DAVID W. CURTIS AMENDED AND RESTATED SUPPLEMENTAL COMPENSATION AGREEMENT
Exhibit 10.9
DAVID W. CURTIS
AMENDED AND RESTATED SUPPLEMENTAL COMPENSATION AGREEMENT
THIS AMENDED AND RESTATED SUPPLEMENTAL COMPENSATION AGREEMENT (this “Agreement”) is adopted effective as of , 2008 by and between The Community Bank (the “Bank”) and David W. Curtis (hereinafter called the “Executive”).
WITNESSETH:
WHEREAS, the Bank and the Executive entered into a supplemental compensation agreement on May 1, 2002 (the “Original Agreement”); and
WHEREAS, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), effective January 1, 2005, requires deferred compensation arrangements to comply with its provisions and restrictions and limitations on payments of deferred compensation; and
WHEREAS, the Bank desires to amend and restate the Original Agreement in order to make changes to comply with Section 409A of the Code, and to make certain other changes; and
WHEREAS, the Executive has agreed to such changes.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Bank and the Executive hereby agree as follows:
ARTICLE ONE
| 1.01 | Employment. The Board of Directors of the Bank may employ the Executive in such capacity as the Bank may from time to time determine. Notwithstanding anything contained herein, this Agreement is not an agreement of employment and shall not be deemed to confer upon the Executive any rights to continue his employment with the Bank. Nothing herein shall restrict the right of the Executive to enter into an agreement with the Bank concerning any terms and conditions of his employment. |
The benefits provided by this Agreement 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.
ARTICLE TWO
| 2.01 | Normal Retirement Benefits. If the Executive shall continue in the employment of the Bank until his sixty-seventh (67th) birthday (“Normal Retirement Date”), and subject to Section 5.03, he shall be entitled to a retirement benefit paid by the Bank commencing on the first day of the month (or later, as may be required by Section 10.04) next following the termination for any reason, other than death or termination for Cause (as defined in Section 5.04 below), of his employment with the Bank on or at any time after such Normal Retirement Date and continuing during his lifetime, payable monthly, in the annual amount of $100,000. |
| 2.02 | Accrued Benefit. As used herein the term “Accrued Benefit” shall mean, in any case in which the Executive’s employment with the Bank is terminated for any reason prior to the Normal Retirement Date, the product of (a) $100,000 multiplied |
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| by (b) a fraction, the numerator of which is the actual number of full calendar months of employment with the Bank completed by the Executive as of the date of such termination, and the denominator of which is the total number of full calendar months of employment with the Bank that the Executive would have completed had he continued his employment with the Bank until the Normal Retirement Date. |
| 2.03 | Optional Forms of Payment. In lieu of the lifetime payments provided in Section 2.01 above, or whenever an Accrued Benefit is payable under this Agreement, with the sole approval of the Bank, the Executive may request in the calendar year prior to the calendar year in which payments are to begin an optional form of payment which shall be the actuarial equivalent of the said lifetime payments and which shall be any optional form other than a lump sum which is provided the Executive under the terms of the Bank’s qualified pension plan (the “Annuity Payment”); provided that the Annuity Payment provides (a) the same scheduled date for the first annuity payment, (b) the Annuity Payments are actuarially equivalent applying reasonable actuarial methods and assumptions, and (c) and otherwise complies with Treasury Regulation Section 1.409A-2 and Section 409A of the Code. |
ARTICLE THREE
| 3.01 | Death of Executive During Employment or Disability. Should the Executive die while actively employed with the Bank, whether before or after the Normal Retirement Date, or should he die while disabled and receiving benefits from the Bank’s long term disability plan, the Executive’s named beneficiary, if any, shall be entitled to receive ninety (90) percent of an amount equal to (a) the total proceeds of Policy No. 56601291 issued by New York Life Insurance and Annuity Corporation or any substitute therefor, less (b) the cash surrender value of such policy as of the date of his death, paid in one lump sum, within sixty (60) days of such death, and no further benefits shall be paid or payable under this Agreement. |
| 3.02 | Death of Executive After Termination of Employment. Upon the Executive’s death following the termination of his employment for any reason, other than termination for Cause as defined in Section 5.04 below, whether such termination occurs before or after the |
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| Normal Retirement Date, the Executive’s named beneficiary, if any, shall be entitled to receive fifty (50) percent of an amount equal to the product of (a) 0.90 and (b) the difference between (i) the total proceeds of Policy No. 56601291 issued by New York Life Insurance and Annuity Corporation or any substitute therefore and (ii) the cash surrender value of such policy as of the date of his death, paid in one lump sum, within sixty (60) days of such death, and no further benefits shall be paid or payable under this “Agreement other than as may be required in accordance with the terms of any optional form of payment that the Executive may have chosen prior to his death, with the approval of the Bank, pursuant to Section 2.03 above. |
| 3.03 | Death Benefit Forfeiture. Anything to the contrary in this Agreement notwithstanding, the death benefit provided in either Section 3.01 or Section 3.02 above shall become null and void should the Bank not receive for any reason the proceeds of Policy Number 56601291 issued by New York Life Insurance and Annuity Corporation or any policy substituted therefore. |
ARTICLE FOUR
| 4.01 | Disability of Executive. In the event the Executive becomes disabled and is receiving benefits from the Bank’s long term disability plan, he shall continue to accrue months of employment service during such period of disability, including during any waiting period required by the Bank’s long term disability plan, for purpose of calculating any Accrued Benefit under Section 2.02 of this Agreement. This continuing accrual of employment service shall terminate effective with the last month for which such disability benefits are paid. |
ARTICLE FIVE
| 5.01 | Termination of Employment or Discharge. In the event that the Executive’s employment with the Bank is terminated for any reason prior to the Normal Retirement Date, whether such termination is initiated by the Bank or by the Executive, other than any such termination within twenty-four (24) months following a Change in Control (as defined in Section 10.01) or any such termination resulting from death, disability or Cause as defined in Section 5.04 below, and subject to the limitations |
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| set forth further below in Sections 5.01, 5.03 and 10.04, the Executive shall be entitled to an annual benefit payable monthly commencing at the Normal Retirement Date and continuing for his lifetime, which shall be his Accrued Benefit determined in accordance with Section 2.02 above as of the date of his termination of employment. Such Accrued Benefit shall be multiplied by a percentage based on the following table (for purposes of this Agreement, the Anniversary shall occur on May 1st of each year with the first Anniversary on May 1, 2003): |
| Anniversary of this Agreement | Percentage Multiple | ||
| Before second | 0 | % | |
| After second, before third | 40 | % | |
| After third, before fourth | 60 | % | |
| After fourth, before fifth | 0 | % | |
| After fifth | 100 | % |
| 5.02 | [This Section Intentionally Blank] |
| 5.03 | Employment by Competition. Anything to the contrary in this Agreement notwithstanding, in the event of termination of the Executive’s employment with the Bank for any reason, payments that might otherwise be due and payable under the terms of this Agreement will be forfeited and this Agreement shall become null and void should the Executive become an owner or partner or be employed in any way, including employment as a consultant, by a competitor of the Bank (as determined by a vote of two-thirds of the outside directors of the Bank and its parent mutual holding company voting as a single body), which has an office within twenty-five (25) miles of |
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| any branch or other office of the Bank, at any time within twenty-four months following any such termination of employment with the Bank; provided, however, that the provisions of this Section 5.03 shall not apply, and shall have no further force or effect, upon and following the occurrence of a Change in Control. |
| 5.04 | Forfeiture. Anything to the contrary in this Agreement notwithstanding, benefits under this Agreement shall be forfeited and all rights of the Executive and his beneficiaries shall become null and void, if the Executive’s employment is terminated for Cause. For purposes of this Agreement, termination of the Executive’s employment for “Cause” shall mean termination on the basis of (i) the Executive’s willful and continued failure to substantially perform his employment duties (other than any such failure resulting from the Executive’s death or incapacity due to physical or mental illness) after (A) a written demand for substantial performance is delivered to the Executive jointly by the respective Chairpersons of the Bank’s and its parent mutual holding company’s Board of Directors, which demand specifically identifies the manner in which the Bank’s and its parent mutual holding company’s Board of Directors believes that the Executive has not substantially performed his employment duties, and (B) the Executive has been afforded a reasonable opportunity to meet jointly with the Bank’s and its parent mutual holding company’s Board of Directors regarding such assertions of nonperformance, or (ii) the Executive’s willfully engaging in conduct which is demonstrably and materially injurious to the Bank, monetarily or otherwise. For purposes of this Section 5.04, no act, or failure to act, on the part of the Executive shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that his action or omission was in the best interests of the Bank. The Executive shall be deemed to have been terminated for Cause only at such time as there shall have been delivered to him a written notice of termination by the Bank, which has been duly adopted by the affirmative vote of not less than a majority in number of the entire membership of the Bank’s and its parent mutual holding company’s Board of Directors (excluding the Executive if he is then a director of either the Bank or its parent mutual holding company or both) voting together as a single body at a joint meeting of such Boards of Directors duly called and held to |
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consider such proposed termination of the Executive, and which states that, in the good faith opinion of such Boards of Directors, the Executive has acted or failed to act in such a way that constitutes conduct set forth above in this Section 5.04 and specifies in detail the acts or omissions that constitute such conduct and serves as the basis for such termination for Cause.
ARTICLE SIX
| 6.01 | Interest. Unless otherwise expressly provided herein, any reference to “interest” shall be a variable rate of interest which shall be the rate of interest on 90-day U.S. Treasury Bills determined at the first auction of each calendar month or part thereof during the period of which interest is to be applied to any obligation hereunder. |
ARTICLE SEVEN
| 7.01 | Alienability. Neither the Executive, his widow, nor any other beneficiary under this Agreement shall have any power or right to transfer, assign, anticipate, hypothecate, mortgage, commute, modify, or otherwise encumber in advance any of the benefits payable hereunder, nor shall any of said benefits be subject to seizure for the payment of any debts, judgments, alimony or separate maintenance, owed by the Executive or his beneficiary or any of them, or be transferable by operation of law in the event of bankruptcy, or otherwise. |
ARTICLE EIGHT
| 8.01 | Participation in Other Plans. Nothing contained in this Agreement shall be construed to alter, abridge, or in any manner affect the rights and privileges of the Executive to participate in and be covered by any pension, profit-sharing, group insurance, bonus or any other employee plan or plans which the Bank may have or hereafter have. |
ARTICLE NINE
| 9.01 | Funding. The Bank reserves the absolute right at its sole and exclusive discretion to insure and otherwise provide for the obligations of the Bank undertaken by |
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| this Agreement or to refrain from same, and to determine the extent, nature and method thereof, including the establishment of one or more trusts. Should the Bank elect to insure this Agreement, in whole or in part, through the medium of insurance or annuities, or both, the Bank shall be the owner of the Policy. At no time shall the Executive or any beneficiary thereof be deemed to have any right, title or interest in or to any specified asset or assets of the Bank or any trust or escrow arrangement, including, but not by way of restriction, any insurance or annuity contract or contracts or the proceeds therefrom, except as provided in Sections 3.01 and 3.02 above. Any such policy, contract or asset shall not in any way be considered to be security for the performance of the obligations of this Agreement. |
If the Bank purchases a life insurance or annuity policy on the life of the Executive, he agrees to sign any papers that may be required for that purpose and to undergo any medical examination or tests which may be necessary, and generally cooperate with the Bank in securing such policy.
ARTICLE TEN
| 10.01 | Change in Control. For purposes of this Agreement, the term “Change in Control” shall mean any change in the ownership or effective control of the Bank or its parent mutual holding company, or in the ownership of a substantial portion of the assets of the Bank or its parent mutual holding company, as such change is defined in Section 409A of the Code, and the regulations issued thereunder (the “Regulations”); provided, however, that under no circumstances shall any conversion of the Bank’s parent mutual holding company from mutual to stock form or any issuance of a minority interest in the Bank or any middle-tier stock holding company constitute on its own a Change in Control for purposes of this Agreement. The Bank shall not consummate any transaction or series of related transactions that results in, or enter into any agreement that provides for or would result in, a Change in Control, unless and until any successor or continuing entity or person agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of a Change in Control, the term “Bank” as used in this Agreement shall be deemed to refer to any such successor or continuing entity or person. |
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| 10.02 | Termination of Employment after Change in Control. Should the Executive’s employment with the Bank terminate for any reason, whether such termination is initiated by the Bank or by the Executive, other than as a result of death, disability or Cause (as defined in Section 5.04 below), within twenty-four (24) months following the occurrence of a Change in Control and prior to the Normal Retirement Date, he shall continue to accrue months of employment service until the Normal Retirement Date and shall be entitled to benefits, as may be appropriate, pursuant to Section 2.01 of this Agreement. |
| 10.03 | Definition of Separation from Service. For purposes of this Agreement, termination of the Executive’s employment as used herein shall be construed to require a “Separation from Service” as defined in Code Section 409A and the Treasury Regulations promulgated thereunder, provided, however, that the Bank and the Executive reasonably anticipate that the level of bona fide services the Executive would perform after termination would permanently decrease to a level that is less than 50% of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period. |
| 10.04 | Restriction on Timing of Distributions. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee (as defined in Section 10.05), the provisions of this Section 10.04 shall govern all distributions under this Agreement. Benefit distributions which would otherwise be made to the Executive due to a termination of employment, pursuant to Sections 2.01 and 5.01, shall not be made during the first six (6) months following the date of the Executive’s termination of employment. Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the |
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| Executive in a lump sum on the first day of the seventh month following the date of the termination of employment. All subsequent distributions shall be paid in the manner specified in this Agreement. |
| 10.05 | Specified Employee means an employee who at the time of termination of employment is a key employee of the Bank, if any stock of a company owning 100% of the common stock of the Bank is publicly traded on an established securities market or otherwise. For purposes of this Agreement, an employee is a key employee if the employee meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the 12-month period ending on December 31 (the “identification period”). If the employee is a key employee during an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month period that begins on the first day of April following the close of the identification period. |
ARTICLE ELEVEN
| 11.01 | Benefits and Burdens. This Agreement shall be binding upon and inure to the benefit of the Executive, his beneficiaries and his personal representatives, and the Bank, and any successor organization, including without limitation any person or entity that shall succeed to substantially all of the Bank’s assets and business without regard to the form of such succession. |
| 11.02 | Bank. As used in this Agreement, Bank shall mean The Community Bank, its subsidiaries and affiliates and any successor organization. |
ARTICLE TWELVE
| 12.01 | Communications. Any notice or communication required of either party with respect to this Agreement shall be made in writing and may either be delivered personally or sent by First Class mail, as the case may be: |
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To the Bank:
The Community Bank
1265 Belmont Street - P.O. Box 3035
Brockton, MA 02304
Attention: Chairman
To the Executive:
David W. Curtis
170 Main Street Sandwich, MA 02563
Each party shall have the right by written notice to change the place to which any notice may be addressed.
ARTICLE THIRTEEN
| 13.01 | Claims Procedure. In the event that benefits under this Agreement are not paid to the Executive (or his beneficiary in the case of the Executive’s death), and such person feels entitled to receive them under the terms of this Agreement, a claim shall be made in writing to the Bank within sixty (60) days after written notice from the Bank to the Executive or his beneficiary or personal representative that payments are not being made or are not to be made under this Agreement, or, within sixty (60) days after the date such benefit should have been paid under this Agreement according to such claimant. Such claim shall be reviewed by the Bank. If the claim is approved or denied, in full or in part, the Bank shall provide a written notice of approval or denial within sixty (60) days setting forth the specific reason for denial, specific reference to the provisions of this Agreement upon which the denial is based, and any additional material or information necessary to perfect the claim, if any. Also, such written notice shall indicate the steps to be taken if a review of the denial is desired. If a claim is denied (a claim shall be deemed denied if the Bank does not take action within the aforesaid sixty (60) day period) and a review is desired, the Executive (or beneficiary or personal representative in the case of the Executive’s death) shall notify the Bank in writing within twenty (20) business days from the earlier of the date of the denial or the end of such sixty (60) day period. In requesting a review, the Executive or his beneficiary or personal representative may review this Agreement or any document relating to it and submit any written issues and comments he or she may feel appropriate. In its sole discretion the Bank shall then review the claim and provide a written decision within sixty (60) days after receiving the request for review of the denial. This decision likewise shall state the specific reasons for the decision and shall include reference to specific provisions of this Agreement on which the decision is based. |
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Any decision of the Bank shall not be binding on the Executive, his personal representative, or any beneficiary without consent, nor shall it preclude further action by the Executive, his personal representative or beneficiary.
ARTICLE FOURTEEN
| 14.01 | Entire Agreement. This instrument may be altered or amended only by a written agreement signed by the parties hereto. |
| 14.02 | Actions. Any action with regard to this Agreement by the Bank or the Board of Directors of the Bank shall require a majority vote of the outside directors, except as otherwise provided herein. |
| 14.03 | Jurisdiction. The terms and conditions of this Agreement are subject to the laws of the Commonwealth of Massachusetts. |
| 14.04 | Compliance with Code Section 409A. The terms of this Agreement shall not be amended, modified or waived in any way if the effect thereof would be to change the time or form of any payment or benefit under this Agreement, except to the extent permitted by Section 409A of the Code and the Regulations, and the provisions of this Agreement shall be construed to comply with Section 409A of the Code. |
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IN WITNESS WHEREOF, the Bank has caused this Agreement to be duly executed by its duly authorized officer and its Seal affixed, duly attested by its Secretary, and the Executive has hereunto set his hand at Brockton, Massachusetts the day and year first above written.
| THE COMMUNITY BANK | ||||||
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| By: |
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| Witness | ||||||
| EXECUTIVE | ||||||
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| Witness | David W. Curtis | |||||
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