Document:

ex10-1.htm

     

    EXHIBIT 10.1

    
       

      
        MUTUAL
FEDERAL BANCORP, INC.

        2006 MANAGEMENT RECOGNITION
AND RETENTION PLAN

        (As
Amended and Restated Effective January 1, 2007)

         

        ARTICLE I

         

        ESTABLISHMENT
OF THE PLAN

         

        Mutual
Federal Bancorp, Inc. (the “Corporation”) established the 2006 Management
Recognition and Retention Plan (the “Plan”), effective as of November 29, 2006
(“Effective Date”).  The Plan, as amended and restated in this
document, is effective as of January 1, 2007.

         

        ARTICLE II

         

        PURPOSE
OF THE PLAN

         

        The
purpose of the Plan is to reward and retain personnel of experience and ability
in key positions with the Corporation, its Subsidiary Companies and its Parent
by providing Employees and Non-Employee Directors with a proprietary interest in
the Corporation as compensation for their contributions to the Corporation, its
Subsidiary Companies and its Parent and as an incentive to make such
contributions in the future.  Each Recipient of a Plan Share Award
hereunder is advised to consult with his or her personal tax advisor with
respect to the tax consequences under federal, state, local and other tax laws
of the receipt of a Plan Share Award hereunder.

         

        ARTICLE III

         

        DEFINITIONS

         

        3.01           “Bank” means Mutual Federal Savings and Loan
Association of Chicago, a wholly owned subsidiary of the
Corporation.

         

        3.02           “Beneficiary” means the person or persons
designated by a Recipient to receive any benefits payable under the Plan in the
event of such Recipient’s death.  Such person or persons shall be
designated in writing on forms provided for this purpose by the Committee and
may be changed from time to time by similar written notice to the
Committee.  In the absence of a written designation, the Beneficiary
shall be the Recipient’s surviving spouse, if any, or if none, the Recipient’s
estate.

         

        3.03           “Board” means the Board of Directors of the
Corporation.

         

        3.04           “Change in Control of the Corporation” shall be
deemed to have occurred if:

         

        (a)                any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act) other than (A) a trustee or other fiduciary holding securities
under

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        an
employee benefit plan of the Corporation, its Parent or any of its Subsidiary
Companies, or (B) a corporation owned directly or indirectly by the
stockholders of the Corporation in substantially the same proportions as their
ownership of stock of the Corporation, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 20% or more of the total voting power
of the Corporation’s then outstanding shares of capital stock entitled to vote
generally in the election of directors (the “Voting Stock”); provided, however,
that the following shall not constitute a change in
control:  (1) such person becomes a beneficial owner of 20% or
more of the Voting Stock as the result of an acquisition of such Voting Stock
directly from the Corporation; or (2) such person becomes a beneficial
owner of 20% or more of the Voting Stock as a result of the decrease in the
number of outstanding shares of Voting Stock caused by the repurchase of shares
by the Corporation; provided, further, that in the event a person described in
clause (1) or (2) shall thereafter increase (other than in circumstances
described in clause (1) or (2)) beneficial ownership of stock representing more
than 1% of the Voting Stock, such person shall be deemed to become a beneficial
owner of 20% or more of the Voting Stock for purposes of this
paragraph (B), provided such person continues to beneficially own 20% or
more of the Voting Stock after such subsequent increase in beneficial ownership;
or

         

        (b)                individuals
who, as of the Effective Date hereof, constitute the Board of Directors of the
Corporation (the “Incumbent Corporation Board”) or individuals who, as of the
Effective Date hereof, constitute the Board of Directors of the Parent (the
“Incumbent Parent Board”) cease for any reason to constitute at least a majority
of the Incumbent Corporation Board or Incumbent Parent Board, as applicable,
provided that any individual becoming a director, whose election or nomination
for election by the Corporation’s stockholders or Parent’s owners, as
applicable, was approved by a vote of at least two-thirds (2/3) of the directors
then comprising the Incumbent Corporation Board or Incumbent Parent Board, as
applicable, shall be considered as though such individual were a member of the
Incumbent Corporation Board or Incumbent Parent Board, as applicable, but
excluding for this purpose, any individual whose initial assumption of office is
in connection with an actual or threatened election contest relating to the
election of the directors of the Corporation or Parent, as applicable, (as such
terms are used in Rule 14a-11 promulgated under the Exchange Act);
or

         

        (c)                consummation
of a reorganization, merger or consolidation or the sale or other disposition of
all or substantially all of the assets of the Corporation (a “Business
Combination”), in each case, unless (1) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Voting Stock immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the total voting power represented by
the voting securities entitled to vote generally in the election of directors of
the corporation resulting from the Business Combination (including, without
limitation, a corporation which as a result of the Business Combination owns the
Corporation, or all or substantially all of the Corporation’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to the Business
Combination

         

        
          
             

          

          
            2

            
              

            

          

          
             

          

        

        of the
Voting Stock of the Corporation, and (2) at least a majority of the members
of the board of directors of the corporation resulting from the Business
Combination were members of the Incumbent Corporation Board, at the time of the
execution of the initial agreement, or action of the Incumbent Corporation
Board, providing for such Business Combination.  Notwithstanding
anything in this Plan to the contrary, in no event shall a  full
conversion of Mutual Federal Bancorp, MHC, or any successor corporation, to the
stock form of ownership under applicable regulations constitute a “Change in
Control” for purposes of this Plan; or

         

        (d)                approval
by the stockholders of the Corporation of a plan of complete liquidation or
dissolution of the Corporation.

         

        3.05           “Code” means the Internal Revenue Code of 1986,
as amended.

         

        3.06           “Committee” means the Compensation Committee of
the Board of Directors of the Corporation or such other committee of the Board
as may be designated by the Board from time to time to administer this
Plan.

         

        3.07           “Common Stock” means shares of common stock, par
value $0.01 per share, of the Corporation.

         

        3.08           “Disability” means any physical or mental
impairment which qualifies an individual for disability benefits under the
applicable long-term disability plan maintained by the Corporation, the Parent
or a Subsidiary Company or, if no such plan applies, then “Disability” means the
inability to substantially perform the duties appropriate for the individual’s
position with the Corporation, the Parent, the Bank or the Subsidiary Company,
as appropriate, as determined by a physician reasonably designated by the
Corporation.

         

        3.09           “Employee” means any person who is employed by
the Corporation, the Parent, the Bank, or any Subsidiary Company, or is an
Officer of the Corporation, the Parent, the Bank, or any Subsidiary Company, but
not including directors who are not also Officers of or otherwise employed by
the Corporation, the Parent, the Bank or a Subsidiary Company.

         

        3.10           “Employer Group” means the Corporation, the
Parent and any Subsidiary Company which, with the consent of the Board, agrees
to participate in the Plan.

         

        3.11           “Exchange Act” means the Securities Exchange Act
of 1934, as amended.

         

        3.12           “Non-Employee Director” means a member of the
Board of Directors of the Corporation, the Board of Directors of the Parent or
the Board of Directors of the Subsidiary Company or any successor thereto,
including an advisory director or a director emeritus of the Boards of the
Corporation, the Parent and/or the Bank (or any successor company), who is not
an Officer or Employee of the Corporation, the Parent, the Bank or any
Subsidiary Company.

         

        3.13           “Officer” means an Employee whose position in
the Corporation, the Parent or a Subsidiary Company is that of a corporate
officer, as determined by the Board.

         

        
          
             

          

          
            3

            
              

            

          

          
             

          

        

        3.14           “Parent” means Mutual Federal Bancorp, MHC, a
federally chartered mutual holding company which currently owns 70% of the
Corporation’s Common Stock.

         

        3.15           “Performance Share Award” means a Plan Share
Award granted to a Recipient pursuant to Section 7.05 of the
Plan.

         

        3.16           “Performance Goal” means an objective for the
Corporation, the Parent or any Subsidiary Company or any unit thereof or any
Employee with respect to any of the foregoing that may be established by the
Committee for a Performance Share Award to become vested, earned or
exercisable.  The performance Goals shall be based on one or more of
the following criteria:

         

        
          
            	 
      	
                    (a)

                  	
                    net
      income, as adjusted for non-recurring items;

                  
	 
      	
                    (b)

                  	
                    cash
      earnings;

                  
	 
      	
                    (c)

                  	
                    earnings
      per share;

                  
	 
      	
                    (d)

                  	
                    cash
      earnings per share;

                  
	 
      	
                    (e)

                  	
                    return
      on average equity;

                  
	 
      	
                    (f)

                  	
                    return
      on average assets;

                  
	 
      	
                    (g)

                  	
                    asset
      quality;

                  
	 
      	
                    (h)

                  	
                    stock
      price;

                  
	 
      	
                    (i)

                  	
                    total
      stockholder return;

                  
	 
      	
                    (j)

                  	
                    capital;

                  
	 
      	
                    (k)

                  	
                    net
      interest income;

                  
	 
      	
                    (l)

                  	
                    market
      share;

                  
	 
      	
                    (m)

                  	
                    profits;

                  
	 
      	
                    (n)

                  	
                    attainment
      of strategic and/or operational initiatives;

                  
	 
      	
                    (o)

                  	
                    cost
      control or efficiency ratio; and

                  
	 
      	
                    (p)

                  	
                    asset
      growth.

                  

          

           

        

        3.17           “Plan Shares” or “Shares” means shares of Common Stock which may
be distributed to a Recipient pursuant to the Plan.

         

        3.18           “Plan Share Award” or “Award” means a right granted under this Plan to
receive a distribution of Plan Shares upon completion of the service
requirements described in Article VII, and includes Performance Share
Awards.

         

        3.19           “Recipient” means an Employee or Non-Employee
Director who receives a Plan Share Award or Performance Share Award under the
Plan.

         

        3.20           “Subsidiary Companies” means those subsidiaries
of the Corporation, including the Bank, which meet the definition of “subsidiary
corporation” set forth in Section 424(f) of the Code, at the time of the
granting of the Plan Share Award in question.

         

        
          
             

          

          
            4

            
              

            

          

          
             

          

        

        ARTICLE IV

         

        ADMINISTRATION
OF THE PLAN

         

        4.01           Duties of the Committee.  The
Plan shall be administered and interpreted by the Committee.  The
Committee shall have all of the powers allocated to it in this and other
sections of the Plan.  The interpretation and construction by the
Committee of any provisions of the Plan, any rule, regulation or procedure
adopted by it pursuant thereto or of any Award shall be final and binding in the
absence of action by the Board.

         

        4.02           Limitation on Liability.  No member
of the Board or the Committee shall be liable for any determination made in good
faith with respect to the Plan or any Plan Shares or Plan Share Awards granted
under the Plan.  If a member of the Board or the Committee is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of anything done or not done by him in such capacity
under or with respect to the Plan, the Corporation shall, subject to the
requirements of applicable laws and regulations, indemnify such member against
all liabilities and expenses (including attorneys’ fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in the best interests of the Corporation and any
Subsidiaries and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.

         

        4.03           Compliance with Laws and
Regulations.  All Awards granted hereunder shall be subject to
all applicable federal and state laws, rules and regulations and to such
approvals by any government or regulatory agency or stockholders as may be
required.  The Corporation shall not be required to issue or deliver
any certificates for shares of Common Stock prior to the completion of any
registration or qualification of or obtaining of consents or approvals with
respect to such shares under any federal or state law or any rule or regulation
of any government body, which the Corporation shall, in its sole discretion,
determine to be necessary or advisable.

         

        4.04           Restrictions on Transfer.  The
Corporation may place a legend upon any certificate representing shares issued
pursuant to a Plan Share Award noting that such shares may be restricted by
applicable laws and regulations.

         

        ARTICLE V

         

        NUMBER
OF SHARES AVAILABLE

         

        The
aggregate number of Plan Shares available for distribution pursuant to this Plan
shall be 71,282 shares of Common Stock, subject to adjustment as provided in
Section 8.01 hereof.

        
          
             

          

          
            5

            
              

            

          

          
             

          

        

        ARTICLE VI

         

        ELIGIBILITY;
ALLOCATIONS

         

        6.01           Awards.  Plan Share Awards and
Performance Share Awards may be made to such Employees and Non-Employee
Directors as may be selected by the Board or the Committee.  In
selecting those Employees and Non-Employee Directors to whom Plan Share Awards
and/or Performance Share Awards may be granted and the number of Shares covered
by such Awards, the Board or the Committee shall consider the duties,
responsibilities and performance of each respective Employee and Non-Employee
Director, his present and potential contributions to the growth and success of
the Corporation, the Parent and/or Subsidiary Companies, his salary and such
other factors as deemed relevant to accomplishing the purposes of the
Plan.  The Board or the Committee may but shall not be required to
request the written recommendation of the Chief Executive Officer of the
Corporation other than with respect to Plan Share Awards and/or Performance
Share Awards to be granted to him.

         

        6.02           Form of Allocation.  As promptly as
practicable after an allocation pursuant to Section 6.01 that a Plan Share
Award or a Performance Share Award is to be issued, the Board or the Committee
shall notify the Recipient in writing of the grant of the Award, the number of
Plan Shares covered by the Award, and the terms upon which the Plan Shares
subject to the Award shall be distributed to the Recipient.  The date
on which the Board or the Committee makes such determination with respect to an
Award shall be considered the date of grant of the Plan Share Award or the
Performance Share Award.  The Board or the Committee shall maintain
records as to all grants of Plan Share Awards or Performance Share Awards under
the Plan.

         

        6.03           Allocations Not Required to Any Specific Employee or
Non-Employee Director.  No Employee or Non-Employee Director
shall have any right or entitlement to receive a Plan Share Award hereunder, as
the granting of Awards is subject to the total discretion of the Board or the
Committee.

         

        ARTICLE VII

         

        EARNING
AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS

         

        7.01           Earning Plan Shares; Forfeitures.

         

        (a)           General Rules.  Subject to the terms
hereof, Plan Share Awards granted shall be earned by a Recipient at the rate
specified by the Board or the Committee.  If the employment of an
Employee or service as a Non-Employee Director is terminated for any reason
prior to the Plan Share Award being fully earned (except as specifically
provided in subsections (b), (c) and (d) below), the Recipient shall forfeit the
right to any Shares subject to the Award which have not theretofore been
earned.  In the event of a forfeiture of the right to any Shares
subject to an Award, such forfeited Shares shall become available for allocation
pursuant to Section 6.01 hereof as if no Award had been previously granted
with respect to such Shares.  No fractional shares shall be
distributed pursuant to this Plan.  In determining the number of
Shares which are earned as of any date, fractional shares shall be rounded up to
the nearest whole number if the fraction is 0.5 or higher, and down if it is
less.

         

        
          
             

          

          
            6

            
              

            

          

          
             

          

        

        (b)           Exception for Terminations Due to Death or
Disability.  Notwithstanding the general rule contained in
Section 7.01(a), all Plan Shares subject to a Plan Share Award held by a
Recipient whose employment with the Corporation, Parent or any Subsidiary
Company or service as a Non-Employee Director terminates due to death or
Disability shall be deemed earned as of the Recipient’s last day of employment
with or service to the Corporation, Parent or any Subsidiary Company (provided,
however, no such accelerated vesting shall occur in the event of Disability if a
Recipient remains employed by at least one member of the Employer Group) and
shall be distributed as soon as practicable thereafter.

         

        (c)           Exception for a Change in Control of the
Corporation or Parent.  Notwithstanding the general rule
contained in Section 7.01(a), all Plan Shares subject to a Plan Share Award
held by a Recipient shall be deemed to be earned as of the effective date of a
Change in Control of the Corporation or Parent, as applicable.

         

        (d)           Revocation for
Misconduct.  Notwithstanding anything in this Plan to the
contrary, the Board may by resolution immediately revoke, rescind and terminate
any Plan Share Award or Performance Share Award or portion thereof, previously
awarded under this Plan, to the extent Plan Shares have not been distributed
hereunder to the Recipient, whether or not yet earned, in the case of an
Employee who is discharged from the employ of the Corporation, Parent or any
Subsidiary Company for cause (as hereinafter defined).  Termination
for cause shall mean termination because of the Employee’s personal dishonesty,
willful misconduct, breach of fiduciary duty, intentional failure to perform
stated duties, willful violation of any law, rule, or regulation (other than
traffic violations or similar offenses) or final cease-and-desist
order.  Plan Share Awards granted to a Non-Employee Director who is
removed for cause pursuant to the Corporation’s Articles of Incorporation and
Bylaws, the Parent’s Charter and Bylaws or the Subsidiary Company’s Charter and
Bylaws shall terminate as of the effective date of such removal.

         

        7.02           Distribution of Dividends.  Any cash
dividends, stock dividends or returns of capital declared in respect of each
unvested Plan Share Award (including a Performance Share Award)(whether declared
before or after the applicable Award was granted), including any interest
thereon, will be paid to the Recipient thereof as soon as practicable after the
Plan Share Awards become earned, but no later than the March 15th following the
end of the Plan Year in which such Plan Share Awards become
earned.  Any cash dividends, stock dividends or returns of capital
declared in respect of each vested Plan Share (whether declared before or after
the applicable Award was granted) will be paid to the Recipient as soon as
practicable, but no later than the March 15th following the end of the Plan
Year in which such dividends were declared.

         

        7.03           Distribution of Plan Shares.

         

        (a)           Timing of Distributions: General
Rule.  Subject to applicable regulatory requirements, Plan
Shares shall be distributed to the Recipient or his Beneficiary, as the case may
be, as soon as practicable after they have been earned.

         

        (b)           Form of Distributions.  All Plan
Shares, together with any Shares representing stock dividends, shall be
distributed in the form of Common Stock.  One share of

         

        
          
             

          

          
            7

            
              

            

          

          
             

          

        

        Common
Stock shall be given for each Plan Share earned and
distributable.  Payments representing cash dividends or returns of
capital shall be made in cash.

         

        (c)           Withholding.  The Corporation may
withhold from any cash payment or Common Stock distribution made under this Plan
sufficient amounts to cover any applicable withholding and employment taxes, and
if the amount of a cash payment is insufficient, the Corporation may require the
Recipient or Beneficiary to pay the amount required to be withheld as a
condition of delivering the Plan Shares.

         

        (d)           Restrictions on Selling of Plan
Shares.  Plan Share Awards may not be sold, assigned, pledged
or otherwise disposed of prior to the time that they are earned and distributed
pursuant to the terms of this Plan.  Upon distribution, the Board or
the Committee may require the Recipient or his Beneficiary, as the case may be,
to agree not to sell or otherwise dispose of his distributed Plan Shares except
in accordance with all then applicable federal and state securities laws, and
the Board or the Committee may cause a legend to be placed on the stock
certificate(s) representing the distributed Plan Shares in order to restrict the
transfer of the distributed Plan Shares for such period of time or under such
circumstances as the Board or the Committee, upon the advice of counsel, may
deem appropriate.

         

        7.04           Voting of Plan Shares.  After a
Plan Share Award has been made, the Recipient shall be entitled to vote the Plan
Shares which are covered by the Plan Share Award, subject to rules and
procedures adopted by the Committee for this purpose.

         

        7.05           Performance Share Awards.

         

        (a)           Designation of Performance Share
Awards.  The Committee may determine to make any Plan Share
Award a Performance Share Award by making such Plan Share Award contingent upon
the achievement of a Performance Goal or any combination of Performance
Goals.  Each Performance Share Award shall be evidenced by a written
agreement (“Award Agreement”), which shall set forth the Performance Goals
applicable to the Performance Share Award, the maximum amounts payable and such
other terms and conditions as are applicable to the Performance Share
Award.

         

        (b)           Restrictions on
Grants.  Nothing contained in this Plan will be deemed in any
way to limit or restrict the Committee from making any Award or payment to any
person under any other plan, arrangement or understanding, whether now existing
or hereafter in effect.

         

        (c)           Distribution.  No Performance Share
Award or portion thereof that is subject to the attainment or satisfaction of a
condition of a Performance Goal shall be distributed or considered to be earned
or vested until the Committee certifies in writing that the conditions or
Performance Goal to which the distribution, earning or vesting of such Award is
subject have been achieved.

         

        
          
             

          

          
            8

            
              

            

          

          
             

          

        

        ARTICLE VIII

         

        MISCELLANEOUS

         

        8.01           Adjustments for Capital Changes.  The
aggregate number of Plan Shares available for distribution pursuant to the Plan
Share Awards and the number of Shares to which any unvested Plan Share Award
relates shall be proportionately adjusted for any increase or decrease in the
total number of outstanding shares of Common Stock issued subsequent to the
effective date of the Plan resulting from any split, subdivision or
consolidation of shares or other capital adjustment, the payment of a stock
dividend or other increase or decrease in such shares effected without receipt
or payment of consideration by the Corporation.  If, upon a merger,
consolidation, reorganization, liquidation, recapitalization or the like of the
Corporation or of another corporation, each Recipient of a Plan Share Award
shall be entitled, subject to the conditions herein stated, to receive such
number of shares of Common Stock or amount of other securities of the
Corporation or such other corporation as were exchangeable for the number of
shares of Common Stock of the Corporation which such Recipients would have been
entitled to receive except for such action.

         

        8.02           Amendment and Termination of the
Plan.  The Board may, by resolution, at any time amend or
terminate the Plan and the Trust, subject to any required stockholder approval
or any stockholder approval which the Board may deem to be advisable for any
reason, such as for the purpose of obtaining or retaining any statutory or
regulatory benefits under tax, securities or other laws or satisfying any
applicable stock exchange listing requirements.  The Board may not,
without the consent of the Recipient, alter or impair any Plan Share Award
previously granted under this Plan except as specifically authorized
herein.  Termination of this Plan shall not affect Plan Share Awards
previously granted, and such Plan Share Awards shall remain valid and in effect
until they (a) have been fully earned, (b) are surrendered, or
(c) expire or are forfeited in accordance with their terms.

         

        8.03           Nontransferable.  Plan Share Awards
and Performance Share Awards and rights to Plan Shares shall not be transferable
by a Recipient, and during the lifetime of the Recipient, Plan Shares may only
be earned by and paid to the Recipient who was notified in writing of the Award
pursuant to Section 6.02.  No Recipient or Beneficiary shall have
any right in or claim to any assets of the Plan or Trust, nor shall the
Corporation, the Parent or any Subsidiary Company be subject to any claim for
benefits hereunder.

         

        8.04           Employment or Service
Rights.  Neither the Plan nor any grant of a Plan Share Award,
Performance Share Award or Plan Shares hereunder nor any action taken by the
Committee or the Board in connection with the Plan shall create any right on the
part of any Employee or Non-Employee Director to continue in such
capacity.

         

        8.05           Voting and Dividend Rights.  No
Recipient shall have any voting or dividend rights or other rights of a
stockholder in respect of any Plan Shares covered by a Plan Share Award or
Performance Share Award, except as expressly provided in Sections 7.02,
7.04 and 7.05 above, prior to the time said Plan Shares are actually earned and
distributed to him.

         

        
          
             

          

          
            9

            
              

            

          

          
             

          

        

        8.06           Governing Law.  To the extent not
governed by federal law, the Plan shall be governed by the laws of the State of
Illinois.

         

        8.07           Term of Plan.  This Plan shall remain
in effect until the earlier of (i) ten (10) years from the Effective Date
or (ii) termination by the Board.

         

        8.08           Pronouns.  Wherever appropriate, the
masculine pronouns shall include the feminine pronouns and the singular shall
include the plural.

         

        
          
             

          

          
            10ex10-7.htm

     

    Exhibit
10.7

    
 

    AMENDED
AND RESTATED

    SUPPLEMENTAL
EXECUTIVE RETIREMENT AGREEMENT

    

    

    THIS AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT (the “Agreement”) is dated as
of January 1, 2007, by and between EAST BOSTON SAVINGS BANK, a
corporation organized and existing under the laws of the Commonwealth of
Massachusetts (the “Bank”) and ROBERT F. VERDONCK (the
“Executive”).  The Agreement is an amendment and restatement of the
agreement by and between the Bank and the Executive dated January 29, 1985, as
amended by instruments dated February 10, 1994, and September 14, 1995, and as
amended and restated as of July 1, 1996 and December 1, 2003.

    

    In
consideration of the mutual covenants herein contained, the parties hereby agree
as follows:

    

    1.           Definitions.

    

    (a)            “Actuarial
Equivalent” means a benefit of equivalent value when computed on the basis of an
interest rate of 6.5% and the 1983 Group Annuity Mortality Table, Unisex (50%
male, 50% female), with no setback; provided, however, that for purposes of
determining the value of a lump sum distribution, the following assumptions will
be used:

    

    
      	
               
      

            	
              Interest:

            	
              Applicable
      interest rate under Section 417(e)(3) of the Code, as determined for the
      month of November of the preceding
year.

            

    

    

    Mortality:              Applicable
mortality table under Section 417(e)(3) of the Code.

    

    (b)           “Accrued
Benefit” means 70% of the Executive’s Final Average Salary, offset by the SBERA
Pension Benefit and multiplied by the Executive’s Non-forfeitable Percentage set
forth in Paragraph 2(b) if the Executive has less than 20 years of
service.

    

    (c)           “Cause”
means the following:

    

    (i)           the
conviction of the Executive for any felony involving moral turpitude, deceit,
dishonesty or fraud;

    

    (ii)           a
material act or acts of dishonesty in connection with the performance of the
Executive’s duties, including without limitation, material misappropriation of
funds or property;

    

    (iii)           an
act or acts of gross misconduct (including sexual harassment) by the Executive
exposing the Bank to potential material liability or loss; or

    

    (iv)           continued,
willful and deliberate non-performance by the Executive of duties (other than by
reason of illness or disability) which has continued for more than 30 days
following written notice of non-performance from the Board of
Directors.

    

    (d)           For
purposes of this Agreement, a “Change in Control” means a change in control of
the Bank or Meridian Interstate Bancorp, Inc. (the “Company”) as defined in
Section 409A of the Internal Revenue Code of 1986 (the “Code”), as amended, and
rules, regulations, and guidance of general application thereunder, including
the following:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (i)           Change in ownership:
A change in ownership of the Bank or the Company occurs on the date any one
person or group of persons accumulates ownership of more than 50% of the total
fair market value or total voting power of the Bank or the Company;
or

    

    (ii)           Change in effective
control: A change in effective control occurs when either (i) any one
person or more than one person acting as a group acquires within a 12-month
period ownership of stock of the Company possessing 35% or more of the total
voting power of the Company; or (ii) a majority of the Bank’s or Company’s Board
of Directors is replaced during any 12-month period by Directors whose
appointment or election is not endorsed in advance by a majority of the Bank’s
or Company’s Board of Directors (as applicable); or

    

    (iii)          Change in ownership of a
substantial portion of assets: A change in the ownership of a substantial
portion of the Company's assets occurs if, in a 12 month period, any one person
or more than one person acting as a group acquires assets from the Company
having a total gross fair market value equal to or exceeding 40% of the total
gross fair market value of the Company’s entire assets immediately before the
acquisition or acquisitions.  For this purpose, “gross fair market value”
means the value of the Company’s assets, or the value of the assets being
disposed of, determined without regard to any liabilities associated with the
assets.

    

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

    

    (f)           “Final
Average Compensation” means the average of the Executive’s annual base salary
(prior to any salary reduction contributions to any Section 401(k) plan or any
other pre-tax salary reductions), excluding bonuses, for the three calendar
years during the Executive’s employment with the Bank for which the Executive’s
annual base salary was the highest.

    

    (g)           “Normal
Form” means an unreduced life annuity with 50% spousal survivor
annuity.

    

    (h)           “SBERA
Pension Benefit” means the distributions to the Executive from the Savings Bank
Employees Association Pension Plan (“SBERA Plan”) that are attributable to Bank
contributions, assumed to grow at 5.5% per annum within an Individual Retirement
Account, and converted to an immediate single life annuity payable at age 65
using the assumptions set forth in Section 1(a) for purposes of computing the
benefit of equivalent value other than in the case of lump sum.

    

    (i)           “Separation
from Service” means a termination of the Executive’s services (whether as an
employee or as an independent contractor) to the Bank.  Whether a
Separation from Service has occurred shall be determined in accordance with the
requirements of Section 409A of the Code based on whether the facts and
circumstances indicate that the Bank 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 Executive would perform after such date (whether
as an employee or as an independent contractor) would permanently decrease to no
more than twenty percent (20%) of the average level of bona fide services
performed (whether as an employee or an independent contractor) over the
immediately preceding thirty-six (36) month period.

    

    
      	
              2.

            	
              Payments to
      Executive.

            

    

    

    (a)           If
the Executive remains employed by the Bank from the date of his employment until
his termination of employment on or after 10 years of service, the Bank will pay
to the Executive annually, a benefit payable in the Normal Form in equal monthly
installments commencing on the first day of the month next following the
termination of the Executive’s employment, an amount equal to 70% of the average
of the Executive’s Final Average Compensation offset by the SBERA Pension
Benefit, adjusted as provided in clauses (b) and (c) of this Paragraph 2;
provided, the Executive’s termination constitutes a “Separation from Service”
for purposes of Section 409A of the Code.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (b)           The
Executive’s benefits under the Agreement shall become non-forfeitable in
accordance with the following schedule:

    

    
      	
              

                Years of
      Service
10

            	
              

                Non-forfeitable
      Percentage
50

            
	
              11

            	
              55

            
	
              12

            	
              60

            
	
              13

            	
              65

            
	
              14

            	
              70

            
	
              15

            	
              75

            
	
              16

            	
              80

            
	
              17

            	
              85

            
	
              18

            	
              90

            
	
              19

            	
              95

            
	
              20

            	
              100

            

    

    

    Notwithstanding
the foregoing, the Executive shall become fully vested immediately upon his
death prior to a Separation from Service, a Change in Control or upon any
involuntary termination of his employment by the Bank other than for
Cause.

    

    (c)           If
the Accrued Benefit is payable before the Executive’s 65th
birthday, the Accrued Benefit shall be reduced by 2.5% for each year benefits
commence before the Executive’s 65th
birthday.  The foregoing 2.5% reduction shall be pro-rated for a
partial year.  Notwithstanding the foregoing, the Accrued Benefit
shall not be reduced by the 2.5% increments after the Executive has completed
twenty-five (25) years of service with the Bank, or following a Change in
Control.

    

    (d)           In
lieu of the Normal Form provided by the foregoing provisions of this Paragraph
2, with the consent of the Bank, the Executive may elect an optional form of
payment which is the Actuarial Equivalent of the Normal Form to which the
Executive is entitled, which optional form of payment may be any optional form
provided under the SBERA Plan, including a lump sum.  (The Executive
elected a lump sum payment prior to January 1, 2007).  On or after
January 1, 2009, if the Executive wishes to change his payment election as to
the form of payment, the Executive may do so by completing a payment election
form approved by the Board of Directors, provided that any such election (i)
must be made prior to the Executive’s Separation from Service, (ii) must be made
at least 12 months before the date on which any benefit payments are scheduled
to commence, (iii) shall not take effect until at least 12 months after the date
the election is made, and (iv) for payments to be made other than upon death or
disability, must provide an additional deferral period of at least five years
from the date such payment would otherwise have been made (or in the case of any
installment payments treated as a single payment, five years from the date the
first amount was scheduled to be paid).  For purposes of this
Agreement and clause (iv) above, all installment payments under this Agreement
shall be treated as a single payment.  On or before December 31, 2008,
if the Executive wishes to change his payment election as to the form of
payment, the Participant may do so by completing a payment election form,
provided that any such election (i) must be made prior to the Executive’s
Separation from Service, (ii) shall not take effect before the date that is 12
months after the date the election is made, and (iii) made in 2008 cannot apply
to amounts that would otherwise be payable in 2008 and may not cause an amount
to be paid in 2008 that

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    would
otherwise be paid in a later year.  A lump sum payment shall be made
within sixty (60) days following the date the Participant becomes entitled to
receive a benefit under the Plan.

    

    (e)            Notwithstanding
anything to the contrary set forth herein, in no event shall the Executive be
entitled to receive any benefits under this Agreement if he is terminated by the
Board of Directors of the Bank for Cause.  A determination of whether
the Executive’s employment is terminated for Cause shall be made at a meeting of
the Board of Directors called and held for such purpose, at which the Board of
Directors makes a finding that in their good faith opinion an event set forth in
Section 1(c) of this Agreement has occurred and specifying the particulars
thereof in detail.

    

    (f)            Notwithstanding
any provision of this Agreement to the contrary, if the Executive is considered
a Specified Employee at Separation from Service under such procedures as
established by the Bank in accordance with Section 409A of the Code, benefit
distributions that are made upon Separation from Service may not commence
earlier than six (6) months after the date of such Separation from
Service.  Therefore, in the event this Section 2(f) is applicable to
the Executive, any distribution which would otherwise be paid to the Executive
within the first six months following the Separation from Service shall be
accumulated and paid (with interest calculated at the Prime Rate reported in the
Wall Street Journal as of the date the benefit first became payable) to the
Executive in a lump sum on the first day of the seventh month following the
Separation from Service.  All subsequent distributions shall be paid
in the manner specified under this Section 2 of the Plan with respect to the
applicable benefit.  A Specified Employee means a key employee (as
defined in Section 416(i) of the Code without regard to paragraph 5 thereof) of
the Bank if any stock of the Bank is publicly traded on an established
securities market or otherwise or if the Bank is the subsidiary of a
publicly-traded holding company.

    

    
      	
              3.

            	
              Death of the
      Executive.

            

    

    

    (a)           If
the Executive dies prior to the commencement of the payment of benefits under
this Agreement, the Bank will pay to the Executive’s surviving spouse a benefit
payable for her life assuming that the Executive had retired the day before his
death and had elected to receive his Accrued Benefit (as reduced by 2.5% each
year and pro-rated for a partial year if the death occurs before the Executive’s
65th
birthday and before the Executive has completed twenty-five (25) years of
service, as provided for in Section 2(c) of this Agreement) in the form of a
joint and 100% spousal survivor annuity.  The surviving spouse may
elect to receive the death benefit in a lump sum or any other form on an
Actuarially Equivalent basis.

    

    (b)           If
the Executive dies following the commencement of the payment of benefits under
this Agreement, death benefits, if any, will be determined pursuant to the form
of benefit payment in effect at the time of death and paid to the beneficiary
designated by the Executive.

    

    
      	
              4.

            	
              Disability
      Benefits.

            

    

    

    If the
Executive becomes permanently and totally disabled, as determined by a physician
mutually acceptable to the Bank and the Executive, from any cause while in the
employ of the Bank and prior to the commencement of payments under Paragraph 2
above, the Executive shall be entitled to receive the Accrued Benefit that would
be payable to the Executive pursuant to Paragraph 2 above if the Executive had
terminated his employment on the date of his disability with twenty (20) years
of service.  Disability payments may be subject to a six (6) month
waiting period, in which case during such time the Bank shall continue to pay
the Executive his base salary.  For purposes of this Agreement,
“Disabilities” shall mean the Executive is unable to engage in any substantial
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
              5.

            	
              Claims
      Procedure.

            

    

    

    (a)           In
the event the Executive (or his beneficiary in the case of the Executive’s
death) or their authorized representative (hereinafter the “Claimant”) asserts a
right to a benefit under this Agreement which has not been received, the
Claimant must file a claim for such benefit with the Bank on forms provided by
the Bank.  The Bank shall render its decision on the claim within 90
days after its receipt of the claim.  If special circumstances apply,
the 90-day period may be extended by an additional 90 days; provided, written
notice of the extension is provided to the Claimant during the initial 90-day
period and such notice indicates the special circumstances requiring an
extension of time and the date by which the Bank expects to render its decision
on the claim.  If the Bank wholly or partially denies the claim, the
Bank shall provide written notice to the Claimant within the time limitations of
the immediately preceding paragraph.  Such notice shall set
forth:

    

    (i)           the
specific reasons for the denial of the claim;

    

    (ii)           specific
reference to pertinent provisions of the Agreement on which the denial is
based;

    

    (iii)           a
description of any additional material or information necessary to perfect the
claim and an explanation of why such material or information is
necessary;

    

    (iv)           a
description of the Agreement’s claims review procedures, and the time
limitations applicable to such procedures; and

    

    (v)           a
statement of the Claimant’s right to bring a civil action under Section 502(a)
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), if
the claim denial is appealed to the Bank and the Bank fully or partially denies
the claim.

    

    (b)           A
Claimant whose application for benefits is denied may request a full and fair
review of the decision denying the claim by filing, in accordance with such
procedures as the Bank may establish, a written appeal which sets forth the
documents, records and other information relating to the claim within 60 days
after receipt of the notice of the denial from the Bank.  In
connection with such appeal and upon request by the Claimant, a Claimant may
review (or receive free copies of) all documents, records or other information
relevant to the Claimant’s claim for benefit, all in accordance with such
procedures as the Bank may establish.  If a Claimant fails to file an
appeal within such 60-day period, he shall have no further right to
appeal.

    

    (c)           A
decision on the appeal by the Bank shall include a review by the Bank that takes
into account all comments, documents, records and other information submitted by
the Claimant relating to the claim, without regard to whether such information
was submitted or considered in the initial claim determination.  The
Bank shall render its decision on the appeal not later than 60 days after the
receipt by the Bank of the appeal.  If special circumstances apply,
the 60-day period may be extended by an additional 60 days; provided, written
notice of the extension is provided to the Claimant during the initial 60-day
period and such notice indicates the special circumstances requiring an
extension of time and the date by which the Bank expects to render its decision
on the claim on appeal.  If the Bank wholly or partly denies the claim
on appeal, the Bank shall provide written notice to the Claimant within the time
limitations of the immediately preceding paragraph.  Such notice shall
set forth:

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (i)           the
specific reasons for the denial of the claim;

    

    (ii)           specific
reference to pertinent provisions of the Agreement on which the denial is
based;

    

    (iii)           a
statement of the Claimant’s right to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other
information relevant to the Claimant’s claim for benefits; and

    

    (iv)           a
statement of the Claimant’s right to bring a civil action under Section 502(a)
of ERISA.

    

    
      	
              6.

            	
              Violation of
      Agreement.

            

    

    

    In the
event of the violation of any of any material terms of the Agreement by the
Executive, the Bank, in addition to any other rights which it may have, shall be
relieved of the liability to make any further payments under the Agreement to,
or on behalf of, the Executive so long as such violation continues, and shall
have the right to specific enforcement of the Agreement by proceedings in
equity.

    

    
      	
              7.

            	
              Nonassignable
      Rights.

            

    

    

    Except as
otherwise provided by the Agreement, neither the Executive nor his surviving
spouse shall have any right to commute, sell, assign, transfer or otherwise
convey the right to receive any payments hereunder, which payments and the right
thereto are expressly declared to be nonassignable and
nontransferable.

    

    
      	
              8.

            	
              Independence of
      Agreement.

            

    

    

    The
benefits payable under the Agreement shall be independent of, and in addition
to, any employment agreement that may exist from time to time between the
parties hereto, or any other compensation payable by the Bank to the Executive,
whether as salary, bonus or otherwise.  The Agreement shall not be
deemed to constitute a contract of employment between the parties hereto, and no
provision hereof shall restrict the right of the Bank to discharge the Executive
for adequate cause, or restrict the right of the Executive to terminate his
employment.

    

    
      	
              9.

            	
              General Obligation of
      the Bank.

            

    

    

    The
benefits provided under the Agreement constitute a mere promise by the Bank to
make payments in the future, and the rights of the Executive hereunder shall be
those of a general unsecured creditor of the Bank.  Nothing contained
herein shall be construed to create a trust of any kind or to render the Bank a
fiduciary with respect to the Executive.  The Bank shall not be
required to maintain any fund or segregate any amount or in any other way
currently fund the future payment of any benefit provided under the Agreement,
and nothing contained herein shall be construed to give the Executive or any
other person any right to any specific assets of the Bank or of any other
person.

    

    
      	
              10.

            	
              Governing
      Law.

            

    

    

    The
Agreement shall be construed under and governed by the laws of the Commonwealth
of Massachusetts.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    EXECUTED under seal as of the
day and year first above written, in the case of the Bank by its duly authorized
officer.

    

    

    
      	 
      	 
      	 
      	
              EAST
      BOSTON SAVINGS BANK

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              ATTEST:

            	 
      	 
      	
              BY:

            	 
      
	 
      	 
      	 
      	 
      	
              Name:

            
	 
      	 
      	 
      	 
      	
              Title:

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              WITNESS:

            	 
      	 
      	
              BY:

            	 
      
	 
      	 
      	 
      	 
      	
              Executive

            

    

    

    

    

    This
Agreement is joined in by Meridian Financial Services, Inc. for purposes of
fulfilling the obligations of the Bank under Paragraphs 2, 3 and 4
hereof.

    

    
      
        	 
      	 
      	
                MERIDIAN
      FINANCIAL SERVICES, INC.

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                BY:

              	 
      
	 
      	 
      	 
      	
                Name:

              
	 
      	 
      	 
      	
                Title:    Director

              

      

    

    

     

     

    7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}]]