Exhibit 10.8

 

PILGRIM BANK

RETENTION BONUS AGREEMENT

 

This Retention Bonus Agreement (the “Agreement”) is entered into on this 15th
day of June, 2017 by and between Pilgrim Bank (the "Bank") and Christopher G.
McCourt (the "Executive"). To incentivize and retain the Executive, the Bank is
willing to provide a cash retention bonus payable at the end of a specified
period as defined herein, provided that the Executive is continuously employed
with the Bank at the end of the specified period. The objective of this
Agreement is to align the interests of the Executive with the interests of the
Bank to obtain superior results for the Bank and to encourage the Executive to
remain employed with the Bank. The retention bonus award under this Agreement is
intended to be exempt from Section 409A of the Internal Revenue Code under the
“short term deferral rule” set forth in Treasury Regulations Section
1.409A-1(b)(4). Furthermore, this Agreement is intended to be a "bonus program"
under U.S. Department of Labor regulation 2510.3-2(c) and shall be construed and
administered in accordance with such intention.

 

ARTICLE I

Definitions

 

Definitions. For purposes of this Agreement, the following terms may have the
meanings indicated, unless the context clearly indicates otherwise:

 

1.1           “Annual Retention Bonus Award" means an amount equal to five (5)
percent of Executive's Base Salary in effect as of the last day of each Plan
Year.

 

1.2           "Base Salary" means the annual rate of base salary paid to
Executive by the Bank.

 

1.3           “Beneficiary” means the person or persons (and their heirs)
designated as Beneficiary by the Executive to whom the deceased Executive’s
benefits are payable. If no Beneficiary is designated, then the Executive's
spouse, if living, will be deemed the Beneficiary. If the Executive's spouse is
not living, then the children of the Executive will be deemed the Beneficiaries
and will take on a per stirpes basis. If there are no living children, then the
estate of the Executive will be deemed the Beneficiary.

 

1.4           “Cause” shall have the same meaning as set forth in any employment
agreement or change in control agreement between the Bank or the Company and the
Executive. If the Executive is not a party to an employment agreement or change
in control agreement with the Bank or the Company, then Cause means a good faith
determination of the Board of Directors of the Executive’s: (1) personal
dishonesty; (2) incompetence; (3) willful misconduct; (4) breach of fiduciary
duty involving personal profit; (5) intentional failure to perform stated
duties; or (6) willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or final cease and desist order.

 

1.5           “Change in Control” means: (a) a change in the ownership of the
Bank; (b) a change in the effective control of the Bank; or (c) a change in the
ownership of a substantial portion of the assets of the Bank as defined in
accordance with Code Section 409A. For purposes of this Section 1.4, the term
“Bank” shall be defined to include the Company or any successor thereto.

 

 

 

 

(a)        A change in the ownership of a corporation occurs on the date that
any one person, or more than one person acting as a group (as defined in
Treasury Regulation 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the
Bank that, together with stock held by such person or group, constitutes more
than 50 percent of the total fair market value or total voting power of the
stock of such corporation.

 

(b)          A change in the effective control of the Bank occurs on the date
that either (i) any one person, or more than one person acting as a group (as
defined in Treasury Regulation 1.409A-3(i)(5)(vi)(D)) acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) ownership of stock of the Bank possessing 30 percent or
more of the total voting power of the stock of the Bank, or (ii) a majority of
the members of the Board is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members of
the Board prior to the date of the appointment or election, provided that this
subsection “(ii)” is inapplicable where a majority shareholder of the Bank is
another corporation.

 

(c)          A change in a substantial portion of the Bank’s assets occurs on
the date that any one person or more than one person acting as a group (as
defined in Treasury Regulation 1.409A-3(i)(5)(vii)(C)) acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) assets from the Bank that have a total gross fair market
value equal to or more than 40 percent of the total gross fair market value of
(i) all of the assets of the Bank, or (ii) the value of the assets being
disposed of, either of which is determined without regard to any liabilities
associated with such assets. For all purposes hereunder, the definition of
Change in Control shall be construed to be consistent with the requirements of
Treasury Regulation 1.409A-3(i)(5), except to the extent that such regulations
are superseded by subsequent guidance.

 

(d)          For all purposes hereunder, the definition of Change in Control
shall be construed to be consistent with the requirements of Treasury Regulation
Section 1.409A-3(i)(5), except to the extent modified herein.

 

1.6           “Code” means the Internal Revenue Code of 1986, as amended from
time to time.

 

1.7           “Committee” means the Compensation Committee of the Bank’s Board
of Directors.

 

1.8           "Company" means Pilgrim Bancshares, Inc., the stock holding
company of the Bank.

 

1.9           “Disability” or “Disabled” has the meaning given to such term in
Code Section 409A.

 

1.10         “Good Reason” exists in the event of any of following events which
occur without the Executive’s consent: (1) there is a material reduction in the
Executive’s base compensation; (2) there is a material diminution in the
Executive’s duties and responsibilities; or (3) there is a permanent change in
the Executive’s primary place of employment by more than 25 miles from the
Executive’s primary place of employment at the time of this Agreement. In the
event a Executive has Good Reason to resign, the Executive must give the Bank
written notice of such Good Reason at least 90 days before the Executive’s
expected date of termination of employment. The Bank shall then have at least 30
days to cure the Good Reason, provided, however, the Bank may waive such cure
period.

 

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1.11         “Involuntary Termination” means an involuntary termination of
employment without Cause, including the Executive's resignation for Good Reason.

 

1.12         “Plan Year” means each calendar year during the Retention Period.

 

1.13         “Retention Period” means the five-year period commencing on January
1, 2017 and ending on December 31, 2021.

 

1.14         "Retention Bonus Account" means a bookkeeping account to which the
Bank shall credit any Annual Retention Bonus Award received by the Executive.
The Retention Bonus Account shall be utilized solely as a device for determining
the amounts to be paid to the Executive pursuant to the Agreement, and shall not
constitute or be treated as a trust fund of any kind.

 

1.15         "Retention Bonus Account Balance" means the balance of the
Executive's Retention Bonus Account as of the applicable distribution date.

 

ARTICLE II

Annual Retention Bonus Awards

 

On the last day of each Plan Year during the Retention Period, the Bank shall
credit to the Executive's Retention Bonus Account an amount equal to the Annual
Retention Bonus Award, provided, however, that such Annual Retention Bonus Award
shall only be credited if the Executive is employed with the Bank as of the last
day of the Plan Year. No interest or earnings shall be credited by the Bank to
the Executive's Retention Bonus Account.

 

ARTICLE III

Payment of Retention Bonus

 

3.1           Completion of the Retention Period. If the Executive remains
employed with the Bank for the duration of the Retention Period, then the
Executive shall receive a cash lump sum payment equal to his Retention Bonus
Account Balance, with such payment to be made by the Bank within 30 days
following the completion of the Retention Period.

 

3.2           Termination Before the End of the Retention Period. Except in the
case of death, Disability, Involuntary Termination (including in connection with
a Change in Control), the Executive's termination of employment prior to the
Retention Period shall result in the forfeiture of his contractual right to any
portion of his Retention Bonus Account Balance. However, if the Executive's
termination of employment occurs before the end of the Retention Period due to:
(1) death; (2) Disability; or (3) Involuntary Termination (including in
connection with a Change in Control), the Executive (or the Executive's
Beneficiary in the event death) shall receive a cash lump sum payment equal to
his Retention Bonus Account Balance as of the Executive's date of termination,
with such payment to be made by the Bank within 30 days following the
Executive's date of termination.

 

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ARTICLE IV

Modification and Waiver

 

4.1           Right to Modify or Amend. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties hereto.

 

4.2           Waiver. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.

 

ARTICLE V

Miscellaneous

 

5.1           Binding Effect. This Agreement shall be binding on the Bank and
its successors.

 

5.2           No Guarantee of Employment. This Agreement is not an employment
policy or contract. Nothing contained herein will confer upon Executive the
right to be retained in the service of the Bank nor limit the right of the Bank
to discharge or otherwise deal with the Executive without regard to the
existence of this Agreement.

 

5.3           Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached, or encumbered in any manner.

 

5.4           Applicable Law. This Agreement and all rights hereunder shall be
governed by the laws of the Commonwealth of Massachusetts, except to the extent
preempted by the laws of the United States of America.

 

5.5           Entire Agreement. This Agreement constitutes the entire agreement
between the Bank and the Executive as to the subject matter hereof. No rights
are granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.

 

5.6           Regulatory and Tax Provisions.

 

(a)          Notwithstanding anything herein to the contrary, any payments to
the Executive pursuant to this Agreement or otherwise, are subject to and
conditioned upon their compliance with Section 18(k) of the Federal Deposit
Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated
thereunder in 12 C.F.R. Part 359.

(b)          Notwithstanding anything else in this Agreement to the contrary,
Executive's employment shall not be deemed to have been terminated for purposes
of this Agreement unless and until the Executive has a "Separation from Service"
within the meaning of Code Section 409A. For all purposes hereunder, the
definition of Separation from Service shall be interpreted consistent with
Treasury Regulation Section 1.409A-1(h)(ii). If the Executive is a “specified
employee” (i.e., a “key employee” of a publicly traded company within the
meaning of Section 409A of the Code and the final regulations issued thereunder)
and any payment under this Agreement is triggered due to the Executive's
Separation from Service (other than due to Disability or death), then solely to
the extent necessary to avoid penalties under Section 409A of the Code, no
payment shall be made during the first six (6) months following the Executive's
Separation from Service. Rather, any payment which would otherwise be paid to
the Executive during such period shall be accumulated and paid to the Executive
in a lump sum on the first day of the seventh (7th) month following such
Separation from Service.

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as the date
first written above.

 

  PILGRIM BANK         By:   /s/ Francis E. Campbell     Francis E. Campbell    
Chairman, President and CEO         EXECUTIVE         By:   /s/ Christopher G.
McCourt     Christopher G. McCourt     Executive Vice President and Chief
Financial Officer

 

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