this Agreement are subject to and conditioned upon their compliance with 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder. (d) This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties with respect to any related subject matter, including all prior employment agreements or other arrangements providing for severance benefits upon termination of employment. 14. SUCCESSORS AND ASSIGNS. (a) This Employment Agreement shall inure to the benefit of and be binding upon any corporate or other successor of the Bank which shall acquire, directly or indirectly, by merger, consolidation, purchase or otherwise, all or substantially all of the assets of the Bank. (b) Since the Bank is contracting for the unique and personal skills of the Employee, the Employee shall be precluded from assigning or delegating his rights or duties hereunder without first obtaining the written consent of the Bank. 15. AMENDMENTS. No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided. 7 16. APPLICABLE LAW. This Agreement shall be governed by all respects whether as to validity, construction, capacity, performance or otherwise, by the laws of Massachusetts. 17. SEVERABILITY. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 8 IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first hereinabove written. ATTEST: CENTRAL COOPERATIVE BANK /s/ Edward F. Sweeney, Jr. By /s/ Richard E. Stevens - ----------------------------------- ------------------------------------- WITNESS: /s/ William P. Morrissey ---------------------------------------- EMPLOYEE /s/ Rhoda K. Astone - ------------------------------------ 9 EX-10.3 4 central8kdec2007ex10-3.txt EXHIBIT 10.3 EXECUTIVE SALARY CONTINUATION AGREEMENT THIS AGREEMENT, made and entered into this 20th day of December, 2007, by and between Central Co-Operative Bank, a bank organized and existing under the laws of the Commonwealth of Massachusetts (hereinafter referred to as the "Bank"), and John D. Doherty, an Executive of the Bank (hereinafter referred to as the "Executive"), a member of a select group of management and highly compensated employees of the Bank. WHEREAS, the Executive has been and continues to be a valued Executive of the Bank; and WHEREAS, the purpose of this Agreement is to further the growth and development of the Bank by providing the Executive with supplemental retirement income, and thereby encourage the Executive's productive efforts on behalf of the Bank and the Bank's shareholders, and to align the interests of the Executive and those shareholders; and WHEREAS, it is the desire of the Bank and the Executive to enter into this Agreement under which the Bank will agree to make certain payments to the Executive at retirement or the Executive's Beneficiary in the event of the Executive's death pursuant to this Agreement; and ACCORDINGLY, it is intended that the Agreement be "unfunded" for purposes of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and not be construed to provide income to the participant or beneficiary under the Internal Revenue Code of 1986, as amended (the "Code"), particularly Section 409A of the Code and guidance or regulations issued thereunder, prior to actual receipt of benefits; and NOW THEREFORE, it is agreed as follows: I. EFFECTIVE DATE The Effective Date of this Agreement shall be December 20, 2007. II. FRINGE BENEFITS The salary continuation 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 these salary continuation benefits except as set forth hereinafter. 1 III. DEFINITIONS A. Beneficiary: ----------- The Executive shall have the right to name a Beneficiary of the Death Benefit. The Executive shall have the right to name such Beneficiary at any time prior to the Executive's death and submit it to the Plan Administrator (or Plan Administrator's representative) on the form provided. Once received and acknowledged by the Plan Administrator, the form shall be effective. The Executive may change a Beneficiary designation at any time by submitting a new form to the Plan Administrator. Any such change shall follow the same rules as for the original Beneficiary designation and shall automatically supersede the existing Beneficiary form on file with the Plan Administrator. If the Executive dies without a valid Beneficiary designation on file with the Plan Administrator, death benefits shall be paid to the Executive's estate. If the Plan Administrator determines in its discretion that a benefit is to be paid to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that person's property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such distribution amount. B. Change in Control: ----------------- "Change in Control" shall mean a change in ownership or control of the Bank as defined in Treasury Regulation Section 1.409A-3(i)(5) or any subsequently applicable Treasury Regulation. C. Disability or Disabled: ---------------------- "Disability or Disabled" shall mean the Executive: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) 2 months, or (ii) 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 twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering executives of the Bank, provided that the definition of Disability applied under such Disability insurance programs complies with the requirements of Section 409A. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration's or provider's determination. D. Discharge For Cause: ------------------- The term "For Cause" shall mean any of the following that result in an adverse effect on the Bank: (i) the commission of a felony or gross misdemeanor involving fraud or dishonesty; (ii) the willful violation of any banking law, rule, or banking regulation (other than a traffic violation or similar offense); (iii) an intentional failure to perform stated duties; or (iv) a breach of fiduciary duty involving personal profit. If a dispute arises as to discharge "For Cause," such dispute shall be resolved by arbitration as set forth in this Agreement. E. Normal Retirement Age: --------------------- "Normal Retirement Age" shall mean the date on which the Executive attains age sixty-five (65). F. Plan Year: --------- Any reference to "Plan Year" shall mean a calendar year from January 1st to December 31st. In the year of implementation, the term "Plan Year" shall mean the period from the Effective Date to December 31st of the year of the Effective Date. G. Restriction on Timing of Distribution: ------------------------------------- Notwithstanding any provision of this Agreement to the contrary, distributions hereunder may not commence earlier than six (6) months after the date of a Separation from Service, as that term is used under Section 409A if, pursuant to Internal Revenue Code Section 409A, the Executive is considered a "specified employee" of the Bank under Internal Revenue Code Section 416(i), if any stock of the Bank is publicly traded on an established securities market or otherwise. In the event a distribution is delayed pursuant to this paragraph, the originally scheduled payment shall be delayed for six (6) months, and shall commence instead on the first day of the seventh month following Separation from Service. 3 If payments are scheduled to be made in installments, the first six (6) months of installment payments shall be delayed, aggregated, and paid instead on the first day of the seventh month, after which all installment payments shall be made on their regular schedule. If payment is scheduled to be made in a lump sum, the lump sum payment shall be delayed for six (6) months and instead be made on the first day of the seventh month. H. Retirement Date: --------------- "Retirement Date" shall mean the later of the Executive's sixty-fifth (65th) birthday or Separation from Service. I. Separation from Service: ----------------------- "Separation from Service" shall mean the Executive has experienced a termination of employment with the Bank. For purposes of this Agreement, whether a termination of employment or 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 Executive would perform after such date (whether as an Executive or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an Executive or an independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Bank if the Executive has been providing services to the Bank less than 36 months). Facts and circumstances to be considered in making this determination include, but are not limited to, whether the Executive continues to be treated as an Executive for other purposes (such as continuation of salary and participation in Executive benefit programs), whether similarly situated service providers have been treated consistently, and whether the Executive is permitted, and realistically available, to perform services for other service recipients in the same line of business. The Executive will be presumed not to have separated from service where the level of bona fide services performed continues at a level that is fifty percent (50%) or more of the average level of service performed by the Executive during the immediately preceding thirty-six (36) month period. IV. RETIREMENT BENEFIT ------------------ Upon attainment of the Retirement Date, the Bank shall pay the Executive an annual benefit equal to fifty percent (50%) of the average high three (3) years of the Executive's base salary, offset by: (i) the amount available to the Executive from the Bank's pension plan assuming lifetime with fifteen (15) years certain; 4 (ii) the Bank's contribution to the Executive's 401(k) plan annuitized assuming the Executive would be paid for fifteen (15) years certain using a rate of return equal to the average one-year Federal funds rate for the twelve (12) months immediately preceding the Executive's retirement. It shall further be assumed that the executive has contributed the maximum voluntary contribution to the 401(k) plan thereby being eligible for maximum Bank contribution and assume six percent (6%) interest on Bank contribution. And, (iii) fifty percent (50%) of the Executive's age sixty-five (65) Social Security benefit. The benefit shall increase by a three percent (3%) annual cost of living increase. Said benefit shall be paid in monthly installments (1/12th of the annual benefit) until the death of the Executive. Said payment shall be made the first day of the month following Separation from Service. V. DEATH BENEFIT A. Pre-Retirement Death Benefit: ---------------------------- In the event the Executive should die at any time after the Effective Date of this Agreement, the Bank will pay an amount equal to the Executive's Accrued Liability Retirement Account, as of the date of death, in one (1) lump sum to the Executive's Beneficiary(ies). Said payment due hereunder shall be made within sixty (60) days of the Executive's death. B. Post-Retirement Death Benefit: ----------------------------- Should the Executive die before the one hundred eighty (180) monthly installments have been paid in Paragraph IV, the Bank shall continue payments of said installments to the Executive's Beneficiary(ies) until one hundred eighty (180) installments have been paid. Said payment due hereunder shall be made within sixty (60) days of the Executive's death. VI. BENEFIT ACCOUNTING/ ACCRUED LIABILITY RETIREMENT ACCOUNT The Bank shall account for this benefit using the regulatory accounting principles of the Bank's primary federal regulator. The Bank shall establish an Accrued Liability Retirement Account for the Executive on the books of the Bank into which appropriate reserves shall be accrued. VII. VESTING The Executive shall be one hundred percent (100%) vested in the Accrued Liability Retirement Account as of the Effective Date of this Agreement. VIII. TERMINATION PRIOR TO NORMAL RETIREMENT AGE Subject to Paragraph IX, in the event that the employment of the Executive shall terminate prior to the Normal Retirement Age, by the Executive's voluntary 5 action, or by the Executive's discharge by the Bank without cause, the Bank shall pay to the Executive an amount equal to the balance of the Executive's Accrued Liability Retirement Account on the date of Separation from Service. Such balance shall be paid in one (1) lump sum within sixty (60) days following Separation from Service. IX. DISCHARGE FOR CAUSE Notwithstanding anything to the contrary, in the event the Executive shall be Discharged For Cause at any time, this Agreement shall terminate and all benefits provided herein shall be forfeited. X. DISABILITY OR DISABLED In the event that there is a finding of any qualified period of Disability for the Executive, the Bank will deposit into the Contingent Disability Trust (hereafter "Trust") for the Executive, an amount equal to the balance of the Accrued Liability Retirement Account at the time of such Disability, established on the Executive's behalf pursuant to this Agreement. No other benefits will be owed to the Executive under this Agreement during the period of Disability. The Trust shall be an unfunded Trust until such time that the Executive is deemed Disabled. If the Executive is Disabled on the date the Executive reaches Normal Retirement Age, this Agreement shall automatically terminate and the Executive shall not be entitled to any further benefits under this Agreement. If the period of Disability ends prior to Normal Retirement Age and the Executive returns to active employment with the Bank, Massachusetts Mutual will cease paying the disability benefit to the Trust and the Bank will pay the Executive a reduced retirement benefit amount. The retirement benefit determined in accordance with Paragraph IV shall be reduced by the thirteen (13) year annual annuity that would be payable from the Trust assuming the trust assets earned on a net of four percent (4%) annually starting from the date of the existence of said Trust. Payment shall be made in the same time and form as stated in Paragraph IV. XI. CHANGE IN CONTROL Upon a Change in Control, the Executive shall receive one hundred percent (100%) of the Accrued Liability Retirement Account. Such balance shall be paid in a lump sum within sixty (60) days of a Change in Control. Upon a Change in Control subsequent to the Retirement Date, the Executive shall continue to receive the Retirement Benefit as stated in Paragraph IV in the same time and form as stated in such Paragraph IV. 6 XII. RESTRICTIONS ON FUNDING The Bank shall have no obligation to set aside, earmark or entrust any fund or money with which to pay its obligations under this Agreement. The Executive, their Beneficiary, or any successor in interest shall be and remain simply a general creditor of the Bank in the same manner as any other creditor having a general claim for matured and unpaid compensation. The Bank reserves the absolute right, at its sole discretion, to either fund the obligations undertaken by this Agreement 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 purchase of life insurance, mutual funds, Disability policies or annuities, the Bank reserves the absolute right, in its sole discretion, to terminate such funding at any time, in whole or in part. At no time shall any Executive be deemed to have any lien, right, title or interest in any specific funding investment or assets of the Bank. If the Bank elects to invest in a life insurance, Disability or annuity policy on the life of the Executive, then 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. XIII. MISCELLANEOUS A. Alienability and Assignment Prohibition: --------------------------------------- Neither the Executive nor any 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 the Executive's Beneficiary, nor be transferable by operation of law in the event of bankruptcy, insolvency or otherwise. B. Amendment or Revocation: ----------------------- During the lifetime of the Executive, this Agreement may be amended or revoked at any time or times, in whole or in part only, by the mutual written consent of the Executive and the Bank. Any such amendment shall not be effective to decrease or restrict the Executive's accrued benefit under this Agreement, determined as of the date of amendment, unless agreed to in writing by the Executive, and provided further, no amendment shall be made, or if made, shall be effective, if such amendment would cause the Agreement to violate Internal Revenue Code Section 409A. 7 C. Applicable Law: -------------- The validity and interpretation of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. D. Binding Obligation of the Bank and any Successor in --------------------------------------------------- Interest: -------- The Bank 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. This Agreement shall be binding upon the parties hereto, their successors, assignees, beneficiaries, heirs and personal representatives. E. Gender: ------ Whenever in this Agreement words are used in the masculine or neutral gender, they shall be read and construed as in the masculine, feminine or neutral gender, whenever they should so apply. F. Headings: -------- Headings and subheadings in this Agreement are inserted for reference and convenience only and shall not be deemed a part of this Agreement. G. 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 employment. H. Opportunity to Consult with Independent Advisors: ------------------------------------------------ The Executive acknowledges that he has been afforded the opportunity to consult with independent advisors of his choosing including, without limitation, accountants or tax advisors and legal counsel regarding both the benefits granted to him under the terms of this Agreement and the: (i) terms and conditions which may affect the Executive's right to these benefits; and (ii) personal tax effects of such benefits including, without limitation, the effects of any federal or state taxes, Section 280G of the Code, Section 409A of the Code and guidance or regulations thereunder, and any other taxes, costs, expenses or liabilities whatsoever related to such benefits, which in any of the foregoing instances the Executive acknowledges and agrees shall be the sole responsibility of the Executive notwithstanding any other term or provision of this Agreement. The 8 Executive further acknowledges and agrees that the Bank shall have no liability whatsoever related to any such personal tax effects or other personal costs, expenses, or liabilities applicable to the Executive and further specifically waives any right for himself or herself, and his or her heirs, beneficiaries, legal representative, agents, successor and assign to claim or assert liability on the part of the Bank related to the matters described above in this paragraph. The Executive further acknowledges that he has read, understands and consents to all of the terms and conditions of this Agreement, and that he enters into this Agreement with a full understanding of its terms and conditions. I. Partial Invalidity: ------------------ If any term, provision, covenant, or condition of this Agreement is determined by an arbitrator or a court, as the case may be, to be invalid, void, or unenforceable, such determination shall not render any other term, provision, covenant, or condition invalid, void, or unenforceable, and the Agreement shall remain in full force and effect notwithstanding such partial invalidity. J. Permissible Acceleration Provision: ---------------------------------- Under Treasury Regulation Section 1.409A-3(j)(4), a payment of deferred compensation may not be accelerated except as provided in regulations by the Internal Revenue Code. This Agreement allows all permissible payment accelerations under 1.409A-3(j)(4) that include but are not limited to payments necessary to comply with a domestic relations order, payments necessary to comply with certain conflict of interest rules, payments intended to pay employment taxes, and other permissible payments are allowed as permitted by statute or regulation. K. Subsequent Changes to Time and Form of Payment: ---------------------------------------------- The Bank may permit subsequent changes to the time and form of payment. Any such change shall be considered made only when it becomes irrevocable under the terms of the Agreement. Any subsequent time and form of payment changes will be considered irrevocable not later than thirty (30) days following acceptance of the change by the Plan Administrator, subject to the following rules: a. the subsequent change may not take effect until at least twelve (12) months after the date on which the change is made; b. the payment (except in the case of death, disability, or unforeseeable emergency) upon which the change is made is deferred for a period of not less than five (5) years from the date such payment would otherwise have been paid; and 9 c. in the case of a payment made at a specified time, the change must be made not less than twelve (12) months before the date the payment is scheduled to be paid. L. Tax Withholding: --------------- The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement. The Executive acknowledges that the Bank's sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authority(ies). XIV. ADMINISTRATIVE AND CLAIMS PROVISIONS A. Plan Administrator: ------------------ The "Plan Administrator" of this Agreement shall be Central Co-Operative Bank. As Plan Administrator, the Bank shall be responsible for the management, control and administration of the Agreement. The Plan Administrator may delegate to others certain aspects of the management and operation responsibilities of the Agreement including the employment of advisors and the delegation of ministerial duties to qualified individuals. B. Claims Procedure: ---------------- a. Filing a Claim for Benefits: --------------------------- Any insured, Beneficiary, or other individual, ("Claimant") entitled to benefits under this Agreement will file a claim request with the Plan Administrator. The Plan Administrator will, upon written request of a Claimant, make available copies of all forms and instructions necessary to file a claim for benefits or advise the Claimant where such forms and instructions may be obtained. If the claim relates to disability benefits, then the Plan Administrator shall designate a sub-committee to conduct the initial review of the claim (and applicable references below to the Plan Administrator shall mean such sub-committee). b. Denial of Claim: --------------- A claim for benefits under this Agreement will be denied if the Bank determines that the Claimant is not entitled to receive benefits under the Agreement. Notice of a denial shall be furnished the Claimant within a reasonable period of time after receipt of the claim for benefits by the Plan Administrator. This time period 10 shall not exceed more than ninety (90) days after the receipt of the properly submitted claim. In the event that the claim for benefits pertains to disability, the Plan Administrator shall provide written notice within forty-five (45) days. However, if the Plan Administrator determines, in its discretion, that an extension of time for processing the claim is required, such extension shall not exceed an additional ninety (90) days. In the case of a claim for disability benefits, the forty-five (45) day review period may be extended for up to thirty (30) days if necessary due to circumstances beyond the Plan Administrator's control, and for an additional thirty (30) days, if necessary. Any extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the determination on review. c. Content of Notice: ----------------- The Plan Administrator shall provide written notice to every Claimant who is denied a claim for benefits which notice shall set forth the following: (i.) The specific reason or reasons for the denial; (ii.) Specific reference to pertinent Agreement provisions on which the denial is based; (iii.) A description of any additional material or information necessary for the Claimant to perfect the claim, and any explanation of why such material or information is necessary; and (iv.) Any other information required by applicable regulations, including with respect to disability benefits. d. Review Procedure: ---------------- The purpose of the Review Procedure is to provide a method by which a Claimant may have a reasonable opportunity to appeal a denial of a claim to the Plan Administrator for a full and fair review. The Claimant, or his duly authorized representative, may: (i.) Request a review upon written application to the Plan Administrator. Application for review must be made within sixty (60) days of receipt of written notice of denial of claim. If the denial of claim pertains to disability, application for review must be made within one hundred 11 eighty (180) days of receipt of written notice of the denial of claim; (ii.) Review and copy (free of charge) pertinent Agreement documents, records and other information relevant to the Claimant's claim for benefits; (iii.) Submit issues and concerns in writing, as well as documents, records, and other information relating to the claim. e. Decision on Review: ------------------ A decision on review of a denied claim shall be made in the following manner: (i.) The Plan Administrator may, in its sole discretion, hold a hearing on the denied claim. If the Claimant's initial claim is for disability benefits, any review of a denied claim shall be made by members of the Plan Administrator other than the original decision maker(s) and such person(s) shall not be a subordinate of the original decision maker(s). The decision on review shall be made promptly, but generally not later than sixty (60) days after receipt of the application for review. In the event that the denied claim pertains to disability, such decision shall not be made later than forty-five (45) days after receipt of the application for review. If the Plan Administrator determines that an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial sixty (60) day period. In no event shall the extension exceed a period of sixty (60) days from the end of the initial period. In the event the denied claim pertains to disability, written notice of such extension shall be furnished to the Claimant prior to the termination of the initial forty-five (45) day period. In no event shall the extension exceed a period of thirty (30) days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the determination on review. (ii.) The decision on review shall be in writing and shall include specific reasons for the decision written in an understandable manner with specific references to the pertinent Agreement provisions upon which the decision is based. 12 (iii.) The review will take into account all comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination. Additional considerations shall be required in the case of a claim for disability benefits. For example, the claim will be reviewed without deference to the initial adverse benefits determination and, if the initial adverse benefit determination was based in whole or in part on a medical judgment, the Plan Administrator will consult with a health care professional with appropriate training and experience in the field of medicine involving the medical judgment. The health care professional who is consulted on appeal will not be the same individual who was consulted during the initial determination or the subordinate of such individual. If the Plan Administrator obtained the advice of medical or vocational experts in making the initial adverse benefits determination (regardless of whether the advice was relied upon), the Plan Administrator will identify such experts. (iv.) The decision on review will include a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records or other information relevant to the Claimant's claim for benefits. f. Exhaustion of Remedies: ---------------------- A Claimant must follow the claims review procedures under this Agreement and exhaust his or her administrative remedies before taking any further action with respect to a claim for benefits. C. Arbitration: ----------- If claimants continue to dispute the benefit denial based upon completed performance of this Agreement or the meaning and effect of the terms and conditions thereof, then claimants may submit the dispute to an Arbitrator for final arbitration. The Arbitrator shall be selected by mutual agreement of the Bank and the claimants. The Arbitrator shall operate under any generally recognized set of arbitration rules. The parties hereto agree that they and their heirs, personal representatives, successors and assigns shall be bound by the decision of such Arbitrator with respect to any controversy properly submitted to it for determination. 13 Where a dispute arises as to the Bank's discharge of the Executive "For Cause," such dispute shall likewise be submitted to arbitration as above described and the parties hereto agree to be bound by the decision thereunder. IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement and executed the original thereof effective as of the first day set forth hereinabove, and that, upon execution, each has received a conforming copy. CENTRAL CO-OPERATIVE BANK Somerville, MA /s/ Richard E. Stevens By: /s/ Edward F. Sweeney, Jr. - ------------------------------- ------------------------------------ Witness (Bank Director other than Executive) Title /s/ Paul S. Feeley /s/ John D. Doherty - ------------------------------- ------------------------------------ Witness John D. Doherty 14
BENEFICIARY DESIGNATION FORM FOR THE EXECUTIVE SALARY CONTINUATION AGREEMENT I. PRIMARY DESIGNATIONS -------------------- A. Person(s) as a Primary Designation: ---------------------------------- (Please indicate the percentage for each beneficiary.) 1. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 2. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 3. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 4. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- II. ESTATE AND/OR TRUST AS PRIMARY DESIGNATIONS ------------------------------------------- A. Estate as a Primary Designation: ------------------------------- An Estate can still be listed even if there is no will. My Primary Beneficiary is The Estate of as set forth in the Last Will and --------------------------------- (Insert full name) Testament dated the day of , 200 and any codicils thereto. -------- --------------- --- B. Trust as a Primary Designation: Name of the Trust: ------------------------------------------------------------------------------------------------------------------- Execution Date of the Trust: Name of the Trustee: ------------------------------------------------------------------------------------------------------------------- Beneficiary of the Trust: (please indicate the percentage for each beneficiary): ------------------------------------------------------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------------------------------------------------- Is this an Irrevocable Life Insurance Trust? Yes No ----- ----- (If yes and this designation is for a Joint Beneficiary Designation Agreement, an Assignment of Rights form must be completed.)
III. SECONDARY (CONTINGENT) DESIGNATIONS ----------------------------------- A. Person(s) as a Secondary (Contingent) Designation: (Please indicate the percentage for each beneficiary in the event of the Primary's Death.) 1. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 2. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 3. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 4. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- IV. ESTATE AND/OR TRUST AS SECONDARY (CONTINGENT) DESIGNATIONS ---------------------------------------------------------- A. Estate as a Secondary (Contingent) Designation: ---------------------------------------------- My Primary Beneficiary is The Estate of as set forth in the last will and ------------------------------ Testament dated the day of , 200 and any codicils thereto. --------- --------------------- ---- B. Trust as a Secondary (Contingent) Designation: Name of the Trust: ------------------------------------------------------------------------------------------------------------------- Execution Date of the Trust: Name of the Trustee: ------------------------------------------------------------------------------------------------------------------- Beneficiary of the Trust: (please indicate the percentage for each beneficiary): ------------------------------------------------------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------------------------------------------------- Is this an Irrevocable Life Insurance Trust? Yes No ----- ----- (If yes and this designation is for a Joint Beneficiary Designation Agreement, an Assignment of Rights form must be completed.) V. SIGN AND DATE ------------- This Beneficiary Designation Form is valid until the Executive notifies the bank in writing. - ------------------------------------ ------------------------------ John D. Doherty Date
AMENDMENT TO THE EXECUTIVE SALARY CONTINUATION AGREEMENT EFFECTIVE DECEMBER 20, 2007 THIS AMENDMENT, made and entered into this 21st day of December, 2007, by and between Central Co-Operative Bank, a bank organized and existing under the laws of the Commonwealth of Massachusetts, (hereinafter referred to as the "Bank"), and John Doherty, an Executive of the Bank, (hereinafter referred to as the "Executive"), shall effectively amend the Executive Salary Continuation Agreement effective December 20, 2007 as follows: 1.) Paragraph VI, BENEFIT ACCOUNTING/ACCRUED LIABILITY RETIREMENT ACCOUNT, shall be deleted in its entirety and replaced with the following: The Bank shall account for this benefit using the regulatory accounting principles of the Bank's primary federal regulator. The Bank shall establish an Accrued Liability Retirement Account for the Executive on the books of the Bank into which appropriate reserves shall be accrued. The Accrued Liability Retirement Account calculation is provided in Attachment A. 2.) Paragraph VIII, TERMINATION PRIOR TO NORMAL RETIREMENT AGE, shall be deleted in its entirety and replaced with the following: Subject to Paragraph IX, in the event that the employment of the Executive shall terminate prior to the Normal Retirement Age, by the Executive's voluntary action, or by the Executive's discharge by the Bank without cause, the Bank shall pay to the Executive an amount of money equal to the balance of the Executive's Accrued Liability Retirement Account on the date of Separation from Service. Such balance shall be paid in one (1) lump sum within sixty (60) days following Separation from Service, and the Bank shall have no further obligation to the Executive, under this Agreement. 3.) Attachment "A" shall be added to the Executive Salary Continuation Agreement as attached hereto. This Amendment shall be effective the 20th day of December, 2007. To the extent that any term, provision, or paragraph of said Agreement is not specifically amended herein, or in any other amendment thereto, said term, provision, or paragraph shall remain in full force and effect as set forth in said December 20, 2007 Agreement. IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Amendment and executed the original thereof on the first day set forth hereinabove, and that, upon execution, each has received a conforming copy. CENTRAL CO-OPERATIVE BANK Somerville, MA
/s/ Rhoda K. Astone By: /s/ Paul S. Feeley - ------------------------------- ------------------------------------------- Witness Title /s/ Rhoda K. Astone /s/ John D. Doherty - ------------------------------- ------------------------------------------- Witness John D. Doherty
PARTICIPATION PLAN SUMMARY CENTRAL CO-OPERATIVE BANK Attachment A Doherty, John December 12, 2007 End of Year Age: 50 PARTICIPANT Retirement Age: 65 Age At Death: 85 End of APB 12 Post-Mortality Benefit Pre-Tax Split Dollar Tax On End of Year Benefit Benefit Liability Retirement Death FICA/ Economic Year Year Age Expense Expense Balance Benefit Benefit Medicare Value ============================================================================================================================== 2007 1 50 2008 2 51 (36,039) 36,039 523 2009 3 52 (40,675) 76,714 557 2010 4 53 (45,758) 122,472 594 2011 5 54 (51,328) 173,800 633 2012 6 55 (57,424) 231,224 675 2013 7 56 (64,092) 295,316 720 2014 8 57 (71,380) 366,696 767 2015 9 58 (79,341) 446,037 818 2016 10 59 (88,031) 534,068 872 2017 11 60 (97,510) 631,578 930 2018 12 61 (107,844) 739,423 991 2019 13 62 (119,105) 858,528 1,057 2020 14 63 (131,368) 989,895 1,127 2021 15 64 (144,716) 1,134,611 1,201 2022 16 65 (122,528) 1,208,307 48,832 720 2023 17 66 (73,653) 1,163,298 118,662 2024 18 67 (70,636) 1,111,712 122,222 2025 19 68 (67,192) 1,053,016 125,888 2026 20 69 (63,287) 986,638 129,665 2027 21 70 (58,884) 911,968 133,555 2028 22 71 (53,944) 828,350 137,562 2029 23 72 (48,424) 735,086 141,689 2030 24 73 (42,280) 631,426 145,939 2031 25 74 (35,462) 516,571 150,317 2032 26 75 (27,920) 389,663 154,827 2033 27 76 (19,598) 249,789 159,472 2034 28 77 (10,437) 95,970 164,256 2035 29 78 (1,502) (71,712) 0 169,184 2036 30 79 (174,259) 174,259 2037 31 80 (179,487) 179,487 2038 32 81 (184,872) 184,872 2039 33 82 (190,418) 190,418 2040 34 83 (196,130) 196,130 2041 35 84 (202,014) 202,014
EX-10.4 5 central8kdec2007ex10-4.txt EXHIBIT 10.4 EXECUTIVE SALARY CONTINUATION AGREEMENT THIS AGREEMENT, made and entered into this 20th day of December, 2007, by and between Central Co-Operative Bank, a bank organized and existing under the laws of the Commonwealth of Massachusetts (hereinafter referred to as the "Bank"), and William P. Morrissey, an Executive of the Bank (hereinafter referred to as the "Executive"), a member of a select group of management and highly compensated employees of the Bank. WHEREAS, the Executive has been and continues to be a valued Executive of the Bank; and WHEREAS, the purpose of this Agreement is to further the growth and development of the Bank by providing the Executive with supplemental retirement income, and thereby encourage the Executive's productive efforts on behalf of the Bank and the Bank's shareholders, and to align the interests of the Executive and those shareholders; and WHEREAS, it is the desire of the Bank and the Executive to enter into this Agreement under which the Bank will agree to make certain payments to the Executive at retirement or the Executive's Beneficiary in the event of the Executive's death pursuant to this Agreement; and ACCORDINGLY, it is intended that the Agreement be "unfunded" for purposes of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and not be construed to provide income to the participant or beneficiary under the Internal Revenue Code of 1986, as amended (the "Code"), particularly Section 409A of the Code and guidance or regulations issued thereunder, prior to actual receipt of benefits; and NOW THEREFORE, it is agreed as follows: I. EFFECTIVE DATE The Effective Date of this Agreement shall be December 20, 2007. II. FRINGE BENEFITS The salary continuation 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 these salary continuation benefits except as set forth hereinafter. - 1 - III. DEFINITIONS A. Beneficiary: ----------- The Executive shall have the right to name a Beneficiary of the Death Benefit. The Executive shall have the right to name such Beneficiary at any time prior to the Executive's death and submit it to the Plan Administrator (or Plan Administrator's representative) on the form provided. Once received and acknowledged by the Plan Administrator, the form shall be effective. The Executive may change a Beneficiary designation at any time by submitting a new form to the Plan Administrator. Any such change shall follow the same rules as for the original Beneficiary designation and shall automatically supersede the existing Beneficiary form on file with the Plan Administrator. If the Executive dies without a valid Beneficiary designation on file with the Plan Administrator, death benefits shall be paid to the Executive's estate. If the Plan Administrator determines in its discretion that a benefit is to be paid to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that person's property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such distribution amount. B. Change in Control: ----------------- "Change in Control" shall mean a change in ownership or control of the Bank as defined in Treasury Regulation Section 1.409A-3(i)(5) or any subsequently applicable Treasury Regulation. C. Disability or Disabled: ---------------------- "Disability or Disabled" shall mean the Executive: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result -2- in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank. Medical determination of Disability may be made by either the Social Security Administration or by the provider of an accident or health plan covering executives of the Bank, provided that the definition of Disability applied under such Disability insurance programs complies with the requirements of Section 409A. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration's or provider's determination. D. Discharge For Cause: ------------------- The term "For Cause" shall mean any of the following that result in an adverse effect on the Bank: (i) the commission of a felony or gross misdemeanor involving fraud or dishonesty; (ii) the willful violation of any banking law, rule, or banking regulation (other than a traffic violation or similar offense); (iii) an intentional failure to perform stated duties; or (iv) a breach of fiduciary duty involving personal profit. If a dispute arises as to discharge "For Cause," such dispute shall be resolved by arbitration as set forth in this Agreement. E. Normal Retirement Age: --------------------- "Normal Retirement Age" shall mean the date on which the Executive attains age eighty-five (85). F. Plan Year: --------- Any reference to "Plan Year" shall mean a calendar year from January 1st to December 31st. In the year of implementation, the term "Plan Year" shall mean the period from the Effective Date to December 31st of the year of the Effective Date. G. Restriction on Timing of Distribution: ------------------------------------- Notwithstanding any provision of this Agreement to the contrary, distributions hereunder may not commence earlier than six (6) months after the date of a Separation from Service, as that term is used under Section 409A if, pursuant to Internal Revenue Code Section 409A, the Executive is considered a "specified employee" of the Bank under Internal Revenue Code Section 416(i), if any stock of the Bank is publicly traded on an established securities market or otherwise. In the event a distribution is delayed pursuant to this paragraph, the originally scheduled payment shall be delayed for six (6) months, and shall commence instead on the first day of the seventh month following Separation from Service. If payments are scheduled to be made in installments, the first six (6) months of installment payments shall be -3- delayed, aggregated, and paid instead on the first day of the seventh month, after which all installment payments shall be made on their regular schedule. If payment is scheduled to be made in a lump sum, the lump sum payment shall be delayed for six (6) months and instead be made on the first day of the seventh month. H. Retirement Date: --------------- "Retirement Date" shall mean the later of the Executive's eighty-fifth (85th) birthday or Separation from Service. I. Separation from Service: ----------------------- "Separation from Service" shall mean the Executive has experienced a termination of employment with the Bank. For purposes of this Agreement, whether a termination of employment or 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 Executive would perform after such date (whether as an Executive or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an Executive or an independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Bank if the Executive has been providing services to the Bank less than 36 months). Facts and circumstances to be considered in making this determination include, but are not limited to, whether the Executive continues to be treated as an Executive for other purposes (such as continuation of salary and participation in Executive benefit programs), whether similarly situated service providers have been treated consistently, and whether the Executive is permitted, and realistically available, to perform services for other service recipients in the same line of business. The Executive will be presumed not to have separated from service where the level of bona fide services performed continues at a level that is fifty percent (50%) or more of the average level of service performed by the Executive during the immediately preceding thirty-six (36) month period. IV. RETIREMENT BENEFIT Upon attainment of the Retirement Date, the Bank shall pay the Executive an annual benefit equal to forty percent (40%) of the average high three (3) years of the Executive's base salary, offset by: (i) the amount available to the Executive from the Bank's pension plan assuming lifetime with fifteen (15) years certain; (ii) the Bank's contribution to the Executive's 401(k) plan annuitized assuming the Executive would be paid for fifteen (15) years certain using a rate of return equal to the average one-year Federal funds rate for the twelve (12) months immediately preceding the Executive's retirement. It shall further be assumed that the executive has contributed the maximum voluntary -4- contribution to the 401(k) plan thereby being eligible for maximum Bank contribution and assume seven percent (7%) interest on Bank contribution; and, (iii) Nine Thousand Four Hundred Eighty and 00/100th Dollars ($9,480.00) Social Security benefit. The benefit shall increase by a three percent (3%) annual cost of living increase. Said benefit shall be paid in monthly installments (1/12th of the annual benefit) until the death of the Executive. Said payment shall be made the first day of the month following Separation from Service. V. DEATH BENEFIT A. Pre-Retirement Death Benefit: ---------------------------- In the event the Executive should die at any time after the Effective Date of this Agreement, the Bank will pay an amount equal to the Executive's Accrued Liability Retirement Account, as of the date of death, in one (1) lump sum to the Executive's Beneficiary(ies). Said payment due hereunder shall be made within sixty (60) days of the Executive's death. B. Post-Retirement Death Benefit: ----------------------------- Should the Executive die before the one hundred eighty (180) monthly installments have been paid in Paragraph IV, the Bank shall continue payments of said installments to the Executive's Beneficiary(ies) until one hundred eighty (180) installments have been paid. VI. BENEFIT ACCOUNTING/ ACCRUED LIABILITY RETIREMENT ACCOUNT The Bank shall account for this benefit using the regulatory accounting principles of the Bank's primary federal regulator. The Bank shall establish an Accrued Liability Retirement Account for the Executive on the books of the Bank into which appropriate reserves shall be accrued. VII. VESTING The Executive shall be one hundred percent (100%) vested in the Accrued Liability Retirement Account as of the Effective Date of this Agreement. VIII. TERMINATION PRIOR TO NORMAL RETIREMENT AGE Subject to Paragraph IX, in the event that the employment of the Executive shall terminate prior to the Normal Retirement Age, by the Executive's voluntary action, or by the Executive's discharge by the Bank without cause, the Bank shall pay to the Executive an amount of money equal to the balance of the Executive's Accrued Liability Retirement Account on the date of Separation from Service. Such balance shall be paid in one (1) lump sum within sixty (60) days following Separation from Service. -5- IX. DISCHARGE FOR CAUSE Notwithstanding anything to the contrary, in the event the Executive shall be Discharged For Cause at any time, this Agreement shall terminate and all benefits provided herein shall be forfeited. X. DISABILITY OR DISABLED In the event the Executive becomes Disabled prior to the Executive's Normal Retirement Age, the balance of the Accrued Liability Retirement Account shall be paid to the Executive in a lump sum, sixty (60) days following the Executive's Disability. XI. CHANGE IN CONTROL Upon a Change in Control, the Executive shall receive one hundred percent (100%) of the Accrued Liability Retirement Account. Such balance shall be paid in a lump sum within sixty (60) days of a Change in Control. Upon a Change in Control subsequent to the Retirement Date, the Executive shall continue to receive the Retirement Benefit as stated in Paragraph IV in the same time and form as stated in such Paragraph IV. XII. RESTRICTIONS ON FUNDING The Bank shall have no obligation to set aside, earmark or entrust any fund or money with which to pay its obligations under this Agreement. The Executive, their Beneficiary, or any successor in interest shall be and remain simply a general creditor of the Bank in the same manner as any other creditor having a general claim for matured and unpaid compensation. The Bank reserves the absolute right, at its sole discretion, to either fund the obligations undertaken by this Agreement 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 purchase of life insurance, mutual funds, Disability policies or annuities, the Bank reserves the absolute right, in its sole discretion, to terminate such funding at any time, in whole or in part. At no time shall any Executive be deemed to have any lien, right, title or interest in any specific funding investment or assets of the Bank. If the Bank elects to invest in a life insurance, Disability or annuity policy on the life of the Executive, then 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. XIII. MISCELLANEOUS A. Alienability and Assignment Prohibition: --------------------------------------- Neither the Executive nor any Beneficiary under this Agreement shall have any power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify or otherwise encumber -6- 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 the Executive's Beneficiary, nor be transferable by operation of law in the event of bankruptcy, insolvency or otherwise. B. Amendment or Revocation: ----------------------- During the lifetime of the Executive, this Agreement may be amended or revoked at any time or times, in whole or in part only, by the mutual written consent of the Executive and the Bank. Any such amendment shall not be effective to decrease or restrict the Executive's accrued benefit under this Agreement, determined as of the date of amendment, unless agreed to in writing by the Executive, and provided further, no amendment shall be made, or if made, shall be effective, if such amendment would cause the Agreement to violate Internal Revenue Code Section 409A. C. Applicable Law: -------------- The validity and interpretation of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. D. Binding Obligation of the Bank and any Successor in Interest: ------------------------------------------------------------ The Bank 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. This Agreement shall be binding upon the parties hereto, their successors, assignees, beneficiaries, heirs and personal representatives. E. Gender: ------ Whenever in this Agreement words are used in the masculine or neutral gender, they shall be read and construed as in the masculine, feminine or neutral gender, whenever they should so apply. F. Headings: --------' Headings and subheadings in this Agreement are inserted for reference and convenience only and shall not be deemed a part of this Agreement. G. 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 -7- hereof restrict the right of the Bank to discharge the Executive, or restrict the right of the Executive to terminate employment. H. Opportunity to Consult with Independent Advisors: ------------------------------------------------ The Executive acknowledges that he has been afforded the opportunity to consult with independent advisors of his choosing including, without limitation, accountants or tax advisors and legal counsel regarding both the benefits granted to him under the terms of this Agreement and the: (i) terms and conditions which may affect the Executive's right to these benefits; and (ii) personal tax effects of such benefits including, without limitation, the effects of any federal or state taxes, Section 280G of the Code, Section 409A of the Code and guidance or regulations thereunder, and any other taxes, costs, expenses or liabilities whatsoever related to such benefits, which in any of the foregoing instances the Executive acknowledges and agrees shall be the sole responsibility of the Executive notwithstanding any other term or provision of this Agreement. The Executive further acknowledges and agrees that the Bank shall have no liability whatsoever related to any such personal tax effects or other personal costs, expenses, or liabilities applicable to the Executive and further specifically waives any right for himself or herself, and his or her heirs, beneficiaries, legal representative, agents, successor and assign to claim or assert liability on the part of the Bank related to the matters described above in this paragraph. The Executive further acknowledges that he has read, understands and consents to all of the terms and conditions of this Agreement, and that he enters into this Agreement with a full understanding of its terms and conditions. I. Partial Invalidity: ------------------ If any term, provision, covenant, or condition of this Agreement is determined by an arbitrator or a court, as the case may be, to be invalid, void, or unenforceable, such determination shall not render any other term, provision, covenant, or condition invalid, void, or unenforceable, and the Agreement shall remain in full force and effect notwithstanding such partial invalidity. J. Permissible Acceleration Provision: ---------------------------------- Under Treasury Regulation Section 1.409A-3(j)(4), a payment of deferred compensation may not be accelerated except as provided in regulations by the Internal Revenue Code. This Agreement allows all permissible payment accelerations under 1.409A-3(j)(4) that include but are not limited to payments necessary to comply with a domestic relations order, payments necessary to comply with certain conflict of interest rules, payments intended to pay employment taxes, and other -8- permissible payments are allowed as permitted by statute or regulation. K. Subsequent Changes to Time and Form of Payment: ---------------------------------------------- The Bank may permit subsequent changes to the time and form of payment. Any such change shall be considered made only when it becomes irrevocable under the terms of the Agreement. Any subsequent time and form of payment changes will be considered irrevocable not later than thirty (30) days following acceptance of the change by the Plan Administrator, subject to the following rules: a. the subsequent change may not take effect until at least twelve (12) months after the date on which the change is made; b. the payment (except in the case of death, disability, or unforeseeable emergency) upon which the change is made is deferred for a period of not less than five (5) years from the date such payment would otherwise have been paid; and c. in the case of a payment made at a specified time, the change must be made not less than twelve (12) months before the date the payment is scheduled to be paid. L. Tax Withholding: --------------- The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement. The Executive acknowledges that the Bank's sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authority(ies). XIV. ADMINISTRATIVE AND CLAIMS PROVISIONS A. Plan Administrator: ------------------ The "Plan Administrator" of this Agreement shall be Central Co-Operative Bank. As Plan Administrator, the Bank shall be responsible for the management, control and administration of the Agreement. The Plan Administrator may delegate to others certain aspects of the management and operation responsibilities of the Agreement including the employment of advisors and the delegation of ministerial duties to qualified individuals. B. Claims Procedure: ---------------- a. Filing a Claim for Benefits: --------------------------- Any insured, Beneficiary, or other individual, ("Claimant") entitled to benefits under this Agreement will file a claim request with the Plan -9- Administrator. The Plan Administrator will, upon written request of a Claimant, make available copies of all forms and instructions necessary to file a claim for benefits or advise the Claimant where such forms and instructions may be obtained. If the claim relates to disability benefits, then the Plan Administrator shall designate a sub-committee to conduct the initial review of the claim (and applicable references below to the Plan Administrator shall mean such sub-committee). b. Denial of Claim: --------------- A claim for benefits under this Agreement will be denied if the Bank determines that the Claimant is not entitled to receive benefits under the Agreement. Notice of a denial shall be furnished the Claimant within a reasonable period of time after receipt of the claim for benefits by the Plan Administrator. This time period shall not exceed more than ninety (90) days after the receipt of the properly submitted claim. In the event that the claim for benefits pertains to disability, the Plan Administrator shall provide written notice within forty-five (45) days. However, if the Plan Administrator determines, in its discretion, that an extension of time for processing the claim is required, such extension shall not exceed an additional ninety (90) days. In the case of a claim for disability benefits, the forty-five (45) day review period may be extended for up to thirty (30) days if necessary due to circumstances beyond the Plan Administrator's control, and for an additional thirty (30) days, if necessary. Any extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the determination on review. c. Content of Notice: ----------------- The Plan Administrator shall provide written notice to every Claimant who is denied a claim for benefits which notice shall set forth the following: (i.) The specific reason or reasons for the denial; (ii.) Specific reference to pertinent Agreement provisions on which the denial is based; (iii.) A description of any additional material or information necessary for the Claimant to perfect the claim, and any explanation of why such material or information is necessary; and -10- (iv.) Any other information required by applicable regulations, including with respect to disability benefits. d. Review Procedure: ---------------- The purpose of the Review Procedure is to provide a method by which a Claimant may have a reasonable opportunity to appeal a denial of a claim to the Plan Administrator for a full and fair review. The Claimant, or his duly authorized representative, may: (i.) Request a review upon written application to the Plan Administrator. Application for review must be made within sixty (60) days of receipt of written notice of denial of claim. If the denial of claim pertains to disability, application for review must be made within one hundred eighty (180) days of receipt of written notice of the denial of claim; (ii.) Review and copy (free of charge) pertinent Agreement documents, records and other information relevant to the Claimant's claim for benefits; (iii.) Submit issues and concerns in writing, as well as documents, records, and other information relating to the claim. e. Decision on Review: ------------------ A decision on review of a denied claim shall be made in the following manner: (i.) The Plan Administrator may, in its sole discretion, hold a hearing on the denied claim. If the Claimant's initial claim is for disability benefits, any review of a denied claim shall be made by members of the Plan Administrator other than the original decision maker(s) and such person(s) shall not be a subordinate of the original decision maker(s). The decision on review shall be made promptly, but generally not later than sixty (60) days after receipt of the application for review. In the event that the denied claim pertains to disability, such decision shall not be made -11 later than forty-five (45) days after receipt of the application for review. If the Plan Administrator determines that an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial sixty (60) day period. In no event shall the extension exceed a period of sixty (60) days from the end of the initial period. In the event the denied claim pertains to disability, written notice of such extension shall be furnished to the Claimant prior to the termination of the initial forty-five (45) day period. In no event shall the extension exceed a period of thirty (30) days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the determination on review. (ii.) The decision on review shall be in writing and shall include specific reasons for the decision written in an understandable manner with specific references to the pertinent Agreement provisions upon which the decision is based. (iii.) The review will take into account all comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination. Additional considerations shall be required in the case of a claim for disability benefits. For example, the claim will be reviewed without deference to the initial adverse benefits determination and, if the initial adverse benefit determination was based in whole or in part on a medical judgment, the Plan Administrator will consult with a health care professional with appropriate training and experience in the field of medicine involving the medical judgment. The health care professional who is consulted on appeal will not be the same individual who was consulted during the initial determination or the subordinate of such individual. If the Plan Administrator obtained the advice of medical or vocational experts in making the initial adverse benefits determination (regardless of whether the advice was relied upon), the Plan Administrator will identify such experts. (iv.) The decision on review will include a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records or other information relevant to the Claimant's claim for benefits. f. Exhaustion of Remedies: ---------------------- A Claimant must follow the claims review procedures under this Agreement and exhaust his or her 12 administrative remedies before taking any further action with respect to a claim for benefits. C. Arbitration: ----------- If claimants continue to dispute the benefit denial based upon completed performance of this Agreement or the meaning and effect of the terms and conditions thereof, then claimants may submit the dispute to an Arbitrator for final arbitration. The Arbitrator shall be selected by mutual agreement of the Bank and the claimants. The Arbitrator shall operate under any generally recognized set of arbitration rules. The parties hereto agree that they and their heirs, personal representatives, successors and assigns shall be bound by the decision of such Arbitrator with respect to any controversy properly submitted to it for determination. Where a dispute arises as to the Bank's discharge of the Executive "For Cause," such dispute shall likewise be submitted to arbitration as above described and the parties hereto agree to be bound by the decision thereunder. IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement and executed the original thereof effective as of the first day set forth hereinabove, and that, upon execution, each has received a conforming copy. CENTRAL CO-OPERATIVE BANK Somerville, MA
/s/ Richard E. Stevens By: /s/ Edward F. Sweeney, Jr. - ---------------------------------- ----------------------------------------------- Witness (Bank Director other than Executive) Title /s/ Paul S. Feeley /s/ William P. Morrissey - ---------------------------------- ----------------------------------------------- Witness William P. Morrissey
-13-
BENEFICIARY DESIGNATION FORM FOR THE EXECUTIVE SALARY CONTINUATION AGREEMENT I. PRIMARY DESIGNATIONS -------------------- A. Person(s) as a Primary Designation: ---------------------------------- (Please indicate the percentage for each beneficiary.) 1. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 2. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 3. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 4. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- II. ESTATE AND/OR TRUST AS PRIMARY DESIGNATIONS ------------------------------------------- A. Estate as a Primary Designation: ------------------------------- An Estate can still be listed even if there is no will. My Primary Beneficiary is The Estate of as set forth in the Last Will and --------------------------------- (Insert full name) Testament dated the day of , 200 and any codicils thereto. -------- --------------- --- B. Trust as a Primary Designation: Name of the Trust: ------------------------------------------------------------------------------------------------------------------- Execution Date of the Trust: Name of the Trustee: ------------------------------------------------------------------------------------------------------------------- Beneficiary of the Trust: (please indicate the percentage for each beneficiary): ------------------------------------------------------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------------------------------------------------- Is this an Irrevocable Life Insurance Trust? Yes No ----- ----- (If yes and this designation is for a Joint Beneficiary Designation Agreement, an Assignment of Rights form must be completed.) 14 III. SECONDARY (CONTINGENT) DESIGNATIONS ----------------------------------- A. Person(s) as a Secondary (Contingent) Designation: (Please indicate the percentage for each beneficiary in the event of the Primary's Death.) 1. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 2. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 3. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 4. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- IV. ESTATE AND/OR TRUST AS SECONDARY (CONTINGENT) DESIGNATIONS ---------------------------------------------------------- A. Estate as a Secondary (Contingent) Designation: ---------------------------------------------- My Primary Beneficiary is The Estate of as set forth in the last will and ------------------------------ Testament dated the day of , 200 and any codicils thereto. --------- --------------------- ---- B. Trust as a Secondary (Contingent) Designation: Name of the Trust: ------------------------------------------------------------------------------------------------------------------- Execution Date of the Trust: Name of the Trustee: ------------------------------------------------------------------------------------------------------------------- Beneficiary of the Trust: (please indicate the percentage for each beneficiary): ------------------------------------------------------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------------------------------------------------- Is this an Irrevocable Life Insurance Trust? Yes No ----- ----- (If yes and this designation is for a Joint Beneficiary Designation Agreement, an Assignment of Rights form must be completed.) V. SIGN AND DATE ------------- This Beneficiary Designation Form is valid until the Executive notifies the bank in writing. - ------------------------------------ ------------------------------ William P. Morrissey Date
-15- AMENDMENT TO THE EXECUTIVE SALARY CONTINUATION AGREEMENT EFFECTIVE DECEMBER 20, 2007 THIS AMENDMENT, made and entered into this 21st day of December, 2007, by and between Central Co-Operative Bank, a bank organized and existing under the laws of the Commonwealth of Massachusetts, (hereinafter referred to as the "Bank"), and William P. Morrissey, an Executive of the Bank, (hereinafter referred to as the "Executive"), shall effectively amend the Executive Salary Continuation Agreement effective December 20, 2007 as follows: 1.) Paragraph VI, BENEFIT ACCOUNTING/ACCRUED LIABILITY RETIREMENT ACCOUNT, shall be deleted in its entirety and replaced with the following: The Bank shall account for this benefit using the regulatory accounting principles of the Bank's primary federal regulator. The Bank shall establish an Accrued Liability Retirement Account for the Executive on the books of the Bank into which appropriate reserves shall be accrued. The Accrued Liability Retirement Account calculation is provided in Attachment A. 2.) Paragraph VIII, TERMINATION PRIOR TO NORMAL RETIREMENT AGE, shall be deleted in its entirety and replaced with the following: Subject to Paragraph IX, in the event that the employment of the Executive shall terminate prior to the Normal Retirement Age, by the Executive's voluntary action, or by the Executive's discharge by the Bank without cause, the Bank shall pay to the Executive an amount of money equal to the balance of the Executive's Accrued Liability Retirement Account on the date of Separation from Service. Such balance shall be paid in one (1) lump sum within sixty (60) days following Separation from Service, and the Bank shall have no further obligation to the Executive, under this Agreement. 3.) Attachment "A" shall be added to the Executive Salary Continuation Agreement as attached hereto. This Amendment shall be effective the 20th day of December, 2007. To the extent that any term, provision, or paragraph of said Agreement is not specifically amended herein, or in any other amendment thereto, said term, provision, or paragraph shall remain in full force and effect as set forth in said December 20, 2007 Agreement. IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Amendment and executed the original thereof on the first day set forth hereinabove, and that, upon execution, each has received a conforming copy. CENTRAL CO-OPERATIVE BANK Somerville, MA
/s/ Rhoda K. Astone By: /s/ Paul S. Feeley - ------------------------------- ------------------------------------------- Witness Title /s/ Rhoda K. Astone /s/ William P. Morrissey - ------------------------------- ------------------------------------------- Witness William P. Morrissey
PARTICIPANT PLAN SUMMARY CENTRAL CO-OPERATIVE BANK Attachment A Morrissey, William P. December 12, 2007 End of Year Age: 80 PARTICIPANT Retirement Age: 85 Age At Death: 95 End of Death APB 12 Deferred Benefit Pre-Tax Split Dollar Tax On End of Year Benefit Benefit Tax Liability Retirement Death FICA/ Economic Year Year Age Expense Expense Credit Balance Benefit Benefit Medicare Value ==================================================================================================================================== 2007 1 80 (376) 1,000,000 2008 2 81 (4,828) (61,450) 21,508 61,450 1,000,000 908 445 2009 3 82 (5,448) (69,355) 24,274 130,805 1,000,000 970 544 2010 4 83 (6,127) (78,023) 27,308 208,829 1,000,000 1,038 662 2011 5 84 (6,872) (87,519) 30,632 296,348 1,000,000 1,110 797 2012 6 85 7,381 (78,086) 27,330 363,491 10,944 1,000,000 885 960 2013 7 86 11,461 (21,866) 7,653 341,255 44,102 1,000,000 1,161 2014 8 87 4,809 (20,391) 7,137 316,220 45,425 1,000,000 1,425 2015 9 88 (18,734) 6,557 288,165 46,788 1,000,000 1,755 2016 10 89 (16,881) 5,908 256,855 48,192 1,000,000 2,137 2017 11 90 (14,817) 5,186 222,034 49,638 1,000,000 4,250 2018 12 91 (12,526) 4,384 183,434 51,127 1,000,000 4,613 2019 13 92 (9,991) 3,497 140,765 52,660 1,000,000 5,003 2020 14 93 (7,192) 2,517 93,717 54,240 1,000,000 5,470 2021 15 94 (4,110) 1,439 41,959 55,867 1,000,000 6,037 2022 16 95 (877) 307 0 42,836 6,574
EX-10.5 6 central8kdec2007ex10-5.txt EXHIBIT 10.5 LIFE INSURANCE ENDORSEMENT METHOD SPLIT DOLLAR PLAN AGREEMENT
Insurer: John Hancock Life Insurance Company (USA) Policy Number: Bank: Central Co-Operative Bank Insured #1: William P. Morrissey Insured #2: Donna C. Morrissey Relationship of Insured #1 to Bank: Executive - William P. Morrissey Trust: Rabbi Trust for the Executive Salary Continuation Agreement and the Life Insurance Endorsement Method Split Dollar Plan Agreement The respective rights and duties of the Bank and the Insured in the above-referenced policy shall be pursuant to the terms set forth below: I. DEFINITIONS Refer to the policy contract for the definition of any terms in this Agreement that are not defined herein. If the definition of a term in the policy is inconsistent with the definition of a term in this Agreement, then the definition of the term as set forth in this Agreement shall supersede and replace the definition of the terms as set forth in the policy. II. POLICY TITLE AND OWNERSHIP Title and ownership shall reside in the Trustee for the Rabbi Trust for the Executive Salary Continuation Agreement and the Life Insurance Endorsement Method Split Dollar Plan Agreement for its use and for the use of the Insured all in accordance with this Agreement. The Trustee at the direction of the Bank may, to the extent of its interest, exercise the right to borrow or withdraw on the policy cash values. Where the Trustee at the direction of the Bank and the Insured (or assignee, with the consent of the Insured) mutually agree to exercise the right to increase the coverage under the subject Split Dollar Agreement, then, in such event, the rights, duties and benefits of the parties to such increased coverage shall continue to be subject to the terms of this Agreement. III. BENEFICIARY DESIGNATION RIGHTS The Insured (or assignee) shall have the right and power to designate a beneficiary or beneficiaries to receive the Insured's share of the proceeds payable upon the death of the Insured, and to elect and change a payment option for such beneficiary, subject to any right or interest the Trustee at the direction of the Bank or the Trust may have in such proceeds, as provided in this Agreement. The Insured shall have the right to name such Beneficiary at any time prior to the Insured's death and submit it to the Plan Administrator (or Plan Administrator's representative) on the form provided. Once received and acknowledged by the Plan Administrator, the form shall be effective. The Insured may change a Beneficiary designation at any time by submitting a new form to the Plan Administrator. Any such change shall follow the same rules as for the original Beneficiary designation and shall automatically supersede the existing Beneficiary form on file with the Plan Administrator. If the Insured dies without a valid Beneficiary designation on file with the Plan Administrator, death benefits shall be paid to the Insured's estate. If the Plan Administrator determines in its discretion that a benefit is to be paid to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that person's property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of the Insured and the Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such distribution amount. IV. PREMIUM PAYMENT METHOD Subject to the Bank's absolute right to surrender or terminate the policy at any time and for any reason, the Bank or the Trustee at the direction of the Bank shall pay an amount equal to the planned premiums and any other premium payments that might become necessary to keep the policy in force. V. TAXABLE BENEFIT Annually the Insured will receive a taxable benefit equal to the imputed value of insurance as required by the Internal Revenue Service. The Bank (or its administrator) will report to the Insured the amount of imputed income each year on Form W-2 or its equivalent. VI. DIVISION OF DEATH PROCEEDS Subject to Paragraphs VII and IX herein, the division of the death proceeds of the policy is as follows: A. Upon the death of the Insured #1 and Insured #2, the Insured's beneficiary(ies), designated in accordance with Paragraph III, shall be entitled to an amount equal to One Million and 00/100th Dollars ($1,000,000.00). B. The Bank shall be entitled to the remainder of such proceeds. C. The Bank and the Insured (or assignees) shall share in any interest due on the death proceeds on a pro rata basis as the proceeds due each respectively bears to the total proceeds, excluding any such interest. 2 VII. DIVISION OF THE CASH SURRENDER VALUE OF THE POLICY The Bank or the Trust shall at all times be entitled to an amount equal to the policy's cash value, as that term is defined in the policy contract, less any policy loans and unpaid interest or cash withdrawals previously incurred by the Bank or the Trustee at the direction of the Bank and any applicable surrender charges. Such cash value shall be determined as of the date of surrender or death as the case may be. VIII. RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION EXISTS In the event the policy involves an endowment or annuity element, the Bank's or the Trust' right and interest in any endowment proceeds or annuity benefits, on expiration of the deferment period, shall be determined under the provisions of this Agreement by regarding such endowment proceeds or the commuted value of such annuity benefits as the policy's cash value. Such endowment proceeds or annuity benefits shall be considered to be like death proceeds for the purposes of division under this Agreement. IX. TERMINATION OF AGREEMENT Should William P. Morrissey be discharged from employment with the Bank "for cause" at any time, this Agreement shall terminate and all benefits herein forfeited by the Insured. The term "for cause" shall mean any of the following that result in an adverse effect on the Bank: (i) gross negligence or gross neglect; (ii) the commission of a felony or gross misdemeanor involving fraud or dishonesty; (iii) the willful violation of any law, rule, or regulation; (iv) an intentional failure to perform stated duties; or (v) a breach of fiduciary duty involving personal profit. Except as provided above, this Agreement shall terminate upon distribution of the death benefit proceeds in accordance with Paragraph VI above. X. INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS Insured #1 or Insured #2 may not, without the written consent of the Bank or the Trustee at the direction of the Bank, assign to any individual, trust or other organization, any right, title or interest in the subject policy nor any rights, options, privileges or duties created under this Agreement. XI. AGREEMENT BINDING UPON THE PARTIES This Agreement shall bind the Insured #1, Insured #2 and the Bank or the Trustee at the direction of the Bank, their heirs, successors, personal representatives and assigns. XII. ADMINISTRATIVE AND CLAIMS PROVISIONS The following provisions are part of this Agreement and are intended to meet the requirements of the Employee Retirement Income Security Act of 1974 ("ERISA"): 3 A. Plan Administrator: ------------------ The "Plan Administrator" of this Life Insurance Endorsement Method Split Dollar Plan Agreement shall be Central Co-Operative Bank. As Plan Administrator, the Bank or the Trustee at the direction of the Bank shall be responsible for the management, control, and administration of this Life Insurance Endorsement Method Split Dollar Plan Agreement as established herein. The Plan Administrator may delegate to others certain aspects of the management and operation responsibilities of the Plan, including the employment of advisors and the delegation of any ministerial duties to qualified individuals. B. Basis of Payment of Benefits: ---------------------------- Direct payment by the Insurer is the basis of payment of benefits under this Agreement, with those benefits in turn being based on the payment of premiums as provided in this Agreement. C. Claim Procedures: ---------------- Claim forms or claim information as to the subject policy can be obtained by contacting Renaissance Bank Advisors (800-544-6079). When the Plan Administrator has a claim which may be covered under the provisions described in the insurance policy, they should contact the office named above, and they will either complete a claim form and forward it to an authorized representative of the Insurer or advise the Plan Administrator what further requirements are necessary. The Insurer will evaluate and make a decision as to payment. If the claim is payable, a benefit check will be issued in accordance with the terms of this Agreement. In the event that a claim is not eligible under the policy, the Insurer will notify the Plan Administrator of the denial pursuant to the requirements under the terms of the policy. If the Plan Administrator is dissatisfied with the denial of the claim and wishes to contest such claim denial, they should contact the office named above and they will assist in making an inquiry to the Insurer. All objections to the Insurer's actions should be in writing and submitted to the office named above for transmittal to the Insurer. XIII. GENDER Whenever in this Agreement words are used in the masculine or neutral gender, they shall be read and construed as in the masculine, feminine or neutral gender, whenever they should so apply. XIV. INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT The Insurer shall not be deemed a party to this Agreement, but will respect the rights of the parties as herein developed upon receiving an 4 executed copy of this Agreement. Payment or other performance in accordance with the policy provisions shall fully discharge the Insurer from any and all liability. XV. CHANGE OF CONTROL Change of Control shall be defined as the occurrence of any one of the following: a. the acquisition of more than fifty percent (50%) of the value or voting power of the Bank's stock by a person or group; b. the acquisition in a period of twelve (12) months or less of at least thirty-five percent (35%) of the Bank's stock by a person or group; c. the replacement of a majority of the Bank's board in a period of twelve (12) months or less by Directors who were not endorsed by a majority of the current board members; or d. the acquisition in a period of twelve (12) months or less of forty percent (40%) or more of the Bank's assets by an unrelated entity. For the purposes of this Agreement, transfers made on account of deaths or gifts, transfers between family members or transfers to a qualified retirement plan maintained by the Bank shall not be considered in determining whether there has been a Change in Control. Upon a Change of Control, if Insured #1's employment is subsequently terminated, except for cause, then Insured #1 shall be one hundred percent (100%) vested in the benefits promised in this Agreement and, therefore, upon the death of Insured #1 and Insured #2, the beneficiary(ies) (designated in accordance with Paragraph III) shall receive the death benefit provided herein as if Insured #1 had died while employed by the Bank [see Subparagraph VI (A)]. XVI. AMENDMENT OR REVOCATION, AND EXCHANGE OF POLICY Subject to the Bank's sole and absolute right to surrender or terminate any and all life insurance policies that are the subject matter of this Agreement, it is agreed by and between the parties hereto that, during the lifetime of Insured #1 and Insured #2, this Agreement may be amended or revoked at any time or times, in whole or in part, by the mutual written consent of Insured #1 and the Bank. In the event of the death of Insured #1, the consent may be made by Insured #2 and the Bank. The Bank may, however, unilaterally and without the consent of the Insureds, exchange any life insurance policy(ies) that are the subject matter of this Agreement, with or without replacing said policy(ies) and, in the event of a same or similar exchange, the Insureds expressly agrees to the same. XVII. EFFECTIVE DATE The Effective Date of this Agreement shall be December 20, 2007. 5 XVIII. SEVERABILITY AND INTERPRETATION If a provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall nonetheless be enforceable according to their terms. Further, in the event that any provision is held to be overbroad as written such provision shall be deemed amended to narrow its application to the extent necessary to make the provision enforceable according to law and enforced as amended. XIX. APPLICABLE LAW The validity and interpretation of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. Executed at Somerville, Massachusetts this 20th day of December, 2007. CENTRAL CO-OPERATIVE BANK Somerville, MA /s/ Richard E. Stevens By: /s/ Edward F. Sweeney, Jr. - ------------------------------- ------------------------------------------ Witness (Bank Director other than Insured) Title /s/ Paul S. Feeley /s/ William P. Morrissey - ------------------------------- ------------------------------------------ Witness William P. Morrissey /s/ Robert Ernst, Jr. /s/ Donna C. Morrissey - ------------------------------- ------------------------------------------ Witness Donna C. Morrissey 6 BENEFICIARY DESIGNATION FORM FOR THE EXECUTIVE SALARY CONTINUATION AGREEMENT I. PRIMARY DESIGNATIONS -------------------- A. Person(s) as a Primary Designation: ---------------------------------- (Please indicate the percentage for each beneficiary.) 1. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 2. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 3. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 4. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- II. ESTATE AND/OR TRUST AS PRIMARY DESIGNATIONS ------------------------------------------- A. Estate as a Primary Designation: ------------------------------- An Estate can still be listed even if there is no will. My Primary Beneficiary is The Estate of as set forth in the Last Will and --------------------------------- (Insert full name) Testament dated the day of , 200 and any codicils thereto. -------- --------------- --- B. Trust as a Primary Designation: Name of the Trust: ------------------------------------------------------------------------------------------------------------------- Execution Date of the Trust: Name of the Trustee: ------------------------------------------------------------------------------------------------------------------- Beneficiary of the Trust: (please indicate the percentage for each beneficiary): ------------------------------------------------------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------------------------------------------------- Is this an Irrevocable Life Insurance Trust? Yes No ----- ----- (If yes and this designation is for a Joint Beneficiary Designation Agreement, an Assignment of Rights form must be completed.) 7 III. SECONDARY (CONTINGENT) DESIGNATIONS ----------------------------------- A. Person(s) as a Secondary (Contingent) Designation: ------------------------------------------------- (Please indicate the percentage for each beneficiary in the event of the Primary's Death.) 1. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 2. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 3. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- 4. Name: Relationship: SS#: % ------------------------------------------------------------------------------------------------------------------- Address: ------------------------------------------------------------------------------------------------------------------- (Street) (City) (State) (Zip) ------------------------------------------------------------------------------------------------------------------- IV. ESTATE AND/OR TRUST AS SECONDARY (CONTINGENT) DESIGNATIONS ---------------------------------------------------------- A. Estate as a Secondary (Contingent) Designation: ---------------------------------------------- My Primary Beneficiary is The Estate of as set forth in the last will and ------------------------------ Testament dated the day of , 200 and any codicils thereto. --------- --------------------- ---- B. Trust as a Secondary (Contingent) Designation: --------------------------------------------- Name of the Trust: ------------------------------------------------------------------------------------------------------------------- Execution Date of the Trust: Name of the Trustee: ------------------------------------------------------------------------------------------------------------------- Beneficiary of the Trust: (please indicate the percentage for each beneficiary): ------------------------------------------------------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------------------------------------------------- Name(s): ------------------------------------------------------------------------------------------------------------------- Is this an Irrevocable Life Insurance Trust? Yes No ----- ----- (If yes and this designation is for a Joint Beneficiary Designation Agreement, an Assignment of Rights form must be completed.) V. SIGN AND DATE ------------- This Beneficiary Designation Form is valid until the Executive notifies the bank in writing. - ------------------------------------ ------------------------------ William P. Morrissey Date - ------------------------------------ ------------------------------ Donna C. Morrissey Date
8 EX-10.6 7 central8kdec2007ex10-6.txt EXHIBIT 10.6 EXECUTIVE HEALTH INSURANCE PLAN AGREEMENT THIS AGREEMENT is made and entered into this 20th day of December, 2007, by and between Central Co-Operative Bank, a bank organized and existing under the laws of the Commonwealth of Massachusetts (hereinafter referred to as the "Bank"), and John D. Doherty, an Executive of the Bank (hereinafter referred to as the "Executive"). WHEREAS, the Executive has been and continues to be a valued Executive of the Bank; and WHEREAS, the purpose of this Agreement is to further the growth and development of the Bank by providing the Executive with health care insurance coverage, and thereby encourage the Executive's productive efforts on behalf of the Bank; and ACCORDINGLY, the Board has adopted the Executive Health Insurance Plan and it is the desire of the Bank and the Executive to enter into this Agreement under which the Bank will agree to Purchase health care insurance coverage for the Executive upon the Executive's retirement in the event of the Executive's death pursuant to the Executive Health Insurance Plan; and FURTHERMORE, it is the intent of the parties hereto that this Executive Health Insurance Plan be considered an unfunded arrangement maintained primarily to provide Health Care Insurance Coverage for the Executive, and be considered a non-qualified benefit plan for purposes of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The Executive is fully advised of the Bank's financial status and has had substantial input in the design and operation of this benefit plan; and NOW THEREFORE, in consideration of services the Executive has performed in the past and those to be performed in the future, and based upon the mutual promises and covenants herein contained, the Bank and the Executive agree as follows: I. DEFINITIONS A. Effective Date: -------------- The Effective Date of the Executive Health Insurance Plan shall be December 20, 2007. B. Plan Year: --------- Any reference to the "Plan Year" shall mean a calendar year from January 1st to December 31st. In the year of implementation, the term "Plan Year" shall mean the period from the Effective Date to December 31st of the year of the Effective Date. C. Termination of Employment: ------------------------- Termination of Employment shall mean the Executive's voluntary resignation of employment by the Executive or the Bank's discharge of the Executive without cause, prior to the Normal Retirement Age. D. Liability Reserve Account: ------------------------- A Liability Reserve Account shall be established on the books of the Bank for the purpose of providing a health insurance benefit and a Medicare Supplement Benefit for the benefit of the Executive. Prior to the Executive's Termination of Employment or the Executive's retirement, whichever event shall first occur, such Liability Reserve Account shall be credited with the Bank Contribution. The Liability Reserve Account shall be credited interest monthly at the rate of six percent (6%), commencing upon the last day of the month of the first contribution and continuing on the last date of each month thereafter, as long as there is a balance in the account. The interest rate shall be increased or decreased at the discretion of the Bank. E. Bank Contribution: ----------------- The Bank shall make an annual contribution of Ten Thousand and 00/100th Dollars ($10,000.00) into the Liability Reserve Account. Such contribution shall be made in monthly installments. F. Executive Health Care or Medicare Supplement Benefit: ---------------------------------------------------- The Bank shall, either monthly or annually, expense an amount in the Liability Reserve Account to pay the premium payments for post-retirement health care insurance. When the Liability Reserve Account reaches a balance of zero (0) dollars, the Executive Health Care or Medicare Supplement Benefit shall cease. Said benefit shall be for the life of the Executive and the Executive's spouse. G. Change in Control: ----------------- Change of Control shall be defined as the occurrence of any one of the following: a. the acquisition of more than fifty percent (50%) of the value or voting power of the Bank's stock by a person or group; b. the acquisition in a period of twelve (12) months or less of at least thirty-five percent (35%) of the Bank's stock by a person or group; 2 c. the replacement of a majority of the Bank's board in a period of twelve (12) months or less by Directors who were not endorsed by a majority of the current board members; or d. the acquisition in a period of twelve (12) months or less of forty percent (40%) or more of the Bank's assets by an unrelated entity. For the purposes of this Agreement, transfers made on account of deaths or gifts, transfers between family members or transfers to a qualified retirement plan maintained by the Bank shall not be considered in determining whether there has been a Change in Control. H. Normal Retirement Age: --------------------- Normal Retirement Age shall mean the date on which the Executive attains age sixty-five (65). I. Disability or Disabled: ---------------------- "Disability or Disabled" shall mean 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 twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank. Medical determination of Disability or Disabled will be made by the provider of an accident or health plan covering employees of the Bank. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of Social Security Administration's or the provider's determination. II. BENEFITS A. Benefits: -------- Should the Executive remain in the employ of the Bank until the Normal Retirement Age as stated in Subparagraph I (H), the Executive shall be entitled to receive the Executive Health Care or Medicare Supplement Benefit, beginning at Normal Retirement Age until the Liability Reserve Account has a zero (0) balance. B. Termination of Employment: ------------------------- Should the Executive suffer an Termination of Employment, voluntary or involuntary, at anytime from the Effective Date of this Agreement, the Executive shall be entitled to receive the Executive Health Care or Medicare Supplement Benefit until the Liability Reserve Account has a zero (0) balance. Said coverage shall commence the first day of the first month following the death of the Executive. 3 In the event the Executive's death should occur after such termination and there is a balance in the Liability Reserve Account, the Executive's spouse shall be entitled to the Executive Health Care or Medicare Supplement Benefit, until the Liability Reserve Account has a zero balance. Upon the spouse's death, subsequent to the Executive, this Agreement shall terminate and no benefit shall be due. Said coverage shall commence the first day of the first month following the death of the Executive. C. Death Benefit: ------------- Should the Executive die while there is a balance in the Liability Reserve Account, said unpaid balance of the Executive's Liability Reserve Account shall be used to provide the Executive Health Care or Medicare Supplement Benefit for the Executive's spouse until said balance is zero dollars ($0). Upon the spouse's death, subsequent to the Executive, this Agreement shall terminate and no benefit shall be due. Said coverage shall commence the first day of the first month following the death of the Executive. D. Discharge for Cause: ------------------- Should the Executive be Discharged for Cause at any time, the Bank Contribution shall cease on the date of said termination and no coverage shall be provided. The term "for cause" shall mean any of the following that result in an adverse effect on the Bank: (i) the conviction of a felony or gross misdemeanor involving fraud or dishonesty; (ii) the willful violation of any Bank law, rule, or regulation; (iii) an intentional failure to perform stated duties; or (iv) a breach of fiduciary duty involving personal profit. If a dispute arises as to discharge "for cause," such dispute shall be resolved by arbitration as set forth in this Executive Health Insurance Plan. III. RESTRICTIONS UPON FUNDING The Bank shall have no obligation to set aside, earmark or entrust any fund or money with which to pay its obligations under this Executive Health Insurance Plan. The Executive, their beneficiary(ies), or any successor in interest shall be and remain simply a general creditor of the Bank in the same manner as any other creditor having a general claim for matured and unpaid compensation. 4 The Bank reserves the absolute right, at its sole discretion, to either fund the obligations undertaken by this Executive Health Insurance Plan 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 Executive Health Insurance Plan, in whole or in part, through the purchase of life insurance, mutual funds, disability policies or annuities, the Bank reserves the absolute right, in its sole discretion, to terminate such funding at any time, in whole or in part. At no time shall any Executive be deemed to have any lien nor right, title or interest in or to any specific funding investment or to any assets of the Bank. If the Bank elects to invest in a life insurance, disability or annuity policy upon the life of the Executive, then 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. IV. CHANGE IN CONTROL If the Executive suffers a Termination of Employment (voluntarily or involuntarily), except for cause, anytime subsequent to a Change in Control, then the Executive shall be entitled to receive the Executive Health Care or Medicare Supplement Benefit, commencing within thirty (30) days of said termination until the Liability Reserve Account has a zero (0) balance. In the event the Executive's death should occur after such termination and there is a balance in the Liability Reserve Account, the Executive's spouse shall be entitled to the Executive Health Care or Medicare Supplement Benefit, until the Liability Reserve Account has a zero balance. Upon the spouse's death, subsequent to the Executive, this Agreement shall terminate and no benefit shall be due. V. DISABILITY In the event that there is a finding of any qualified period of disability for the Executive, the Bank will pay the Health Care Benefit until the Liability Reserve Account has a zero (0) balance. Said benefit shall commence within thirty (30) days of determination of Disability. In the event of the Executive's death and there is a balance in the Liability Reserve Account, the Executive's spouse shall be entitled to the Executive Health Care or Medicare Supplement Benefit, until the Liability Reserve Account has a zero balance. Upon the spouse's death, subsequent to the Executive, this Agreement shall terminate and no benefit shall be due. VI. MISCELLANEOUS A. Alienability and Assignment Prohibition: --------------------------------------- Neither the Executive nor any other beneficiary(ies) under this Executive Health Insurance Plan shall have any power or right to transfer, assign, anticipate, hypothecate, mortgage, 5 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 the Executive's beneficiary(ies), nor 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 shall forthwith cease and terminate. B. Binding Obligation of the Bank and any Successor in Interest: ------------------------------------------------------------ The Bank 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 Executive Health Insurance Plan. This Executive Health Insurance Plan shall be binding upon the parties hereto, their successors, assignees, beneficiaries, heirs and personal representatives. C. Amendment or Revocation: ----------------------- During the lifetime of the Executive, this Agreement may be amended or revoked at any time or times, in whole or in part only, by the mutual written consent of the Executive and the Bank. Any such amendment shall not be effective to decrease or restrict the Executive's benefit under this Agreement, determined as of the date of amendment, unless agreed to in writing by the Executive. In the event this Agreement is terminated, such termination shall not cause a distribution of benefits, except to provide the Executive Health Care or Medicare Supplement Benefit, if the vesting age is met. D. Gender: ------ Whenever in this Executive Health Insurance Plan words are used in the masculine or neutral gender, they shall be read and construed as in the masculine, feminine or neutral gender, whenever they should so apply. E. Headings: -------- Headings and subheadings in this Executive Health Insurance Plan are inserted for reference and convenience only and shall not be deemed a part of this Executive Health Insurance Plan. F. Applicable Law: -------------- The validity and interpretation of this Agreement shall be governed by the laws of the State where the principal corporate office of the Bank is located. 6 G. Partial Invalidity: ------------------ If any term, provision, covenant, or condition of this Executive Health Insurance Plan is determined by an arbitrator or a court, as the case may be, to be invalid, void, or unenforceable, such determination shall not render any other term, provision, covenant, or condition invalid, void, or unenforceable, and the Executive Health Insurance Plan shall remain in full force and effect notwithstanding such partial invalidity. H. Employment: ---------- No provision of this Executive Health Insurance Plan 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 Employer to discharge the Executive with or without cause. In a similar fashion, no provision shall limit the Executive's rights to voluntarily sever the Executive's employment at any time. I. Tax Withholding: --------------- The Bank shall withhold any taxes that are required to be withheld, under the Code and regulations thereunder, from the benefits provided under this Agreement. The Executive acknowledges that the Bank's sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authority(ies). J. Opportunity to Consult with Independent Advisors: ------------------------------------------------ The Executive acknowledges that he has been afforded the opportunity to consult with independent advisors of his choosing including, without limitation, accountants or tax advisors and legal counsel regarding both the benefits granted to him under the terms of this Agreement and the: (i) terms and conditions which may affect the Executive's right to these benefits; and (ii) personal tax effects of such benefits including, without limitation, the effects of any federal or state taxes, Section 280G of the Code or regulations thereunder, and any other taxes, costs, expenses or liabilities whatsoever related to such benefits, which in any of the foregoing instances the Executive acknowledges and agrees shall be the sole responsibility of the Executive 7 notwithstanding any other term or provision of this Agreement. The Executive further acknowledges and agrees that the Bank shall have no liability whatsoever related to any such personal tax effects or other personal costs, expenses, or liabilities applicable to the Executive and further specifically waives any right for himself or herself, and his or her heirs, beneficiaries, legal representative, agents, successor and assign to claim or assert liability on the part of the Bank related to the matters described above in this paragraph. The Executive further acknowledges that he has read, understands and consents to all of the terms and conditions of this Agreement, and that he enters into this Agreement with a full understanding of its terms and conditions. VII. ADMINISTRATIVE AND CLAIMS PROVISIONS A. Plan Administrator: ------------------ The "Plan Administrator" of this Executive Health Insurance Plan shall be the Board of Directors of Central Co-Operative Bank. As Plan Administrator, the Bank shall be responsible for the management, control and administration of the Executive Health Insurance Plan. The Plan Administrator may delegate to others certain aspects of the management and operation responsibilities of the Executive Health Insurance Plan including the employment of advisors and the delegation of ministerial duties to qualified individuals. B. Claims Procedure: ---------------- a. Filing a Claim for Benefits: --------------------------- Any insured, beneficiary, or other individual, ("Claimant") entitled to benefits under this Executive Plan will file a claim request with the Plan Administrator. The Plan Administrator will, upon written request of a Claimant, make available copies of all forms and instructions necessary to file a claim for benefits or advise the Claimant where such forms and instructions may be obtained. If the claim relates to disability benefits, then the Plan Administrator shall designate a sub-committee to conduct the initial review of the claim (and applicable references below to the Plan Administrator shall mean such sub-committee). b. Denial of Claim: --------------- A claim for benefits under this Executive Plan will be denied if the Bank determines that the Claimant is not entitled to receive benefits under the Executive Plan. Notice of a denial shall be furnished the Claimant within a reasonable period of time after receipt of the claim for benefits by the Plan Administrator. This time period shall not exceed more than ninety (90) days after the receipt of the properly submitted claim. In the event that the claim for benefits pertains to disability, the Plan 8 Administrator shall provide written notice within forty-five (45) days. However, if the Plan Administrator determines, in its discretion, that an extension of time for processing the claim is required, such extension shall not exceed an additional ninety (90) days. In the case of a claim for disability benefits, the forty-five (45) day review period may be extended for up to thirty (30) days if necessary due to circumstances beyond the Plan Administrator's control, and for an additional thirty (30) days, if necessary. Any extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the determination on review. c. Content of Notice: ----------------- The Plan Administrator shall provide written notice to every Claimant who is denied a claim for benefits which notice shall set forth the following: (i.) The specific reason or reasons for the denial; (ii.) Specific reference to pertinent Executive Plan provisions on which the denial is based; (iii.) A description of any additional material or information necessary for the Claimant to perfect the claim, and any explanation of why such material or information is necessary; and (iv.) Any other information required by applicable regulations, including with respect to disability benefits. d. Review Procedure: ---------------- The purpose of the Review Procedure is to provide a method by which a Claimant may have a reasonable opportunity to appeal a denial of a claim to the Plan Administrator for a full and fair review. The Claimant, or his duly authorized representative, may: (i.) Request a review upon written application to the Plan Administrator. Application for review must be made within sixty (60) days of receipt of written notice of denial of claim. If the denial of claim pertains to disability, application for review must be made within one hundred eighty (180) days of receipt of written notice of the denial of claim; 9 (ii.) Review and copy (free of charge) pertinent Executive Plan documents, records and other information relevant to the Claimant's claim for benefits; (iii.) Submit issues and concerns in writing, as well as documents, records, and other information relating to the claim. e. Decision on Review: ------------------ A decision on review of a denied claim shall be made in the following manner: (i.) The Plan Administrator may, in its sole discretion, hold a hearing on the denied claim. If the Claimant's initial claim is for disability benefits, any review of a denied claim shall be made by members of the Plan Administrator other than the original decision maker(s) and such person(s) shall not be a subordinate of the original decision maker(s). The decision on review shall be made promptly, but generally not later than sixty (60) days after receipt of the application for review. In the event that the denied claim pertains to disability, such decision shall not be made later than forty-five (45) days after receipt of the application for review. If the Plan Administrator determines that an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial sixty (60) day period. In no event shall the extension exceed a period of sixty (60) days from the end of the initial period. In the event the denied claim pertains to disability, written notice of such extension shall be furnished to the Claimant prior to the termination of the initial forty-five (45) day period. In no event shall the extension exceed a period of thirty (30) days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the determination on review. (ii.) The decision on review shall be in writing and shall include specific reasons for the decision written in an understandable manner with specific references to the pertinent Executive Plan provisions upon which the decision is based. 10 (iii.) The review will take into account all comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination. Additional considerations shall be required in the case of a claim for disability benefits. For example, the claim will be reviewed without deference to the initial adverse benefits determination and, if the initial adverse benefit determination was based in whole or in part on a medical judgment, the Plan Administrator will consult with a health care professional with appropriate training and experience in the field of medicine involving the medical judgment. The health care professional who is consulted on appeal will not be the same individual who was consulted during the initial determination or the subordinate of such individual. If the Plan Administrator obtained the advice of medical or vocational experts in making the initial adverse benefits determination (regardless of whether the advice was relied upon), the Plan Administrator will identify such experts. (iv.) The decision on review will include a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records or other information relevant to the Claimant's claim for benefits. f. Exhaustion of Remedies: ---------------------- A Claimant must follow the claims review procedures under this Executive Plan and exhaust his or her administrative remedies before taking any further action with respect to a claim for benefits. C. Arbitration: ----------- If claimants continue to dispute the benefit denial based upon completed performance of this Executive Plan or the meaning and effect of the terms and conditions thereof, then claimants may submit the dispute to an Arbitrator for final arbitration. The Arbitrator shall be selected by mutual agreement of the Bank and the claimants. The Arbitrator shall operate under any generally recognized set of arbitration rules. The parties hereto agree that they and their heirs, personal representatives, successors and assigns shall be bound by the decision of such Arbitrator with respect to any controversy properly submitted to it for determination. 11 Where a dispute arises as to the Bank's discharge of the Executive "for cause," such dispute shall likewise be submitted to arbitration as above described and the parties hereto agree to be bound by the decision thereunder. IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement and executed the original thereof effective as of the first day set forth hereinabove, and that, upon execution, each has received a conforming copy. CENTRAL CO-OPERATIVE BANK Somerville, MA
/s/ Richard E. Stevens By: /s/ Edward F. Sweeney, Jr. - ------------------------------- ------------------------------------------- Witness (Bank Director other than Executive) Title /s/ Paul S. Feeley /s/ John D. Doherty - ------------------------------- ------------------------------------------- Witness John D. Doherty
12 SPOUSAL DESIGNATION FORM FOR THE EXECUTIVE HEALTH INSURANCE PLAN AGREEMENT I. DESIGNATION -----------
SPOUSE: ------ 1. Name: SS#: ------------------------------------------------------------------------------------------------------------------------ Address: ------------------------------------------------------------------------------------------------------------------------ (Street) (City) (State) (Zip)
II. SIGN AND DATE ------------- All benefits received under the Executive Health Insurance Plan Agreement by reason of my death shall be made for the benefit of my spouse, if he or she survives me. This beneficiary designation is valid until the participant notifies the Bank in writing. - ------------------------------------------- ---------------------------- John D. Doherty Date EX-10.7 8 central8kdec2007ex10-7.txt EXHIBIT 10.7 EXECUTIVE HEALTH INSURANCE PLAN AGREEMENT THIS AGREEMENT is made and entered into this 20th day of December, 2007, by and between Central Co-Operative Bank, a bank organized and existing under the laws of the Commonwealth of Massachusetts (hereinafter referred to as the "Bank"), and William P. Morrissey, an Executive of the Bank (hereinafter referred to as the "Executive"). WHEREAS, the Executive has been and continues to be a valued Executive of the Bank; and WHEREAS, the purpose of this Agreement is to further the growth and development of the Bank by providing the Executive with health care insurance coverage, and thereby encourage the Executive's productive efforts on behalf of the Bank; and ACCORDINGLY, the Board has adopted the Executive Health Insurance Plan and it is the desire of the Bank and the Executive to enter into this Agreement under which the Bank will agree to Purchase health care insurance coverage for the Executive upon the Executive's retirement in the event of the Executive's death pursuant to the Executive Health Insurance Plan; and FURTHERMORE, it is the intent of the parties hereto that this Executive Health Insurance Plan be considered an unfunded arrangement maintained primarily to provide Health Care Insurance Coverage for the Executive, and be considered a non-qualified benefit plan for purposes of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The Executive is fully advised of the Bank's financial status and has had substantial input in the design and operation of this benefit plan; and NOW THEREFORE, in consideration of services the Executive has performed in the past and those to be performed in the future, and based upon the mutual promises and covenants herein contained, the Bank and the Executive agree as follows: I. DEFINITIONS A. Effective Date: -------------- The Effective Date of the Executive Health Insurance Plan shall be December 20, 2007. B. Plan Year: --------- Any reference to the "Plan Year" shall mean a calendar year from January 1st to December 31st. In the year of implementation, the term "Plan Year" shall mean the period from the Effective Date to December 31st of the year of the Effective Date. C. Termination of Employment: ------------------------- Termination of Employment shall mean the Executive's voluntary resignation of employment by the Executive or the Bank's discharge of the Executive without cause, prior to the Normal Retirement Age. D. Liability Reserve Account: ------------------------- A Liability Reserve Account shall be established on the books of the Bank for the purpose of providing a health insurance benefit and a Medicare Supplement Benefit for the benefit of the Executive. Prior to the Executive's Termination of Employment or the Executive's retirement, whichever event shall first occur, such Liability Reserve Account shall be credited with the Bank Contribution. The Liability Reserve Account shall be credited interest monthly at the rate of six percent (6%), commencing upon the last day of the month of the first contribution and continuing on the last date of each month thereafter, as long as there is a balance in the account. The interest rate shall be increased or decreased at the discretion of the Bank. E. Bank Contribution: ----------------- The Bank shall make an annual contribution of Twenty Five Thousand and 00/100th ($25,000.00) into the Liability Reserve Account. Such contribution shall be made in monthly installments. F. Executive Health Care or Medicare Supplement Benefit: ---------------------------------------------------- The Bank shall, either monthly or annually, expense an amount in the Liability Reserve Account to pay the premium payments for post-retirement health care insurance. When the Liability Reserve Account reaches a balance of zero (0) dollars, the Executive Health Care or Medicare Supplement Benefit shall cease. Said benefit shall be for the life of the Executive and the Executive's spouse. G. Change in Control: ----------------- Change of Control shall be defined as the occurrence of any one of the following: a. the acquisition of more than fifty percent (50%) of the value or voting power of the Bank's stock by a person or group; b. the acquisition in a period of twelve (12) months or less of at least thirty-five percent (35%) of the Bank's stock by a person or group; 2 c. the replacement of a majority of the Bank's board in a period of twelve (12) months or less by Directors who were not endorsed by a majority of the current board members; or d. the acquisition in a period of twelve (12) months or less of forty percent (40%) or more of the Bank's assets by an unrelated entity. For the purposes of this Agreement, transfers made on account of deaths or gifts, transfers between family members or transfers to a qualified retirement plan maintained by the Bank shall not be considered in determining whether there has been a Change in Control. H. Normal Retirement Age: --------------------- Normal Retirement Age shall mean the date on which the Executive attains age eighty-five (85). I. Disability or Disabled: ---------------------- "Disability or Disabled" shall mean 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 twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank. Medical determination of Disability or Disabled will be made by the provider of an accident or health plan covering employees of the Bank. Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of Social Security Administration's or the provider's determination. II. BENEFITS A. Benefits: -------- Should the Executive remain in the employ of the Bank until the Normal Retirement Age as stated in Subparagraph I (H), the Executive shall be entitled to receive the Executive Health Care or Medicare Supplement Benefit, beginning at Normal Retirement Age until the Liability Reserve Account has a zero (0) balance. B. Termination of Employment: ------------------------- Should the Executive suffer an Termination of Employment, voluntary or involuntary, at anytime from the Effective Date of this Agreement, the Executive shall be entitled to receive 3 the Executive Health Care or Medicare Supplement Benefit until the Liability Reserve Account has a zero (0) balance. Said coverage shall commence the first day of the first month following the death of the Executive. In the event the Executive's death should occur after such termination and there is a balance in the Liability Reserve Account, the Executive's spouse shall be entitled to the Executive Health Care or Medicare Supplement Benefit, until the Liability Reserve Account has a zero balance. Upon the spouse's death, subsequent to the Executive, this Agreement shall terminate and no benefit shall be due. Said coverage shall commence the first day of the first month following the death of the Executive. C. Death Benefit: ------------- Should the Executive die while there is a balance in the Liability Reserve Account, said unpaid balance of the Executive's Liability Reserve Account shall be used to provide the Executive Health Care or Medicare Supplement Benefit for the Executive's spouse until said balance is zero dollars ($0). Upon the spouse's death, subsequent to the Executive, this Agreement shall terminate and no benefit shall be due. Said coverage shall commence the first day of the first month following the death of the Executive. D. Discharge for Cause: ------------------- Should the Executive be Discharged for Cause at any time, the Bank Contribution, shall cease on the date of said termination and no coverage shall be provided. The term "for cause" shall mean any of the following that result in an adverse effect on the Bank: (i) the conviction of a felony or gross misdemeanor involving fraud or dishonesty; (ii) the willful violation of any Bank law, rule, or regulation; (iii) an intentional failure to perform stated duties; or (iv) a breach of fiduciary duty involving personal profit. If a dispute arises as to discharge "for cause," such dispute shall be resolved by arbitration as set forth in this Executive Health Insurance Plan. III. RESTRICTIONS UPON FUNDING The Bank shall have no obligation to set aside, earmark or entrust any fund or money with which to pay its obligations under this Executive Health Insurance Plan. The Executive, their beneficiary(ies), or any successor in interest shall be and remain simply a general creditor of the Bank in the same manner as any other creditor having a general claim for matured and unpaid compensation. The Bank reserves the absolute right, at its sole discretion, to either fund the obligations undertaken by this Executive Health Insurance Plan 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 Executive Health Insurance Plan, in whole or in part, through the purchase of life insurance, mutual funds, disability policies or 4 annuities, the Bank reserves the absolute right, in its sole discretion, to terminate such funding at any time, in whole or in part. At no time shall any Executive be deemed to have any lien nor right, title or interest in or to any specific funding investment or to any assets of the Bank. If the Bank elects to invest in a life insurance, disability or annuity policy upon the life of the Executive, then 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. IV. CHANGE IN CONTROL If the Executive suffers a Termination of Employment (voluntarily or involuntarily), except for cause, anytime subsequent to a Change in Control, then the Executive shall be entitled to receive the Executive Health Care or Medicare Supplement Benefit, commencing within thirty (30) days of said termination until the Liability Reserve Account has a zero (0) balance. In the event the Executive's death should occur after such termination and there is a balance in the Liability Reserve Account, the Executive's spouse shall be entitled to the Executive Health Care or Medicare Supplement Benefit, until the Liability Reserve Account has a zero balance. Upon the spouse's death, subsequent to the Executive, this Agreement shall terminate and no benefit shall be due. V. DISABILITY In the event that there is a finding of any qualified period of disability for the Executive, the Bank will pay the Health Care Benefit until the Liability Reserve Account has a zero (0) balance. Said benefit shall commence within thirty (30) days of determination of Disability. In the event of the Executive's death and there is a balance in the Liability Reserve Account, the Executive's spouse shall be entitled to the Executive Health Care or Medicare Supplement Benefit, until the Liability Reserve Account has a zero balance. Upon the spouse's death, subsequent to the Executive, this Agreement shall terminate and no benefit shall be due. VI. MISCELLANEOUS A. Alienability and Assignment Prohibition: --------------------------------------- Neither the Executive nor any other beneficiary(ies) under this Executive Health Insurance 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 5 subject to seizure for the payment of any debts, judgments, alimony or separate maintenance owed by the Executive or the Executive's beneficiary(ies), nor 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 shall forthwith cease and terminate. B. Binding Obligation of the Bank and any Successor in Interest: ------------------------------------------------------------ The Bank 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 Executive Health Insurance Plan. This Executive Health Insurance Plan shall be binding upon the parties hereto, their successors, assignees, beneficiaries, heirs and personal representatives. C. Amendment or Revocation: ----------------------- During the lifetime of the Executive, this Agreement may be amended or revoked at any time or times, in whole or in part only, by the mutual written consent of the Executive and the Bank. Any such amendment shall not be effective to decrease or restrict the Executive's benefit under this Agreement, determined as of the date of amendment, unless agreed to in writing by the Executive. In the event this Agreement is terminated, such termination shall not cause a distribution of benefits, except to provide the Executive Health Care or Medicare Supplement Benefit, if the vesting age is met. D. Gender: ------ Whenever in this Executive Health Insurance Plan words are used in the masculine or neutral gender, they shall be read and construed as in the masculine, feminine or neutral gender, whenever they should so apply. E. Headings: -------- Headings and subheadings in this Executive Health Insurance Plan are inserted for reference and convenience only and shall not be deemed a part of this Executive Health Insurance Plan. F. Applicable Law: -------------- The validity and interpretation of this Agreement shall be governed by the laws of the State where the principal corporate office of the Bank is located. 6 G. Partial Invalidity: ------------------ If any term, provision, covenant, or condition of this Executive Health Insurance Plan is determined by an arbitrator or a court, as the case may be, to be invalid, void, or unenforceable, such determination shall not render any other term, provision, covenant, or condition invalid, void, or unenforceable, and the Executive Health Insurance Plan shall remain in full force and effect notwithstanding such partial invalidity. H. Employment: ---------- No provision of this Executive Health Insurance Plan 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 Employer to discharge the Executive with or without cause. In a similar fashion, no provision shall limit the Executive's rights to voluntarily sever the Executive's employment at any time. I. Tax Withholding: --------------- The Bank shall withhold any taxes that are required to be withheld, under the Code and regulations thereunder, from the benefits provided under this Agreement. The Executive acknowledges that the Bank's sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authority(ies). J. Opportunity to Consult with Independent Advisors: ------------------------------------------------ The Executive acknowledges that he has been afforded the opportunity to consult with independent advisors of his choosing including, without limitation, accountants or tax advisors and legal counsel regarding both the benefits granted to him under the terms of this Agreement and the: (i) terms and conditions which may affect the Executive's right to these benefits; and (ii) personal tax effects of such benefits including, without limitation, the effects of any federal or state taxes, Section 280G of the Code or regulations thereunder, and any other taxes, costs, expenses or liabilities whatsoever related to such benefits, which in any of the foregoing instances the Executive acknowledges and agrees shall be the sole responsibility of the Executive notwithstanding any other term or provision of this Agreement. The Executive further acknowledges and agrees that the Bank shall have no liability whatsoever related to any such personal tax effects or other personal costs, expenses, or liabilities applicable to the Executive and further specifically waives any right for himself or herself, and his or her heirs, beneficiaries, legal representative, agents, 7 successor and assign to claim or assert liability on the part of the Bank related to the matters described above in this paragraph. The Executive further acknowledges that he has read, understands and consents to all of the terms and conditions of this Agreement, and that he enters into this Agreement with a full understanding of its terms and conditions. VII. ADMINISTRATIVE AND CLAIMS PROVISIONS A. Plan Administrator: ------------------ The "Plan Administrator" of this Executive Health Insurance Plan shall be the Board of Directors of Central Co-Operative Bank. As Plan Administrator, the Bank shall be responsible for the management, control and administration of the Executive Health Insurance Plan. The Plan Administrator may delegate to others certain aspects of the management and operation responsibilities of the Executive Health Insurance Plan including the employment of advisors and the delegation of ministerial duties to qualified individuals. B. Claims Procedure: ---------------- a. Filing a Claim for Benefits: --------------------------- Any insured, beneficiary, or other individual, ("Claimant") entitled to benefits under this Executive Plan will file a claim request with the Plan Administrator. The Plan Administrator will, upon written request of a Claimant, make available copies of all forms and instructions necessary to file a claim for benefits or advise the Claimant where such forms and instructions may be obtained. If the claim relates to disability benefits, then the Plan Administrator shall designate a sub-committee to conduct the initial review of the claim (and applicable references below to the Plan Administrator shall mean such sub-committee). b. Denial of Claim: --------------- A claim for benefits under this Executive Plan will be denied if the Bank determines that the Claimant is not entitled to receive benefits under the Executive Plan. Notice of a denial shall be furnished the Claimant within a reasonable period of time after receipt of the claim for benefits by the Plan Administrator. This time period shall not exceed more than ninety (90) days after the receipt of the properly submitted claim. In the event that the claim for benefits pertains to disability, the Plan Administrator shall provide written notice within forty-five (45) days. However, if the Plan 8 Administrator determines, in its discretion, that an extension of time for processing the claim is required, such extension shall not exceed an additional ninety (90) days. In the case of a claim for disability benefits, the forty-five (45) day review period may be extended for up to thirty (30) days if necessary due to circumstances beyond the Plan Administrator's control, and for an additional thirty (30) days, if necessary. Any extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the determination on review. c. Content of Notice: ----------------- The Plan Administrator shall provide written notice to every Claimant who is denied a claim for benefits which notice shall set forth the following: (i.) The specific reason or reasons for the denial; (ii.) Specific reference to pertinent Executive Plan provisions on which the denial is based; (iii.) A description of any additional material or information necessary for the Claimant to perfect the claim, and any explanation of why such material or information is necessary; and (iv.) Any other information required by applicable regulations, including with respect to disability benefits. d. Review Procedure: ---------------- The purpose of the Review Procedure is to provide a method by which a Claimant may have a reasonable opportunity to appeal a denial of a claim to the Plan Administrator for a full and fair review. The Claimant, or his duly authorized representative, may: (i.) Request a review upon written application to the Plan Administrator. Application for review must be made within sixty (60) days of receipt of written notice of denial of claim. If the denial of claim pertains to disability, application for review must be made within one hundred eighty (180) days of receipt of written notice of the denial of claim; 9 (ii.) Review and copy (free of charge) pertinent Executive Plan documents, records and other information relevant to the Claimant's claim for benefits; (iii.) Submit issues and concerns in writing, as well as documents, records, and other information relating to the claim. e. Decision on Review: ------------------ A decision on review of a denied claim shall be made in the following manner: (i.) The Plan Administrator may, in its sole discretion, hold a hearing on the denied claim. If the Claimant's initial claim is for disability benefits, any review of a denied claim shall be made by members of the Plan Administrator other than the original decision maker(s) and such person(s) shall not be a subordinate of the original decision maker(s). The decision on review shall be made promptly, but generally not later than sixty (60) days after receipt of the application for review. In the event that the denied claim pertains to disability, such decision shall not be made later than forty-five (45) days after receipt of the application for review. If the Plan Administrator determines that an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial sixty (60) day period. In no event shall the extension exceed a period of sixty (60) days from the end of the initial period. In the event the denied claim pertains to disability, written notice of such extension shall be furnished to the Claimant prior to the termination of the initial forty-five (45) day period. In no event shall the extension exceed a period of thirty (30) days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render the determination on review. (ii.) The decision on review shall be in writing and shall include specific reasons for the decision written in an understandable manner with specific references to the pertinent Executive Plan provisions upon which the decision is based. 10 (iii.) The review will take into account all comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination. Additional considerations shall be required in the case of a claim for disability benefits. For example, the claim will be reviewed without deference to the initial adverse benefits determination and, if the initial adverse benefit determination was based in whole or in part on a medical judgment, the Plan Administrator will consult with a health care professional with appropriate training and experience in the field of medicine involving the medical judgment. The health care professional who is consulted on appeal will not be the same individual who was consulted during the initial determination or the subordinate of such individual. If the Plan Administrator obtained the advice of medical or vocational experts in making the initial adverse benefits determination (regardless of whether the advice was relied upon), the Plan Administrator will identify such experts. (iv.) The decision on review will include a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records or other information relevant to the Claimant's claim for benefits. f. Exhaustion of Remedies: ---------------------- A Claimant must follow the claims review procedures under this Executive Plan and exhaust his or her administrative remedies before taking any further action with respect to a claim for benefits. C. Arbitration: ----------- If claimants continue to dispute the benefit denial based upon completed performance of this Executive Plan or the meaning and effect of the terms and conditions thereof, then claimants may submit the dispute to an Arbitrator for final arbitration. The Arbitrator shall be selected by mutual agreement of the Bank and the claimants. The Arbitrator shall operate under any generally recognized set of arbitration rules. The parties hereto agree that they and their heirs, personal representatives, successors and assigns shall be bound by the decision of such Arbitrator with respect to any controversy properly submitted to it for determination. 11 Where a dispute arises as to the Bank's discharge of the Executive "for cause," such dispute shall likewise be submitted to arbitration as above described and the parties hereto agree to be bound by the decision thereunder. IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement and executed the original thereof effective as of the first day set forth hereinabove, and that, upon execution, each has received a conforming copy. CENTRAL CO-OPERATIVE BANK Somerville, MA
/s/ Richard E. Stevens By: /s/ Edward F. Sweeney, Jr. - ---------------------------------- ----------------------------------------------- Witness (Bank Director other than Executive) Title /s/ Paul S. Feeley /s/ William P. Morrissey - ---------------------------------- ----------------------------------------------- Witness William P. Morrissey
12 SPOUSAL DESIGNATION FORM FOR THE EXECUTIVE HEALTH INSURANCE PLAN AGREEMENT I. DESIGNATION -----------
SPOUSE: ------ 1. Name: SS#: ------------------------------------------------------------------------------------------------------------------------ Address: ------------------------------------------------------------------------------------------------------------------------ (Street) (City) (State) (Zip)
II. SIGN AND DATE ------------- All benefits received under the Executive Health Insurance Plan Agreement by reason of my death shall be made for the benefit of my spouse, if he or she survives me. This beneficiary designation is valid until the participant notifies the Bank in writing. - ------------------------------------------- ---------------------------- William P. Morrissey Date -----END PRIVACY-ENHANCED MESSAGE-----