Document:

Exhibit 10.5

 

2016 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

This 2016 Supplemental Executive Retirement Plan (the “Agreement”), by and between HarborOne Bank (the “Employer”), and James W. Blake (the “Executive”), effective as of the 21st day of January 2016, formalizes the agreements and understanding between the Employer and the Executive.

 

WITNESSETH:

 

WHEREAS, the Executive is employed by the Employer;

 

WHEREAS, the Employer recognizes the valuable services the Executive has performed for the Employer and wishes to encourage the Executive’s continued employment and to provide the Executive with additional incentive to achieve corporate objectives;

 

WHEREAS, the Employer wishes to provide the terms and conditions upon which the Employer shall pay additional retirement benefits to the Executive;

 

WHEREAS, the Employer and the Executive intend this Agreement shall at all times be administered and interpreted in compliance with Code Section 409A; and

 

WHEREAS, the Employer intends this Agreement shall at all times be administered and interpreted in such a manner as to constitute an unfunded nonqualified deferred compensation arrangement, maintained primarily to provide supplemental retirement benefits for the Executive, a member of select group of management or highly compensated employee of the Employer.

 

NOW THEREFORE, in consideration of the premises and of the mutual promises herein contained, the Employer and the Executive agree as follows:

 

ARTICLE 1

DEFINITIONS

 

For the purpose of this Agreement, the following phrases or terms shall have the indicated meanings:

 

1.1                               “Actuarial Equivalent” means an amount of equal value when computed on the basis of an interest rate of 3.0% compounded annually and the 1983A Mortality Table set back 10 years, and blended 50% male and 50% female.

 

1.2          “Administrator” means the Board or its designee.

 

1.3          “Affiliate” means any business entity with whom the Employer would be considered a single employer under Section 414(b) and 414(c) of the Code.  Such term shall be interpreted in a manner consistent with the definition of “service recipient” contained in Code Section 409A.

 

 

1.4          “Beneficiary” means the person or persons designated in writing by the Executive to receive benefits hereunder in the event of the Executive’s death.

 

1.5          “Board” means the Board of Directors of the Employer.

 

1.6          “Cause” means any of the following acts or circumstances: gross negligence or gross neglect of duties to the Employer; conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Employer; or fraud, disloyalty, dishonesty or willful violation of any law or significant Employer policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Employer.

 

1.7          “Change in Control” means either a change in the ownership or effective control of the Employer, or in the ownership of a substantial portion of the assets of the Employer, as such change is defined in Code Section 409A and regulations thereunder.

 

1.8          “Claimant” means a person who believes that he or she is being denied a benefit to which he or she is entitled hereunder.

 

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

 

1.10        “Disability” means a disability as defined in Treasury Regulation  §1.409A-3(i)(4)

 

1.11        “Effective Date” means December 31, 2015.

 

1.12        “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

1.13        “Final Average Compensation” means one-third of the aggregate of the salary and bonus paid by the Employer on a pre-tax basis to the Executive for services rendered over the thirty-six (36)months of the Executive’s employment ending immediately prior to the Executive’s Separation from Service or death.

 

1.14        “Offsets” means the sum of (i) the Executive’s annual Primary Social Security benefits payable beginning at Separation from Service and (ii) the projected annual benefit payable beginning at Separation from Service in the form of an Actuarial Equivalent single life annuity of the employer provided portion of benefits (without regards to any earnings thereon) provided under the Employer’s 401(k) plan (and any successor plan).

 

1.15        “Separation from Service” means a termination of the Executive’s employment with the Employer and its Affiliates for reasons other than death, Disability or Termination for Cause.  A Separation from Service may occur as of a specified date for purposes of the Agreement even if the Executive continues to provide some services for the Employer or its Affiliates after that date, provided that the facts and circumstances indicate that the Employer and the Executive reasonably anticipated at that date that either no further services would be performed after that date, or that the level of bona fide services

 

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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 over the immediately preceding thirty-six (36) month period (or the full period during which the Executive performed services for the Employer, if that is less than thirty-six (36) months).

 

1.16        “Specified Employee” means an individual that satisfies the definition of a “key employee” of the Employer as such term is defined in Code §416(i) (without regard to Code §416(i)(5)), provided that the stock of the Employer is publicly traded on an established securities market or otherwise, as defined in Code §1.897-1(m).  If the Executive is a key employee at any time during the twelve (12) months ending on December 31, the Executive is a Specified Employee for the twelve (12) month period commencing on the first day of the following April.

 

1.17        “2008 SERP Payment” means the amount paid to the Executive by the Employer pursuant to the Supplemental Executive Retirement Plan Agreement between the Executive and the Employer dated May 28, 2008.

 

ARTICLE 2

PAYMENT OF BENEFITS

 

2.1          Normal Benefit.  Upon Separation from Service or Disability, the Employer shall pay the Executive a lump sum benefit equal to the gross benefit, as defined below, less the 2008 SERP Payment with interest at a rate of 3% per year from the date of payment of such benefit to the date of Separation of Service.  For purposes of this Section 2.1, the gross benefit shall equal the Actuarial Equivalent value of a stream of annual payments over the Executive’s remaining life expectancy in the amount of (i) sixty percent (60%) of Final Average Compensation less (ii) the Offsets.  In no case will the lump sum benefit after application of the Offsets and the 2008 SERP Payment reduction be less than the amount determined as of prior calendar year-end.  This lump sum benefit shall be paid to the Executive within thirty (30) days following Separation from Service, subject to Section 2.9.

 

2.2          Death Benefit.  In the event the Executive dies prior to Separation from Service, the Employer shall pay the Beneficiary a lump sum amount equal to the gross benefit, as defined below, less the 2008 SERP Payment with interest at a rate of 3% per year from the date of payment of such benefit to the date of death.  For purposes of this Section 2.2, the “gross benefit” shall equal the Actuarial Equivalent value of a stream of annual payments over the Executive’s remaining life expectancy (assuming the participant terminated on his date of death) in the amount of (i) sixty percent (60%) of Final Average Compensation less (ii) the Offsets.  In no case will the lump sum benefit after application of the Offsets and the 2008 SERP Payment reduction be less than the amount determined as of prior calendar year-end.  This lump sum benefit shall be paid to the Beneficiary within thirty (30) days following the Executive’s death.

 

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2.3          Termination for Cause.  If the Employer terminates the Executive’s employment for Cause, then the Executive shall not be entitled to any further benefits under the terms of this Agreement.

 

2.4          Acceleration of Payments.  Except as specifically permitted herein, no acceleration of the time or schedule of any payment may be made hereunder.  Notwithstanding the foregoing, payments may be accelerated, in accordance with the provisions of Treasury Regulation §1.409A-3(j)(4) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with ethics agreements with the federal government; (iii) in compliance with the ethics laws or conflicts of interest laws; (iv) in limited cashouts (but not in excess of the limit under Code §402(g)(1)(B)); (v) to pay employment-related taxes; or (vi) to pay any taxes that may become due at any time that the Agreement fails to meet the requirements of Code Section 409A.

 

2.5          Delays in Payment by Employer.  A payment may be delayed to a date after the designated payment date under any of the circumstances described below, and the provision will not fail to meet the requirements of establishing a permissible payment event.  The delay in the payment will not constitute a subsequent deferral election, so long as the Employer treats all payments to similarly situated Participants on a reasonably consistent basis.

 

(a)           Payments subject to Code Section 162(m).  If the Employer reasonably anticipates that the Employer’s deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution from this Agreement is deductible, the Employer may delay payment of any amount that would otherwise be distributed under this Agreement.  The delayed amounts shall be distributed to the Executive (or the Beneficiary in the event of the Executive’s death) at the earliest date the Employer reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).

 

(b)           Payments that would violate Federal securities laws or other applicable law.  A payment may be delayed where the Employer reasonably anticipates that the making of the payment will violate Federal securities laws or other applicable law provided that the payment is made at the earliest date at which the Employer reasonably anticipates that the making of the payment will not cause such violation.  The making of a payment that would cause inclusion in gross income or the application of any penalty provision of the Internal Revenue Code is not treated as a violation of law.

 

(c)           Solvency.  Notwithstanding the above, a payment may be delayed where the payment would jeopardize the ability of the Employer to continue as a going concern.

 

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2.6          Treatment of Payment as Made on Designated Payment Date.  Solely for purposes of determining compliance with Code Section 409A, any payment under this Agreement made after the required payment date shall be deemed made on the required payment date provided that such payment is made by the latest of: (i) the end of the calendar year in which the payment is due; (ii) the 15th day of the third calendar month following the payment due date; (iii) if Employer cannot calculate the payment amount on account of administrative impracticality which is beyond the Executive’s control, the end of the first calendar year which payment calculation is practicable; and (iv) if Employer does not have sufficient funds to make the payment without jeopardizing the Employer’s solvency, in the first calendar year in which the Employer’s funds are sufficient to make the payment.

 

2.7          Facility of Payment.  If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Administrator may make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence; or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee.  Any such distribution shall fully discharge the Employer and the Administrator from further liability on account thereof.

 

2.8          Changes in Form or Timing of Benefit Payments.  The Employer and the Executive may, subject to the terms hereof, amend this Agreement to delay the timing or change the form of payments provided such amendment complies with code Section 409A.

 

2.9          Restriction on Commencement of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at the time of Separation from Service, the provisions of this Section shall govern all distributions hereunder.  Distributions which would otherwise be made to the Executive due to Separation from Service shall not be made during the first six (6) months following Separation from Service.  Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service, or if earlier, upon the Executive’s death.  All subsequent distributions shall be paid as they would have had this Section not applied.

 

ARTICLE 3

BENEFICIARIES

 

3.1          Designation of Beneficiaries.  The Executive may designate any person to receive any benefits payable under the Agreement upon the Executive’s death, and the designation may be changed from time to time by the Executive by filing a new designation.  Each designation will revoke all prior designations by the Executive, shall be in the form prescribed by the Administrator, and shall be effective only when filed in writing with the Administrator during the Executive’s lifetime.  If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Administrator, executed by the Executive’s spouse and returned to the Administrator.  The

 

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Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved.

 

3.2          Absence of Beneficiary Designation.  In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is no living Beneficiary validly named by the Executive, the Employer shall pay the benefit payment to the Executive’s spouse.  If the spouse is not living then the Employer shall pay the benefit payment to the Executive’s living descendants per stirpes, and if there are no living descendants, to the Executive’s estate.  In determining the existence or identity of anyone entitled to a benefit payment, the Employer may rely conclusively upon information supplied by the Executive’s personal representative, executor, or administrator.

 

ARTICLE 4

ADMINISTRATION

 

4.1          Administrator Duties.  The Administrator shall be responsible for the management, operation, and administration of the Agreement.  When making a determination or calculation, the Administrator shall be entitled to rely on information furnished by the Employer, Executive or Beneficiary.  No provision of this Agreement shall be construed as imposing on the Administrator any fiduciary duty under ERISA or other law, or any duty similar to any fiduciary duty under ERISA or other law.

 

4.2          Administrator Authority.  The Administrator shall enforce this Agreement in accordance with its terms, shall be charged with the general administration of this Agreement, and shall have all powers necessary to accomplish its purposes.

 

4.3          Binding Effect of Decision.  The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in this Agreement.

 

4.4          Compensation, Expenses and Indemnity.  The Administrator shall serve without compensation for services rendered hereunder.  The Administrator is authorized at the expense of the Employer to employ such legal counsel and/or recordkeeper as it may deem advisable to assist in the performance of its duties hereunder.  Expense and fees in connection with the administration of this Agreement shall be paid by the Employer.

 

4.5          Employer Information.  The Employer shall supply full and timely information to the Administrator on all matters relating to the Executive’s compensation, death, and such other information as the Administrator reasonably requires.

 

4.6          Compliance with Code Section 409A.  The Employer and the Executive intend that the Agreement comply with the provisions of Code Section 409A to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year prior to the year in which amounts are actually paid to the Executive or Beneficiary.  This Agreement

 

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shall be construed, administered and governed in a manner that affects such intent, and the Administrator shall not take any action that would be inconsistent therewith.

 

ARTICLE 5

CLAIMS AND REVIEW PROCEDURES

 

5.1          Claims Procedure.  A Claimant who has not received benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as follows.

 

(a)           Initiation — Written Claim.  The Claimant initiates a claim by submitting to the Administrator a written claim for the benefits.  If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant.  All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the Claimant.

 

(b)           Timing of Administrator Response.  The Administrator shall respond to such Claimant within ninety (90) days after receiving the claim.  If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional ninety (90) days by notifying the Claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.

 

(c)           Notice of Decision.  If the Administrator denies part or all of the claim, the Administrator shall notify the Claimant in writing of such denial.  The Administrator shall write the notification in a manner calculated to be understood by the Claimant.  The notification shall set forth:  (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which the denial is based; (iii) a description of any additional information or material necessary for the Claimant to perfect the claim and an explanation of why it is needed; (iv) an explanation of this Agreement’s review procedures and the time limits applicable to such procedures; and (v) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

 

5.2          Review Procedure.  If the Administrator denies part or all of the claim, the Claimant shall have the opportunity for a full and fair review by the Administrator of the denial as follows.

 

(a)           Initiation — Written Request.  To initiate the review, the Claimant, within sixty (60) days after receiving the Administrator’s notice of denial, must file with the Administrator a written request for review.

 

(b)           Additional Submissions — Information Access.  The Claimant shall then have the opportunity to submit written comments, documents, records and other

 

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information relating to the claim.  The Administrator shall also provide the Claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits.

 

(c)           Considerations on Review.  In considering the review, the Administrator shall take into account all materials and information the Claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

 

(d)           Timing of Administrator Response.  The Administrator shall respond in writing to such Claimant within sixty (60) days after receiving the request for review.  If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional sixty (60) days by notifying the Claimant in writing, prior to the end of the initial sixty (60) day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.

 

(e)           Notice of Decision.  The Administrator shall notify the Claimant in writing of its decision on review.  The Administrator shall write the notification in a manner calculated to be understood by the Claimant.  The notification shall set forth:  (a) the specific reasons for the denial; (b) a reference to the specific provisions of this Agreement on which the denial is based; (c) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and (d) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a).

 

ARTICLE 6

AMENDMENT AND TERMINATION

 

6.1          Agreement Amendment Generally.  Except as provided in Section 6.2, this Agreement may be amended only by a written agreement signed by both the Employer and the Executive.

 

6.2          Amendment to Insure Proper Characterization of Agreement.  Notwithstanding anything in this Agreement to the contrary, the Agreement may be amended by the Employer at any time, if found necessary in the opinion of the Employer, i) to ensure that the Agreement is characterized as plan of deferred compensation maintained for a select group of management or highly compensated employees as described under ERISA, ii) to conform the Agreement to the requirements of any applicable law or iii) to comply with the written instructions of the Employer’s auditors or banking regulators.

 

6.3          Agreement Termination.  This Agreement may be terminated only by a written agreement signed by the Company and the Executive.  Such termination shall not cause a distribution of benefits under this Agreement.  Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2.

 

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ARTICLE 7

MISCELLANEOUS

 

7.1          No Effect on Other Rights.  This Agreement constitutes the entire agreement between the Employer and the Executive as to the subject matter hereof.  No rights are granted to the Executive by virtue of this Agreement other than those specifically set forth herein.  Nothing contained herein will confer upon the Executive the right to be retained in the service of the Employer nor limit the right of the Employer to discharge or otherwise deal with the Executive without regard to the existence hereof.

 

7.2          State Law.  To the extent not governed by ERISA, the provisions of this Agreement shall be construed and interpreted according to the internal law of the State of Massachusetts without regard to its conflicts of laws principles.

 

7.3          Validity.  In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

 

7.4          Nonassignability.  Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

 

7.5          Unsecured General Creditor Status.  Payment to the Executive or any Beneficiary hereunder shall be made from assets which shall continue, for all purposes, to be part of the general, unrestricted assets of the Employer and no person shall have any interest in any such asset by virtue of any provision of this Agreement.  The Employer’s obligation hereunder shall be an unfunded and unsecured promise to pay money in the future.  In the event that the Employer purchases an insurance policy insuring the life of the Executive to recover the cost of providing benefits hereunder, neither the Executive nor the Beneficiary shall have any rights whatsoever in said policy or the proceeds therefrom.

 

7.6          Unclaimed Benefits.  The Executive shall keep the Employer informed of the Executive’s current address and the current address of the Beneficiary.  If the location of the Executive is not made known to the Employer within three years after the date upon which any payment of any benefits may first be made, the Employer shall delay payment of the Executive’s benefit payment(s) until the location of the Executive is made known to the Employer; however, the Employer shall only be obligated to hold such benefit payment(s) for the Executive until the expiration of three (3) years.  Upon expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Beneficiary.  If the location of the Beneficiary is not made known to the Employer by the end of an additional two (2) month period following expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Executive’s estate.  If there is no estate in existence at such time or if such fact cannot be determined by the Employer, the Executive and Beneficiary shall thereupon forfeit all rights to any benefits provided under this Agreement.

 

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7.7          Removal.  Notwithstanding anything in this Agreement to the contrary, the Employer shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued pursuant to Section 8(e) of the Federal Deposit Insurance Act.  Furthermore, any payments made to the Executive pursuant to this Agreement shall, if required, comply with 12 U.S.C. 1828, FDIC Regulation 12 CFR Part 359 and any other regulations or guidance promulgated thereunder.

 

7.8          Notice.  Any notice, consent or demand required or permitted to be given to the Employer or Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the Employer’s principal business office.  Any notice or filing required or permitted to be given to the Executive or Beneficiary under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive or Beneficiary, as appropriate.  Any notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or on the receipt for registration or certification.

 

7.9          Headings and Interpretation.  Headings and sub-headings in this Agreement are inserted for reference and convenience only and shall not be deemed part of this Agreement.  Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

 

7.10        Alternative Action.  In the event it becomes impossible for the Employer or the Administrator to perform any act required by this Agreement due to regulatory or other constraints, the Employer or Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Employer, provided that such alternative act does not violate Code Section 409A.

 

7.11        Coordination with Other Benefits.  The benefits provided for the Executive or the Beneficiary under this Agreement are in addition to any other benefits available to the Executive under any other plan or program for employees of the Employer.  This Agreement shall supplement and shall not supersede, modify, or amend any other such plan or program except as may otherwise be expressly provided herein.

 

7.12        Inurement.  This Agreement shall be binding upon and shall inure to the benefit of the Employer, its successor and assigns, and the Executive, the Executive’s successors, heirs, executors, administrators, and the Beneficiary.

 

7.13        Tax Withholding.  The Employer may make such provisions and take such action as it deems necessary or appropriate for the withholding of any taxes which the Employer is required by any law or regulation to withhold in connection with any benefits under the Agreement.  The Executive shall be responsible for the payment of all individual tax liabilities relating to any benefits paid hereunder.

 

7.14        Aggregation of Agreement.  If the Employer offers other non-qualified deferred compensation plans, this Agreement and those plans shall be treated as a single plan to the extent required under Code Section 409A.

 

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IN WITNESS WHEREOF, the Executive and a representative of the Employer have executed this Agreement document as indicated below:

 

	
Executive:
    	
 
    	
Employer:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ James W. Blake
    	
 
    	
By:
    	
/s/ Timothy Lynch
    
	
 
    	
 
    	
Its:
    	
Chairman of the Board
    
					

 

11Exhibit 10.6

 

HARBORONE BANK

ENDORSEMENT SPLIT DOLLAR

LIFE INSURANCE AGREEMENT

 

THIS ENDORSEMENT SPLIT DOLLAR LIFE INSURANCE AGREEMENT (the “Agreement”) is adopted this 13th day of November, 2015, by and between HARBORONE BANK, a state-chartered co-operative bank located in Brockton, Massachusetts (the “Bank”) and James Blake (the “Employee”).

 

The purpose of this Agreement is to retain and reward the Employee, by dividing the death proceeds of certain life insurance policies which are owned by the Bank on the life of the Employee with the designated beneficiary of the Employee.  The Bank has paid the life insurance premiums from its general assets.

 

Article 1

Definitions

 

Whenever used in this Agreement, the following terms shall have the meanings specified:

 

1.1                               “Bank’s Interest” means the benefit set forth in Section 2.1.

 

1.2                               “Base Salary” means the Employee’s most recent base annual salary exclusive of any bonuses, options or incentives of any kind.  In the event of retirement or other termination of employment, Base Salary shall be the last base salary annualized prior to retirement or such other termination of employment.

 

1.3                               “Beneficiary” means each designated person, or the estate of the deceased Employee, entitled to benefits, if any, upon the death of the Employee.

 

1.4                               “Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Employee completes, signs and returns to the Plan Administrator to designate one or more Beneficiaries.

 

1.5                               “Board” means the Board of Directors of the Bank as from time to time constituted.

 

1.6                               “Change in Control” means a change in the ownership or effective control of the Bank, or in the ownership of a substantial portion of the assets of the Bank, as such change is defined in Code Section 409A and regulations thereunder.

 

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

 

1.8                               “Disability or “Disabled” means the Employee is disabled and has been approved for Premium Waiver by the Bank’s Group Life Insurance Carrier, and the Premium Waiver period has not ended.

 

1.9                               “Effective Date” means November 6, 2015.

 

1.10                        “Employee’s Interest” means the benefit set forth in Section 2.2.

 

 

1.11                        “Insurer” means the insurance company(ies) issuing the Policy on the life of the Employee.

 

1.12                        “Net Death Proceeds” means the total death proceeds of the Policy or Policies minus the greater of (i) the cash surrender value or (ii) the aggregate premiums paid by the Bank.

 

1.13                        “Plan Administrator” means the plan administrator described in Article 11.

 

1.14                        “Policy” or “Policies” means the individual insurance policy or policies acquired by the Bank for purposes of insuring the Employee’s life under this Agreement.

 

1.15                        “Separation from Service” means termination of employment for any reason other than death or disability.  Whether a Separation from Service has occurred is determined in accordance with the requirements of Code Section 409A based on whether the facts and circumstances indicate that the Bank and Employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Employee 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 immediate preceding thirty-six (36) month period (or the full period of services to the Bank if the Employee has been providing services to the Bank less than thirty-six (36) months).

 

Article 2

Policy Ownership/Interests

 

2.1                               Bank’s Interest.  The Bank shall own the Policies and the Bank shall have the right to exercise all incidents of ownership. The Bank, subject to Article 5, may terminate a Policy without the consent of the Employee.  The Bank shall be the beneficiary of the remaining death proceeds of the Policies after the Employee’s Interest is determined according to Section 2.2 below.

 

2.2                               Employee’s Interest.  The Employee, or the Employee’s assignee, shall have the right to designate the Beneficiary of an amount of death proceeds as specified in this Section 2.2.

 

2.2.1                     Death Prior to Separation from Service.  If the Employee dies prior to Separation from Service, the Beneficiary shall be entitled to a benefit equal to One Million Four Hundred Thousand Dollars ($1,400,000) provided however, such benefit shall not exceed the Net Death Proceeds.

 

2.2.2                     Death After Separation from Service.  If the Employee dies after Separation from Service, the Beneficiary shall be entitled to a benefit equal to One Million Four Hundred Thousand Dollars ($1,400,000) provided however, such benefit shall not exceed the Net Death Proceeds.

 

 

Article 3

Comparable Coverage

 

3.1                               Insurance Policies.  The Bank may provide the Employee’s Interest through the Policies already held by the Bank with the Employee as the insured, or may provide comparable insurance coverage to the Employee through whatever means the Bank deems appropriate.  If the Employee waives or forfeits his or her right to the Employee’s Interest, the Bank may choose to cancel the Policy or Policies on the Employee, or may continue such coverage and become the direct beneficiary of the entire death proceeds.

 

Article 4

Premiums and Imputed Income

 

4.1                               Premium Payment.  The Bank shall pay all premiums due on all Policies.

 

4.2                               Economic Benefit.  The Bank shall determine the economic benefit attributable to the Employee based on the life insurance premium factor for the Employee’s age multiplied by the aggregate death benefit payable to the Beneficiary.  The “life insurance premium factor” is the minimum factor applicable under guidance published pursuant to Treasury Reg. § 1.61-22(d)(3)(ii) or any subsequent authority.

 

4.3                               Imputed Income.  The Bank shall impute the economic benefit to the Employee on an annual basis, by adding the economic benefit to the Employee’s W-2, or if applicable, Form 1099.

 

Article 5

General Limitations

 

5.1                               Removal.  Notwithstanding any provision of this Agreement to the contrary, the Employee’s rights in the Agreement shall terminate if the Employee is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act (“FDIA”).

 

5.2                               Misstatement.  No benefits shall be payable if the insurance company denies coverage (i) for material misstatements of fact made by the Employee on any application for life insurance owned by the Bank, or (ii) for any other reason; provided, however that the Bank shall evaluate the reason for the denial, and upon advice of legal counsel and in its sole discretion, consider judicially challenging any denial.

 

5.3                               Termination for Cause.  No benefits shall be paid if Separation from Service is for Cause.  Cause shall be defined as any of the following that result in an adverse effect on the Bank; (i) gross negligence or gross neglect; (ii) the commission of a felony or gross misdemeanor involving moral turpitude, fraud, or dishonesty; (iii) the willful violation of any law, rule, or regulation (other than a traffic violation or similar offense); (iv) an intentional failure to perform stated duties; or (v) a breach of fiduciary duty involving personal profit.

 

 

Article 6

Beneficiaries

 

6.1                               Beneficiary. The Employee shall have the right, at any time, to designate a Beneficiary to receive any benefits payable under the Agreement upon the death of the Employee.  The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designated under any other Agreement of the Bank in which the Employee participates.

 

6.2                               Beneficiary Designation; Change.  The Employee shall designate a Beneficiary by completing and signing the Beneficiary Designation Form, and delivering it to the Bank or its designated agent.  The Employee’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Employee or if the Employee names a spouse as Beneficiary and the marriage is subsequently dissolved.  The Employee shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Bank’s rules and procedures, as in effect from time to time.  Upon the acceptance by the Bank of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled.  The Bank shall be entitled to rely on the last Beneficiary Designation Form filed by the Employee and accepted by the Bank prior to the Employee’s death.

 

6.3                               Acknowledgment.  No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Bank or its designated agent.

 

6.4                               No Beneficiary Designation.  If the Employee dies without a valid designation of beneficiary, or if all designated Beneficiaries predecease the Employee, then the Employee’s surviving spouse shall be the designated Beneficiary.  If the Employee has no surviving spouse, the benefits shall be made payable to the personal representative of the Employee’s estate.

 

6.5                               Facility of Payment.  If the Bank determines in its discretion that a benefit is to be paid to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of that person’s property, the Bank may direct payment of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.  The Bank may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit.  Any payment of a benefit shall be a payment for the account of the Employee and the Employee’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such payment amount.

 

 

Article 7

Assignment

 

The Employee may irrevocably assign without consideration all of the Employee’s Interest in this Agreement to any person, entity, or trust.  In the event the Employee shall transfer all of the Employee’s Interest, then all of the Employee’s Interest in this Agreement shall be vested in the Employee’s transferee, who shall be substituted as a party hereunder, and the Employee shall have no further interest in this Agreement.

 

Article 8

Insurer

 

The Insurer shall be bound only by the terms of its given Policy.  The Insurer shall not be bound by or deemed to have notice of the provisions of this Agreement.  The Insurer shall have the right to rely on the Bank’s representations with regard to any definitions, interpretations or Policy interests as specified under this Agreement.

 

Article 9

Claims And Review Procedure

 

9.1                               Claims Procedure.  The Employee or Beneficiary (“claimant”) who has not received benefits under the Agreement that he or she believes should be paid shall make a claim for such benefits as follows:

 

9.1.1                     Initiation — Written Claim.  The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits.  If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant.  All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the claimant.

 

9.1.2                     Timing of Bank Response.  The Bank shall respond to such claimant within ninety (90) days after receiving the claim.  If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional ninety (90) days by notifying the claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision.

 

9.1.3                     Notice of Decision.  If the Bank denies part or all of the claim, the Bank shall notify the claimant in writing of such denial.  The Bank shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

 

(a)                                 The specific reasons for the denial;

(b)                                 A reference to the specific provisions of the Agreement on which the

 

 

denial is based;

(c)                                  A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed;

(d)                                 An explanation of the Agreement’s review procedures and the time limits applicable to such procedures; and

(e)                                  A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

 

9.2                               Review Procedure.  If the Bank denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Bank of the denial, as follows:

 

9.2.1                     Initiation — Written Request.  To initiate the review, the claimant, within sixty (60) days after receiving the Bank’s notice of denial, must file with the Bank a written request for review.

 

9.2.2                     Additional Submissions — Information Access.  The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim.  The Bank shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

 

9.2.3                     Considerations on Review.  In considering the review, the Bank shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

 

9.2.4                     Timing of Bank’s Response.  The Bank shall respond in writing to such claimant within sixty (60) days after receiving the request for review.  If the Bank determines that special circumstances require additional time for processing the claim, the Bank can extend the response period by an additional sixty (60) days by notifying the claimant in writing, prior to the end of the initial sixty (60) day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Bank expects to render its decision.

 

9.2.5                     Notice of Decision.  The Bank shall notify the claimant in writing of its decision on review.  The Bank shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

 

(a)                                 The specific reasons for the denial;

(b)                                 A reference to the specific provisions of the Agreement on which the denial is based;

(c)                                  A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits; and

(d)                                 A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

 

 

Article 10

Amendments And Termination

 

The Bank may amend or terminate the Agreement at any time, or may amend or terminate the Employee’s rights under the Agreement at any time prior to the Employee’s death, by providing written notice of such to the Employee; provided, however, the Bank may amend or terminate the Agreement only if: (i) continuation of the Agreement would cause significant financial harm to the Bank, or (ii) the Employee agrees to such action, or (iii) the Bank’s banking regulator(s) issues a written directive to amend or terminate the Agreement. In the event that the Bank decides to maintain the Policy after termination of the Agreement, the Bank shall be the direct beneficiary of the entire death proceeds of the Policy.

 

Article 11

Administration

 

11.1                        Plan Administrator Duties.  This Agreement shall be administered by a Plan Administrator which shall consist of the Board of Trustees or its designee.  The Plan Administrator shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions including interpretations of this Agreement, as may arise in connection with this Agreement.

 

11.2                        Agents.  In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit, (including acting through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Bank.

 

11.3                        Binding Effect of Decisions.  The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement.

 

11.4                        Indemnity of Plan Administrator.  The Bank shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members.

 

11.5                        Information.  To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the death or Separation from Service of the Employee, and such other pertinent information as the Plan Administrator may reasonably require.

 

 

Article 12

Miscellaneous

 

12.1                        Binding Effect.  This Agreement shall bind the Employee and the Bank, their beneficiaries, survivors, executors, administrators and transferees and any Beneficiary.

 

12.2                        No Guarantee of Employment.  This Agreement is not an employment policy or contract. It does not give the Employee the right to remain an Employee of the Bank, nor does it interfere with the Bank’s right to discharge the Employee.  It also does not require the Employee to remain an Employee nor interfere with the Employee’s right to terminate employment at any time.

 

12.3                        Applicable Law.  The Agreement and all rights hereunder shall be governed by and construed according to the laws of the Commonwealth of Massachusetts except to the extent preempted by the laws of the United States of America.

 

12.4                        Reorganization.  The Bank shall not merge or consolidate into or with another company, or reorganize, or sell substantially all of its assets to another company, firm or person unless such succeeding or continuing company, firm or person agrees to assume and discharge the obligations of the Bank under this Agreement.  Upon the occurrence of such event, the term “Bank” as used in this Agreement shall be deemed to refer to the successor or survivor company.

 

12.5                        Notice.  Any notice or filing required or permitted to be given to the Bank under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

 

	
HarborOne   Bank
    
	
Attn:   Human Resource Officer
    
	
770   Oak Street
    
	
Brockton,   MA 02301
    

 

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification.

 

Any notice or filing required or permitted to be given to the Employee under this Agreement shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Employee.

 

12.6                        Entire Agreement.  This Agreement, along with the Employee’s Beneficiary Designation Form, constitutes the entire agreement between the Bank and the Employee as to the subject matter hereof.  No rights are granted to the Employee under this Agreement other than those specifically set forth herein.

 

12.7                        Severability and Interpretation.  If a provision of this Agreement is held to be invalid or unforeseeable, the remaining provisions shall nonetheless be enforceable according to

 

 

their terms.  Further, in the event that any provisions is held to be overbroad as written such provision shall be deemed amended to narrow its application to the extent necessary to make the provision enforceable according to law and enforced as amended.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated above.

 

	
Employee:
    	
HarborOne   Bank:
    
	
 
    	
 
    
	
/s/   James Blake
    	
 
    	
By:
    	
/s/   Joseph Casey
    
	
James   Blake
    	
 
    
	
 
    	
Title:
    	
EVP/COO/CFO/Treasurer

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