EXHIBIT 10.5

 
 
 

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PEOPLES FEDERAL BANCSHARES, INC. AND
PEOPLES FEDERAL SAVINGS BANK

AMENDED AND RESTATED
VOLUNTARY DEFERRED COMPENSATION
AND
SUPPLEMENTAL EMPLOYEE STOCK OWNERSHIP
PLAN
FOR EXECUTIVES

Initially Effective January 1, 2006
Amended December 16, 2008
Amendment and Restatement Effective September 21, 2010

 
 
 

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TABLE OF CONTENTS
 
1.
Purpose of Plan
1
     
2.
Administration
2
     
3.
Eligibility
2
     
4.
Deferrals of Compensation
2
     
5.
Supplemental ESOP Benefits
2
     
6.
Accounts under the Plan
3
     
7.
Deemed Investment of Accounts
3
     
8.
Change in Investment Directions
4
     
9.
Crediting of Accounts
4
     
10.
Status of Investments
4
     
11.
Vesting
4
     
12.
Payment of Accounts
5
     
13.
Unforeseeable Emergency
7
     
14.
Designation of Beneficiaries
8
     
15.
Nonalienation
8
     
16.
Indemnification
8
     
17.
Severability
8
     
18.
Waiver
8
     
19.
Notices
8
     
20.
Governing Law
9
     
21.
Construction of Language
9
     
22.
Amendment or Termination of Plan
9
     
23.
Claims Procedures
10

 
 
 

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PEOPLES FEDERAL BANCSHARES, INC. AND
PEOPLES FEDERAL SAVINGS BANK
AMENDED AND RESTATED VOLUNTARY DEFERRED COMPENSATION AND
SUPPLEMENTAL EMPLOYEE STOCK OWNERSHIP PLAN FOR EXECUTIVES

 
PREAMBLE
 

This Amended and Restated Voluntary Deferred Compensation and Supplemental
Employee Stock Ownership Plan for Executives (“Plan”) of Peoples Federal
Bancshares, Inc. (the “Company”) and Peoples Federal Savings Bank (the “Bank”)
is adopted in connection with the closing of the reorganization of Peoples
Federal Savings Bank from the mutual holding company structure to the stock
holding company structure.  The Plan was initially adopted by the Bank,
effective as of January 1, 2006, and was subsequently amended by the Bank, as of
December 16, 2008.  The Plan, which in its amended and restated form is hereby
adopted by the Company and the Bank, shall in all respects be subject to the
provisions set forth herein.

This Plan is being amended and restated primarily to add a supplemental employee
stock ownership plan feature which is intended to provide those executives of
the Company and the Bank, who are listed in Appendix A, which is attached
hereto, with the economic value of the annual allocations which are not accrued
or credited to such executive’s account under the Peoples Federal Savings Bank
Employee Stock Ownership Plan (“ESOP”) due to the limitations imposed by
Sections 415 and 401(a)(17) of the Internal Revenue Code of 1986, as amended
(the “Code”).  No benefits payable under this Plan shall be deemed to be
grandfathered for purposes of Section 409A of the Code.

The Plan shall at all times be characterized as a “top hat” plan of deferred
compensation maintained for a select group of management or highly compensated
employees, as described under Sections 201(2), 301(a)(3) and 401(a)(1) of the
Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) and any
regulations relating thereto.  The Plan has been and shall continue to be
operated in compliance with Section 409A of the Code.  The Plan is an unfunded
plan for tax purposes.  The provisions of the Plan shall be construed to
effectuate such intentions.

Accordingly, the Company and the Bank hereby adopt this amended and restated
Plan pursuant to the terms and provisions set forth below:

1.           Purpose of the Plan.  This Plan will continue to enable eligible
executives of the Bank and its subsidiaries to defer a portion of their
compensation that would otherwise be paid to them as executives and to, instead,
receive such amounts at a later date.  This Plan will also allow eligible
executives of the Company to commence deferring a portion of their compensation
beginning January 1, 2011, and to receive such amounts at a later date, in
accordance with the terms of this Plan.  This portion of the Plan shall be
referred to as the “Deferral portion” of the Plan.  In addition, this Plan will
credit eligible executives of the Company and the Bank with amounts equal to the
contributions which are not accrued or credited under the ESOP due to the
 

 
 

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limitations imposed by Sections 401(a)(17) and 415 of the Code.  This portion of
the Plan shall be referred to as the “Supplemental ESOP” portion of the Plan.
 
2.           Administration.  The Plan shall be administered by the Compensation
Committee of the Bank or such other committee appointed either by the Board of
Directors of the Bank (the “Board”) or by such Compensation Committee (the
“Committee”). The Committee shall be authorized to interpret the Plan and make
decisions regarding any questions arising thereunder, and any such
interpretation or decision of the Committee shall, unless overruled or modified
by the Board, be final, conclusive and binding upon all executives of the
Company and the Bank and their subsidiaries and upon any person claiming
benefits or rights under the Plan by or through any such individual. No member
of the Committee shall be entitled to act on or decide any matter relating
solely to himself or herself or any of his or her rights or benefits under the
Plan. The Committee may, in its discretion, designate a person or persons to
carry out such duties or functions as the Committee so determines.
Notwithstanding any provision of the Plan to the contrary, any duty or function
which may be performed by the Committee or its delegates under the Plan may
instead be performed by the Board if the Board so determines in its sole
discretion.
 
3.           Eligibility.  Executives of the Company and the Bank and their
subsidiaries who are selected or named by the Committee shall be permitted to
participate in the Plan, provided that only a select group of management or
highly compensated employees may participate in this Plan.  The Committee, may
from time to time designate, in its sole discretion, an executive to participate
in either the Deferral portion of the Plan, the Supplemental ESOP portion of the
Plan or both portions.  A list of the persons designated as eligible for
participation in each portion of the Plan shall be attached hereto as Appendix
A.
 
4.           Deferrals of Compensation.  With respect to each year as to which
an individual has been designated as eligible to participate in this Plan, the
individual (“Participant”) may elect to participate in the Deferral portion of
the Plan by submitting to the Committee or its designee a written election to
defer receipt of either a percentage of the Participant’s compensation, or
specified dollar amount, that would otherwise be earned by the Participant in
connection with his or her services as an employee of the Company or the Bank or
one or more of their subsidiaries in the next following calendar year. Except as
otherwise provided by the Committee in accordance with law, such election shall
be made on or before the last day of the calendar year preceding the calendar
year with respect to which the election relates. Subject to the requirements of
Section 409A of the Internal Revenue Code (“Code”), with respect to each
individual who first becomes an eligible Participant, such an individual may
defer receipt of compensation in the same year he/she first becomes eligible to
participate in the Plan provided the election applies only to compensation
deferred for services performed subsequent to the date the election is filed
with the Committee through the end of the calendar year and the election is made
within 30 days after the individual first becomes an eligible Participant.
 
Any deferral election in effect as of the effective date of this amended and
restated Plan shall continue in effect, until changed in accordance with the
terms of this Section.
 
5.           Supplemental ESOP Benefits.  A Participant who is eligible for the
Supplemental ESOP portion of the Plan (“ESOP Participant”), shall be entitled to
be credited with an annual
 

 
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Bank contribution determined as set forth in this Section 5 (“Supplemental ESOP
Benefit”), which shall be recorded in the ESOP Participant’s Account pursuant to
Section 6 of this Plan.  The amount of the Supplemental ESOP Benefit is equal to
the sum of the difference (expressed in dollars) between “(X)” and “(Y)” where:
 
(a)           “X” is the number of shares of common stock (“Stock”) of Peoples
Federal Bancshares, Inc (“Company”) that would have been allocated to the
account of the ESOP Participant for the period from January 1 to December 31
(“Plan Year”) under the ESOP but for the maximum limitations under Sections
401(a)(17) and 415 of the Code (collectively, the “Applicable Limitations),
multiplied by the fair market value of such Stock on the last day of the ESOP
Plan Year (December 31) for which the allocation is made; and
 
(b)           “Y” is the number of shares of Stock actually allocated to the
account of the ESOP Participant for the relevant ESOP Plan Year, multiplied by
the fair market value of such Stock on the last day of the Plan Year (December
31) for which the allocation is made.
 
The Supplemental ESOP Benefit, which shall be credited to the ESOP Participant’s
Account under this Plan as of December 31 of each year, as applicable, shall be
deemed to be invested in accordance with the ESOP Participant’s investment
elections pursuant to Sections 7 and 8 of this Plan.  The Supplemental ESOP
Benefit will be paid to the ESOP Participant pursuant to Section 12 of this Plan
and the benefit will be subject to all other terms of this Plan.
 
6.           Accounts under the Plan.  Amounts deferred by a Participant (all
references to Participant shall include ESOP Participant, as applicable)
pursuant to Paragraph 4 hereof (or amounts credited under paragraph 5, if any)
shall be maintained in an Account for such Participant by the Company or the
Bank (or by the applicable subsidiary) responsible to pay the compensation being
deferred by the Participant or contributed on his/her behalf hereunder.  The
Account shall consist of sub-accounts, which shall include an Elective Deferral
Account, Supplemental ESOP Benefit Account, and any other sub-account the
Committee deems necessary, in order to track the deferrals, contributions and
investment gains and losses on behalf of a Participant.
 
7.           Deemed Investment of Accounts.  The Account maintained on behalf of
each Participant with respect to the amounts deferred by that Participant
hereunder (or amounts contributed under paragraph 5, if any) with respect to
each year of participation by the Participant shall be deemed to be invested in,
and shall be adjusted to reflect earnings and losses of, such investments or
investment funds as is designated as available from time to time by the
Committee. To the extent the Committee makes available alternative deemed
investment vehicles with respect to amounts eligible to be deferred under the
Plan, each Participant shall, upon making a deferral election hereunder,
designate, in the form and manner prescribed by the Committee, that the amounts
to be credited to his or her Account (or amounts contributed under paragraph 5,
if any) be applied in such proportions as he or she may designate, in such
multiples as is permitted by the Committee, in each deemed investment made
available by the Committee. The Committee may make available different deemed
investments for amounts deferred at different times under the Plan, and may
change the available deemed investments under the Plan
 

 
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from time to time. The Committee may also designate that only one deemed
investment be available with respect to any amounts deferred hereunder, in which
event that deemed investment shall apply to all such amounts without regard to
any other election that a Participant may desire.
 
8.           Change in Investment Directions.  A Participant may, in the form
and manner prescribed by the Committee, elect to change his or her investment
direction with respect to all or a portion of the amounts then held, or to be
held, in such Participant’s Account, with such election and new investment
direction becoming effective the first day of any calendar quarter (i.e January
1, April 1, July 1 or October 1), provided such investment direction election is
made, and not revoked, prior to the first day of such calendar quarter. Such
direction may relate solely to amounts already allocated to the Participant’s
Account (in which event it shall constitute a direction to transfer amounts in
the Participant’s Account among the various available deemed investments) or may
relate solely to amounts to be deferred in the future, or may relate to both
amounts already allocated to the Participant’s Account and amounts to be
deferred in the future. Any investment direction election made by a Participant
shall remain in effect until changed, to the extent such change is permitted
under the Plan.
 
9.           Crediting of Accounts.  Each Participant’s Account shall be deemed
credited at the end of each calendar quarter (or on such other dates as is
designated by the Committee) with the earnings or losses that the amount in the
Account would have experienced had the Account actually been invested in the
deemed investment designated by the Participant or, as appropriate, the
Committee.
 
10.           Status of Investments.  All investments made by the Company, the
Bank or any other subsidiary pursuant to this Plan will be deemed made solely
for the purpose of aiding such entity in measuring and meeting its obligations
under the Plan.  Further, such entities are not limited to the investments
described in the provisions set forth above but are merely obligated to provide
payments pursuant to the terms of this Plan that reflect the investment returns
offered by the deemed investments made available under the Plan.  The Company,
the Bank or, as applicable, one or more of their subsidiaries, will be named
sole owner of all such investments and of all rights and privileges conferred by
the terms of the instruments evidencing such investments. This Plan places no
obligation upon any entity to invest any portion of the amount in a
Participant’s Account, to invest or continue to invest in any specific asset, to
liquidate any particular investment, or to apply in any specific manner the
proceeds from the sale, liquidation, or maturity of any particular investment.
Nothing stated herein shall cause such investments to be treated as anything but
the general assets of the Company or the Bank or, as applicable, other
subsidiaries, nor will anything stated herein cause such investments to
represent the vested, secured or preferred interest of the Participant or his or
her beneficiaries designated under this Plan. Participants hereunder have the
status of unsecured creditors with respect to their Accounts, and it is intended
that the Plan be unfunded for tax purposes and, to any extent applicable, for
purposes of Title I of the ERISA.
 
11.           Vesting.  Participants shall be fully vested in all amounts in
their Deferral Accounts at all times.  Participants in the Supplemental ESOP
shall be vested in their Supplemental ESOP Account to the same extent that they
are vested in their account in the tax-qualified ESOP.
 

 
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12.           Payment of Accounts.
 
(a)           At the time a Participant elects to defer compensation hereunder,
the Participant shall designate the time and the manner of the payment of the
amounts to be allocated to such Participant’s Account with respect to such
deferral of compensation (and amounts credited under paragraph 5, if any).
Except as otherwise provided below, payment to a Participant shall commence upon
a fixed date selected by the Participant at the time of the deferral chosen from
the following dates:
 
(i)           The last day of a calendar quarter ending at least two years from
the end of the calendar year in which the deferred compensation would otherwise
become payable, but no later than the end of the calendar quarter in which
occurs the Participant’s 75th birthday; or
 
(ii)           The last day of any one of the four calendar quarters ending
after the Participant experiences a Separation from Service (as defined in
Section 12(f) of this Plan) (as designated by the Participant at the time of
deferral).
 
Except as otherwise provided below, the form of payment of deferred amounts in a
Participant’s Account shall be designated by the Participant at the time the
election to defer compensation is made and shall be from among the following
options, to the extent such optional forms are made available by the Committee.
All forms of payment shall be based on the value of a Participant’s Account
attributable to the particular deferral election (including amounts credited
under paragraph 5, if any) and all forms of payment shall be actuarially
equivalent to each other. The options that may be made available are:
 
(A)           a lump sum;
 
(B)           a number of quarterly installments or annual installments, limited
in such manner as is determined by the Committee;
 
(C)           one or more forms of annuity, with such terms as shall be
determined by the Committee; or
 
(D)           a designated dollar amount (to the extent such amount is allocated
to the Participant’s Account with respect to the deferral of compensation in
question) or percentage of the Participant’s account at the end of one or more
calendar quarters otherwise available for election for the commencement of
distributions as described above, with the remainder of the amount subject to
such designation to be distributed commencing at such other date chosen by the
Participant at the time of the deferral.
 
In the event that payment is to be made in the form of an annuity, the amount of
each annuity payment shall be determined by the Committee or its designee in its
sole discretion, which amount shall be based on the amounts that could be
payable under one or more commercial annuity products that could be purchased
with the amount in a Participant’s Account that is to be paid in the form of an
annuity at a date set by the Committee that is within 60 days of the starting
date of the annuity, with the identity of
 

 
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the commercial annuity products to be used for this purpose to be determined in
the sole discretion of the Committee, or by the Committee’s designee in
accordance with standards established by the Committee.  Any such determination
and the determination by the Committee or its delegates of the amount of any
annuity payments to be made hereunder shall be final and binding upon all
Participants and beneficiaries. In the event that the Committee or its designee,
in their sole and absolute discretion, shall direct that a commercial annuity be
purchased in order to fund any payment obligations hereunder, such annuity
contract, when purchased, shall be the property of the Company or the Bank or
other purchasing subsidiary, and the Participant will continue to be no more
than an unsecured creditor of the Company, the Bank or, as applicable, another
subsidiary, as described above. Each Participant’s Account under the Plan shall
be reduced by the amount of any distribution hereunder.
 
(b)           Payment Upon Unforeseeable Emergency.  A Participant may also,
solely to the extent permitted by the Committee, direct that a portion of the
amounts payable to the Participant be distributed in the event of an
Unforeseeable Emergency (as defined in Section 13 of this Plan).
 
(c)           Payments Upon Death.  To the extent permitted by the Committee, a
Participant may elect that if the Participant dies before payments of a deferred
amount have otherwise commenced to the Participant, the amount allocated to the
Participant’s Account be distributed to the Participant’s Beneficiary (as
defined below in Paragraph 14) either on the last day of the calendar quarter in
which the Participant dies (or as soon as practicable thereafter) or on the last
day of the first calendar quarter in the calendar year immediately following the
date of the Participant’s death; provided, however that if no such election is
made, payment shall be made in a single lump sum at the end of the calendar
quarter in which the Participant died, or as soon as practicable thereafter.  If
payments of a deferred amount in the form of installments have already commenced
to the Participant, they shall continue to be made after the Participant’s death
to the Participant’s Beneficiary in accordance with the Participant’s election,
and the Beneficiary shall otherwise be granted the same rights as were held by
the Participant hereunder.
 
(d)           Additional Payment Elections.  Notwithstanding the preceding
provisions of this Paragraph 12 to the contrary, a Participant may subsequently
elect, in such form and manner as may be prescribed by the Committee, a revised
commencement date for the amounts credited to his or her Account, in lieu of the
date(s) initially selected, provided that any such election is not effective
until 12 months following such election, that the election provides that payment
will be deferred for at least five (5) years from the date such payment would
otherwise have been made (except for death as provided above), and the election
is made at least 12 months prior to the first scheduled payment. Further,
notwithstanding the preceding provisions of this Paragraph 12 to the contrary, a
Participant may also subsequently elect, in such form and manner as may be
prescribed by the Committee, that the amounts credited to his or her Account be
paid in any one of the forms of benefit payment provided under this Paragraph 12
in lieu of the form of payment initially selected, provided that any such
election is not effective for 12 months, that the election to modify the form of
distribution provides that payment will be deferred
 

 
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for at least five (5) years from the date such payment would otherwise have been
made (except for death as provided above), and such election is made at least 12
months prior to the first scheduled payment.
 
(e)           409A Requirements.  For purposes of this Plan, “terminates” and
“separation from service” shall mean “Separation from Service” as defined in
Code Section 409A and the Treasury Regulations promulgated thereunder, provided,
however, that the Bank and Participant reasonably anticipate that the level of
bona fide services Participant would perform after termination would permanently
decrease to a level that is less than 50% of the average level of bona fide
services performed (whether as an employee or independent contractor) over the
immediately preceding 36-month period.  Notwithstanding any provision of the
Plan to the contrary, a Participant who is a specified employee as defined in
the regulations promulgated under Code Section 409A may not commence receipt of
his/her benefit until the first day of the seventh month following his or her
Separation from Service. For purposes of Code Section 409A, the Committee shall
determine which Participants are specified employees as of December 31 in
accordance with the Regulations promulgated under Section 409A. Such
determination by the Committee shall be effective for the twelve month period
commencing on April 1.
 
13.           Unforeseeable Emergency.  A Participant may request, in writing to
the Committee, a request for a withdrawal from his/her Account if the
Participant experiences an Unforeseeable Emergency. Withdrawals for the purpose
of an Unforeseeable Emergency are limited to the extent needed to satisfy the
emergency, which cannot be met by the Participant utilizing other resources. The
Committee shall make a determination with regard to the Unforeseeable Emergency
in accordance with Code Section 409A and the Treasury Regulations promulgated
thereunder.
 
(a)           “Unforeseeable Emergency” shall mean a severe financial hardship
to the Participant resulting from (1) an illness or accident of the Participant,
the Participant’s spouse, or a dependent of the Participant (within the meaning
of Section 152(a) of the Code), (2) a loss of the Participant’s property due to
casualty, or (3) other extraordinary and unforeseeable circumstances arising as
a result of events beyond the control of the Participant.  The amount of such
distribution may not exceed the amounts necessary to satisfy the emergency.  The
circumstances that will constitute an “Unforeseeable Emergency” will depend on
the facts of each case, but, in any case, payment may not be made in the even t
that such hardship is or may be relieved:
 
(i)           through reimbursement or compensation by insurance or otherwise;
 
(ii)           by liquidation of the Participant’s assets, to the extent that
liquidation of such assets would not itself cause severe financial hardship; or
 
(iii)           by cessation of deferrals under the Plan.
 

 
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14.           Designation of Beneficiaries.  In the event that a Participant
dies prior to the receipt of all amounts payable to him or her pursuant to the
Plan, all remaining amounts credited to his or her Account shall be paid to such
one or more Beneficiaries and in such proportions as the Participant may
designate, in accordance with the provisions of Paragraph 12.  If no Beneficiary
has been named by the Participant, or if a named Beneficiary has predeceased the
Participant and no successor beneficiary has been named or if a beneficiary
designation is otherwise ineffective, payment shall be made to the estate of the
Participant, and if any Beneficiary shall die after payments to that Beneficiary
have commenced, if any remaining payments would otherwise be made to such
Beneficiary, they shall instead be made to the estate of the Beneficiary.  A
Beneficiary designation pursuant to this Paragraph 14 shall not be effective
unless it is in writing and is received by the Committee prior to the death of
the Participant making the designation.
 
15.           Nonalienation.  The right to receive a benefit under the Plan
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of the
Participant or the Participant’s beneficiaries.
 
16.           Indemnification.  The Company and the Bank shall indemnify, hold
harmless and defend each member of the Board, each member of the Committee, each
member of the Benefits Committee, and each of their designees who are employees
of the Bank or the Company or any of its subsidiaries, against any reasonable
costs, including legal fees, incurred by them, or arising out of any action,
suit or proceeding in which they may be involved, as a result of their efforts,
in good faith, to defend or enforce the terms of the Plan.
 
17.           Severability.  A determination that any provision of the Plan is
invalid or unenforceable shall not affect the validity or enforceability of any
other provision hereof.
 
18.           Waiver.  Failure to insist upon strict compliance with any of the
terms, covenants or conditions of the Plan shall not be deemed a waiver of such
term, covenant or condition. A waiver of any provision of the Plan must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought.  Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.
 
19.           Notices.  Any notice or other communication required or permitted
to be given to a party under the Plan shall be deemed given if personally
delivered or if mailed, postage prepaid, by certified mail, return receipt
requested, to the party at the address listed below, or at such other address as
one such party may by written notice specify to the other:
 
(a)           if to the Committee:
 
 
Attention:
Chairman - Compensation Committee

Peoples Federal Savings Bank
435 Market Street
Brighton, MA 02135
 
(b)           if to any party other than the Committee, to such party at the
address last published by such party by written notice to the Committee.
 

 
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20.           Governing Law.  The Plan shall be construed, administered and
enforced according to the laws of the Commonwealth of Massachusetts, except to
the extent that such laws are preempted by federal law.
 
21.           Construction of Language.  Wherever appropriate in the Plan, words
used in the singular may be read in the plural, words in the plural may be read
in the singular, and words importing the male gender shall be deemed equally to
refer to the feminine or the neuter.
 
22.           Amendment or Termination of the Plan.
 
(a)           The Company and the Bank reserve the right to amend or terminate
the Plan at any time, except that no such amendment will affect the benefits or
rights to which any Participant became entitled prior to such amendment or
termination.  A termination of the Plan will not be a distributable event,
except in the three circumstances set forth in Paragraph 22(b) below.
 
(b)           Termination.  Under no circumstances may the Plan permit the
acceleration of the time or form of any payment under the Plan prior to the
payment events specified herein, except as provided in this Section 22(b).  The
Company and/or the Bank may, in their or its discretion, elect to terminate the
Plan in any of the following three circumstances and accelerate the payment of
the entire unpaid balance of the Participant’s benefits as of the date of such
payment in accordance with Section 409A of the Code:
 
(i)           the Plan is irrevocably terminated within the 30 days preceding a
Change in Control and (1) all arrangements sponsored by the Company and/or Bank
that would be aggregated with the Plan under Treasury Regulation §1.409A-1(c)(2)
are terminated, and (2) each Participant participating in the Plan and all
participants under the other aggregated arrangements receive all of their
benefits under the terminated arrangement within 12 months of the date the bank
irrevocably takes all necessary action to terminate the Plan and the other
aggregated arrangements;
 
(ii)           the Plan is irrevocably terminated at a time that is not
proximate to a downturn in the financial health of the Company and/or Bank and
(1) all arrangements sponsored by the Bank that would be aggregated with the
Plan under Treasury Regulation 1.409A-1(c) if a Participant participated in such
arrangements are terminated, (2) no payments are made within 12 months of the
date the Company and/or Bank takes all necessary action to irrevocably terminate
the arrangements, other than payments that would be payable under the terms of
the arrangements if the termination had not occurred, (3) all payments are made
within 24 months of the date the Company and/or Bank takes all necessary action
to irrevocably terminate the arrangements, and (4) the Company and/or Bank does
not adopt a new arrangement that would be aggregated with the Plan under
Treasury Regulation 1.409A-1(c) if a Participant participated in both
arrangements, at any time within three years following the date the Company
and/or Bank takes all necessary action to irrevocably terminate the Plan; or
 

 
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(iii)           the Plan is terminated within 12 months of a corporate
dissolution taxed under Section 331 of the Code, or with the approval of a
bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that the amounts
deferred by each Participant under the Plan are included in the Participant’s
gross income in the later of (1) the calendar year in which the termination of
the Plan occurs, or (2) the first calendar year in which the payment is
administratively practicable.
 
23.           Claims Procedures
 
(a)           This Section is based on final regulations issued by the
Department of Labor and published in the Federal Register on November 21, 2000
and codified at 29 C.F.R. Section 2560.503-1.  If any provision of this Section
conflicts with the requirements of those regulations, the requirements of those
regulations will prevail.
 
(b)           The Participant or any beneficiary who believes he or she is
entitled to any benefit under the Plan (a “Claimant”) may file a claim with the
Bank.  The Bank shall review the claim itself or appoint an individual or an
entity to review the claim.
 
(i)           Initial Decision.  The Claimant shall be notified within ninety
(90) days after the claim is filed whether the claim is allowed or denied,
unless the Claimant receives written notice from the Bank or appointee of the
Bank prior to the end of the ninety (90) day period stating that special
circumstances require an extension of the time for decision, with such extension
not to extend beyond the day which is one hundred eighty (180) days after the
day the claim is filed.
 
(ii)           Manner and Content of Denial of Initial Claims.  If the Bank
denies a claim, it must provide to the Claimant, in writing or by electronic
communication:
 
(A)           The specific reasons for the denial;
 
(B)           A reference to the provision of the Plan upon which the denial is
based;
 
(C)           A description of any additional information or material that the
Claimant must provide in order to perfect the claim;
 
(D)           An explanation of why such additional material or information is
necessary;
 
(E)           Notice that the Claimant has a right to request a review of the
claim denial and information on the steps to be taken if the Claimant wishes to
request a review of the claim denial; and
 
(F)           A statement of the Participant’s right to bring a civil action
under Section 502(a) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”) following a denial on review of the initial denial.
 

 
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(c)           Review Procedures.
 
(i)           Request for Review.  A request for review of a denied claim must
be made in writing to the Bank within sixty (60) days after receiving notice of
denial.  The decision upon review will be made within sixty (60) days after the
Bank’s receipt of a request for review, unless special circumstances require an
extension of time for processing, in which case a decision will be rendered not
later than one hundred twenty (120) days after receipt of a request for
review.  A notice of such an extension must be provided to the Claimant within
the initial sixty (60) day period and must explain the special circumstances and
provide an expected dated of decision.
 
The reviewer shall afford the Claimant an opportunity to review and receive,
without charge, all relevant documents, information and records and to submit
issues and comments in writing to the Bank.  The reviewer shall take into
account all comments, documents, records and other information submitted by the
Claimant relating to the claim regardless of whether the information was
submitted or considered in the initial benefit determination.
 
(ii)           Manner and Content of Notice of Decision on Review.  Upon
completion of its review of an adverse claim determination, the Bank will give
the Claimant, in writing or by electronic notification, a notice containing:
 
(A)           its decision;
 
(B)           the specific reasons for the decision;
 
(C)           the relevant provisions of the Plan upon which its decision is
based;
 
(D)           a statement that the Claimant is entitled to receive, upon request
and without charge, reasonable access to, and copies of, all documents, records
and other information in the Bank’s files which is relevant to the Claimant’s
claim for benefits;
 
(E)           a statement describing the Claimant’s right to bring an action for
judicial review under Section 502(a) of ERISA; and
 
(F)           if an internal rule, guideline, protocol or other similar
criterion was relied upon in making the adverse determination on review, a
statement that a copy of the rule, guideline, protocol or other similar
criterion will be provided without charge to the Claimant upon request.
 
(d)           For purposes of the time periods specified in this Section, the
period of time during which a benefit determination is required to be made
begins at the time a claim is filed in accordance with the procedures herein
without regard to whether all the information necessary to make a decision
accompanies the claim.  If a period of time is extended due to a Claimant’s
failure to submit all information necessary, the period for
 

 
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making the determination shall be tolled from the date the notification is sent
to the Claimant until the date the Claimant responds.
 
(e)           If the Bank fails to follow the claims procedures required by this
Section, a Claimant shall be deemed to have exhausted the administrative
remedies available under the Plan and shall be entitled to pursue any available
remedy under Section 502(a) of ERISA on the basis that the Plan has failed to
provide a reasonable claims procedure that would yield a decision on the merits
of the claim.  A Claimant’s compliance with the foregoing provisions of this
Section is a mandatory requisite to a Claimant’s right to commence any legal
action with respect to any claims for benefits under the Plan.
 
(f)           Notwithstanding anything in this Plan to the contrary, the Bank
may determine, in its sole and absolute discretion, to review any claim for
benefits submitted by a Claimant under this Agreement.
 
[Signatures on next page]
 

 
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IN WITNESS WHEREOF, Peoples Federal Bancshares, Inc. and Peoples Federal Savings
Bank have caused this Amended and Restated Voluntary Deferred Compensation and
Supplemental Employee Stock Ownership Plan for Executives to be executed
effective as of the day and date first above written.

   
PEOPLES FEDERAL BANCSHARES, INC.
ATTEST:
 
 
   
/s/ Myron Fox
 
/s/ Hugh Gallagher
Secretary
 
Authorized Representative
               
PEOPLES FEDERAL SAVINGS BANK
ATTEST:
 
 
   
/s/ Myron Fox
 
/s/ Hugh Gallagher
Secretary
 
Authorized Representative

 
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Appendix A
Peoples Federal Savings Bank
Amended and Restated
Voluntary Deferred Compensation
and
Supplemental Employee Stock Ownership Plan
for Executives
 
Effective Date: September 21, 2010

ESOP Participant
Date of Participation

Maurice H. Sullivan, Jr.

Thomas J. Leetch

James J. Gavin
 
 

 
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