Exhibit 10.10
SEVERANCE PAY PLAN
OF
SLADE'S FERRY BANK
ARTICLE I
PURPOSE
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Section 1.1 Statement of Purpose.
(a) Slade's Ferry Bank adopts this Severance Pay Plan for the
benefit of its eligible Employees and those of other Participating
Employers. The Bank recognizes that, as a wholly owned subsidiary of a
public company, it will be subject to the possibility of a negotiated or
unsolicited change of control, which may result in a loss of employment for
some of its Employees. The purpose of the Plan is to encourage the Bank's
Employees and those of other Participating Employers to continue working
for their employers with their full time and attention devoted to their
employer's affairs by providing a severance benefit in the event of an
Involuntary Severance following a Change of Control.
(b) The Bank also recognizes that it may be appropriate in certain
circumstances other than a Change of Control to provide a severance benefit
to Employees in the event of an Involuntary Severance, and thus the Plan
provides for the payment of a severance benefit in circumstances other than
a Change of Control as determined in the discretion of the Plan
Administrator.
Section 1.2 Other Severance Plans, Policies, and Practices
Superseded.
As of the Effective Date hereof, this Plan supersedes in its entirety
any plan, policy, or practice of the Bank for the provision of the
severance benefit to Employees, whether written or oral or formal or
informal, and no severance benefit shall be provided to any person whose
employment terminates with the Bank on or after the Effective Date, except
as provided under the terms of the Plan or as provided under the terms of a
written, complete and fully executed employment agreement specifically
providing for the payment of a severance benefit following termination of
employment with the Bank.
ARTICLE II
DEFINITIONS
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For purposes of the Plan, the following terms shall have the meanings
assigned to them below, unless a different meaning is plainly indicated by
the context:
Section 2.1 Affiliated Employer means the Bank; any corporation
which is a member of a controlled group of corporations (as defined in
section 414(b) of the Internal Revenue Code of 1986, as amended, (the
"Code") that includes the Bank; any trade or business (whether or not
incorporated) that is under common control (as defined in section 414(c) of
the Code) with the Bank; any organization (whether or not incorporated)
that is a member of an affiliated service group (as defined in section
414(m) of the Code) that includes the Bank; any leasing organization (as
defined in section 414(n) of the Code) to the extent that any of its
employees are required pursuant to section 414(n) of the Code to be treated
as
employees of the Bank; and any other entity that is required to be
aggregated with the Bank pursuant to regulations under section 414(o) of
the Code.
Section 2.2 Bank means Slade's Ferry Bank (or its successors or
assigns, whether by merger, consolidation, sale of assets, statutory
receivership, operation of law or otherwise).
Section 2.3 Board means the Board of Directors of Slade's Ferry
Bank.
Section 2.4 Cause means, with respect to the conduct of an Employee
in connection with his employment with any Participating Employer, personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease and desist order in each
case as measured against standards generally prevailing at the relevant
time in the savings and community banking industry.
Section 2.5 Change of Control means the happening of any of the
following events:
(i) the consummation of a reorganization, merger or consolidation
of the Company with one or more other persons, other than a transaction
following which:
(A) at least 51% of the equity ownership interests of the
entity resulting from such transaction are beneficially owned (within
the meaning of Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended ("Exchange Act")) in substantially the same
relative proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) at least 51% of the outstanding
equity ownership interests in the Company; and
(B) at least 51% of the securities entitled to vote generally
in the election of directors of the entity resulting from such
transaction are beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) in substantially the same
relative proportions by persons who, immediately prior to such
transaction, beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) at least 51% of the securities
entitled to vote generally in the election of directors of the
Company;
(ii) the acquisition of all or substantially all of the assets
of the Company or beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 25% or more of the
outstanding securities of the Company entitled to vote generally in
the election of directors by any person or by any persons acting in
concert;
(iii) a complete liquidation or dissolution of the Company;
(iv) the occurrence of any event if, immediately following
such event, at least 50% of the members of the Board of Directors of
the Company do not belong to any of the following groups:
(A) individuals who were members of the Board of
Directors of the Company on the Effective Date; or
(B) individuals who first became members of the Board
of Directors of the Company after the Effective Date either:
(1) upon election to serve as a member of the
Board of Directors of the Company by affirmative vote of
three-quarters of
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the members of such board, or of a nominating committee
thereof, in office at the time of such first election; or
(2) upon election by the shareholders of the
Board of Directors of the Company to serve as a member of
such board, but only if nominated for election by
affirmative vote of three-quarters of the members of the
Board of Directors of the Company, or of a nominating
committee thereof, in office at the time of such first
nomination;
provided, however, that such individual's election or nomination
did not result from an actual or threatened election contest or
other actual or threatened solicitation of proxies or consents
other than by or on behalf of the Board of Directors of the
Company; or
(v) any event which would be described in section 2.5(i), (ii),
(iii) or (iv) if the term "Bank" were substituted for the term "Company"
therein; and
In no event, however, shall a Change of Control be deemed to have
occurred as a result of any acquisition of securities or assets of the
Company, the Bank, or a subsidiary of either of them, by the Company, the
Bank, or any subsidiary of either of them, or by any employee benefit plan
maintained by any of them. For purposes of this section 2.5, the term
"person" shall have the meaning assigned to it under sections 13(d)(3) or
14(d)(2) of the Exchange Act.
Section 2.6 Committee means the Personnel Committee described in
section 4.3.
Section 2.7 Company means Slade's Ferry Bancorp (or its successors
or assigns, whether by merger, consolidation, sale of assets, statutory
receivership, operation of law or otherwise).
Section 2.8 Effective Date means January 10, 2005.
Section 2.9 Employee means any person who is employed on a full-time
or part-time basis by a Participating Employer, other than: (a) a person
who is classified as an "independent contractor" by a Participating
Employer even if considered an employee under applicable law; (b) an
Employee receiving long-term disability benefits; or (c) a person who has
an employment contract, change of control agreement or other agreement with
the Bank or a Participating Company who is covered by other programs which
provide severance benefits or by their terms exclude such person from
participation in this Plan.
Section 2.10 FDI Act means the Federal Deposit Insurance Act, as
the same may be amended from time to time, and the corresponding provisions
of any successor statute.
Section 2.11 Involuntary Severance means (a) the discharge or
dismissal of an Employee by a Participating Employer other than for Cause,
or the resignation by the Employee from his position with a Participating
Employer, which resignation the Employee is asked or compelled by a
Participating Employer to tender other than for Cause; or (b) termination
of employment at an Employee's election within sixty (60) days after any
action following a Change of Control which, either alone or together with
other actions, results in: (i) the reduction in the Employee's Salary
without his or her consent; (ii) the assignment of the Employee's principal
place of employment outside a 30 mile radius of his or her principal place
of employment at the time of the Change of Control; or (iii) a material
adverse change in the Employee's title, position or responsibilities at a
Participating Employer.
Section 2.12 Participating Employer means the Bank, and any
successor thereto and any other Affiliated Employer which, with the prior
written approval of the Board of
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Directors of Slade's Ferry Bank and subject to such terms and conditions as
may be imposed by the Board of Directors of Slade's Ferry Bank, shall adopt
this Plan.
Section 2.13 Plan means this Severance Pay Plan of Slade's Ferry
Bank, as the same may be amended from time to time.
Section 2.14 Plan Administrator means the Committee or any person,
committee, corporation or organization designated in section 4.2, or
appointed pursuant to section 4.2, to perform the responsibilities of that
office.
Section 2.15 Salary means the Employee's annual rate of base salary
for his or her services to a Participating Employer (excluding overtime,
bonuses and other forms of additional compensation) plus the average annual
commissions earned by the Employee for the three (3) calendar years (or if
shorter, the Employee's period of employment) preceding the Employee's
Involuntary Severance. If the Employee is paid on an hourly-rate basis,
Salary shall mean the weekly amount of base wages paid for the number of
hours of work contemplated by such person's normal weekly work schedule.
Section 2.16 Service means service rendered by an Employee that is,
or would be, recognized under the 401(k) Plan maintained by Slade's Ferry
Bank for vesting purposes as of the date of the Employee's Involuntary
Severance.
ARTICLE III
BENEFIT
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Section 3.1 Severance Benefit for Employees.
(a) An Employee with at least one (1) year of Service whose
employment with all Participating Employers is terminated under
circumstances constituting an Involuntary Severance, other than for Cause,
as a result of, within twelve (12) months following or within three (3)
months prior to a Change of Control shall be entitled, as severance pay, to
a lump sum payment in an amount equal to two (2) weeks' Salary multiplied
by the number of the Employee's whole years of Service. Notwithstanding
the foregoing, no Employee who is an Officer entitled to receive benefits
under this Plan shall receive a severance benefit equal to less than twelve
(12) weeks' Salary. Similarly no Officer shall be entitled to receive more
than twenty-six (26) weeks Salary under this Plan. All other employees of
the Bank shall receive a severance benefit amount equal to two (2) weeks
Salary multiplied by the number of the Employee's whole years of service.
Similarly, no Employee shall be entitled to receive more than twenty-six
(26) weeks' Salary under this Plan. The lump sum severance payment shall
be made as soon as practicable after, but in no case later than five (5)
business days following, the Employee's Involuntary Severance. Employees
who elect salary continuation vs. lump sum distribution may continue to
participate in medical and dental plans at the employee rate for the
duration of their severance. COBRA will then be available at the end of
the salary continuation period.
(b) For purposes of section 3.1(a) an "Officer" shall mean, in the
case of an Employee, an Employee who is not subject to the wage and hour
standards imposed under the federal Fair Labor Standards Act.
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Section 3.2 Vesting.
The benefit to be provided under section 3.1(a) of the Plan to an
Employee shall be completely vested and no forfeitable upon the occurrence
of a Change of Control as described in section 2.5.
Section 3.3 Discretionary Severance Benefit.
An Employee with at least one year of Service whose employment with
all Participating Employers is terminated under circumstances constituting
an Involuntary Severance but not related to a Change of Control as provided
under section 3.1 who is selected for eligibility under the Plan in the
sole discretion of the Plan Administrator shall be entitled to such
severance as the Plan Administrator may determine.
Section 3.4 Benefit Contingent on Execution of Release.
The severance benefit provision under the Plan (including the
discretionary severance benefit under section 3.3) to any Employee shall be
subject to the condition that the Employee execute and deliver to the Plan
Administrator an instrument, in such form as the Plan Administrator shall
prescribe, which shall include a release in favor of the Participating
Employers. Such release shall include, but not be limited to, a release of
any claims which the Employee may have against any Participating Employer
under the Age Discrimination in Employment Act of 1967, as amended; the
Fair Labor Standards Act, as amended; the Worker Adjustment Retraining and
Notification Act, as amended; the Civil Rights Act of 1964, as amended;
Title VII of the Civil Rights Act of 1866, as amended; and any other
federal, state or local law, rule or regulation under which the Employee
may have a claim arising out of his employment with a Participating
Employer or the termination of such employment. No Participating Employer
shall have any obligation to provide a benefit under this Plan to any
Employee who fails or refuses to sign and deliver such a release.
ARTICLE IV
ADMINISTRATION
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Section 4.1 Named Fiduciaries.
The term "Named Fiduciary" shall mean (but only to the extent of the
responsibilities of each of them) the Plan Administrator, the Committee and
the Board. This Article IV is intended to allocate to each Named Fiduciary
the responsibility for the prudent execution of the functions assigned to
him or it, and none of such responsibilities or any other responsibility
shall be shared by two or more of such Named Fiduciaries. Whenever one
Named Fiduciary is required by the Plan to follow the directions of another
Named Fiduciary, the two Named Fiduciaries shall not be deemed to have been
assigned a shared responsibility, but the responsibility of the Named
Fiduciary giving the directions shall be deemed his sole responsibility,
and the responsibility of the Named Fiduciary receiving those directions
shall be to follow them insofar as such instructions are on their face
proper under applicable law.
Section 4.2 Plan Administrator.
There shall be a Plan Administrator, who shall be the Personnel
Committee of the Board of Directors of the Bank, or such Employee or
officer as may be designated by the Committee, as hereinafter provided, and
who shall, subject to the responsibilities of the Committee and the Board,
have the responsibility for the day-to-day control, management, operation
and administration of the Plan. The Plan Administrator shall have the
following responsibilities:
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(a) To maintain records necessary or appropriate for
the administration of the Plan;
(b) To give and receive such instructions, notices,
information, materials, reports and certifications as may be
necessary or appropriate in the administration of the Plan;
(c) To prescribe forms and make rules and regulations
consistent with the terms of the Plan and with the
interpretations and other actions of the Committee;
(d) To require such proof or evidence of any matter
from any person as may be necessary or appropriate in the
administration of the Plan;
(e) To prepare and file, distribute or furnish all
reports, plan descriptions, and other information concerning
the Plan, including, without limitation, filings with the
Secretary of Labor and employee communications as shall be
required of the Plan Administrator under ERISA;
(f) To determine any question arising in connection
with the Plan, including any question of Plan interpretation,
and the Plan Administrator's decision or action in respect
thereof shall be final and conclusive and binding upon all
persons having an interest under the Plan; provided however,
that any question relating to inconsistency or omission in the
Plan, or interpretation of the provisions of the Plan, shall be
referred to the Committee by the Plan Administrator and the
decision of the Committee in respect thereof shall be final;
(g) To review and dispose of claims under the Plan
filed pursuant to section 4.4 and appeals of claims decisions
pursuant to section 4.5;
(h) If the Plan Administrator shall determine that by
reason of illness, senility, insanity, or for any other reason,
it is undesirable to make any payment to the person entitled
thereto, to direct the application of any amount so payable to
the use or benefit of such person in any manner that the Plan
Administrator may deem advisable or to direct in the Plan
Administrator's discretion the withholding of any payment under
the Plan due to any person under legal disability until a
representative competent to receive such payment in his behalf
shall be appointed pursuant to law;
(i) To discharge such other responsibilities or follow
such directions as may be assigned or given by Committee or the
Board; and
(j) To perform any duty or take any action which is
allocated to the Plan Administrator under the Plan.
The Plan Administrator shall have the power and authority necessary or
appropriate to carry out his responsibilities. The Plan Administrator may
resign only be giving at least 30 days' prior written notice of resignation
to the Committee, and such resignation shall be effective on the date
specified in such notice.
Section 4.3 Committee Responsibilities.
The Committee shall, subject to the responsibilities of the Board,
have the following responsibilities:
(a) To review the performance of the Plan
Administrator;
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(b) To hear and decide appeals, pursuant to the claims
procedure contained in section 4.5 of the Plan, taken from the
decisions of the Plan Administrator;
(c) To hear and decide questions, including
interpretation of the Plan, as may be referred to the Committee
by the Plan Administrator;
(d) To the extent required by ERISA, to establish a
funding policy and method consistent with the objectives of the
Plan and the requirements of ERISA, and to review such policy
and method at least annually;
(e) To report and make recommendations to the Board
regarding changes in the Plan, including changes in the
operation and management of the Plan;
(f) To designate an Alternate Plan Administrator to
serve in the event that the Plan Administrator is absent or
otherwise unable to discharge his responsibilities;
(g) To remove and replace the Plan Administrator or
Alternate, or both of them, and to fill a vacancy in either
office;
(h) To discharge such other responsibilities or follow
such directions as may be assigned or given by the Board; and
(i) To perform any duty or to take any action which is
allocated to the Committee under the Plan.
The committee shall have the power and authority necessary or appropriate
to carry out its responsibilities.
Section 4.4 Claims Procedure.
Any claim relating to a benefit under the Plan shall be filed with
the Plan Administrator on a form prescribed by it. If a claim is denied in
whole or in part, the Plan Administrator shall give the claimant written
notice of such denial, which notice shall specifically set forth:
(a) The reasons for the denial;
(b) The pertinent Plan provisions on which the denial was
based;
(c) Any additional material or information necessary
for the claimant to perfect his claim and an explanation of why
such material or information is needed; and
(d) An explanation of the Plan's procedure for review
of the denial of the claim.
In the event that the claim is not granted and notice of denial of a claim
is not furnished by the 30th day after such claim was filed, the claim
shall be deemed to have been denied on that day for the purpose of
permitting the claimant to request review of the claim.
Section 4.5 Claims Review Procedure.
Any person whose claim filed pursuant to section 4.4 has been denied
in whole or in part by the Plan Administrator may request review of the
claim by the Committee, upon a form prescribed by the Plan Administrator.
The claimant shall file such form (including a statement of his position)
with the Committee no later than 60 days after the mailing or delivery of
the written notice of denial provided for in
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section 4.4, or, if such notice is not provided, within 60 days after such
claim is deemed denied pursuant to section 4.4. The claimant shall be
permitted to review pertinent documents. A decision shall be rendered by
the Committee and communicated to the claimant not later than 30 days after
receipt of the claimant's written request for review. However, if the
Committee finds it necessary, due to special circumstances (for example,
the need to hold a hearing), to extend this period and so notifies the
claimant in writing, the decision shall be rendered as soon as practicable,
but in no event later than 120 days after the claimant's request for
review. The Committee's decision shall be in writing and shall
specifically set forth:
(a) The reasons for the decision; and
(b) The pertinent Plan provisions on which the decision
is based.
Any such decision of the Committee shall be binding upon the claimant and
the Participating Employer, and the Plan Administrator shall take
appropriate action to carry out such decision.
Section 4.6 Allocation of Fiduciary Responsibilities and
Employment of Advisors.
Any Named Fiduciary may:
(a) Allocate any of his or its responsibilities (other
than trustee responsibilities) under the Plan to such other
person or persons as he or it may designate, provided that such
allocation and designation shall be in writing and filed with
the Plan Administrator;
(b) Employ one or more persons to render advice to him
or it with regard to any of his or its responsibilities under
the Plan; and
(c) Consult with counsel, who may be counsel to a
Participating Employer.
Section 4.7 Other Administrative Provisions.
(a) Any person whose claim has been denied in whole or in part must
exhaust the administrative review procedures provided in section 4.5 prior
to initiating any claim for judicial review.
(b) No bond or other security shall be required of the Plan
Administrator, or any officer or employee of a Participating Employer to
whom fiduciary responsibilities are allocated by a Named Fiduciary, except
as may be required by ERISA.
(c) Subject to any limitation on the application of this section
4.7(c) pursuant to ERISA, neither the Plan Administrator, nor any officer
or employee of a Participating Employer to whom fiduciary responsibilities
are allocated by a Named Fiduciary, shall be liable for any act of omission
or commission by himself or by another person, except for his own
individual willful and intentional malfeasance.
(d) The Plan Administrator or the Committee may, except with
respect to actions under section 4.5, shorten, extend or waive the time
(but not beyond 60 days) required by the Plan for filing any notice or
other form with the Plan Administrator or Committee, or taking any other
action under the Plan.
(e) Any person, group of persons, committee, corporation or
organization may serve in more than one fiduciary capacity with respect to
the Plan.
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(f) Any action taken or omitted by any fiduciary with respect to
the Plan, including any decision, interpretation, claim, denial or review
on appeal, shall be conclusive and binding on the Bank and all interested
parties and shall be subject to judicial modification or reversal only to
the extent it is determined by a court of competent jurisdiction that such
action or omission was arbitrary and capricious and contrary to the terms
of the Plan.
ARTICLE V
MISCELLANEOUS
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Section 5.1 Rights of Employees.
No Employee shall have any right or claim to any benefit under the
Plan except in accordance with the provisions of the Plan. The
establishment of the Plan shall not be construed as conferring upon any
Employee or other person any legal right to a continuation of employment or
to any terms or conditions of employment, nor as limiting or qualifying the
right of a Participating Employer to discharge any Employee.
Section 5.2 Non-alienation of Benefit.
The right to receive a benefit under the Plan shall not be subject in
any manner to anticipation, alienation, or assignment, nor shall such right
be liable for or subject to debts, contracts, liabilities, or torts.
Section 5.3 Non-duplication of Benefit.
No provisions in this Plan shall be deemed to duplicate any
compensation or benefits provided under any agreement, plan or program
covering the Employee to which a Participating Employer is a party and any
duplicative amount payable under any such agreement, plan or program shall
be applied as an offset to reduce the amounts otherwise payable hereunder.
Section 5.4 Construction.
Wherever appropriate in the Plan, words used in the singular may be
read in the plural, words used in the plural may be read in the singular,
and the masculine gender may be read as referring equally to the feminine
gender or the neuter. Any reference to an Article or section number shall
refer to an Article or section of the Plan, unless otherwise indicated.
Section 5.5 Headings.
The headings of Articles and sections are included solely for
convenience of reference. If there is any conflict between such headings
and the text of the Plan, the text shall control.
Section 5.6 Governing Law.
The Plan shall be construed, administered and enforced according to
the laws of the Commonwealth of Massachusetts without giving effect to the
conflict of laws principles thereof, except to the extent that such laws
are preempted by federal law.
Section 5.7 Severability.
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The invalidity or unenforceability, in whole or in part, of any
provision of this Plan shall in no way affect the validity or
enforceability of the remainder of such provision or of any other provision
of this Plan, and any provision, or part thereof, deemed to be invalid or
unenforceable shall be reformed as necessary to render it valid and
enforceable to the maximum possible extent.
Section 5.8 Termination or Amendment.
(a) The Participating Employers expect to continue the Plan
indefinitely, but, subject to the provisions of this section 5.8 hereunder,
the Participating Employers expressly reserve the right to terminate or
amend the Plan, in whole or in part, at any time by action of the Board;
provided, however, that no such amendment or termination which adversely
affects the current or prospective rights of any Employee shall be
effective earlier than six (6) months after written notice thereof is given
to such Employee.
(b) In the event that a corporation or trade or business other than
Slade's Ferry Bank shall adopt this Plan, such corporation or trade or
business shall, by adopting the Plan, empower Slade's Ferry Bank to amend
or terminate the Plan, insofar as it shall cover employees of such
corporation or trade or business, upon the terms and conditions set forth
in this section 5.8(b); provided, however, that any such corporation or
trade or business may, by action of its board of directors or other
governing body, amend or terminate the Plan, insofar as it shall cover
employees of such corporation or trade or business, at different times and
in a different manner. In the event of any such amendment or termination
by action of the board of directors or other governing body of such a
corporation or trade or business, a separate plan shall be deemed to have
been established for the employees of such corporation or trade or
business.
Section 5.9 Required Regulatory Provisions.
The following provision is included for the purposes of complying
with various laws, rules and regulations applicable to the Bank:
Notwithstanding anything herein contained to the contrary, any
payments to the Employee by the Bank, whether pursuant to this Plan or
otherwise, are subject to and conditioned upon their compliance with
section 18(k) of the FDI Act and any regulations promulgated thereunder.
If and to the extent that the foregoing provision shall cease to be
required by applicable law, rule or regulation, the same shall become
inoperative automatically as though eliminated by formal amendment of the
Plan.
Section 5.10 Withholding.
Payments from this Plan shall be subject to all applicable federal,
state and local income withholding taxes.
Section 5.11 Status as Welfare Benefit Plan Under ERISA.
This Plan is an "employee welfare benefit plan" within the meaning of
section 3(1) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") and shall be construed, administered and enforced
according to the provisions of ERISA.
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