Exhibit 10.5
AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT is made this day of August 21, 2007
between Slade's Ferry Bancorp, a Massachusetts Corporation, with its principal
place of business in Somerset, Massachusetts, hereafter referred to as the
Employer, or the Corporation, and Mary Lynn Lenz, President and Chief Executive
Officer of the Corporation hereafter referred to as the Employee.
Employee is employed by the Corporation and its subsidiary, Slade's Ferry
Bank ("the Bank"), in key positions and the Corporation wishes to provide
additional incentive to retain the services of Employee until her retirement.
THEREFORE, in consideration of these premises and the mutual promises and
obligation set forth hereafter, Mary Lynn Lenz as Employee and the Corporation
as Employer agree as follows:
1. The Corporation agrees that, if Employee remains continuously employed by
the Corporation and/or its subsidiary Bank until her retirement, in such
offices and capacities as she may be elected to by the Board of Directors of
either entity, or in any such offices, roles, and capacities which she
otherwise holds on behalf of the Corporation and/or its subsidiary Bank, at
such compensation as may be mutually agreed upon, the Corporation and/or Bank
will pay and the Employee shall be entitled to receive additional compensation
in the amount of $3,000.00 per month for one hundred twenty (120) months
commencing on the first day of the first month following her retirement.
2. (a) The Corporation agrees that the Employee may retire from full-time
employment upon the first day of the month immediately following her 62nd
birthday, or at any time prior thereto after completing fifteen (15) years
continuous employment with the Corporation if she becomes permanently and
totally disabled as defined in paragraph (b) or at anytime following her 62nd
birthday, but not later than the first day of February following her 70th
birthday hereinafter referred to as the Retirement Date.
(b) Employee shall be deemed to have become permanently and totally
disabled if and when the Board of Directors of the Corporation determines, on
the basis of medical or other evidence satisfactory to it, that the Employee
qualifies as disabled under any applicable Long-Term disability plan, policy or
program provided or utilized by the Corporation or Bank or under the Social
Security Act (42 U.S.C. Section 1382) as amended for the purpose of
supplemental security income.
3. (a) The Corporation agrees that, in the event of the death of the Employee
after completing fifteen (15) years of continuous employment with the
Corporation and prior to the Retirement Date while employed by the Corporation,
it will pay to her surviving spouse, if any, or, if none, in equal shares to
her children then living and deceased children leaving issue then living by
right of representation, or to such other persons as she may have designated,
or if none, to her estate, $3,000.00 per month for one hundred and twenty (120)
consecutive months commencing upon the first day of the first month following
the date of death of the Employee. If
any beneficiary should die prior to the receipt of all such payments, any
remaining payments shall be made to such beneficiary's estate.
4. The Corporation agrees to pay to or for the benefit of Employee from the
date of her retirement and thereafter for and during the term of her natural
life such amounts as are required for the employer contribution to provide
medical health insurance coverage comparable to that provided immediately
before her retirement, supplemental to Medicare as it may be amended, in the
form of Blue Cross/Blue Shield Medex Gold or its substantial equivalent
according to the schedule of contribution by the Corporation or the Bank and
the Employee as is in effect for the Corporation's (or the Bank's, if provided
through the Bank) employees generally at the time of Employee's retirement.
The Corporation agrees to pay to or for the benefit of Employee's spouse,
such amounts as are required according to the schedule of contribution by the
Corporation or the Bank and the Employee, as amended from time to time, to
provide master medical health insurance in effect at the Corporation or the
Bank and available to employees generally, or its equivalent, for Employee's
spouse until he attains the age of 65 years or obtains coverage under the
Medicare program, whichever first occurs, and thereafter to pay such amounts as
are required under such schedule of contribution as is in effect at that time
to provide comparable medical health insurance coverage supplemental to
Medicare as it may be amended, in the form of Blue Cross/Blue Shield Medex
Gold, or its substantial equivalent, for and during the term of his natural
life.
5. Employee's rights and benefits under this Agreement are in addition to and
not a substitute for Employee's rights and benefits under the Corporation or
Bank's other retirement disability or benefit plans. Subject to the terms of
the group life insurance policy in force at the time of retirement, the Bank
will continue to include the Employee in the current group life insurance
policy in force at the time of retirement.
6. In the event that the Employee should die on or after the Retirement Date,
but prior to receipt of any amount to which she is entitled hereunder pursuant
to Paragraph 1, or of all such amounts, any amounts remaining unpaid shall be
paid to such beneficiary or beneficiaries as the Employee may designate by
filing with the Corporation a notice in writing, but in the absence of any such
designation, such unpaid amounts shall be so paid to her surviving spouse, if
any, or, if none, in equal shares to her children then living and deceased
children leaving issue then living by right of representation, and if none,
then to her estate.
7. Whenever the Employee's beneficiaries (other than her, her spouse's, or
any beneficiary's estate) shall be entitled to receive any amount hereunder, the
amount shall be paid to such beneficiaries in monthly installments: (a) over a
period of ten (10) years, in the event that no monthly installment payments
have theretofore commenced to the Employee, or (b) for the balance of the ten
(10) year period (commencing with the first such installment so received by the
Employee), on the same due dates, in the event payment of monthly installments
shall have theretofore commenced to the Employee.
8. Notwithstanding any other provision of this Agreement to the contrary, the
Employee shall have the right, with the consent of the Corporation, to elect
that payment of the amounts
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due hereunder be made (a) over a longer period than one hundred and twenty
(120) months or (b) as a life annuity (with or without refund); provided,
however, that
(i) Any such election shall not take effect until twelve (12) months
after it is received by the Corporation; and
(ii) In the case of an election to defer a payment to be made on account
of an event other than the Employee's death, disability or Unforeseeable
Emergency (defined below), the first payment made under such election
shall not occur until at least five (5) years later than such payment
would have otherwise have been made.
"Unforeseeable Emergency" as used herein means, with respect to an
Employee, a severe financial hardship to the Employee resulting from an illness
or accident of the Employee, the Employee's spouse or a dependent (within the
meaning of Section 152(e) of the Internal Revenue Code of 1986, as amended (the
"Code")) of the Employee, loss of the Employee's property due to casualty, or
other similar extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Employee. The existence of an Unforeseeable
Emergency shall be determined by the Corporation in accordance with Section
409A of the Code and the regulations hereunder.
9. Notwithstanding anything in this Agreement to the contrary, if the
Corporation determines that Employee is a "key employee" within the meaning of
Section 409A of the Code and that, as a result of such status, any portion of
the payments under this Agreement would be subject to additional taxation, the
Corporation will delay paying all or any portion of such amount until the
earliest permissible date on which payments may commence without triggering
such additional taxation (with such delay not to exceed six (6) months from the
date of Employee's separation from service), with the first such payment to
include any amounts that would have been paid earlier but for the above delay.
10. As used herein the term "Value of the Account" shall mean an amount equal
to the sum of the monthly remaining payments for the remaining period of
payment discounted at the prime lending rate as published in the Wall Street
Journal on the first Monday after the event triggering the valuation.
11. Except as otherwise expressly provided in this Agreement, Employee agrees
on behalf of herself and of her executors and administrators, heirs, legatees,
distributes, and any other person or, persons claiming any benefits under her
under this Agreement that this Agreement and its rights, interests, and
benefits shall not be assigned, transferred, pledged, or hypothecated in any
way by Employee or any executor, administrators, heir, legatee, distributee, or
other person claiming under Employee by virtue of this Agreement, and shall not
be subject to execution, attachment, or similar process. Any attempted
assignment, transfer, pledge or hypothecation, or other disposition of this
Agreement or of such rights, interests, and benefits contrary to the above
provisions, or the levy of any attachment or similar process thereupon, shall
be null and void and without effect.
12. This Agreement does not constitute an employment agreement. Nothing
contained in this Agreement shall be construed to be a contract of employment
for any term of years, nor as
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conferring upon the Employee the right to continue to be employed by the
Corporation or the Bank in her present capacity, or in any other capacity. It
is expressly understood by the parties hereto that this Agreement relates
exclusively to additional compensation for the Employee's services, which
compensation is payable after her retirement from full-time service with the
Corporation and the Bank or her death, and is not intended to be an employment
contract. The benefits payable under this Agreement shall be independent of,
and in addition to, any benefits under any other employment agreement that may
exist from time to time between the parties hereto, or any other compensation
payable by the Corporation to the Employee whether as salary or otherwise. In
the event that Employee's employment is terminated for any reason other than
her death or retirement under the provision of paragraphs 2 and 3 hereof, this
Agreement shall automatically terminate and the Corporation shall have no
further obligation hereunder.
13. The rights of the Employee under this Agreement and of any beneficiary of
the Employee shall be solely those of an unsecured creditor of the Corporation,
and neither the Employee nor any beneficiary of the Employee shall have or
acquire any interest, rights or claims to any property or assets of the
Corporation by virtue of this Agreement except as set forth in paragraph 16(b).
The Corporation's obligation hereunder, except as set forth in paragraph 16(b),
shall be an unfunded and unsecured promise to pay money in the future.
14. Hereafter, either during her full-time employment or while she is
receiving any benefits under this Agreement, Employee agrees that she will not
enter into competition with the Corporation or the Bank, directly or indirectly,
within the Town of Somerset or a fifty (50) mile radius thereof, either as a
director, officer, employee, agent, consultant, partner or any other capacity
with any business which is in substantial competition with the Corporation or
the Bank. The reasonable judgment of a majority of the Board of Directors that
such competition exists shall be conclusive for the purposes of this Agreement.
This provision shall not be construed to prevent the Employee from owning shares
in any publicly traded corporation for investment purposes.
15. In the event that Employee should violate the provisions of Article 14
hereof, and should she continue to do so without adequate cause for a period
thirty of days after the Corporation shall have requested her in writing to
refrain from an action prohibited by said Article 14, Employee agrees that no
further payments shall be due her, her spouse, or any other designated
beneficiary under this Agreement and that the Corporation shall have no further
obligation whatsoever hereunder. Any disputes hereunder shall be referred to
arbitration pursuant to Article 17 hereof.
16. (a) The Corporation agrees that it will not merge or consolidate with any
other corporation or organization, or permit its business to be taken over by
any other organization, unless and until the succeeding or continuing
corporation or other organization shall expressly assume the rights and
obligations of the Corporation herein set forth. The Corporation further agrees
that it will not cease its business activities or terminate its existence,
other than as heretofore set forth in this Article, without having made
adequate provision for the fulfilling of its obligations hereunder.
(b) In the event of a Change of Control (as defined below) of the
Corporation, the Corporation shall immediately fund, within 90 days of the
change of control, the unpaid portion
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of Employee's compensation hereunder by establishing an irrevocable trust
account with an independent corporate Trustee which is a national or state
charted bank with Trustee powers located in Massachusetts or Rhode Island,
funded with an amount which will be sufficient to meet all of Employer's
obligations hereunder. The terms of the Trust shall meet the requirements of
the Internal Revenue Service for "rabbi trusts" and shall generally provide as
set forth herein modified or expanded as necessary to meet said IRS
requirements. The Trust fund shall be held and managed by the Trustee for the
exclusive purpose of providing the compensation hereunder to Employee hereunder
and the Trustee shall act as agent of the Corporation by making payments of
benefits to the Employee in accordance with the terms hereof. Any and all
expenses and taxes incurred by reason of the Trust and its income shall be paid
by the Corporation. After all benefits payable hereunder have been paid to the
Employee or her beneficiaries or after this Agreement has otherwise properly
terminated under its terms, any amounts remaining in the Trust account shall
revert to Corporation. Except for the rights of creditors in the event of
Corporation's bankruptcy or receivership, Corporation shall have no right to
reclaim amounts contributed to the Trust hereunder until all benefits have been
paid or this Agreement has properly terminated under its terms. In the event of
Corporation's bankruptcy or receivership, the Trustee shall, upon proper
notice, deliver all assets held hereunder to the Trustee in bankruptcy or the
duly court appointed receiver for the benefit of the general creditors
(including Employee) of Corporation.
"Change of Control" as used herein means any merger or consolidation with
or acquisition by any other organization, the sale of substantially all the
assets of the Corporation to another person or organization, or the acquisition
directly or indirectly of 20% or more of the common stock of the Corporation by
one or more persons or organizations acting in concert.
17. Unless otherwise provided in this Agreement, any controversy or claim
arising out of or relating to this contract, or the breach thereof, shall be
settled by arbitration in accordance with the Rules of the American Arbitration
Association, and judgment upon the award rendered by the Arbitrator(s) may be
entered in any Court having jurisdiction thereof. The Corporation agrees that
it will pay Employee's costs including reasonable attorneys' fees in connection
with any controversy or claim hereunder in which Employee prevails or in which
the Arbitrator(s) or court determine that the Corporation should pay such
costs.
18. This Agreement shall be binding upon and inure to the benefit of the
parties, the Corporation's successors and assigns, and the Employee's heirs,
beneficiaries, executors and administrators.
19. This Agreement shall be construed and administered in such manner as shall
be necessary to effect compliance with Section 409A. If and to the extent that
you or the Corporation reasonably determine that any amount payable under this
Agreement or the manner of administration of this Agreement would fail to
satisfy any applicable requirement of Section 409A of the Code and trigger the
additional tax and/or penalties or interest imposed by Section 409A of the
Code, the Agreement shall be administered, modified, and/or amended to bring it
into compliance with Section 409A of the Code and avoid such additional tax,
penalties or interest, and preserve the intended amounts and benefits payable
to Employee.
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IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first written above.
Slade's Ferry Bancorp
By: /s/ Paul Downey
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Title: Lead Director
/s/ Mary Lynn Lenz
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Mary Lynn Lenz
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