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.
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(Exact Name Of Registrant As Specified In Charter)
MASSACHUSETTS 0-25251 04-3447594
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(State Or Other Jurisdiction (Commission (IRS Employer
Of Incorporation) File Number) Identification No.)
399 HIGHLAND AVENUE, SOMERVILLE, MASSACHUSETTS 02144
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(Address Of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (617) 628-4000
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NOT APPLICABLE
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(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
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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
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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
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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
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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
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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
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(d) Exhibits
Number Description
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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
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John D. Doherty
President and Chief Executive Officer