Exhibit 10.6
AMENDED AND
RESTATED
BAY-VANGUARD FEDERAL SAVINGS
BANK
CHANGE IN CONTROL SEVERANCE
COMPENSATION PLAN
A. Purpose
.
The purpose of the Bay-Vanguard
Federal Savings Bank Change in Control Severance Compensation Plan
(the “Plan”) is to ensure the successful continuation
of the business of Bay-Vanguard Federal Savings Bank (the
“Bank”) and the fair and equitable treatment of the
Bank’s employee following a Change in Control (as defined
below). The Bank has amended and restated this Plan to conform with
the requirements of Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”).
B. Covered Employees
.
Subject to paragraph C below, any
employee of the Bank with at least one year of service as of his or
her termination date shall be eligible to receive a Change in
Control Severance Benefit (as defined below) if, within the period
beginning on the effective date of a Change in Control and ending
on the first anniversary of such date, (i) the
employee’s employment with the Bank is involuntarily
terminated or (ii) the employee terminates employment with the
Bank voluntarily after being offered continued employment in a
position that is not a Comparable Position (as defined
below).
C. Limitations on Eligibility
for Change in Control Severance Benefits .
1. No employee shall be eligible for
a Change in Control Severance Benefit if (a) his or her
employment is terminated for “Cause”, (b) he or
she is offered a Comparable Position within the Bank and declines
to accept such position or (c) the employee is, at the time of
termination of employment, a party to an individual employment
agreement or change in control agreement with the Bank and/or BV
Financial, Inc. (the “Company”).
2. For purposes of this Plan, a
termination of employment for “Cause” shall include
termination because of the employee’s personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other
than traffic violations or similar offenses) or violation of any
final cease-and- desist order, or material breach of any provision
of the plan.
3. For purposes of this Plan, a
“Comparable Position” shall mean a position that would
(i) provide the employee with base compensation and benefits
that are comparable in the aggregate to those provided to the
employee prior to the Change in Control, (ii) provide the
employee with an opportunity for variable bonus compensation that
is comparable to the opportunity provided to the employee prior to
the Change in Control, (iii) be in a location that would not
require the employee to increase his or her daily one way commuting
distance by more than twenty-five (25) miles as compared to
the employee’s commuting distance immediately prior to the
Change in Control and (iv) have job skill requirements and
duties that are comparable to the requirements and duties of the
position held by the employee prior to the Change in
Control.
D. Definition of Change in
Control .
For purposes of this Plan,
“Change in Control” means the occurrence of any one of
the following events:
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(1)
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Merger : The Company merges into or consolidates with
another corporation, or merges another corporation into the
Company, and as a result less than a majority of the combined
voting power of the resulting corporation immediately after the
merger or consolidation is held by persons who were stockholders of
the Company immediately before the merger or
consolidation.
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(2)
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Acquisition
of Significant Share Ownership : There is filed or required to be filed a
report on Schedule 13D or another form or schedule (other than
Schedule 13G) required under Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, if the schedule discloses that the
filing person or persons acting in concert has or have become the
beneficial owner of 25% or more of a class of the Company’s
voting securities, but this clause (b) shall not apply to
beneficial ownership of Company voting shares held in a fiduciary
capacity by an entity of which the Company directly or indirectly
beneficially owns 50% or more of its outstanding voting
securities.
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(3)
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Change in Board
Composition : During any period of two
consecutive years, individuals who constitute the Company’s
Board of Directors at the beginning of the two-year period cease
for any reason to constitute at least a majority of the
Company’s Board of Directors; provided, however, that for
purposes of this clause (iii), each director who is first elected
by the board (or first nominated by the board for election by the
stockholders) by a vote of at least two-thirds (
2 / 3 ) of the directors who were
directors at the beginning of the two-year period shall be deemed
to have also been a director at the beginning of such period;
or
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(4)
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Sale of
Assets : The Company
sells to a third party all or substantially all of its
assets.
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Notwithstanding anything in this
Plan to the contrary, in no event shall the reorganization of the
Bank from the mutual holding company form of organization to the
full stock holding company form of organization (including the
elimination of the mutual holding company) constitute a
“Change in Control” for purposes of this
Plan.
E. Determination of the Change
in Control Severance Benefit .
The Change in Control Severance
Benefit payable to an eligible employee under this Plan shall be
determined as follows:
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(1)
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An eligible
employee who become entitled to receive a Change in Control
Severance Payment under the Plan shall receive a benefit determined
under the following schedule:
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(a)
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The basic
benefit under the Plan shall be determined as the product of
(i) the employee’s years of service from his or her hire
date (including partial years) through the termination date and
(ii) two (2) months of the employee’s Base
Compensation (as defined below). A “year of service”
shall mean each 12-
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