COASTWAY COMMUNITY BANK
2015 AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR WILLIAM A. WHITE
 
WHEREAS, this Supplemental Executive Retirement Plan for William A. White was
originally adopted effective January 1, 2011, by Coastway Community Bank (the
“Bank”) for the benefit of William A. White (the “Participant”) and was amended
January 1, 2013 (as “amended, the “Plan”); and.
 
WHEREAS, the Bank and the Participant wish to again amend and restate the Plan
in order to clarify permit the Participant to invest all or a portion of his
Liability Reserve Account (as defined below) in common stock of Coastway
Bancorp, Inc. (“Employer Stock”).
 
NOW THEREFORE, the Plan is hereby amended and restated as follows, effective
March 31, 2015.
 
ARTICLE I
 
DEFINITIONS
 
When used herein, the following words shall have the meanings below unless the
context clearly indicates otherwise:
 
1.1           “Beneficiary” means the person(s) designated by the Participant
from time to time, using the Beneficiary Designation Form set forth as Appendix
A, as the beneficiary(ies) to whom the deceased Participant’s account will be
payable. If no beneficiary is so designated, then the Participant’s estate will
be the Beneficiary.

  1.2           “Board” means the Bank’s Board of Directors.

  1.3           “Cause” means that the Participant has:  (a) been absent from
employment for an unauthorized period of more than one week; or (b) committed a
material breach of this Agreement; or (c) been grossly negligent in the
performance of his required duties; or (d) willfully failed to perform his
obligations under this Agreement; or (e) committed unethical, dishonest,
fraudulent, or criminal acts against the Bank; or (f) becomes unbondable.
 
1.4           “Change in Control” shall mean any of the following events: (i) a
change in the ownership of the Company or Bank; (ii) a change in the effective
control of the Company or Bank; or (iii) a change in the ownership of a
substantial portion of the assets of the Company or Bank, as described below:

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

 
 

--------------------------------------------------------------------------------

 

(b)           A change in the effective control of the Company or Bank occurs on
the date that either (A) any one person, or more than one person acting as a
group (as defined in Treasury Regulations section 1.409A-3(i)(5)(vi)(B))
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
Company or Bank possessing 30% or more of the total voting power of the stock of
the Company or Bank, or (B) a majority of the members of the Bank’s or the
Company’s Board of Directors is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members of
the Bank’s or the Company’s Board of Directors prior to the date of the
appointment or election, provided that this subsection is inapplicable where a
majority shareholder of the corporation is another corporation.

(c)           A change in the ownership of a substantial portion of the Bank’s
or the Company’s assets occurs on the date that any one person or more than one
person acting as a group (as defined in Treasury Regulations section
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 Company or Bank that have a total gross fair market value equal
to or more than 40% of the total gross fair market value of all of the assets of
the Company.  For purposes of this Agreement, “gross fair market value” means
the value of the assets of the Company or Bank, or the value of the assets being
disposed of, without regard to any liabilities associated with such assets.
 
(d)           For all purposes hereunder, the definition of Change in Control
shall be construed to be consistent with the requirements of Treasury
Regulations section 1.409A-3(i)(5), except to the extent that such regulations
are superseded by subsequent guidance.
 
  1.5           “Company” means Coastway Bancorp, Inc. or any successor thereto.
 
1.6           “Code” means the Internal Revenue Code of 1986, as amended from
time to time.
 
1.7           “Disabled” or “Disability” means that the Participant: (a) is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months; or (b) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than 3 months under an accident and health
plan covering employees of the Participant’s employer; or (c) is determined to
be disabled by the Social Security Administration.
 
1.8           “Employer Stock” means the common stock of the Company.
 
1.9           “Liability Reserve Account” means the balance to the credit of the
Participant in a bookkeeping account established and maintained by the Bank for
the benefit of the Participant under this Plan.
 
1.10           “Normal Retirement Age” means the Participant’s attainment of age
67 (i.e., April 9, 2023).
 
-2-

 
 

--------------------------------------------------------------------------------

 

1.11           “Separation from Service” or “Separates from Service” means the
Participant’s retirement or other termination of employment with the Company
within the meaning of Code Section 409A.  No Separation from Service shall be
deemed to occur due to military leave, sick leave or other bona fide leave of
absence if the period of such leave does not exceed six months or, if longer, so
long as the Participant’s right to reemployment is provided by law or
contract.  If the leave exceeds six months and the Participant’s right to
reemployment is not provided by law or by contract, then the Participant shall
have a Separation from Service on the first date immediately following such
six-month period.
 
Whether a Separation from Service has occurred is determined based on whether
the facts and circumstances indicate that the Company and the Participant
reasonably anticipated that no further services would be performed after a
certain date or that the level of bona fide services the Participant would
perform after such date (whether as an employee or as an independent contractor)
would permanently decrease to no more than 49% of the average level of bona fide
services performed over the immediately preceding 36 months (or such lesser
period of time in which the Participant performed services for the
Company).  The determination of whether the Participant has had a Separation
from Service shall be made by applying the presumptions set forth in the
Treasury Regulations under Code Section 409A.
 
1.12           “Unforeseeable Emergency” means a severe financial hardship to
the Participant resulting from an illness or accident of the Participant, the
Participant’s spouse or a dependent, loss of the Participant’s property due to
casualty, or other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the Participant, all within the
meaning of Treasury Regulations Section 1.409A-3(i)(3).
 

ARTICLE II
 
ELIGIBILITY AND VESTING
 

2.1           Eligibility.  The Plan is only available to the Participant.  The
Plan qualifies as a “top hat” plan as defined in ERISA.

2.2           Vesting.  As of January 1, 2011, the Participant shall be 50%
vested in his Liability Reserve Account.  On each December 31 thereafter, the
Participant shall become vested in an additional 5% of his Liability Reserve
Account, such that the Participant shall be fully vested in his Liability
Reserve Account after completing 10 years of vesting service, as set forth
below.  All contributions made after December 31, 2020 are 100% vested when
made.  Contributions are required under this Plan until April 9, 2023 (i.e.,
when the Participant attains age 67).
 
-3-

 
 

--------------------------------------------------------------------------------

 

Vesting Dates
Percentage of Interest Vested
December 31, 2011
55%
December 31, 2012
60%
December 31, 2013
65%
December 31, 2014
70%
December 31, 2015
75%
December 31, 2016
80%
December 31, 2017
85%
December 31, 2018
90%
December 31, 2019
95%
December 31, 2020
100%

Notwithstanding the foregoing, the Participant shall become fully vested in the
Liability Reserve Account upon his death, Disability or upon the occurrence of a
Change in Control.

ARTICLE III
 
FUNDING
 
3.1           Type of Plan.  The Plan is a nonqualified deferred compensation
plan, where the Bank accrues amounts annually in order to fund a future stream
of payments for the Participant.  The benefits provided under this Plan are not
based on any salary reduction by the Participant.  The Participant does not have
the option of receiving any current payment or bonus in lieu of the benefits
provided under this Plan.

3.2           Funding.

(a)           The Bank shall account for the Plan benefits using the regulatory
accounting principles of the Bank’s primary federal regulator.  The Bank shall
establish an accrued liability reserve account (the “Liability Reserve Account”)
for the benefit of the Participant into which appropriate reserves shall be
accrued for the Participant until the Participant has attained Normal Retirement
Age.

(b)           Notwithstanding the preceding sentence, the Participant, his
Beneficiaries or any successor in interest to him shall be and remain simply a
general creditor of the Bank in the same manner as any other creditor having a
general claim for unpaid compensation. The Participant, his Beneficiaries, or
any other person claiming through Participant, shall only have the right to
receive from the Bank those payments as specified under this Plan.

(c)           The Bank reserves the absolute right, at its sole discretion, to
either informally fund the obligations undertaken by this Plan by setting aside
assets in a “rabbi trust,” within the meaning of Internal Revenue Procedure
92-64, or other vehicle pursuant to which assets are held solely in the name of
the Bank or to refrain from funding the same and to determine the extent,
nature, and method of such informal funding. The Bank may establish a rabbi
trust into which the Bank may contribute assets which shall be held therein,
pursuant to the agreement which establishes such rabbi trust.  The contributed
assets shall be subject to the claims of the Bank’s creditors in the event of
the Bank’s “insolvency” as defined in the agreement which establishes such rabbi
trust, until the contributed assets are paid to the Participant or his
Beneficiary(ies) in such manner and at such times as specified in this
Plan.  Should the Bank elect to fund this Plan, in whole or in part, through the
establishment of a rabbi trust, the Bank reserves the absolute right, in its
sole discretion, to terminate such funding at any time, in whole or in part.
 
-4-

 
 

--------------------------------------------------------------------------------

 

(d)           At no time shall the Participant be deemed to have any lien nor
right, title or interest in or to any specific funding investment or to any
assets of the Bank. Any asset used or acquired by the Bank in connection with
the liabilities it has assumed under this Plan shall not be deemed to be held
under any trust for the benefit of the Participant or his Beneficiaries, nor
shall it be considered security for the performance of the obligations of the
Bank. It shall be, and remain, a general, unpledged, and unrestricted asset of
the Bank. The Participant or any Beneficiary under this Plan shall not have any
power or right to transfer, assign, anticipate, hypothecate, mortgage, commute,
modify or otherwise encumber in advance any of the benefits payable hereunder,
nor shall any of said benefits be subject to seizure for the payment of any
debts, judgments, alimony or separate maintenance owed by the Participant or his
Beneficiary, nor be transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. In the event the Participant or any Beneficiary
attempts assignment, communication, hypothecation, transfer or disposal of the
benefits hereunder, the Bank’s liabilities shall forthwith cease and terminate.

 
ARTICLE IV
 
BENEFITS
 

4.1           Benefit Amount. Effective January 1, 2011 the Bank shall make an
initial contribution to the Participant’s Liability Reserve Account of
$450,000.00.  Each January 1 thereafter, until April 9, 2023 (i.e., when the
Participant attains age 67), the Bank shall make a contribution of $72,000.00 to
the Participant’s Liability Reserve Account.  If the Participant terminates
employment before April 9, 2023, the Bank’s obligation to make such
contributions shall cease as of the date of such termination of employment.

4.2           Investments. The Participant shall have the right to provide the
Board with investment directions for the entire balance in his Liability Reserve
Account.  Effective as of March 31, 2015, the Participant shall have the right
to invest all or a portion of his Liability Reserve Account in Employer Stock,
provided, however, that to the extent that the Participant elects to invest all
or a portion of the Participant’s Liability Reserve Account in Employer Stock,
the Participant cannot later liquidate such Employer Stock or exchange such
Employer Stock for other investments.  Upon distribution of the Participant’s
interest in his Liability Reserve Account, any amount invested in Employer Stock
shall be distributed in-kind.  All earnings or losses as a result of such
investments are the sole responsibility of the Participant, such that the Bank
is not obligated to make up any losses incurred as a result of investment
performance.
 
-5-

 
 

--------------------------------------------------------------------------------

 

4.3           Normal Retirement Benefit. Upon Participant’s Separation from
Service on or after attaining age 67, the Bank shall pay the Participant’s
Retirement Benefit in 10 approximately equal annual installments on the first
business day of January immediately following the Participant’s Separation from
Service, provided, however, that in the event the Participant dies before
receiving 10 annual installments, the Bank shall pay the remainder of the
Participant’s Liability Reserve Account the Participant’s Beneficiary as a lump
sum no later than the first day of the second calendar month following the
Participant’s date of death.  The amount of the Retirement Benefit shall equal
the then-current value of the Participant’s vested Liability Reserve Account,
divided by the number of payments remaining to be made to the Participant.  For
example, if the Participant has a Separation from Service on December 31, 2019,
the first payment owed to the Participant will equal the value of the
Participant’s vested Liability Reserve Account on January 1, 2020 divided by
10.  The second payment owed to the Participant (payable on January 2, 2021)
equals the value of the Participant’s vested Liability Reserve Account on
January 1, 2021 divided by 9.  The third payment owed to the Participant
(payable on January 2, 2022) equals the value of the Participant’s vested
Liability Reserve Account on January 1, 2022 divided by 8, etc.  Notwithstanding
the foregoing, to the extent that the Participant has Employer Stock in his
Liability Reserve Account, the Participant can select whether such Employer
Stock will be distributed in one or more of the installments and the order of
the installments in which it is distributed (i.e., first, last or some other
order), subject only to the requirement that the installments be approximately
equal.

4.4           Disability.  If a Participant becomes Disabled before reaching his
Normal Retirement Date, the Participant shall be entitled to a lump sum payment
of the Participant’s Liability Reserve Account, determined as of the date the
Participant became Disabled.  Such payment shall be made no later than the first
day of the second calendar month after the date the Participant became Disabled.

4.5           Death Before Normal Retirement Age.  If a Participant dies before
reaching his Normal Retirement Age, the Participant’s Beneficiaries shall be
entitled to a lump sum payment of the Participant’s Liability Reserve Account,
determined as of the Participant’s date of death.  Such payment shall be made no
later than the first day of the second calendar month after the date the
Participant died.

4.6           Separation from Service Before Normal Retirement Age or For
Cause.  In the event of the Participant’s Separation from Service prior to
Normal Retirement Age for reasons other than death, Disability, or Separation
from Service due to Cause, the Participant shall be paid the vested portion of
the Participant’s Liability Reserve Account (which shall be fully vested in the
event of a Separation from Service in connection with or following a Change in
Control) in a lump sum no later than the first day of the second calendar month
following the date of the Participant’s Separation from Service, unless the
Participant is a “specified employee” under Code Section 409A, in which case
such payment shall be made on the first day of the seventh month after such
Separation from Service.  In the event the Participant’s employment is
terminated for Cause, the Participant shall forfeit all benefits under this
Plan.

4.7           Unforeseeable Emergency.  A Participant may apply to the Board for
an Unforeseeable Emergency distribution.  Such distribution shall be paid no
later than 90 days after the Board determines that the Participant has suffered
an Unforeseeable Emergency.  The amount of the distribution shall be limited to
only the vested portion of the Participant’s Liability Reserve Account and no
more may be paid to the Participant than the amount that is reasonably necessary
to satisfy the Participant’s Unforeseeable Emergency, including payment of any
taxes that are owed due to the distribution.  A distribution may not be paid
under this Section to the extent the Unforeseeable Emergency is or may be
relieved:
 
-6-

 
 

--------------------------------------------------------------------------------

 

(a)           through reimbursement or compensation by insurance, or otherwise;
 
(b)           by liquidation of Participant’s assets, to the extent such
liquidation would not in itself cause financial hardship; or
 
(c)           by cessation of elective deferrals under the Bank’s tax-qualified
retirement plans.
 

ARTICLE V
 
ADMINISTRATION
 
5.1           Administrator. The Board shall be the named fiduciary and
administrator of this Plan.  As administrator, the Board shall be responsible
for the management, control and administration of the Plan as established
herein. The Board may delegate to others certain aspects of the management and
operational responsibilities of the Plan, including the employment of advisors
and the delegation of ministerial duties to qualified individuals.
 
5.2           Claims Procedure.  In the event that benefits under this Plan are
not paid to Participant (or to his Beneficiary in the case of Participant’s
death) and such claimants feel they are entitled to receive such benefits, then
a written claim must be made to the Board within 60 days from the date payments
are refused. The Board shall review the written claim and, if the claim is
denied, in whole or in part, they shall provide in writing within 60 days of
receipt of such claim their specific reasons for such denial, reference to the
provisions of this Plan upon which the denial is based and any additional
material or information necessary to perfect the claim. Such written notice
shall further indicate the additional steps to be taken by claimants if a
further review of the claim denial is desired.
 
5.3           Appeal.  If claimants desire a second review, they shall notify
the Board in writing within 60 days of the first claim denial. Claimants may
review the Plan or any documents relating thereto and submit any issues, in
writing, and comments they may feel appropriate. In its sole discretion, the
Board shall then review the second claim and provide a written decision within
60 days of receipt of such claim. This decision shall likewise state the
specific reasons for the decision and shall include reference to specific
provisions of the Plan upon which the decision is based.
 
5.4           Arbitration.  Any controversy or claim arising out of or relating
to this Plan, or the breach thereof, shall be settled by arbitration in the
State of Rhode Island administrated by the American Arbitration Association in
accordance with its rules.  Judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof.
 
-7-

 
 

--------------------------------------------------------------------------------

 

ARTICLE VI
 
AMENDMENT OR TERMINATION
 
6.1           Amendment.  This Plan may not be altered, amended, changed,
modified, revised, supplemented, or terminated at any time except by means of
the mutual written agreement of the Participant and the Board.
 
6.2           Termination. The Bank reserves the right to terminate the Plan at
any time.  Upon Plan termination, the Board shall determine whether all payments
of benefits shall be made in accordance with the normal distribution schedule
set forth under the Plan or if payment of benefits shall be accelerated in order
to wind down the Plan.  To the extent any benefits under the Plan are subject to
Code Section 409A, any acceleration of the payment of such benefits due to Plan
termination shall comply with the following.  The termination of the Plan with
accelerated payment of benefits may not be undertaken if such termination is
proximate to an economic downturn of the Bank.  Such termination must also
satisfy the following conditions and any other requirements of Code Section 409A
 
(a)           all arrangements sponsored by the Bank that would be aggregated
with this Plan under Treasury Regulations Section 1.409A-1(c)(2) if the
Participant covered by this Plan was also covered by any of those other
arrangements are also terminated;
 
(b)           no payments other than payments that would be payable under the
terms of the arrangement if the termination had not occurred are made within 12
months of the termination of the arrangement;
 
(c)           all payments are made within 24 months of the termination of the
arrangements; and
 
(d)           the Bank does not adopt a new arrangement that would be aggregated
with any terminated arrangement under Treasury Regulations Section
1.409A-1(c)(2) if the same Participant participated in both arrangements, at any
time within three years following the date of termination of the arrangement.
 

ARTICLE VII
 
MISCELLANEOUS
 
7.1           No Effect on Employment Rights.  Nothing contained herein shall
confer upon the Participant the right to be retained in the service of the Bank
nor limit the right of the Bank to discharge or otherwise deal with Participant
without regard to the existence of this Plan.
 
7.2           Governing Law.  The Plan is established under, and will be
construed according to, the laws of the State of Rhode Island, to the extent
that such laws are not preempted by ERISA.
 
-8-

 
 

--------------------------------------------------------------------------------

 

7.3           Severability.  In the event that any provision of this Plan is
held to be inoperative or invalid by any court of competent jurisdiction, then:
(1) insofar as is reasonable, effect will be given to the intent manifested in
such provision, and (2) the validity and enforceability of the remaining
provisions will not be affected thereby.
 
7.4           Tax Withholding.  The Bank may withhold from any benefit payable
under this Plan all federal, state, city, income, employment or other taxes as
shall be required pursuant to any law or governmental regulation then in effect.
 
7.5           Entire Agreement.  This Plan sets forth the entire understanding
of the parties hereto with respect to the transactions contemplated hereby, and
any previous Plans or understandings between the parties hereto regarding the
subject matter hereof are merged into and superseded by this Plan.
 
7.6           Acceleration of Payments.  Except as specifically permitted herein
or in other sections of this Plan, no acceleration of the time or schedule of
any payment may be made hereunder.  Notwithstanding the foregoing, payments may
be accelerated hereunder by the Bank, in accordance with the provisions of
Treasury Regulation Section 1.409A-3(j)(4) and any subsequent guidance issued by
the United States Treasury Department.  Accordingly, payments may be
accelerated, in accordance with requirements and conditions of the Treasury
Regulations (or subsequent guidance) in the following circumstances: (i) as a
result of certain domestic relations orders; (ii) in compliance with ethics
agreements with the Federal government; (iii) in compliance with ethics laws or
conflicts of interest laws; (iv) in limited cash-outs (but not in excess of the
limit under Code Section 402(g)(1)(B)); (v) in the case of certain distributions
to avoid a non-allocation year under Code Section 409(p); (vi) to apply certain
offsets in satisfaction of a debt of the Participant to the Bank; (vii) in
satisfaction of certain bona fide disputes between the Participant and the Bank;
or (viii) for any other purpose set forth in the Treasury Regulations and
subsequent guidance.
 
  7.7           Required Provision.  Any payments made to the Participant
pursuant to this Plan, or otherwise, are subject to and conditioned upon their
compliance with 12 U.S.C. § 1828(k) and any regulations promulgated thereunder.

IN WITNESS WHEREOF, the Participant and a duly authorized officer of the Bank
have signed this Plan on the date set forth below.

 

   
COASTWAY COMMUNITY BANK
                 
 April 23, 2015
 
 /s/ Mark E. Crevier
  Date  
By: Mark E. Crevier, Chairman of the Board of Directors
     

 
-9-

 
 

--------------------------------------------------------------------------------

 

 

   
PARTICIPANT
                 
 April 23, 2015
 
 /s/ William A. White
  Date  
William A. White
     

 -10-