Document:

Exhibit 10.2

 

COASTWAY COMMUNITY BANK

EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN

 

ARTICLE I.
 ESTABLISHMENT OF THE PLAN

 

Coastway Community Bank (the “Bank”) hereby establishes this Executive Change in Control Severance Plan (the “Plan”), which is a severance plan for certain of its key executive management personnel.  The primary purpose of the Plan is to ensure the successful continuation of the Bank’s business and the fair and equitable treatment of the Bank’s key executives in connection with a termination of employment related to a Change in Control (as defined below).  The term “Company” means Coastway Bancorp, Inc. The Company is a party to this Plan for the sole purpose of guaranteeing the payments required hereunder, except as otherwise provided herein.  The effective date of the Plan is                         .

 

ARTICLE II.
 PARTICIPATION

 

The Chief Executive Officer of the Bank shall designate which employees shall become Participants hereunder by setting forth their name and date of participation on Schedule A hereto the Chief Executive Officer of the Bank shall not participate in this Plan.

 

ARTICLE III.
  CHANGE IN CONTROL SEVERANCE BENEFITS

 

Section 3.1.           Entitlement to Severance Payment.

 

(a)           Each Participant shall be eligible to receive Severance Payments (as defined below) if, within twenty-four (24) months after the effective date of the Change in Control, (i) the Participant’s employment with the Bank is involuntarily terminated for reasons other than Cause (as defined below) or (ii) the Participant terminates employment with the Bank voluntarily after being offered continued employment in a position that is not a Comparable Position (as defined below) and the Participant also complies with the additional requirements of Section 3(e) below.

 

(b)           “Change in Control” shall mean any of the following events: (i) a change in the ownership of the Bank or any holding company of the Bank (the “Company”); (ii) a change in the effective control of the Bank or the Company; or (iii) a change in the ownership of a substantial portion of the assets of the Bank or the Company, as described below.  The definition of Change in Control shall be construed to be consistent with the requirements of Treasury Regulations section 1.409A-3(i)(5), except to the extent that such regulations are superseded by subsequent guidance.

 

1

 

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

 

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

 

(3)           A change in the ownership of a substantial portion of the Bank’s or the Company’s assets occurs on the date that any one person or more than one person acting as a group (as defined in Treasury Regulations section 1.409A-3(i)(5)(vii)(C)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Bank or the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company.  For purposes of this Agreement, “gross fair market value” means the value of the assets of the Bank or the Company, or the value of the assets being disposed of, without regard to any liabilities associated with such assets.

 

(c)           “Cause” means termination of employment because of the Participant’s moral turpitude, personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, material breach of the Bank’s Code of Ethics, willfully engaging in actions that in the reasonable opinion of the Executive Committee of the Board will likely cause substantial financial harm or substantial injury to the reputation of the Bank, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than routine traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of the Participant’s employment or change in control agreement (if any) with the Bank.

 

(d)           A “Comparable Position” means a position that would (i) provide the Participant with base compensation and benefits that are comparable in the aggregate to those provided to the Participant prior to the Change in Control; (ii) be in a location that would not require the Participant to increase his or her daily one way commuting distance by more than fifty (50) miles 

 

2

 

as compared to the Participant’s commuting distance immediately prior to the Change in Control; and (iii) have job skill requirements and duties that are comparable to the requirements and duties of the position held by the Participant prior to the Change in Control, regardless of job title and level and regardless of changes in the supervisor (or level of supervisor) to whom the Participant reports.

 

(e)           Upon the occurrence of a voluntary termination of employment described in Section 3.1(a)(ii) above, the Participant shall have the right to elect to terminate his or her employment by resignation upon not less than thirty (30) days prior written notice to the Bank, which notice must be given by the Participant within ninety (90) days after the initial event giving rise to said right to elect to terminate his or her employment.  Notwithstanding the preceding sentence, the Participant, after giving due notice within the prescribed time frame of an initial event specified above, shall not waive any of his or her rights by virtue of the fact that the Participant has submitted his or her resignation but has remained in the employment of the Bank and is engaged in good faith discussions to resolve the situation described above.  The Bank shall have at least thirty (30) days to remedy any condition set forth above, provided, however, that the Bank shall be entitled to waive such period and make an immediate payment hereunder.

 

(f)            Notwithstanding any other provision in this Plan, “termination of employment” as described in Section 3.1(a) shall mean “separation from service” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury Regulations thereunder, such that the Company and the Participant reasonably anticipate that the level of bona fide services the Participant would perform after termination would permanently decrease to a level that is less than 50% of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period.

 

(g)           Notwithstanding anything in this Plan to the contrary, if the Participant is a “specified employee” (within the meaning of Treasury Regulations §1.409A-1(i)), then, to the extent necessary to avoid penalties under Code Section 409A, no payment shall be made to the Participant prior to the first day of the seventh month following the date of termination in excess of the “permitted amount” under Code Section 409A.  For these purposes, the “permitted amount” shall be an amount that does not exceed two times the lesser of: (i) the sum of Participant’s annualized compensation based upon the annual rate of pay for services provided to the Bank for the calendar year preceding the year in which occurs the date of termination or (ii) the maximum amount that may be taken into account under a tax-qualified plan pursuant to Code Section 401(a)(17) for the calendar year in which occurs the date of termination.  Payment of the “permitted amount” shall be made in accordance with regular payroll practices.  Any payment in excess of the permitted amount that was not paid during the first six months following the Participant’s termination shall be aggregated and paid to the Participant ratably over the remaining payment period for such Severance Payments, starting on the Bank’s first regularly

 

3

 

scheduled payroll date on or after the first day of the seventh month following the Participant’s date of termination.

 

Section 3.2.           Benefit Amount.  A Participant’s aggregate Severance Payment will be the amount set forth on Schedule A, payable ratably over the applicable period of time set forth on Schedule A.  Severance Payments shall be paid on the Bank’s regular payroll dates, less applicable payroll taxes and withholdings.  Payments shall begin no later than sixty (60) days after the date of termination, provided, however, that Severance Payments are contingent upon the Participant timely signing and not revoking a release of all claims, as described in Section 3.3 before the end of such sixty (60) day period; and provided further, that if such sixty (60) day period crosses over into a different calendar year, then such Severance Payments shall begin in the later calendar year.  Each installment shall be treated as a separate payment for purposes of Code Section 409A.

 

Section 3.3.           Required Regulatory Provisions.

 

(a)           If the Participant is suspended from office and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) (12 U.S.C. §1818(e)(3)) or 8(g)(1) (12 U.S.C. §1818(g)(1)) of the Federal Deposit Insurance Act (“FDIA”), as amended by the Financial Institutions Reform, Recovery and Enforcement Act of 1989, the Bank’s obligations under this Plan shall be suspended as of the date of service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Bank may pay the Participant the Severance Payment withheld while its Plan obligations were suspended.

 

(b)           If the Participant is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) (12 U.S.C. §1818(e)(4)) or 8(g)(1) (12 U.S.C. §1818(g)(1)) of the FDIA, all obligations of the Bank under this Plan shall terminate as of the effective date of the order, but vested rights shall not be affected.

 

(c)           If the Bank is in default as defined in Section 3(x)(1) (12 U.S.C. §1813(x)(1)) of the FDIA, all obligations under this Plan shall terminate as of the date of default, but this paragraph shall not affect any vested rights.

 

(d)           All obligations under this Plan shall be terminated, except to the extent determined that continuation of this Plan is necessary for the continued operation of the Bank: (i) by the Board of Governors of the Federal Reserve System (the “FRB”), at the time the Federal Deposit Insurance Corporation (the “FDIC”) enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) (12 U.S.C. §1823(c)) of the FDIA; or (ii) by the FRB at the time the FRB approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the FRB to be in an unsafe or unsound condition.  Any vested rights shall not be affected by such action.

 

4

 

(e)           Notwithstanding anything herein contained to the contrary, any Severance Payments are subject to and conditioned upon their compliance with Section 18(k) of the FDIA, 12 U.S.C. § 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359, Golden Parachute and Indemnification Payments.

 

Section 3.4.           Non-Solicitation.  The Participant agrees that for the period of time that Severance Payments are being made hereunder to the Participant (and including the period immediately after the Participant’s termination of employment and before Severance Payments begin) that the Participant will not to solicit, provide any information, advice or recommendation or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any customer of the Bank, the Company or affiliates to terminate an existing business or commercial relationship with the Bank, the Company or affiliates.

 

Section 3.5.           Confidentiality.  The Participant will not, during or after his or her employment with the Bank, disclose any knowledge of the past, present, planned or considered business activities of the Bank, the Company or affiliates thereof to any person, firm, corporation, or other entity for any reason or purpose whatsoever, except for such disclosure as may be required to be provided to any banking agency with jurisdiction over the Bank, the Company or any affiliates.

 

ARTICLE IV.
 ADMINISTRATION OF PLAN

 

Section 4.1.           Plan Administrator.   The Executive Committee of the Company’s Board of Directors shall serve as Plan Administrator (“Plan Administrator”).  The Bank or the Company shall indemnify the Plan Administrator and any employees of the Bank or the Company to whom responsibilities have been delegated under Section 4.1 against any liability incurred in the course of administration of the Plan, except liability arising from their own negligence, willful misconduct or breach of fiduciary duty.

 

Section 4.2.           Amendment or Termination.  The Plan may be terminated or amended in any respect by resolution adopted by a majority of the Board of Directors of the Bank, unless a Change in Control has occurred.  If a Change in Control occurs, the Plan no longer shall be subject to amendment or termination if such amendment or termination would reduce the benefits owed to Participants hereunder.

 

Section 4.3.           Claims Procedure.  The claims procedure set forth in this Section is the exclusive method of resolving disputes that arise under the Plan.

 

(a)           Written Claim.  Any person asserting any rights under this Plan must submit a written claim to the Plan Administrator.  The Plan Administrator shall render a decision within a reasonable period of time from the date on which the Plan Administrator received the written claim, not to exceed 90 days, unless an extension of time is necessary due to reasonable cause.

 

5

 

(b)           Denial of Claim.  If a claim is denied in whole or in part, the claimant must be provided with the following information:

 

(1)           A statement of specific reasons for the denial of the claim;

 

(2)           References to the specific provisions of the Plan on which the denial is based;

 

(3)           A description of any additional material or information necessary to perfect the claim with an explanation of why such material information is necessary;

 

(4)           An explanation of the claims review procedures with a statement that the claimant must request review of the decision denying the claim within 30 days following the date on which the claimant received such notice.

 

(c)           Review of Denial.  The claimant may request that the Bank’s Board of Directors review the denial of a claim.  A request for review must be in writing and must be received by the Board of Directors within 30 days of the date on which the claimant received written notification of the denial of the claim.  The Board of Directors will render a decision with respect to a written request for review within 60 days from the date on which the Board of Directors received the request for review.  If the request for review is denied in whole or in part, the Board of Directors must mail the claimant a written decision that includes a statement of the reasons for the decision.

 

ARTICLE V.
 MISCELLANEOUS

 

Section 5.1.           Severability.  If, for any reason, any provision of this Plan, or any part of any provision, is held invalid, such invalidity shall not affect any other provision of this Plan or any part of such provision not held so invalid, and each such other provision and part thereof shall to the full extent consistent with law continue in full force and effect.

 

Section 5.2.           Applicable Laws.  To the extent not pre-empted by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Plan shall be governed by the laws of the State of Rhode Island.

 

Section 5.3.           Non-Guaranty of Employment.  Nothing in this Plan shall be construed as granting any Participant a right to continued employment with the Bank.

 

6

 

Section 5.4.           Successors and Assigns.  The Bank and/or the Company shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Bank or the Company, expressly and unconditionally to assume and agree to perform the Bank’s and the Company’s obligations under this Plan, in the same manner and to the same extent that the Bank and/or the Company would be required to perform if no such succession or assignment had taken place.

 

7

 

IN WITNESS WHEREOF, the Bank and the Company have duly executed this Plan, effective as of the date first above written.

 

	
 
    	
 
    	
 
    	
COASTWAY   COMMUNITY BANK
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
Date
    	
 
    	
 
    	
William   A. White, President and Chief Executive Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
COASTWAY   BANCORP, INC.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
Date
    	
 
    	
 
    	
William   A. White, President and Chief Executive Officer
    

 

8

 

COASTWAY COMMUNITY BANK

EXECUTIVE CHANGE IN CONTROL SEVERANCE PLAN

 

SCHEDULE A — LIST OF PARTICIPANTS

 

The following individuals have been designated as Participants in the Plan:

 

	
Name
    	
 
    	
Participation
   Date
    	
 
    	
Benefit Formula
    
	
Richard   H. Petrarca
    	
 
    	
 
    	
 
    	
2x   base salary, determined as of termination date, plus 2x highest annual bonus   paid in the 2 calendar years before termination date, payable ratably over 24   months
    
	
Jeanette   Fritz
    	
 
    	
 
    	
 
    	
2x   base salary, determined as of termination date, plus 2x highest annual bonus   paid in the 2 calendar years before termination date, payable ratably over 24   months
    
	
Jana   Planka
    	
 
    	
 
    	
 
    	
2x   base salary, determined as of termination date, plus 2x highest annual bonus   paid in the 2 calendar years before termination date, payable ratably over 24   months
    
	
Paul   Wielgus
    	
 
    	
 
    	
 
    	
2x   base salary, determined as of termination date, plus 2x highest annual bonus   paid in the 2 calendar years before termination date, payable ratably over 24   months
    
	
Stephen   J. Gibbons
    	
 
    	
 
    	
 
    	
2x   base salary, determined as of termination date, plus 2x highest annual bonus   paid in the 2 calendar years before termination date, payable ratably over 24   months
    
	
Suzanne   Fry
    	
 
    	
 
    	
 
    	
1x   base salary, determined as of termination date, plus 1x annual bonus paid in   the calendar year before termination date, payable ratably over 12 months
    

 

9Exhibit 10.3

 

COASTWAY COMMUNITY BANK
 2013 AMENDED AND RESTATED
 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
 FOR WILLIAM A. WHITE

 

WHEREAS, the Supplemental Executive Retirement Plan for William A. White (the “Plan”) was originally adopted effective January 1, 2011, by Coastway Community Bank (the “Bank”) for the benefit of William A. White (“Participant”); and.

 

WHEREAS, the Bank and the Participant wish to amend and restate the Plan in order to clarify certain provisions of the Plan and to change the Participant’s Normal Retirement Date from age 62 to age 67, as permitted by Section 409A of the Internal Revenue Code of 1986, as amended, because such change is being made at least 12 months before the beginning of any payment owed to the Participant hereunder, and the new payment starting date is 5 years from the original payment starting date.

 

NOW THEREFORE, the Plan is hereby amended and restated as follows, effective January 1, 2013.

 

ARTICLE I

 

DEFINITIONS

 

When used herein, the following words shall have the meanings below unless the context clearly indicates otherwise:

 

1.1          “Beneficiary” means the person(s) designated by Participant from time to time, using the Beneficiary Designation Form set forth as Appendix A, as the beneficiary(ies) to whom the deceased Participant’s account will be payable. If no beneficiary is so designated, then the Participant’s estate will be the Beneficiary.

 

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

 

1.3          “Cause” means that the Participant has:  (a) been absent from employment for an unauthorized period of more than one week; or (b) committed a material breach of this Agreement; or (c) been grossly negligent in the performance of his required duties; or (d) willfully failed to perform his obligations under this Agreement; or (e) committed unethical, dishonest, fraudulent, or criminal acts against the Bank; or (f) becomes unbondable.

 

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

 

1.5          “Disabled” or “Disability” means that the Participant: (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period

 

 

of not less than 3 months under an accident and health plan covering employees of the Participant’s employer; or (c) is determined to be disabled by the Social Security Administration.

 

1.6          “Liability Reserve Account” means the balance to the credit of the Participant in a bookkeeping account established and maintained by the Bank for the benefit of the Participant under this Plan.

 

1.7          “Normal Retirement Age” means the Participant’s attainment of age 67 (i.e., April 9, 2023).

 

1.8          “Separation from Service” or “Separates from Service” means the Participant’s retirement or other termination of employment with the Company within the meaning of Code Section 409A.  No Separation from Service shall be deemed to occur due to military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six months or, if longer, so long as the Participant’s right to reemployment is provided by law or contract.  If the leave exceeds six months and the Participant’s right to reemployment is not provided by law or by contract, then the Participant shall have a Separation from Service on the first date immediately following such six-month period.

 

Whether a Separation from Service has occurred is determined based on whether the facts and circumstances indicate that the Company and the Participant reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Participant would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 49% of the average level of bona fide services performed over the immediately preceding 36 months (or such lesser period of time in which the Participant performed services for the Company).  The determination of whether a Participant has had a Separation from Service shall be made by applying the presumptions set forth in the Treasury Regulations under Code Section 409A.

 

1.9          “Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse or a dependent, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all within the meaning of Treasury Regulations Section 1.409A-3(i)(3).

 

ARTICLE II

 

ELIGIBILITY AND VESTING

 

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

 

2.2          Vesting.  The Participant shall become fully vested upon death or Disability.  As of January 1, 2011, the Participant shall be 50% vested in his Liability Reserve Account.  On each December 31 thereafter, the Participant shall become vested in an additional 5% of his Liability Reserve Account, such that the Participant shall be fully vested in his Liability Reserve

 

2

 

Account after completing 10 years of vesting service, as set forth below.  All contributions made after December 31, 2020 are 100% vested when made.  Contributions are required under this Plan until April 9, 2023 (i.e., when the Participant attains age 67).

 

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

 

ARTICLE III

 

FUNDING

 

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

 

3.2          Funding.

 

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

 

(b)           Notwithstanding the preceding sentence, the Participant, his Beneficiaries or any successor in interest to him shall be and remain simply a general creditor of the Bank in the same manner as any other creditor having a general claim for unpaid compensation. The Participant, his Beneficiaries, or any other person claiming through Participant, shall only have the right to receive from the Bank those payments as specified under this Plan.  The Bank reserves the absolute right, at its sole discretion, to either fund the obligations undertaken by this Plan or to refrain from funding the same and to determine the extent, nature, and method of such informal funding. Should the Bank elect to fund this Plan, in whole or in part, through the purchase of life insurance products, the Bank reserves the absolute right, in its sole discretion, to terminate such funding at any time, in whole or in part.

 

3

 

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

 

ARTICLE IV

 

BENEFITS

 

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

 

4.2          Investments. The Participant shall have the right to provide the Board with investment directions for the entire balance in his Liability Reserve Account.  All earnings or losses as a result of such investments are the sole responsibility of the Participant, such that the Bank is not obligated to make up any losses incurred as a result of investment performance.

 

4.3          Normal Retirement Benefit. Upon Participant’s Separation from Service on or after attaining age 67, the Bank shall pay the Participant’s Retirement Benefit in 10 annual installments on the first business day of January immediately following the Participant’s Separation from Service, provided, however, that in the event the Participant dies before receiving 10 annual installments, the Bank shall pay the remainder of the Participant’s Liability Reserve Account the Participant’s Beneficiary as a lump sum no later than the first day of the second calendar month following the Participant’s date of death.  The amount of the Retirement Benefit shall equal the then-current value of the Participant’s vested Liability Reserve Account, divided by the number of payments remaining to be made to the Participant.  For example, if the Participant has a Separation from Service on December 31, 2019, the first payment owed to the Participant will equal the value of the Participant’s vested Liability Reserve Account on January 1, 2020 divided by 10.  The second payment owed to the Participant (payable on January 2, 2021) equals the value of the Participant’s vested Liability Reserve Account on January 1, 2021

 

4

 

divided by 9.  The third payment owed to the Participant (payable on January 2, 2022) equals the value of the Participant’s vested Liability Reserve Account on January 1, 2022 divided by 8, etc.

 

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

 

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

 

4.6          Separation from Service Before Normal Retirement Age or For Cause.  In the event of the Participant’s Separation from Service prior to Normal Retirement Age for reasons other than death, Disability, or Separation from Service due to Cause, the Participant shall be paid the vested portion of the Participant’s Liability Reserve Account in a lump sum no later than the first day of the second calendar month following the date of the Participant’s Separation from Service.  In the event the Participant’s employment is terminated for Cause, the Participant shall forfeit all benefits under this Plan.

 

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

 

(a)           through reimbursement or compensation by insurance, or otherwise;

 

(b)           by liquidation of Participant’s assets, to the extent such liquidation would not in itself cause financial hardship; or

 

(c)           by cessation of elective deferrals under the Bank’s tax-qualified retirement plans.

 

ARTICLE V

 

ADMINISTRATION

 

5.1          Administrator. The Board shall be the named fiduciary and administrator of this Plan.  As administrator, the Board shall be responsible for the management, control and administration of the Plan as established herein. The Board may delegate to others certain aspects

 

5

 

of the management and operational responsibilities of the Plan, including the employment of advisors and the delegation of ministerial duties to qualified individuals.

 

5.2          Claims Procedure.  In the event that benefits under this Plan are not paid to Participant (or to his Beneficiary in the case of Participant’s death) and such claimants feel they are entitled to receive such benefits, then a written claim must be made to the Board within 60 days from the date payments are refused. The Board shall review the written claim and, if the claim is denied, in whole or in part, they shall provide in writing within 60 days of receipt of such claim their specific reasons for such denial, reference to the provisions of this Plan upon which the denial is based and any additional material or information necessary to perfect the claim. Such written notice shall further indicate the additional steps to be taken by claimants if a further review of the claim denial is desired.

 

5.3          Appeal.  If claimants desire a second review, they shall notify the Board in writing within 60 days of the first claim denial. Claimants may review the Plan or any documents relating thereto and submit any issues, in writing, and comments they may feel appropriate. In its sole discretion, the Board shall then review the second claim and provide a written decision within 60 days of receipt of such claim. This decision shall likewise state the specific reasons for the decision and shall include reference to specific provisions of the Plan upon which the decision is based.

 

5.4          Arbitration.  Any controversy or claim arising out of or relating to this Plan, or the breach thereof, shall be settled by arbitration in the State of Rhode Island administrated by the American Arbitration Association in accordance with its rules.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

 

ARTICLE VI

 

AMENDMENT OR TERMINATION

 

6.1          Amendment.  This Plan may not be altered, amended, changed, modified, revised, supplemented, or terminated at any time except by means of the mutual written agreement of the Participant and the Board.

 

6.2          Termination. The Bank reserves the right to terminate the Plan at any time.  Upon Plan termination, the Board shall determine whether all payments of benefits shall be made in accordance with the normal distribution schedule set forth under the Plan or if payment of benefits shall be accelerated in order to wind down the Plan.  To the extent any benefits under the Plan are subject to Code Section 409A, any acceleration of the payment of such benefits due to Plan termination shall comply with the following.  The termination of the Plan with accelerated payment of benefits may not be undertaken if such termination is proximate to an economic downturn of the Bank.  Such termination must also satisfy the following conditions and any other requirements of Code Section 409A

 

(a)           all arrangements sponsored by the Bank that would be aggregated with this Plan under Treasury Regulations Section 1.409A-1(c)(2) if the Participant covered by this Plan was also covered by any of those other arrangements are also terminated;

 

6

 

(b)           no payments other than payments that would be payable under the terms of the arrangement if the termination had not occurred are made within 12 months of the termination of the arrangement;

 

(c)           all payments are made within 24 months of the termination of the arrangements; and

 

(d)           the Bank does not adopt a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations Section 1.409A-1(c)(2) if the same Participant participated in both arrangements, at any time within three years following the date of termination of the arrangement.

 

ARTICLE VII

 

MISCELLANEOUS

 

7.1          No Effect on Employment Rights.  Nothing contained herein shall confer upon the Participant the right to be retained in the service of the Bank nor limit the right of the Bank to discharge or otherwise deal with Participant without regard to the existence of this Plan.

 

7.2          Governing Law.  The Plan is established under, and will be construed according to, the laws of the State of Rhode Island, to the extent that such laws are not preempted by ERISA.

 

7.3          Severability.  In the event that any provision of this Plan is held to be inoperative or invalid by any court of competent jurisdiction, then: (1) insofar as is reasonable, effect will be given to the intent manifested in such provision, and (2) the validity and enforceability of the remaining provisions will not be affected thereby.

 

7.4          Establishment of Rabbi Trust.  The Bank may, but is not obligated to, establish a rabbi trust into which the Bank may contribute assets which shall be held therein, subject to the claims of the Bank’s creditors in the event of the Bank’s insolvency, until the contributed assets are paid to Participants and their Beneficiaries in such manner and at such times as specified in this Plan.

 

7.5          Tax Withholding.  The Bank may withhold from any benefit payable under this Plan all federal, state, city, income, employment or other taxes as shall be required pursuant to any law or governmental regulation then in effect.

 

7.6          Entire Agreement.  This Plan sets forth the entire understanding of the parties hereto with respect to the transactions contemplated hereby, and any previous Plans or understandings between the parties hereto regarding the subject matter hereof are merged into and superseded by this Plan.

 

7.7          Acceleration of Payments.  Except as specifically permitted herein or in other sections of this Plan, no acceleration of the time or schedule of any payment may be made hereunder.  Notwithstanding the foregoing, payments may be accelerated hereunder by the Bank,

 

7

 

in accordance with the provisions of Treasury Regulation Section 1.409A-3(j)(4) and any subsequent guidance issued by the United States Treasury Department.  Accordingly, payments may be accelerated, in accordance with requirements and conditions of the Treasury Regulations (or subsequent guidance) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with ethics agreements with the Federal government; (iii) in compliance with ethics laws or conflicts of interest laws; (iv) in limited cash-outs (but not in excess of the limit under Code Section 402(g)(1)(B)); (v) in the case of certain distributions to avoid a non-allocation year under Code Section 409(p); (vi) to apply certain offsets in satisfaction of a debt of the Participant to the Bank; (vii) in satisfaction of certain bona fide disputes between the Participant and the Bank; or (viii) for any other purpose set forth in the Treasury Regulations and subsequent guidance.

 

7.8          Required Provision.  Any payments made to the Participant pursuant to this Plan, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. § 1828(k) and any regulations promulgated thereunder.

 

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

 

	
 
    	
 
    	
COASTWAY   COMMUNITY BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
7/25/2013
    	
 
    	
/s/Mark   E. Crevier
    
	
Date
    	
 
    	
By:   Mark E. Crevier, Chairman of the Board of Directors
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
PARTICIPANT
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
7/25/2013
    	
 
    	
/s/   William A. White
    
	
Date
    	
 
    	
William   A. White
    

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00221-of-00352.parquet"}]]