Document:

ex10-2.htm

Exhibit 10.2

 

SUPPLEMENTAL RETIREMENT PLAN

FOR SENIOR EXECUTIVES

 

FARMINGTON BANK

 

Effective January 1, 2009

 

PLAN OF DEFERRED COMPENSATION WITH

PARTICIPATION AGREEMENT FOR EACH EXECUTIVE

 

  

  

  

 

SUPPLEMENTAL RETIREMENT PLAN FOR SENIOR EXECUTIVES

 

This Supplemental Retirement Plan for Senior Executives (the “Plan”) is adopted by Farmington Bank (the “Bank”) effective January 1, 2009.  The purpose of the Plan us to provide supplemental retirement benefits to certain executives who have been designated by the Board of the Bank as being eligible to participate in the Plan.  It is intended that the Plan comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and is to be construed and interpreted in a manner consistent with the requirements of Section 409A.  The Plan is intended to be a Plan of Deferred Compensation.  Each participant (now or in the future), referred to herein as an “Executive,” will enroll in the Plan by execution of a separate Supplemental Retirement Plan Participation Agreement (“Participation Agreement”) in a form provided by the Bank.  Any reference herein to the “Company” shall refer to First Connecticut Bancorp, Inc.

 

W I T N E S S E T H:

 

WHEREAS, Executives are employed by the Bank; and

 

WHEREAS, the Bank recognizes the valuable services heretofore performed for it by such Executives and wishes to encourage their continued employment and to provide them with additional incentive to achieve corporate objectives; and

 

WHEREAS, the Bank desires to draft the Plan to comply with new Section 409A of the Internal Revenue Code (“Code”); and

 

WHEREAS, the Bank intends this Plan to be considered an unfunded arrangement, maintained primarily to provide supplemental retirement income for its Executives, members of a select group of management or highly compensated employees of the Bank, for tax purposes and for purposes of the Employee Retirement Income Security Act of 1974, as amended; and

 

WHEREAS, the Bank has adopted this Supplemental Retirement Plan for Senior Executives which controls all issues relating to Supplemental Benefits as described herein;

 

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

 

SECTION I

DEFINITIONS

 

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

 

	
1.1

	
“Act” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

  

  

  

 

	
1.2

	

“Administrator” means the Bank and/or its Board.

 

	
1.3

	
“Annuity Benefit” means a stream of payments to an Executive payable in annual payments of the Yearly Benefit Amount for 20 years certain, commencing on the Annuity Commencement Date.

 

	
1.4

	
“Annuity Commencement Date” means, unless otherwise set forth herein, the Executive’s Benefit Age.

 

	
1.5

	
“Bank” means Farmington Bank and any successor thereto.

 

	
1.6

	
“Beneficiary” means the person or persons (and their heirs) designated as Beneficiary by Executive to whom the deceased Executive’s benefits are payable. Such beneficiary designation shall be made on the form attached hereto as Exhibit A and filed with the Plan Administrator.  If no Beneficiary is so designated, then Executive’s Spouse, if living, will be deemed the Beneficiary. If Executive’s Spouse is not living, then the Children of Executive will be deemed the Beneficiaries and will take on a per stirpes basis. If there are no living Children, then the Estate of Executive will be deemed the Beneficiary.

 

	
1.7

	
“Benefit Age” means the birthday on which Executive attains age 65.

 

	
1.8

	
“Board” means the Board of Trustees of the Bank, unless specifically noted otherwise.

 

	
1.9

	
“Cause” means Executive’s:  (i) conviction of a felony; (ii) act of fraud, embezzlement or theft in connection with Executive’s duties or in the course of his employment with the Bank; (iii) intentional or grossly negligent act which causes damage to property of the Bank; (iv) willful or grossly negligent violation of any law, rule, regulation or final administrative action that causes material harm to the Bank or its assets; (v) intentional or grossly negligent breach of fiduciary duty owed to the Bank involving personal profit; (vi) willful failure to discharge, or habitual neglect of, material obligations or duties of Executive’s position; or (vii)  material violation of Section 7.13 of this Plan.  For the purpose of this paragraph, no act, or failure to act, on the part of Executive shall be deemed “intentional” or “willful” unless done, or omitted to be done, by Executive without reasonable belief that his action or omission was in the best interest of the Bank.  Notwithstanding the foregoing, Executive shall not be deemed to have been terminated by reason of clause (vi) unless and until Executive is notified in writing by the Board of Directors of such a determination, specifying the particulars thereof in reasonably sufficient detail, and giving the Executive a reasonable opportunity (of not less than thirty (30) days), together with his counsel, to explain to the Board of Directors why clause (vi) has not occurred, followed by a finding by the Board of Directors (1) that, in the good faith opinion of the Board of Directors, Executive has committed an act set forth in clause (vi), (2) specifying the particulars thereof in detail, and (3) determining that such violation has not been corrected, or is not capable of correction.

 

  

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1.10

	
“Change in Control” means (1) a change in ownership of the Company or the Bank under paragraph (i) below, or (2) a change in effective control of the Company or the Bank under paragraph (ii) below, or (3) a change in the ownership of a substantial portion of the assets of the Company or the Bank under paragraph (iii) below:

 

	
  

	
(i)

	
A change in the ownership of the Company or the Bank shall occur on the date that any one person, or more than one person acting as a group (as defined in Treasury Regulation Section 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the corporation 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 such corporation.

 

	
  

	
(ii)

	
A change in the effective control of the Company or the Bank shall occur on the date that either (A) any one person, or more than one person acting as a group (as defined in Treasury Regulation Section 1.409A-3(i)(5)(vi)(D)), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company or the Bank possessing 30% or more of the total voting power of the stock of the Company or the Bank, as applicable; or (B) a majority of members of 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 corporation’s Board of Directors prior to the date of the appointment or election, provided that this sub-section (B) is inapplicable where a majority shareholder of the corporation is another corporation.

 

	
  

	
(iii)

	
A change in the ownership of a substantial portion of the Company’s or the Bank’s assets shall occur on the date that any one person, or more than one person acting as a group (as defined in Treasury Regulation 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 that have a total gross fair market value equal to more than 40% of the total gross fair market value of all of the assets of the Company or Bank, as applicable, immediately prior to such acquisition.  For this purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

 

For all purposes hereunder, the definition of Change in Control shall be construed to be consistent with the requirements of Treasury Regulation Section 1.409A-3(i)(5), except to the extent that such regulations are superseded by subsequent guidance.  Notwithstanding anything in this subsection to the contrary, a Change in Control shall not be deemed to have occurred either (i) upon the conversion of the Bank’s mutual holding company or any future subsidiary holding company to stock form or any similar transaction or (ii) any public stock offering by the Bank or the Company or any subsidiary holding company.

 

  

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1.11

	
“Children” means Executive’s children, or the issue of any deceased Children, then living at the time payments are due the Children under this Plan. The term “Children” shall include both natural and adopted Children.

 

	
1.12

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

 

	
1.13

	
“Compensation” means Executive’s total Base Salary and Incentive Bonus paid during a calendar year, including amounts deferred under Section 402(g) of the Code and amounts contributed to a plan under Section 125 of the Code.

 

	
1.14

	
“Death Benefit” means, unless an Executive’s Participation Agreement provides otherwise, a Lump Sum payment equal to the amount that would have been payable as of the date of death if Executive had incurred a voluntary Separation from Service on such date, but without reduction for early retirement.  The time of payment of such benefit shall be as set forth in Section 3.3.

 

	
1.15

	
“Disability” or “Disabled” means that Executive is, by reason of any medically determinable physical or mental impairment, unable to engage in any substantial gainful activity for a continuous period of not less than six months.  If any dispute occurs regarding the existence of the Disability hereunder, the matter shall be resolved by the determination of the Bank in its reasonable judgment, after consultation with a physician to be selected by the Bank.  Executive shall submit to reasonable medical examinations for purposes of such determination provided that any examining physician must be a United States doctor with Board Certification in the applicable areas of specialty and must have an office within a reasonable proximity to Executive’s residence.

 

	
1.16

	
“Disability Benefit” means the benefit described in Section 3.3.

 

	
1.17

	
“Effective Date” of this Plan is January 1, 2009.

 

	
1.18

	
“Estate” means the estate of Executive.

 

	
1.19

	
“Executive” means the executive officer who has been selected and approved by the Board to participate in the Plan and who has agreed to participation by completing a Participation Agreement.

 

	
1.20

	
“Final Average Compensation” means the average of Executive’s highest three (3) years of Compensation within the last five (5) years.

 

	
1.21

	
“Good Reason” means Executive’s resignation from his position(s) with the Company within six (6) months after the occurrence of any of the following actions by the Bank, without the prior written consent of the Executive and which is not remedied within thirty (30) calendar days after receipt by the Bank of written notice from the Executive: (a) a diminution in Executive’s base compensation; (b) a material diminution in Executive’s authority, duties, or responsibilities; (c) the relocation of Executive’s principal place of work to a location more than thirty-five (35) miles from Executive’s current principal place of work; or (d) a material breach by the Bank of any agreement under which Executive provides services, including this Plan.  Notwithstanding the foregoing, if Executive is a party to an employment agreement or change in control agreement that provides a different definition of “Good Reason,” then for these purposes, the Good Reason definition under such other agreement shall control with respect to such Executive for purposes of this Plan and shall be deemed to be incorporated herein.

 

  

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1.22

	
“Lump Sum” means payment in a single sum equal to the Present Value of the Annuity Benefit or Accrued Annuity Benefit, as applicable.

 

	
1.23

	
“Normal Benefit Date” means 45 days after the date on which Executive’s Separation from Service occurs, other than due to death or Disability.  In the event of Executive’s death, Normal Benefit Date means 45 days following the date of Executive’s death.  In the event of Executive’s Disability, Normal Benefit Date means Executive’s Benefit Age, unless Executive has elected in the initial execution of the Participation Agreement to commence the Disability Benefit upon Separation from Service, in which case Normal Benefit Date shall mean 45 days after the date on which Executive’s Separation from Service occurs.

 

	
1.24

	
“Normal Benefit Form” means a Lump Sum payment equal to the Present Value, as of the time of payment, of the Annuity Benefit.

 

	
1.25

	
“Participation Agreement” means the agreement between Executive and the Bank which sets forth the particulars of Executive’s Supplemental Benefit and/or other benefits to which Executive or Executive’s Beneficiary becomes entitled under the Plan.

 

	
1.26

	
“Plan Year” means the calendar year.

 

	
1.27

	
“Present Value” means the actuarial present value of a payment stream.  Unless otherwise set forth herein, the Present Value shall be determined using a six percent (6%) discount rate and 1994 Group Annuity Reserving Table.

 

	
1.28

	
“Prorate Fraction” means a fraction, the numerator of which is the Executive’s years of employment from the Executive’s original date of hire and the denominator of which is set forth in the Executive’s Participation Agreement, provided, however, that the Prorate Fraction shall never exceed “one” (1).

 

	
1.29

	
“Separation from Service” means Executive’s death, retirement or other termination of employment with the Bank 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 Executive’s right to reemployment is provided by law or contract.  If the leave exceeds six months and Executive’s right to reemployment is not provided by law or by contract, then Executive 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 employer 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 49% of the average level of bona fide services performed over the immediately preceding 36 months (or such lesser period of time in which Executive performed services for the Bank).  The determination of whether an Executive has had a Separation from Service shall be made by applying the presumptions set forth in the Treasury Regulations under Code Section 409A.

 

  

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1.30

	
“Specified Employee” means, in the event the Bank or any corporate parent is or becomes publicly traded, a “Key Employee” as such term is defined in Code Section 416(i) without regard to paragraph 5 thereof.  Notwithstanding anything to the contrary herein, in the event an Executive is a Specified Employee and becomes entitled to a payment hereunder due to Separation from Service for any reason (other than death or Disability), the payments to such Executive shall not commence until the first day of the seventh month following such Separation from Service.  Whether and the extent to which a person is a Specified Employee shall be determined on the “Specified Employee Determination Date” which shall be December 31 of each calendar year and shall be applicable commencing on the following April 1, in accordance with the rules set forth in the Treasury Regulations under Code Section 409A.

 

	
1.31

	
“Spouse” means the individual to whom Executive is legally married at the time of Executive’s death, provided, however, that the term “Spouse” shall not refer to an individual to whom Executive is legally married at the time of death if Executive and such individual have entered into a formal separation agreement (provided that such separation agreement does not provide otherwise or state that such individual is entitled to a portion of the benefit hereunder).

 

	
1.32

	
“Supplemental Benefit” means a benefit (before taking into account federal and state income taxes) payable to an Executive who satisfies the conditions to receive a benefit as described in this Plan.

 

	
1.33

	
“Treasury Regulations” means the final regulations promulgated under Section 409A of the Code.

 

	
1.34

	
“Vesting Rate” means the rate set forth in the Executive’s Participation Agreement.

 

	
1.35

	
“Yearly Benefit Amount” means the annual amount contingently payable as an Annuity Benefit.  The Yearly Benefit Amount is equal to the percentage of the Executive’s Final Average Compensation set forth in the Executive’s Participation Agreement, multiplied by the Prorate Fraction, and is subject to reduction for early retirement under Section 3.2.

 

  

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SECTION II

ESTABLISHMENT OF RABBI TRUST

 

The Bank may 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” as defined in the agreement which establishes such rabbi trust, until the contributed assets are paid to Executives and their Beneficiaries in such manner and at such times as specified in this Plan. Contributions to a rabbi trust would provide the Bank with a source of funds to assist it in meeting the liabilities of this Plan.  To the extent the language in this Plan is modified by the language in the rabbi trust agreement, the rabbi trust agreement shall supersede this Plan. Contributions to the rabbi trust may be made during each Plan Year in accordance with the rabbi trust agreement. It is expected that the amount of such contribution(s), if any, would be equal to the full present value of all benefit accruals under this Plan, if any, less: (i) previous contributions made on behalf of Executive to the rabbi trust, and (ii) earnings to date on all such previous contributions. In the event of a Change in Control, the Bank shall transfer to the rabbi trust within thirty (30) days prior to such Change in Control, the present value (applying the Interest Factor applicable to a Change in Control) of an amount sufficient to fully fund the Supplemental Benefit for each Executive covered by this Plan.

 

SECTION III

BENEFITS

 

	
3.1

	
Separation from Service On or After Benefit Age.

 

	
  

	
(a)

	
Calculation of Supplemental Benefit.  If Executive has a Separation from Service (other than due to Cause or death) on or after the attainment of Benefit Age, Executive shall be entitled to a Supplemental Benefit determined in the manner set forth herein. The Supplemental Benefit shall be determined as an Annuity Benefit, at Normal Benefit Date, with payments equal to the Yearly Benefit Amount multiplied by the Prorate Fraction, using actual years of employment and actual Final Average Compensation and subject to Executive’s Vesting Rate.

 

	
  

	
(b)

	
Time and Form of Payment.  The Supplemental Benefit shall be paid on Executive’s Normal Benefit Date in a Lump Sum that is the then Present Value of the Annuity Benefit described in Section 3.1(a).  Notwithstanding the foregoing, if Executive’s Participation Agreement so permitted and Executive elected at the time of execution of the Participation Agreement (or in accordance with Section 3.7) to receive another form of benefit, the Supplemental Benefit shall be paid commencing on the Normal Benefit Date in such other form, which also shall be the actuarial equivalent, using the Present Value factors, of the Annuity Benefit described in Section 3.1(a).

 

	
3.2

	
Separation from Service Prior to Benefit Age.

 

	
  

	
(a)

	
Calculation of Supplemental Benefit.  If Executive has a Separation from Service (other than due to Cause, death or Disability, or following a Change in Control governed by Section 3.5) prior to the attainment of Benefit Age, Executive shall be entitled to a Supplemental Benefit, determined in the manner set forth herein.  The Supplemental Benefit shall be determined as an Annuity Benefit, at Benefit Age, with payments equal to the Yearly Benefit Amount multiplied by the Prorate Fraction, using actual years of employment and actual Final Average Compensation, subject to Executive’s Vesting Rate and, if Executive’s Normal Benefit Date is prior to age 62, reduced by 6% per year for each year (prorated with respect to partial years) prior to age 62.

 

  

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(b)

	
Time and Form of Payment.  The Supplemental Benefit shall be paid on Executive’s Normal Benefit Date in a Lump Sum that is the then Present Value of the Annuity Benefit described in Section 3.2(a).  Notwithstanding the foregoing, if Executive’s Participation Agreement so permitted and Executive elected at the time of execution of the Participation Agreement (or in accordance with Section 3.7) to receive another form of benefit, the Supplemental Benefit shall be paid commencing on the Normal Benefit Date in such other form, which also shall be the actuarial equivalent, using the Present Value factors, of the Annuity Benefit described in Section 3.2(a).

 

	
3.3

	
Disability.  The Bank may terminate Executive’s employment upon a determination of Disability.

 

	
  

	
(a)

	
Calculation of Supplemental Benefit.  Notwithstanding any other provision hereof, if Executive becomes Disabled prior to Separation from Service and Benefit Age, Executive shall be entitled to a Supplemental Benefit, determined in the manner set forth herein.  The Supplemental Benefit shall be determined as an Annuity Benefit, at Benefit Age, with payments equal to the Yearly Benefit Amount calculated as if:  (i) Executive had completed the years of employment between Disability and Benefit Age, and (ii) Executive’s Final Average Compensation had increased three percent (3%) per year for each calendar year until Executive’s Benefit Age.

 

	
  

	
(b)

	
Time and Form of Payment.  The Supplemental Benefit shall be paid on Executive’s Normal Benefit Date (but shall not be reduced for early retirement even if Normal Benefit Date is before age 62), in a Lump Sum that is the then Present Value of the Annuity Benefit described in Section 3.3(a).  Notwithstanding the foregoing, if Executive’s Participation Agreement so permitted and Executive elected at the time of execution of the Participation Agreement (or in accordance with Section 3.7) to receive another form of benefit, the Supplemental Benefit shall be paid commencing on the Normal Benefit Date in such other form, which also shall be the actuarial equivalent, using the Present Value factors, of the Annuity Benefit described in Section 3.3(a).

 

3.4           Death Benefit.

 

	
  

	
(a)

	
If Executive dies prior to Separation from Service, Executive’s Beneficiary shall be entitled to a Lump Sum payment equal to the Lump Sum that would have been payable to Executive under Section 3.1 or 3.2 if Executive had incurred a Separation from Service on the date of death, but without reduction for early retirement.  Such death benefit shall be payable on the Normal Benefit Date.

 

  

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(b)

	
If an Executive dies following Separation from Service with a vested Supplemental Benefit, but prior to commencement of benefit payments, Executive’s Beneficiary shall be entitled to the Supplemental Benefit that would have been paid to Executive under the applicable subsection of this Section III (i.e., Section 3.1, 3.2, 3.3 or 3.5), which shall be paid in a Lump Sum on the Normal Benefit Date.

 

3.5           Benefit Payable Following a Change in Control.

 

	
  

	
(a)

	
Calculation of Supplemental Benefit. If a Change in Control occurs and, within a two (2) year period thereafter, Executive has an involuntarily Separation from Service without Cause or a Separation from Service for Good Reason, Executive shall be entitled to a Supplemental Benefit, determined in the manner set forth herein. The Supplemental Benefit shall be determined as an Annuity Benefit, at Benefit Age, with payments equal to the Yearly Benefit Amount calculated as if:  (i) Executive had completed the years of employment between Separation from Service and Benefit Age, and (ii) Executive’s Final Average Compensation had increased three percent (3%) per year for each calendar year until Executive’s Benefit Age.

 

	
  

	
(b)

	
Time and Form of Payment.  The Supplemental Benefit shall be paid on Executive’s Normal Benefit Date (but shall not be reduced for early retirement even if Executive’s Normal Benefit Date is before age 62), in a Lump Sum that is the then Present Value of the Annuity Benefit described in Section 3.5(a).  Notwithstanding the foregoing, if Executive elected in the initial execution of the Participation Agreement (or in accordance with Section 3.7) to receive another form of benefit, the Supplemental Benefit shall be paid commencing on the Normal Benefit Date in such other form, which also shall be the actuarial equivalent, using the Present Value factors, of the Annuity Benefit described in Section 3.5(a).

 

	
  

	
(c)

	
Change in Control After Payments Commence.  If a Change in Control occurs after benefit payments to Executive have commenced under this Plan in a form other than a Lump Sum, and Executive had so elected in the initial execution of the Participation Agreement, the Present Value of the remaining payments shall be determined and paid to Executive in a Lump Sum 45 days after the date on which the Change in Control occurs.

 

3.6           Vesting; Termination for Cause.  If Executive has a Separation from Service (other than a separation for Good Reason, an involuntary separation without Cause or a separation due to death or Disability) before the Executive has a vested Annuity Benefit, then no Supplemental Benefit shall be payable hereunder. If Executive is terminated for Cause, all benefits under this Plan shall be forfeited by Executive and Executive’s participation in this Plan shall become null and void.

 

  

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3.7           Change in Form or Timing of Benefit.  In the event the Executive desires to change the form or time of payment of the Supplemental Retirement Benefit, and such alternate form or time is permitted by the applicable subsection of this Section III, the Executive shall be permitted to make one such change in election, provided the following conditions are satisfied:

 

	
  

	
(a)

	
any change in the form or timing must be elected at least 12 months before the benefit would otherwise be paid or commence, and

 

	
  

	
(b)

	
any change (in form or timing) results in a five (5) year delay in the commencement of payment.  Accordingly, notwithstanding the time of payment set forth in the applicable section of this Plan, payment shall be made on the fifth anniversary of such date, but shall be calculated using the Normal Benefit Date.

 

3.8           Section 280G.  Notwithstanding the foregoing provisions of this Section III, if the Supplemental Benefit provided hereunder, either as a stand-alone benefit or when aggregated with other payments to or for the benefit of an Executive that are contingent on a Change in Control, would cause an Executive to have an “excess parachute payment” under Code Section 280G, the Supplemental Benefit and/or other payments shall be reduced to avoid this result.  In the event that such a reduction is necessary, then the amount of severance payable under Executive’s employment agreement or change of control agreement, if any, shall first be reduced, and the Supplemental Benefit payable hereunder shall next be reduced.

 

SECTION IV

BENEFICIARY DESIGNATION

 

Executive shall make an initial designation of primary and secondary Beneficiaries upon execution of his Participation Agreement and shall have the right to change such designation, at any subsequent time, by submitting to the Administrator, in substantially the form attached as Exhibit A, a written designation of primary and secondary Beneficiaries. Any Beneficiary designation made subsequent to execution of the Participation Agreement shall become effective only when receipt thereof is acknowledged in writing by the Administrator.

 

SECTION V

EXECUTIVE’S RIGHT TO ASSETS:

ALIENABILITY AND ASSIGNMENT PROHIBITION

 

At no time shall Executive be deemed to have any lien, right, title or interest in or to any specific investment or asset of the Bank. The rights of Executive, any Beneficiary, or any other person claiming through Executive under this Plan, shall be solely those of an unsecured general creditor of the Bank. Executive, the Beneficiary, or any other person claiming through Executive, shall only have the right to receive from the Bank those payments so specified under this Plan. Neither Executive nor any Beneficiary under this Plan shall 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 Executive or his Beneficiary, nor be transferable by operation of law in the event of bankruptcy, insolvency or otherwise.

 

  

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SECTION VI

ACT PROVISIONS

 

	
6.1

	
Named Fiduciary and Administrator.  The Bank shall be the Named Fiduciary and Administrator of this Plan. As Administrator, the Bank shall be responsible for the management, control and administration of the Plan as established herein. The Administrator may delegate to others certain aspects of the management and operational responsibilities of the Plan, including the employment of advisors and the delegation of ministerial duties to qualified individuals.

 

	
6.2

	
Claims Procedure and Arbitration.  In the event that benefits under this Plan are not paid to Executive (or to his Beneficiary in the case of Executive’s death) and such claimants feel they are entitled to receive such benefits, then a written claim must be made to the Administrator within sixty (60) days from the date payments are refused. The Administrator shall review the written claim and, if the claim is denied, in whole or in part, they shall provide in writing, within thirty (30) days of receipt of such claim, their specific reasons for such denial, reference to the provisions of this Plan or the Participation Agreement upon which the denial is based, and any additional material or information necessary to perfect the claim. Such writing by the Administrator shall further indicate the additional steps which must be undertaken by claimants if an additional review of the claim denial is desired.

 

If claimants desire a second review, they shall notify the Administrator in writing within thirty (30) days of the first claim denial. Claimants may review this Plan, the Participation Agreement or any documents relating thereto and submit any issues and comments, in writing, they may feel appropriate. In its sole discretion, the Administrator shall then review the second claim and provide a written decision within thirty (30) days of receipt of such claim. This decision shall state the specific reasons for the decision and shall include reference to specific provisions of this Plan or the Participation Agreement upon which the decision is based.

 

If claimants continue to dispute the benefit denial based upon completed performance of this Plan and the Participation Agreement or the meaning and effect of the terms and conditions thereof, it shall be settled by arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

 

  

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SECTION VII

MISCELLANEOUS

 

	
7.1

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

 

	
7.2

	
Governing Law.  The Plan is established under, and will be construed according to, the laws of the state of Connecticut, to the extent such laws are not preempted by the Act or the Code and applicable regulations published thereunder.

 

	
7.3

	
Severability and Interpretation of Provisions.  In the event that any of the provisions of this Plan or portion hereof are held to be inoperative or invalid by any court of competent jurisdiction, or in the event that any provision is found to violate Code Section 409A and would subject Executive to additional taxes and interest on the amounts deferred hereunder, or in the event that any legislation adopted by any governmental body having jurisdiction over the Bank would be retroactively applied to invalidate this Plan or any provision hereof or cause the benefits hereunder to be taxable, then: (1) insofar as is reasonable, effect will be given to the intent manifested in the provisions held invalid or inoperative, and (2) the validity and enforceability of the remaining provisions will not be affected thereby.

 

	
7.4

	
Incapacity of Recipient.  In the event Executive is declared incompetent and a conservator or other person legally charged with the care of his person or Estate is appointed, any benefits under the Plan to which such Executive is entitled shall be paid to such conservator or other person legally charged with the care of his person or Estate.

 

	
7.5

	
Limitations on Liability.   Notwithstanding any of the preceding provisions of the Plan, no individual acting as an employee or agent of the Bank, or as a member of the Board of the Bank shall be personally liable to Executive or any other person for any claim, loss, liability or expense incurred in connection with the Plan.

 

	
7.6

	
Gender.  Whenever in this Plan words are used in the masculine or neuter gender, they shall be read and construed as in the masculine, feminine or neuter gender, whenever they should so apply.

 

	
7.7

	
Effect on Other Corporate Benefit Plans.  Nothing contained in this Plan shall affect the right of Executive to participate in or be covered by any qualified or nonqualified pension, profit sharing, group, bonus or other supplemental compensation or fringe benefit agreement constituting a part of the Bank’s existing or future compensation structure.

 

	
7.8

	
Inurement.  This Plan shall be binding upon and shall inure to the benefit of the Bank, its successors and assigns, and Executive, his successors, heirs, executors, administrators, and Beneficiaries.

 

  

12

  

 

	
7.9

	
Acceleration of Payments.  Except as specifically permitted herein or in other sections of this Plan, no acceleration of the time or schedule of any payment may be made hereunder.  Notwithstanding the foregoing, payments may be accelerated hereunder by the Bank, in accordance with the provisions of Treasury Regulation Section 1.409A-3(j)(4) and any subsequent guidance issued by the United States Treasury Department.  Accordingly, payments may be accelerated, in accordance with requirements and conditions of the Treasury Regulations (or subsequent guidance) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with ethics agreements with the Federal Government; (iii) in compliance with ethics laws or conflicts of interest laws; (iv) in limited cash-outs (but not in excess of the limit under Code Section 402(g)(1)(B)); (v) in the case of certain distributions to avoid a non-allocation year under Code Section 409(p); (vi) to apply certain offsets in satisfaction of a debt of Executive to the Bank; (vii) in satisfaction of certain bona fide disputes between Executive and the Bank; or (viii) for any other purpose set forth in the Treasury Regulations and subsequent guidance.

 

	
7.10

	
Headings.  Headings and sub-headings in this Plan are inserted for reference and convenience only and shall not be deemed a part of this Plan.

 

	
7.11

	
12 U.S.C. § 1828(k).  Any payments made to Executive pursuant to this Plan or otherwise are subject to and conditioned upon compliance with 12 U.S.C. § 1828(k) or any regulations promulgated thereunder.

 

	
7.12

	
Payment of Employment and Code Section 409A Taxes.  Any distribution under this Plan shall be reduced by the amount of any taxes required to be withheld from such distribution.  This Plan shall permit the acceleration of the time or schedule of a payment to pay employment-related taxes as permitted under Treasury Regulation Section 1.409A-3(j) or to pay any taxes that may become due at any time that the arrangement fails to meet the requirements of Code Section 409A and the regulations and other guidance promulgated thereunder.  In the latter case, such payments shall not exceed the amount required to be included in income as the result of the failure to comply with the requirements of Code Section 409A.

 

	
7.13

	
Non-Competition, Confidentiality and Information/Cooperation

 

	
  

	
(a)

	
Non-Competition.  The benefits provided to Executives under this Plan are specifically conditioned on each Executive’s covenant that, during and for a period of one (1) year following the Executive’s Separation from Service with the Bank (or if Executive is a party to a separate employment agreement or change in control agreement that contains a non-compete provision, then for such period as set forth in such other agreement in lieu of the period set forth herein), that such Executive will not, without the written consent of the Bank, either directly or indirectly:

 

  

13

  

 

	
  

	
i.

	
solicit, offer employment to, or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any officer or employee of the Bank or any affiliate of the Bank, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any business which operates an insured depository institution that competes with the Bank or any affiliate of the Bank, that is: (i) headquartered within fifteen (15) miles of a Bank branch office or any proposed Bank branch office for which the Bank has filed an application for regulatory approval to establish an office (“Restricted Territory”), determined on the earlier of the date of occurrence of the solicitation or the effective date of termination of employment, or (ii) has one or more offices, but is not headquartered, within the Restricted Territory, but in the latter case, only if Executive would be employed to directly solicit business or have other direct solicitation responsibilities or solicitation duties within the Restricted Territory;

 

	
  

	
ii.

	
become an officer, employee, consultant, director, independent contractor, agent, joint venturer, partner or trustee of any savings bank, savings and loan association, savings and loan holding company, credit union, bank or bank holding company or any other business which operates an insured depository institution that competes with the business of the Bank or any affiliate of the Bank, that is: (i) headquartered within the Restricted Territory, determined on the earlier of the date of occurrence of the event or the effective date of termination of employment, or (ii) has one or more offices, but is not headquartered, within the Restricted Territory, but in the latter case, only if Executive would be employed to directly solicit business or have other direct solicitation responsibilities or solicitation duties within the Restricted Territory; or

 

	
  

	
iii.

	
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 to terminate an existing business or commercial relationship with the Bank.

 

	
  

	
(b)

	
Confidentiality.  Executive will not, during or after the term of his employment, disclose any knowledge of the past, present, planned or considered business activities or any other similar proprietary information of the Bank to any person, firm, corporation, or other entity for any reason or purpose whatsoever unless expressly authorized by the Board or required by law.  Notwithstanding the foregoing, Executive may disclose any knowledge of banking, financial and/or economic principles, concepts or ideas which are not solely and exclusively derived from the business plans and activities of the Bank.  Further, Executive may disclose information regarding the business activities of the Bank to any bank regulator having regulatory jurisdiction over the activities of the Bank.

 

  

14

  

 

	
  

	
(c)

	
Information/Disclosure.  During his employment and for a period of one (1) year following his termination of employment with the Bank, Executive shall, upon reasonable notice, furnish such information and assistance to the Bank as may be reasonably required by the Bank, in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party; provided, however, that Executive shall not be required to provide information or assistance with respect to any litigation between the Executive and the Bank or any of its subsidiaries or affiliates.  Executive shall be paid or reimbursed for all reasonable expenses incurred by Executive in connection with the rendering of such assistance to the Bank.  Such reimbursement shall occur no later than sixty (60) days after the end of the calendar year in which Executive incurs such expense.

 

	
  

	
(d)

	
Effect of violation. In the event that the Executive violates any of the provisions of this Section, all Supplemental Benefits payable to Executive shall cease and any Supplemental Benefits previously paid shall be reimbursed to the Bank within thirty (30) days of the Bank’s notification to Executive that this provision has been violated.

 

  

15

  

 

SECTION VIII

AMENDMENT/TERMINATION

 

	
8.1

	
Amendment or Modification.  This Plan may be amended or modified at any time, provided, however, that no such amendment may serve to reduce the vested Accrued Annuity Benefit of any Executive, and provided further, that no amendment or modification shall be valid if it violates Code Section 409A, as in effect at the time of such amendment or modification.

 

	
8.2

	
Termination of Plan.  Subject to the requirements of Code Section 409A, in the event of complete termination of the Plan, the Bank shall pay out to Executive his benefit as if Executive had terminated employment as of the effective date of the complete termination.  Such payment shall occur only under the following circumstances and conditions:

 

	
  

	
(a)

	
The Board may terminate the Plan within 12 months of a corporate dissolution taxed under Code Section 331, or with approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that the amounts deferred under the Plan (e.g., the accrued Annuity Benefit) are included in Executive’s gross income in the latest of (i) the calendar year in which the Plan terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable.

 

	
  

	
(b)

	
The Board may terminate the Plan by Board action taken within the 30 days preceding a Change in Control (but not following a Change in Control), provided that the Plan shall only be treated as terminated if all substantially similar arrangements sponsored by the Bank are terminated so that Executive and all participants under substantially similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within 12 months of the date of the termination of the arrangements.  Following the termination of the Plan, the amount payable to Executive shall be the amount to which Executive is entitled upon a Change in Control, as set forth in Executive’s Participation Agreement.

 

SECTION IX

EXECUTION

 

	
9.1

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

 

	
9.2

	
This Plan shall be executed in duplicate, each copy of which, when so executed and delivered, shall be an original, but both copies shall together constitute one and the same instrument.

 

[signature page follows]

 

  

16

  

 

IN WITNESS WHEREOF, the Bank has caused this Plan to be executed on this 30th day of December, 2009.

 

	ATTEST:	 	FARMINGTON BANK	 
	 	 	 	 	 
	
 
/s/ Brenda O. Kowalski

	 	
By: 

	
/s/ Lee D. Nordstrom

	 
	Secretary 	 	 	 	 
	 	 	Title:	
SVP Human Resources

	 

 

 

17ex10-3.htm

Exhibit 10.3

 

FARMINGTON SAVINGS BANK

VOLUNTARY DEFERRED COMPENSATION PLAN

FOR DIRECTORS AND KEY EMPLOYEES

 

as amended and restated effective January 1, 2007

 

  

  

  

 

TABLE OF CONTENTS

	  	  	  	  
	
Section 1

	
Purpose

	  	
1

	 	 	 	 
	
Section 2

	
Definitions

	  	
1

	 	 	 	 
	
Section 3

	
Administration

	  	
5

	 	 	 	 
	
Section 4

	
Deferrals

	  	
5

	 	 	 	 
	
Section 5

	
Time and Form of Payment

	  	
6

	 	 	 	 
	
Section 6

	
Cancellation of Deferral Election; Distribution Upon Unforeseeable Emergency

	  	
9

	 	 	 	 
	
Section 7

	
Change in Control

	  	
10

	 	 	 	 
	
Section 8

	
Nontransferability of Rights Under the Plan

	  	
10

	 	 	 	 
	
Section 9

	
Successor Employer

	  	
10

	 	 	 	 
	
Section 10

	
Unfunded Plan

	  	
11

	 	 	 	 
	Section 11 	Governing Law	 	
11

	 	 	 	 
	
Section 12

	
Withholding

	  	
11

	 	 	 	 
	
Section 13

	
Amendment, Suspension, or Termination

	  	
11

	 	 	 	 
	
Section 14

	
Claims for Benefits

	  	
12

 

  

i

  

 

FARMINGTON SAVINGS BANK

VOLUNTARY DEFERRED COMPENSATION PLAN

FOR DIRECTORS AND KEY EMPLOYEES

 

 

Section 1.  Purpose

 

1.1          Farmington Savings Bank (the “Bank”) and First Connecticut Bancorp (the “Holding Company”) establish this Farmington Savings Bank Voluntary Deferred Compensation Plan for Directors and Key Employees (the “Plan”) to assist the Bank in attracting, retaining, and motivating individuals of high caliber and experience to act as Directors and key management employees of the Bank by providing them with an opportunity to defer their compensation.  With respect to the participation in the Plan by key management employees, the Plan is intended to be an unfunded plan under ERISA that is maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees.

 

Section 2.  Definitions

 

    The following capitalized terms used in the Plan have the respective meanings set forth in this Section:

 

2.1           “Bank” shall mean Farmington Savings Bank, a mutual savings bank, its successors and any other affiliated company as shall be designated by the Board to participate in the Plan.

 

2.2           “Beneficiary” shall mean one or more persons, estates or other entities, designated in accordance with such procedures as may be specified by the Committee, that are entitled to receive benefits under the Plan upon the death of a Participant.

 

2.3           “Board” shall mean the Board of Directors of the Bank.

 

2.4           “Change in Control” shall mean the occurrence of any of the following events:

 

	
  

	
(a)

	
the Bank, if it converts to the stock form of organization, or the mutual Holding Company parent of the Bank, if it converts to the stock form of organization, or any parent corporation of the Bank that may be formed (the “Parent”) merges into or consolidates with another corporation, or merges another corporation into the Bank, the Holding Company or the Parent, and as a result, with respect to the Bank, the Holding Company or the Parent, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by “Persons” as such term is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) who were stockholders of the Bank, the Holding Company or the Parent, as the case may be, immediately before the merger or consolidation or, with respect to the Bank, the Holding Company or any Parent that is in the form of a mutual company, less than a majority of the directors of the resulting corporation immediately after a merger or consolidation were directors of the Bank, the Holding Company or the Parent, as the case may be, immediately before the merger or consolidation;

 

  

1

  

 

	
  

	
(b)

	
following any conversion of the Bank, the Holding Company or any Parent to the stock form of organization, any Person (other than any trustee or other fiduciary holding securities under an employee benefit plan of the Bank or the Parent or with respect to a conversion of the Bank, the Holding Company or any Parent), becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the resulting corporation representing twenty-five percent (25%) or more of the combined voting power of the resulting corporation’s then-outstanding securities;

 

	
  

	
(c)

	
during any period of twenty-four (24) months, individuals who at the beginning of such period constitute the Board, and any new director (other than (i) a director nominated by a Person who has entered into an agreement with the Bank, the Holding Company or the Parent to effect a transaction described in Sections 2.3(a), (b) or (d) hereof, (ii) a director nominated by any Person (including the Bank) who publicly announces an intention to take or to consider taking actions (including, but not limited to, an actual or threatened proxy contest) which if consummated would constitute a Change in Control or (iii) a director nominated by any Person who is the Beneficial Owner, directly or indirectly, of securities representing twenty-five percent (25%) or more of the combined voting power of the securities of the Bank or any Parent or the Holding Company, if converted to the stock form of organization) whose election by the Board or nomination for election by the Bank’s stockholders was approved in advance by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof;

 

	
  

	
(d)

	
the stockholders or Directors of the Bank approve a plan of complete liquidation of the Bank or an agreement for the sale or disposition by the Bank of all or substantially all of the Bank’s assets; or

 

	
  

	
(e)

	
the Board adopts a resolution to the effect that, for purposes of this Plan, a Change in Control has occurred.

 

  

2

  

 

    Notwithstanding the foregoing, the term “Change in Control” shall not include the issuance of shares to the general public by the Bank or any Parent of the Bank or the conversion of the Bank or the Holding Company from the mutual to the stock form of organization where the stock organization issues its own shares to the general public unless any Person other than the Holding Company becomes the Beneficial Owner, directly or indirectly, of securities of the Bank or the Bank’s Parent representing twenty-five percent (25%) or more of the combined voting power of the Bank’s or the Bank’s Parent’s, as the case may be, then outstanding securities.

 

2.5           “Code” shall mean the Internal Revenue Code of 1986, as amended, or any successor thereto.

 

2.6           “Committee” shall mean the Voluntary Deferred Compensation Committee appointed by the Board.

 

2.7           “Compensation” with respect to any Plan Year shall mean, for purposes of a Deferral by a Director, such Director’s total fees for such Plan Year earned for acting as a Director of the Bank, excluding bonuses, fringe benefits, the taxable value of fringe benefits, and any other form of special or extra pay, and for purposes of a Deferral by an Employee, such Employee’s Compensation for such Plan Year within the meaning provided in the qualified retirement plan maintained by the Bank that includes a cash or deferred arrangement under Section 401(k) of the Code, but including any bonuses includible in such Employee’s W-2 earnings for such Plan Year and without the limitation imposed by Section 401(a)(17) of the Code for such Plan Year.  Compensation payable after December 31st of any Plan Year for services performed during the final payroll period of the immediately preceding Plan Year shall be treated as Compensation for services performed in the Plan Year in which it is paid.  The preceding sentence shall not apply to any Compensation paid for services performed during any period other than such final payroll period, such as the payment of an annual bonus.

 

2.8           “Deferral” shall mean the amount credited to a Participant’s Deferral Account for a Plan Year to reflect Compensation otherwise payable to a Participant during such Plan Year which such Participant has elected to defer pursuant to Section 4 hereof.

 

2.9           “Deferral Account” shall mean the separate account maintained for a Participant on the books of the Bank to reflect Deferrals, adjusted for earnings thereon.

 

2.10         “Disability or Disabled” shall mean either that (a) the Participant has been determined to be totally disabled by the Social Security Administration; or (b) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Bank.

 

2.11         “Effective Date” shall mean January 1, 2007 with respect to this amendment and restatement of the Plan.

 

2.12         “Employee” shall mean a person in the employ of the Bank whom the Committee has identified as being part of a select group of management or highly compensated employees.

 

2.13         “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

  

3

  

 

2.14         “Holding Company” shall mean First Connecticut Bancorp.

 

2.15         “Participant” shall mean: (a) any Director of the Bank who is acting as such on December 31st of the year preceding the Plan Year of Deferral (unless the Plan Year of Deferral is the Director’s initial year of election to the Board) and who elects to make Deferrals for the Plan Year; or (b) any Employee designated by the Committee for participation in this Plan who is employed on December 31st of the year preceding the Plan Year of Deferral (unless the Plan Year of Deferral is the Employee’s initial year of employment) and who elects to make Deferrals for the Plan Year.

 

2.16         “Plan” shall mean the Farmington Savings Bank Voluntary Deferred Compensation Plan for Directors and Key Employees.

 

2.17         “Plan Administrator” shall mean the Committee.

 

2.18         “Plan Interest Rate” shall mean a rate of interest, set annually in December to be effective for the subsequent calendar year, equal to the five-year Bank Certificate of Deposit yield for such month of December plus four percent (4%), subject to a minimum rate of eight percent (8%) and a maximum rate of twelve percent (12%), to be credited on a monthly basis during such subsequent calendar year.

 

2.19         “Plan Year” shall mean each calendar year.

 

2.20         “Potential Change in Control” shall mean:  (a) the Bank, the Holding Company or any parent corporation of the Bank has entered into an agreement, the consummation of which would result in the occurrence of a Change in Control; (b) any Person, as such term is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, (including the Bank or any parent corporation of the Bank) has publicly announced an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or (c) the Board has adopted a resolution to the effect that, for purposes of this Plan, a Potential Change in Control has occurred.

 

2.21         “Regulations” shall mean proposed and final Treasury Regulations, as the same may be amended from time to time.

 

2.22         “Separation from Service” shall mean, with respect to a Director, termination of service as a Director of the Bank and, with respect to an Employee, termination of employment with the Bank and any affiliate of the Bank.  Whether a Participant has had a Separation of Service shall be determined by the Committee on the basis of all relevant facts and circumstances and with reference to Regulations Section 1.409A-1(h).

 

2.23         “Specified Employee” shall mean an Employee who satisfies the requirements for being designated a “key employee” under Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard to Section 416(i)(5) of the Code at any time during a Plan Year, in which case such Employee shall be considered a Specified Employee for the twelve (12)-month period beginning on the first day of the fourth month immediately following the end of such Plan Year.

 

  

4

  

 

2.24          “Unforeseeable Emergency” means a severe financial hardship of a Participant resulting from: (a) an illness or accident of the Participant or the Participant’s spouse or dependent as defined in Section 152 of the Code without regard to Section 152(b)(1), (b)(2) and (d)(1)(B); (b) a loss of the Participant’s property due to casualty; or (c) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  Whether a Participant has an Unforeseeable Emergency shall be determined by the Committee on the basis of all relevant facts and circumstances and with reference to Regulations Section 409A-3(i)(3).

 

Section 3.  Administration

 

3.1           The Plan shall be administered by the Committee. The Committee is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Plan.  The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems necessary or desirable.  Any decision by the Committee in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned (including, but not limited to, Participants and their Beneficiaries or successors).  The foregoing notwithstanding, the Board may exercise any power or perform any function of the Committee, in which case any applicable reference to the “Committee” herein shall be deemed to refer to the Board.

 

3.2           The Committee shall act by vote or written consent of a majority of its members.  Members of the Committee who are either eligible to become Participants or who are Participants may vote on or participate in any matter affecting the administration of the Plan, provided, however, that no member of the Committee may vote on or participate in any matter directly relating to the benefits of such member.

 

3.3           The Committee, or its designee, shall (a) notify Directors and Employees about their eligibility to participate in the Plan; (b) formulate and recommend to the Board such changes in the Plan as may facilitate the administration of the Plan; (c) value Deferral Accounts, and maintain Deferral Accounts and records of Deferrals and earnings thereon, payment of Deferral Account balances, and Beneficiary designations; (d) prepare communications to Participants and Beneficiaries; (e) prepare reports and data required by the Bank concerning the Plan; (f) obtain necessary consents and approvals; and (g) take any other actions as are otherwise necessary or appropriate for effective implementation and administration of the Plan.

 

  

5

  

 

Section 4.  Deferrals

 

4.1          A Participant may voluntarily elect to defer his or her Compensation in the following manner:

 

	
  

	
(a)

	
In order to make a voluntary Deferral election pursuant to the Plan, a Director must complete and deliver to the Committee a written election, on such forms as shall be provided to the Director by the Committee, not later than 30 days after the date on which he or she commences service as a Director of the Bank. An Employee must complete and deliver to the Committee a written election, on such forms as shall be provided to the Employee by the Committee, not later than 30 days after the date on which he or she commences employment with the Bank. For Deferrals to occur in subsequent years, such Director or Employee must complete and deliver to the Committee a written election not later than December 31st of the year preceding the subsequent year (or such earlier deadline as may be specified by the Committee, provided that such deadline shall be established so as to ensure effective tax deferral by the Participant and to conform to all applicable requirements of Code Section 409A).  Such an election shall only be effective with respect to Compensation earned after the date of the election.  Such election shall remain effective for all future years of service unless the Participant makes a new valid election in a subsequent year by the applicable deadline for such election.

 

4.2          A Participant may elect to defer all or any portion of his or her Compensation for any Plan Year in accordance with the procedure specified in Section 4.1. A Deferral election shall designate the portion of the Participant’s Compensation that is to be deferred and shall further designate the time and manner of payment of such Deferral in accordance with Section 5, below.   Elections to make Deferrals for a Plan Year, the amount of such Deferrals for such Plan Year and the time and form of payment of such Deferrals shall be irrevocable except as otherwise provided in Sections 5 and 6, below.

 

4.3          A Participant’s Deferrals shall be credited to a Participant’s Deferral Account as of each date on which his or her Compensation would otherwise have been paid.  A Participant’s Deferral Account shall be credited monthly until such Deferral Account is paid out in full to such Participant or such Participant’s Beneficiary with the amount of notional interest earned on the Deferral Account assuming that such interest is earned at the Plan Interest Rate. A Participant shall at all times be fully vested in his or her Deferral Account.

 

Section 5.  Time and Form of Payment

 

    5.1          A Participant’s Deferral election shall specify the time and form of payment of the Compensation subject to the Deferral election (and the earnings thereon) according to one of the following methods:

 

	
  

	
(a)

	
Payment in a single lump sum at the earliest of the Participant’s Separation from Service, the Participant’s Disability or a date specified in the Participant’s Deferral election;

 

	
  

	
(b)

	
Payment in a single lump sum on a date specified in the Participant’s Deferral election;

 

	
  

	
(c)

	
Payment in equal consecutive annual or monthly installments over a period not to exceed 15 years as specified in the Participant’s Deferral election, the first installment to be paid as of the earliest of the Participant’s Separation from Service, the Participant’s Disability or a date specified in the Participant’s Deferral election; or

 

  

6

  

 

	
  

	
(d)

	
Payment in equal consecutive annual or monthly installments over a period not to exceed 15 years as specified in the Participant’s Deferral election, the first installment to be paid on a date specified in the Participant’s Deferral election.

 

    Payment as provided hereinabove upon a Participant’s Disability or Separation from Service shall be made or begin on such date as the Committee may determine which is not later than 90 days after such event.

 

   5.2          The provisions of Sections 4 and 5 to the contrary notwithstanding, in the event of a Participant’s death prior to the commencement of payment of such Participant’s Deferral Account, payment shall be made to the Participant’s Beneficiary in a single lump sum on such date as the Committee may determine which is not later than 90 days after the Participant’s death unless otherwise specified in the Participant’s Deferral election.   If a Participant dies after installment payments have commenced as provided in Sections 5.1(c) or (d) and before all such payments have been made, the remaining installments shall be accelerated and paid to the Participant’s Beneficiary in a single lump sum on such date as the Committee may determine which is not later than 90 days after the Participant’s death unless otherwise specified in the Participant’s Deferral election.

 

   5.3          A Participant may change an election to delay the time and/or change the form of payment of Compensation governed by a prior Deferral election by filing a subsequent written election with the Committee, provided, however, that (a) no such delay or change shall be effective until twelve (12) months after the date such election is filed with the Committee; (b) except in the event of payment upon death, Disability or Unforeseeable Emergency, such election must be filed with the Committee not fewer than twelve (12) months prior to the date payment was otherwise scheduled to be made in the case of a change to a lump sum distribution or twelve (12) months prior to the date installment payments were scheduled to begin in the case of a change to an installment distribution; and (c) except in the event of payment upon death, Disability or Unforeseeable Emergency, the new distribution date or form of payment may not be effective sooner than the fifth anniversary of the date payment was otherwise scheduled to be made in the case of a change to a lump sum distribution or the fifth anniversary of the date installment payments were scheduled to begin in the case of a change to an installment distribution.  With respect to a change in a prior Deferral election of an installment form of payment, such five-year delay shall apply not only to the first such installment payment but to all subsequent installment payments.   An installment form of distribution shall be treated as an entitlement to a single payment in accordance with the provisions of  Regulations Section 1.409A-2(b)(2)(iii).  The foregoing notwithstanding, a Participant may change a prior Deferral election as to the time and/or form of payment of all or a portion of such Participant’s Deferral Account by filing one or more written elections with the Committee on or before December 31, 2007 (or such later date as may be specified in Regulations or other Internal Revenue Service guidance interpreting Section 409A of the Code) provided that any such election shall be made in writing on such form as the Plan Administrator may reasonably require and, provided further, that (a) with respect to an election made on or after January 1, 2006 and on or before December 31, 2006, the election may apply only to amounts that would not otherwise be payable in 2006 and may not cause an amount to be paid in 2006 that would not otherwise be payable in 2006; and (b) with respect to an election made on or after January 1, 2007 and on or before December 31, 2007, the election may apply only to amounts that would not otherwise be payable in 2007 and may not cause an amount to be paid in 2007 that would not otherwise be payable in 2007.

 

  

7

  

 

    5.4         The provisions of Sections 4 and 5 to the contrary notwithstanding, a payment to a Participant may be delayed to a date after the designated payment date under any of the following circumstances:

 

(a)         if the Bank’s deduction with respect to such payment otherwise would be limited or eliminated by the application of Section 162(m) of the Code, in which case payment shall be made upon the earlier of:  (i) the earliest date at which the Bank reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by the application of Section 162(m) of the Code; or (ii) the calendar year in which the Participant has a Separation from Service;

 

(b)         if the Bank reasonably anticipates that the making of the payment will violate federal securities laws or other applicable law in which case payment shall be made at the earliest date on which the Bank reasonably anticipates that the making of the payment will not cause such violation;

 

(c)         if there is a bona fide dispute as to a Participant’s or Beneficiary’s entitlement to payment as provided in Regulations Section 1.409A-3(g);

 

(d)         if calculation of the amount of the payment is not administratively practicable due to events beyond the control of the Participant, provided that payment is made during the first calendar year in which payment is administratively practicable;

 

(e)         if the funds of the Bank are not sufficient to make the payment on the date specified under the Plan without jeopardizing the Bank’s ability to continue as a going concern, provided that payment is made during the first calendar year in which the making of the payment would not have such effect; or

 

(f)         upon such other events and conditions as the Internal Revenue Service may prescribe in accordance with the Regulations under Section 409A of the Code.

 

    5.5         Anything in this Plan to the contrary notwithstanding, in the event of any conversion of the Bank or any parent corporation of the Bank to the stock form of organization and if such stock is publicly traded on an established securities market or otherwise, payment to any Specified Employee upon Separation from Service shall not be made before the date that is six (6) months after the date of Separation from Service (or, if earlier, the date of death of such Specified Employee).  In the event such Specified Employee has elected payment of his or her Deferral Account in the form of installments as provided in Section 5.1(c) or (d) above, installment payments to which such Specified Employee would otherwise be entitled during the first six (6) months following his or her Separation from Service shall be accumulated and paid on the first installment payment date of the seventh month following the Separation from Service.  The six (6)-month delay in payment described herein shall not apply, however, to any payment made under the circumstances described in Sections 5.6(a) or (b).

 

  

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    5.6         The provisions of Sections 4 and 5 to the contrary notwithstanding, a payment to or on behalf of a Participant shall be accelerated under each of the following circumstances:

 

(a)         if payment is required to be made to an individual other than the Participant to fulfill a domestic relations order as defined in Section 414(p)(1)(B) of the Code;

 

(b)         if payment is necessary to satisfy requirements established pursuant to a written determination by the Office of Government Ethics that:  (i) divestiture of the financial interest or termination of the financial arrangement is reasonably necessary to comply with any Federal conflict of interest statute, regulation, rule or executive order (including Section 208 of Title 18, United States Code), or is requested by a congressional committee as a condition of confirmation; and (ii) specifies the financial interest to be divested or terminated;

 

(c)         if the Plan fails to meet the requirements of Section 409A of the Code and the Regulations thereunder in an amount equal to that required to be included in income as a result of such failure; and

 

(d)         at the Committee’s discretion, if the balance of the Participant’s Deferral Account is not greater than the applicable dollar amount under Section 402(g)(1)(B) of the Code provided that such payment shall constitute the entirety of the Participant’s interest in the Plan and all similar arrangements that would constitute a nonqualified deferred compensation plan under Regulations Section 1.409A-1(c) and provided that the Committee’s decision to make such distribution shall be evidenced in writing no later than the date of such payment.

 

Section 6.  Cancellation of Deferral Election; Distribution Upon Unforeseeable Emergency

 

6.1         The provisions of Sections 4 and 5 to the contrary notwithstanding, in the event that a Participant has an Unforeseeable Emergency, the Participant may apply to the Committee in writing to cancel his or her Deferral election and to obtain a distribution of all or such portion of the Participant’s Deferral Account as is reasonably necessary to satisfy such Unforeseeable Emergency (which may include amounts necessary to pay any Federal, state or local income taxes or penalties reasonably anticipated to result from the distribution).  Upon the Committee’s determination that such an Unforeseeable Emergency exists, the Participant’s Deferral election shall be cancelled and the distribution requested by the Participant shall be made provided that such Unforeseeable Emergency may not be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or by cessation of deferrals under the Plan or any other retirement plan maintained by the Bank.  Following any such distribution, the Participant may not make a subsequent Deferral election except in accordance with the provisions governing Deferral elections set forth in Section 4.1, above.

 

  

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6.2         The provisions of Sections 4 and 5 to the contrary notwithstanding, a Participant’s Deferral election under this Plan shall terminate if necessary for the Participant to obtain a hardship distribution under a qualified retirement plan that includes a cash or deferred arrangement under Section 401(k) of the Code as required by Regulations Section 1.401(k)-1(d)(3).  Following any such termination of a Participant’s Deferral election, the Participant may not make a subsequent Deferral election except in accordance with the provisions governing Deferral elections set forth in Section 4.1, above.

 

Section 7.  Change in Control

 

    7.1         In the event of a Potential Change in Control or a Change in Control, the Bank shall, not later than 15 days thereafter, have established one or more rabbi trusts and shall deposit therein cash in an amount sufficient to provide for full payment of all potential obligations of the Plan.  Such rabbi trust(s) shall be irrevocable and shall provide that the Bank may not, directly or indirectly use or recover any assets of the trust(s) until such time as all obligations which potentially could arise under this Plan have been settled and paid in full, subject only to the claims of creditors of the Bank in the event of insolvency or bankruptcy of the Bank; provided, however, that if no Change in Control has occurred within one year after such Potential Change in Control, such rabbi trust shall at the end of such one-year period become revocable and may thereafter be revoked by the Bank.

 

Section 8.  Nontransferability of Rights Under the Plan

 

8.1         Deferral Accounts shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, whether voluntary or involuntary except as provided in Section 5.6(a).  Any such attempted assignment or transfer shall be void.

 

Section 9.  Successor Employer

 

    9.1         The Bank and the Holding Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Bank or the Holding Company to expressly assume and agree to perform under this Plan in the same manner and to the same extent that the Bank and the Holding Company would be required to perform if no such succession had taken place.   As used in this Plan, “Bank” and “Holding Company” shall mean the Bank and the Holding Company, respectively, as hereinbefore defined, and any successor to its or their business and/or assets as aforesaid which assumes and agrees to perform this Plan by operation of law, or otherwise and, in the case of an acquisition of the Bank or the Holding Company in which the corporate existence of the Bank or the Holding Company, as the case may be, continues, the ultimate parent company following such acquisition. Subject to the foregoing, the Bank and the Holding Company may transfer and assign this Plan and the Bank’s and the Holding Company’s rights and obligations hereunder.

 

  

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Section 10.  Unfunded Plan

 

10.1       The Plan is intended to constitute an unfunded deferred compensation arrangement. Nothing contained in the Plan, and no action taken pursuant to the Plan, shall create or be construed to create a trust of any kind.  The Bank’s obligations hereunder shall be an unfunded and unsecured promise to pay money in the future for tax purposes and, if applicable, for purposes of Title I of ERISA.  A Participant’s right to receive his or her Deferral Account balance shall be no greater than the right of an unsecured general creditor of the Bank.  Deferral Account balances shall be paid from the general funds of the Bank, and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such Deferral Account balances except as otherwise provided in Section 7.1, above.

 

Section 11.  Governing Law

 

    11.1        The Plan shall be construed and governed in accordance with the laws of the State of Connecticut, to the extent not preempted by federal law.  Anything in this Plan to the contrary notwithstanding, the terms of this Plan shall be interpreted and applied in a manner consistent with the requirements of Section 409A of the Code and the Regulations thereunder and the Bank and the Holding Company shall have no right to accelerate or make any payment under this Plan except to the extent permitted under Section 409A of the Code.  The Bank and the Holding Company shall have no obligation, however, to reimburse a Participant for any tax penalty or interest payable or provide a gross-up payment in connection with any tax liability of the Participant under Section 409A of the Code except that this provision shall not apply in the event of the Bank’s or the Holding Company’s negligence or willful disregard in interpreting the application of  Section 409A of the Code to the Plan which negligence or willful disregard causes a Participant to become subject to a tax penalty or interest payable under Section 409A of the Code.

 

Section 12.  Withholding

 

12.1       The Bank shall deduct from all amounts paid under this Plan any taxes required to be withheld by any Federal, state, or local government tax statutes.  The Participants and their Beneficiaries, distributees, and personal representatives will be responsible for the payment of any and all Federal, foreign, state, local, or other income or other taxes imposed on amounts paid under this Plan.

 

Section 13.  Amendment, Suspension, or Termination

 

13.1       This Plan may be amended or suspended by action of the Board; provided, however, that any such amendment or suspension shall not adversely affect the rights of  Participants or Beneficiaries to receive Deferrals credited to their Deferral Accounts prior to such action and notional interest on such Deferral Accounts at the Plan Interest Rate (which may not be decreased from that in effect on the Effective Date) until such Deferral Accounts are paid in full to such Participants or such Participants’ Beneficiaries in accordance with the time and form of payment elections made by or applicable to such Participants pursuant to Section 5, nor shall any such amendment or suspension cause any payment that a Participant or Beneficiary is entitled to receive under this Plan to become subject to an income tax penalty under Section 409A of the Code.

 

  

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                   13.2        This Plan may be terminated and lump sum distributions made to Participants (or their Beneficiaries) of their Deferral Accounts hereunder only in the event of a dissolution of the Bank taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1(A), provided that Participants’ Deferral Account balances are included in such Participants’ gross incomes in the later of:  (i) the calendar year in which the Plan termination occurs; or (ii) the first calendar year in which the payment is administratively practicable.

 

Section 14.  Claims for Benefits

 

                   14.1        Claims for benefits under the Plan may be filed in writing with the Plan Administrator. Written or electronic notice of the disposition of a claim shall be furnished to the claimant within 90 days after the claim is filed (or within 180 days if special circumstances require an extension of time for processing the claim and if notice of such extension and circumstances is provided to the claimant within the initial 90-day period). In the event the claim is denied, the reasons for the denial shall be specifically set forth in the notice in language calculated to be understood by the claimant, pertinent provisions of the Plan shall be cited, and, where appropriate, an explanation as to how the claimant can perfect the claim will be provided.  In addition, the claimant shall be furnished with an explanation of the Plan’s claims review procedures and the time limits applicable to such procedures, including, if the claimant is an Employee, a statement that the claimant has a right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review.

 

                   14.2        Any Participant or former Participant or authorized representative or Beneficiary of either, who has been denied a benefit by a decision of the Plan Administrator shall be entitled to request a review of the denied claim. The claimant may submit a written request for review to the Plan Administrator no later than 60 days after the date on which such denial is received by such claimant.  The claimant may submit written comments, documents, records and other information relating to the claim to the Plan Administrator.  The claim for review shall be given a full and fair review that takes into account all comments, documents, records and other information submitted that relates to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.  The Plan Administrator shall provide the claimant with written or electronic notice of the decision on review within 60 days after the request for review is received by the Plan Administrator (or within 120 days if special circumstances require an extension of time for processing the claim and if notice of such extension and circumstances is provided to the claimant within the initial 60-day period).  Such communication shall be written in a manner calculated to be understood by the claimant and shall include specific reasons for the decision, specific references to the pertinent Plan provisions on which the decision is based, a statement that if the claimant is an Employee, the claimant has a right to bring a civil action under Section 502(a) of ERISA and 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 to the claim for benefits.  A document is relevant to the claim for benefits if it was relied upon in making the determination, was submitted, considered or generated in the course of making the determination or demonstrates that benefit determinations are made in accordance with the Plan and that Plan provisions have been applied consistently with respect to similarly situated claimants.

 

  

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                   14.3        No Employee, former Employee or Beneficiary of an Employee shall institute any action or proceeding in any state or federal court of law or equity, or before any administrative tribunal or arbitrator, for a claim for benefits under the Plan until such claimant has first exhausted the procedures set forth in Sections 14.1 and 14.2.

 

 

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