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Exhibit 10.11
BOSTON FEDERAL SAVINGS BANK
DEFINED CONTRIBUTION RESTORATION PLAN
(EFFECTIVE AS OF SEPTEMBER 21, 1999)
1. PURPOSE. The purpose of the Plan is to (a) attract and retain
certain key executive employees of Boston Federal Savings Bank and certain of
its subsidiaries and affiliates by providing them with supplemental retirement
income (determined by reference to the Savings Plan and ESOP (each as defined
below)) to augment their qualified plan retirement benefits by, for purposes of
the Plan only, eliminating the effect of the limitations contained in Sections
401(a)(17), 401(k)(3), 401(m)(2), 402(g) and 415 of the Internal Revenue Code of
1986, as amended and in effect from time to time (the "Code"), on the benefits
provided under the Savings Plan and the ESOP. The Plan shall be construed
consistent with the purposes described herein, including without limitation, the
anti-conditioning rules of Section 401(k)(4) of the Code.
2. DEFINITIONS. The following terms shall have the following
meanings for purposes of the Plan:
2.1 "ACCELERATION PAYMENT" means a lump sum acceleration
payment, as defined in Section 8 hereof.
2.2 "ACCOUNT" means the bookkeeping account maintained
for each Participant to which amounts credited on behalf of the Participant
under Section 5 hereof shall be recorded. Notwithstanding any other provision of
the Plan that may be interpreted to the contrary, the amounts credited to a
Participant's Account under the Plan are for measurement purposes only and shall
not be considered or construed in any manner as an actual contribution or
investment.
2.3 "ACCOUNT BALANCE" means as of any date with respect
to a Participant the number of BFBI Share equivalents credited to such
Participant's Account.
2.4 "BFBI" means BostonFed Bancorp, Inc., a corporation
organized under the laws of Delaware, or any successor entity(ies) thereto.
2.5 "BFBI SHARE" means a share of the voting common
stock, par value $0.01, issued by BFBI, subject to adjustments pursuant to
Section 6.3.
2.6 "BFSB" means Boston Federal Savings Bank, a federally
chartered stock savings bank, and any successor entity(ies) thereto.
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2.7 "BFSB BOARD" means the board of directors of BFSB or
a committee of the board of directors of BFSB authorized to act on behalf of the
board of directors of BFSB under this Plan.
2.8 "CLOSING PRICE" means for any day the closing price
for one BFBI Share as reported for such day in The Wall Street Journal or in any
successor to The Wall Street Journal or, if there is no such successor, in any
trade publication selected by the BFSB Board or, if no closing price is so
reported for such day, the fair market value of a BFBI Share as determined by
the BFSB Board.
2.9 "CODE" means the Internal Revenue Code, as defined in
Section 1 hereof.
2.10 "DIVIDEND PAYMENT DATE" means a date after the
Effective Date on which a dividend (other than a dividend consisting solely of
additional BFBI Shares) is paid with respect to the BFBI Shares.
2.11 "EARLY TAX OBLIGATION" means an early tax obligation,
as described in Section 15 hereof.
2.12 "EFFECTIVE DATE" means September 21, 1999.
2.13 "ELECTION DATE" means the date on which a Participant
submits an election to receive an Acceleration Payment.
2.14 "EMPLOYER" means BFSB and any subsidiary or affiliate
of BFSB which participates in the ESOP and/or the Savings Plan and which adopts
this Plan with the permission of BFSB Board. Reference to the Employer or the
Employer Board in the context of a particular Participant shall refer to that
Participant's Employer and its board of directors (or authorized committee
thereof).
2.15 "EMPLOYER BOARD" means, with respect to an Employer,
the board of directors of such Employer or a committee of the board of directors
of such Employer authorized to act on behalf of such board of directors under
this Plan.
2.16 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended and in effect from time to time.
2.17 "ESOP" means the Boston Federal Savings Bank Employee
Stock Ownership Plan, as amended from time to time.
2.18 "INTEREST RATE" means, for any calendar year,
interest compounded annually at the rate of 120 percent of the applicable
Federal mid-term interest rate as in effect under Section 1274 of the Code for
the first month of such year.
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2.19 "LIMITATIONS" means the limitations imposed under
Sections 401(a)(17), 401(k)(3), 401(m)(2), 402(g) and 415 of the Code, or any
successor provisions to such sections of the Code.
2.20 "PARTICIPANT" means David F. Holland, David P.
Conley, John A. Simas, and such other senior executives of the Employer as are
selected for participation in the Plan from time to time by the Employer Board.
Notwithstanding the foregoing, no person shall be a Participant until such
person executes and delivers to the Employer Board a Participation Agreement.
2.21 "PARTICIPATION AGREEMENT" means a participation
agreement in the form attached hereto as Exhibit A.
2.22 "PLAN" means the Boston Federal Savings Bank Defined
Contribution Restoration Plan, as set forth herein and as amended from time to
time.
2.23 "SAVINGS PLAN" means the Boston Federal Savings Bank
Employees Savings & Profit Sharing Plan, as amended from time to time, and as
adopted by the Employer.
2.24 "YEAR OF SERVICE" means "Year of Service," as defined
in the Savings Plan.
3. ADMINISTRATION.
3.1 Subject to Sections 2.19, 3.2, 13(b) and 15 hereof,
the Plan shall be administered by the BFSB Board. Except as otherwise provided
in the Plan or by applicable law, the BFSB Board shall have full authority and
discretion to determine the rights and benefits of Participants under the Plan,
to establish from time to time regulations for the administration of the Plan,
to interpret and construe the Plan, and to make all determinations deemed
necessary or advisable for the administration of the Plan.
3.2 The BFSB Board may designate persons other than
members of the BFSB Board to carry out the day-to-day ministerial administration
of the Plan under such conditions and limitations as it may prescribe. The BFSB
Board's determinations under the Plan shall be reasonable and shall be
consistent with the provisions and purposes of the Plan; PROVIDED, HOWEVER,
that, subject to the foregoing, such determinations need not be uniform and may
be made selectively among Participants, whether or not such Participants are
similarly situated. Except as otherwise provided in the Plan or by applicable
law, any such determination, decision or action of the BFSB Board in connection
with the construction, interpretation, administration, implementation or
maintenance of the Plan shall be final, conclusive and binding upon all
Participants and any person(s) claiming under, through or in respect of any
Participant.
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3.3 The BFSB Board and any Employer Board, and/or any
member of the BFSB Board and any Employer Board, shall not be liable to or in
respect of any Participant or to any other person for or in respect of any act,
omission, interpretation, construction or determination made in good faith in
connection with or under the Plan.
4. PARTICIPATION. Participation in the Plan shall be limited to
the Participants. This Plan is intended to constitute a non-qualified, unfunded
deferred compensation plan for a select group of management or highly
compensated employees under Title I of ERISA.
5. SUPPLEMENTAL BENEFIT. Effective as of the last day of each
calendar year during the effectiveness of the Plan, the Employer shall credit to
each Participant's Account:
5.1 An amount equal to two percent (2%) of the amount by
which the Participant's Salary (as defined in the Savings Plan without regard to
the 401(a)(17) language of the Plan incorporating the 401(a)(17) limits) exceeds
the compensation limit set forth in Section 401(a)(17) of the Code for such
calendar year; plus
5.2 An amount equal to the maximum employer contributions
and forfeitures which would have been credited to the account of the Participant
under the ESOP pursuant to the plan contribution and allocation provisions
contained therein if such provisions had been applied without regard to the
Limitations, less the actual employer contributions and forfeitures credited to
such Participant's account under the ESOP with respect to such calendar year.
Notwithstanding the foregoing, to the extent such employer contributions are
applied to the repayment of a Stock Obligation (as defined in the ESOP) and
result in the release of BFBI Shares from the Unallocated Stock Fund (as defined
in the ESOP), the preceding sentence shall be applied by substituting for
employer contributions the number of released BFBI Shares which would have been
credited to such Participant's account under the ESOP but for the Limitations,
less the number of released BFBI Shares actually credited to such Participant's
account under the ESOP.
6. MAINTENANCE OF ACCOUNTS.
6.1 FORM OF ACCOUNT BALANCE. All Account Balances under
the Plan shall be recorded and maintained as a number of BFBI Share equivalents.
Any dollar amount credited under Section 5 to a Participant's Account with
respect to a calendar year shall be converted into, and thereafter accounted for
as, a number of BFBI Share equivalents determined by the following formula:
W = A divided by B, where:
W = the number of BFBI Share equivalents to be credited to such
Participant's Account;
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A = the amount credited to such Participant's Account under Section 5
with respect to such calendar year; and
B = the Closing Price on the last business day of such calendar year.
Any amount of shares credited under Section 5 to a Participant's
Account with respect to a calendar year shall be converted to, and thereafter
accounted for, as a number of BFBI Share equivalents equal to the number of BFBI
Shares so credited.
In addition to the foregoing, as of the Effective Date, the Employer
shall credit to the Account of each Participant listed on Appendix A hereto, the
number of BFBI Share equivalents equal to the number of BFBI Share equivalents
listed next to such Participant's name on said Appendix A.
6.2 DIVIDENDS. There shall be credited to each
Participant's Account as of each Dividend Payment Date an additional number of
BFBI Share equivalents determined by the following formula:
X = (C x D) divided by E, where:
X = the number of BFBI Share equivalents to be credited to such
Participant's Account on such Dividend Payment Date;
C = the number of BFBI Share equivalents credited to such Participant's
Account as of the record date applicable to the dividend being paid on such
Dividend Payment Date;
D = the dividend amount (excluding any portion of the dividend
consisting of additional BFBI Shares) per BFBI Share paid on such Dividend
Payment Date; and
E = the Closing Price on such Dividend Payment Date.
6.3 OTHER ADJUSTMENTS. If, as a result of any
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar change in BFBI Shares, the outstanding BFBI
Shares are increased or decreased or are exchanged for a different number or
kind of shares or other securities of BFBI, or additional shares or new or
different shares or other securities of BFBI or any successor entity (or a
parent or subsidiary thereof) are distributed with respect to such BFBI Shares
or other securities, or, if, as a result of any merger, consolidation, sale of
all or substantially all of the assets of BFBI or similar transaction, the
outstanding BFBI Shares are converted into or exchanged for a different number
or kind of securities of BFBI or any successor entity (or a parent or subsidiary
thereof), the BFSB Board shall make an appropriate or proportionate adjustment
in each Participant's Account Balance and, if appropriate, in the definition of
BFBI Shares. Any such adjustment by the BFSB Board shall be final, binding and
conclusive.
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If, as a result of any reorganization, liquidation, merger,
consolidation, sale of all or substantially all of the assets of BFBI or similar
transaction, there are no outstanding BFBI Shares and the BFSB Board determines
that it is not feasible to adjust the definition of BFBI Shares pursuant to the
preceding paragraph, then, notwithstanding any provision elsewhere herein to the
contrary, the number of BFBI Share equivalents then credited to each
Participant's Account shall be converted to a dollar amount determined by the
following formula:
Y = F x G, where:
Y = the dollar amount to be credited;
F = the number of BFBI Share equivalents then credited to such
Participant's Account; and
G = the most recent Closing Price.
In such event, each such Account shall thereafter be credited with, and
increased by, an additional dollar amount each December 31 equal to interest on
such Account Balance for the year ending on such date at an annual rate equal to
the Interest Rate. Thereafter, any payments made pursuant to Section 7 or
Section 8 shall be made in cash rather than BFBI Shares, but otherwise applying
the provisions of Section 7 or Section 8, whichever is applicable.
7. PAYMENT OF BENEFIT. Provided the Participant has completed at
least five Years of Service, the Participant shall commence receipt of his
Account Balance (as set forth below) on the fifteenth (15th) day of January of
the year following the later of the following:
7.1 such Participant's attainment of age 55; or
7.2 such Participant's retirement, disability or other
termination of employment with the Employer.
Notwithstanding the foregoing, the Participant may irrevocably elect to
commence receipt of his Account Balance (as set forth below) on the fifteenth
(15th) day of January of any year following the year after the later of the
dates set forth in Sections 7.1 and 7.2, provided that such Participant provides
notice to the Employer Board, on or before the last day of the calendar year
immediately preceding the calendar year containing the later of the dates set
forth in Sections 7.1 and 7.2, which notice shall set forth the calendar year in
which such Participant shall commence receipt of his Account Balance; PROVIDED,
HOWEVER, that the making of such an election shall not preclude the Participant
from subsequently electing an Acceleration Payment pursuant to Section 8.
Notwithstanding the foregoing, in a situation where a Participant's
employment with the Employer terminates and such Participant is eligible for
disability benefits under the
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Savings Plan, then such a disabled Participant may commence receipt of his
Account Balance (as set forth below) on the fifteenth (15th) day of January of
any year following the date such Participant becomes disabled, as defined in the
Savings Plan, regardless of his age or Years of Service at that time.
Notwithstanding the foregoing, when a Participant dies, such
Participant's beneficiary shall commence (or continue if such Participant had
already commenced) receipt of such Participant's Account Balance (as set forth
below) on the fifteenth (15th) day of January of the year following such
Participant's death.
A Participant who commences receipt of his Account Balance shall
receive annual payments in the form of BFBI Shares on or before the fifteenth
(15th) day of January of each year until his Account Balance is reduced to zero.
The number of BFBI Shares to be included in each such payment shall be
determined by the following formula:
Z = F divided by (20 - G), where:
Z = the number of BFBI Shares to be included in that payment, PROVIDED,
HOWEVER, that Y shall be rounded to the nearest whole share;
F = the number of BFBI Share equivalents credited to such Participant's
Account on the date such payment is to be made; and
G = the total number of annual payments previously received by (or in
respect of) such Participant.
Immediately following any such payment of benefits, the number of BFBI Share
equivalents credited to the Participant's Account shall be reduced by a number
equal to the number of BFBI Shares actually distributed. Any fractional BFBI
Share equivalents remaining in a Participant's Account after the final payment
of benefits shall be forfeited.
Further notwithstanding the foregoing, in the event any payment to be
made to a Participant (or his designated beneficiary, as the case may be) under
this Section 7 (or under Section 8) has not been paid within 30 days after the
date such payment was to be made hereunder, the Employer shall, in addition to
such payment, pay to such Participant (or his designated beneficiary, as the
case may be) interest on the amount of such delinquent payment (determined as of
the date on which such payment was to be paid), from the date such payment was
to be paid hereunder through the date such payment was actually paid, at a rate
equal to the Interest Rate.
8. ACCELERATION PAYMENT. At any time after a Participant
completes five Years of Service or otherwise becomes eligible to receive
payments under Section 7, upon sixty (60) days' prior written notice to the
Employer Board, a Participant (or a Participant's beneficiary following such
Participant's death) may elect to receive his current Account Balance in the
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form of an Acceleration Payment; PROVIDED, HOWEVER, that no more than one (1)
such Acceleration Payment may be paid with respect to a Participant before such
Participant retires, becomes disabled or otherwise terminates employment with
the Employer. Such Acceleration Payment shall be paid promptly by the Employer
to such Participant in a single lump sum of BFBI Shares. The number of BFBI
Shares to be included in such Acceleration Payment shall equal ninety percent
(90%) of the number of BFBI Share equivalents credited to his Account as of the
Election Date, rounded to the nearest whole share. Immediately after such
Acceleration Payment, such Participant's Account Balance shall be reduced to
zero.
9. ASSIGNMENTS AND TRANSFERS. No right or benefit of a
Participant, a surviving contingent annuitant or a surviving spouse under the
Plan may be assigned, alienated, encumbered, or otherwise hypothecated or
transferred in any manner. No such right or benefit hereunder shall be subject
to legal process or attachment for the payment of any claims of a creditor of or
through a Participant or a beneficiary of a deceased Participant.
10. EMPLOYEE RIGHTS UNDER THE PLAN. Neither the Plan nor any
action taken thereunder shall be construed as giving any Participant any right
to be retained in the employment of the Employer, nor shall it be construed as
limiting in any way the right of the Employer to discharge any Participant or to
treat him without regard to the effect any such treatment would or might have
upon him as a Participant in the Plan.
11. UNFUNDED PLAN. The Plan shall be unfunded and no Participant
in the Plan shall have any right to any specific assets of the Employer by
reason of the Plan, and the rights of each Participant hereunder shall be solely
those of an unsecured creditor of the Employer. Any liability of the Employer to
any Participant under the Plan shall be based solely upon the contractual
obligations that may be created as a result of the Plan and such Participant's
Participation Agreement. No such obligation of the Employer shall be deemed to
be secured by any pledge of, encumbrance on, or other interest in, any property
or asset of the Employer or any affiliate of the Employer. Nothing contained in
the Plan shall be construed as creating in respect of any Participant (or
beneficiary thereof or any other person) any equity or other interest of any
kind in any assets of the Employer or any affiliate of the Employer, or creating
a trust of any kind or a fiduciary relationship of any kind between the
Employer, any affiliate of the Employer, and/or any such Participant, any
beneficiary or any other person. Except as specifically provided herein,
participation in the Plan shall not in any way affect any rights which a
Participant may have under any other employee benefit plan of the Employer or
under any individual contractual agreement between such Participant and the
Employer. Notwithstanding the foregoing, timely payment of all Account Balances
payable under the Plan (including, without limitation, Acceleration Payments and
Early Tax Obligations) shall be fully guaranteed by BFBI.
12. SOURCE OF PAYMENT. Subject to Section 11 hereof, the Employer,
in its sole discretion, may establish (a) a grantor or other trust of which the
Employer is treated as the owner under the Code and the assets of which are
subject to the claims of the Employers general creditors in the event of its
insolvency, (b) an insurance arrangement, or (c) any other
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arrangement or arrangements designed to provide for the payment of benefits
hereunder. Any such arrangement shall be subject to such other terms and
conditions as the Employer may deem necessary or advisable to ensure that
benefits are not includible, by reason of the establishment of any such
arrangement or the funding of any such trust, in the income of the beneficiaries
of such trust or other arrangement prior to actual distribution or other payment
and that the existence of such trust or other arrangement does not cause the
Plan to be considered to be funded for purposes of Title I of ERISA.
13. AMENDMENT OR TERMINATION. The BFSB Board may amend, suspend,
or terminate the Plan or any portion thereof at any time. Notwithstanding the
foregoing, (a) without the consent of the Participant, no such amendment,
suspension, or termination shall cause such Participant's (or his designated
beneficiary's, as the case may be) Account Balance to be less than such
Participant's Account Balance immediately prior to such amendment, suspension,
or termination, and (b) any other Employer Board may terminate its Employers
continued participation in the Plan which shall constitute a termination of the
Plan as to that Employer.
14. GOVERNING LAW; CONSTRUCTION. The Plan shall be governed by and
construed, interpreted and administered in accordance with the laws of the
Commonwealth of Massachusetts, except to the extent such laws are preempted by
ERISA. The titles and headings of sections of the Plan are for convenience of
reference only and shall have no substantive meaning in and of themselves.
15. WITHHOLDING. All payments under the Plan shall be made in BFBI
Shares and shall be reduced by such amounts (by an appropriate reduction in the
number of BFBI Shares to be distributed, based on the Closing Price on the
business day next prior to the date of such payment, with any such reduction
increased to the next whole share) as are required to be withheld with respect
thereto under applicable federal, state and local tax laws and regulations in
effect as of the date of any such payments. In the event any federal, state or
local taxes are imposed with respect to any benefits under the Plan before such
benefits become payable to the Participant or his beneficiary (an "Early Tax
Obligation"), then the Employer shall pay such Early Tax Obligation on behalf of
such Participant or beneficiary and, in the Employer Boards sole discretion,
either (a) withhold an equivalent amount of funds from any current or future
compensation payable by the Employer to the Participant, (b) require the
Participant (or beneficiary) to promptly pay an equivalent amount of funds to
the Employer, or (c) reduce such Participant's Account Balance by the number of
BFBI Share equivalents having a value (based on the Closing Price on the
business day next prior to the date the Employer makes such payment) equal to
the amount of such Early Tax Obligation.
16. OTHER BENEFITS PLANS OR PROGRAMS. Payments and benefits
received under the Plan shall not be deemed a part of any Participant's
compensation for purposes of determining any benefits under any other welfare,
pension or incentive benefit plans or programs, if any, maintained by the
Employer or any of its affiliates or predecessors from time to time.
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17. EFFECTIVE DATE. The Plan shall be effective as of September
21, 1999.
IN WITNESS WHEREOF, the Plan is executed by Boston Federal Savings Bank
on this ___________ day of March, 2000.
BOSTON FEDERAL SAVINGS BANK
By:
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