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EXHIBIT 10.6
EXECUTIVE HEALTH INSURANCE PLAN
AGREEMENT
THIS AGREEMENT is made and entered into this 20th day of
December,
2007, by and between Central Co-Operative Bank, a bank organized
and existing
under the laws of the Commonwealth of Massachusetts (hereinafter
referred to as
the "Bank"), and John D. Doherty, an Executive of the Bank
(hereinafter referred
to as the "Executive").
WHEREAS, the Executive has been and continues to be a valued
Executive
of the Bank; and
WHEREAS, the purpose of this Agreement is to further the growth
and
development of the Bank by providing the Executive with health care
insurance
coverage, and thereby encourage the Executive's productive efforts
on behalf of
the Bank; and
ACCORDINGLY, the Board has adopted the Executive Health Insurance
Plan
and it is the desire of the Bank and the Executive to enter into
this Agreement
under which the Bank will agree to Purchase health care insurance
coverage for
the Executive upon the Executive's retirement in the event of the
Executive's
death pursuant to the Executive Health Insurance Plan; and
FURTHERMORE, it is the intent of the parties hereto that this
Executive
Health Insurance Plan be considered an unfunded arrangement
maintained primarily
to provide Health Care Insurance Coverage for the Executive, and be
considered a
non-qualified benefit plan for purposes of the Employee Retirement
Income
Security Act of 1974, as amended ("ERISA"). The Executive is fully
advised of
the Bank's financial status and has had substantial input in the
design and
operation of this benefit plan; and
NOW THEREFORE, in consideration of services the Executive has
performed
in the past and those to be performed in the future, and based upon
the mutual
promises and covenants herein contained, the Bank and the Executive
agree as
follows:
I.
DEFINITIONS
A.
Effective Date:
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The Effective Date of the Executive Health Insurance Plan
shall be December 20, 2007.
B. Plan
Year:
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Any reference to the
"Plan Year" shall mean a calendar year
from January 1st to December 31st. In the year of
implementation, the term "Plan Year" shall mean the period
from the Effective Date to December 31st of the year of the
Effective Date.
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C.
Termination of Employment:
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Termination of Employment shall mean the Executive's voluntary
resignation of employment by the Executive or the Bank's
discharge of the Executive without cause, prior to the Normal
Retirement Age.
D.
Liability Reserve Account:
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A Liability Reserve Account shall be established on the books
of the Bank for the purpose of providing a health insurance
benefit and a Medicare Supplement Benefit for the benefit of
the Executive. Prior to the Executive's Termination of
Employment or the Executive's retirement, whichever event
shall first occur, such Liability Reserve Account shall be
credited with the Bank Contribution. The Liability Reserve
Account shall be credited interest monthly at the rate of six
percent (6%), commencing upon the last day of the month of the
first contribution and continuing on the last date of each
month thereafter, as long as there is a balance in the
account. The interest rate shall be increased or decreased at
the discretion of the Bank.
E. Bank
Contribution:
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The Bank shall make an annual contribution of Ten Thousand and
00/100th Dollars ($10,000.00) into the Liability Reserve
Account. Such contribution shall be made in monthly
installments.
F.
Executive Health Care or Medicare Supplement Benefit:
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The Bank shall, either monthly or annually, expense an amount
in the Liability Reserve Account to pay the premium payments
for post-retirement health care insurance. When the Liability
Reserve Account reaches a balance of zero (0) dollars, the
Executive Health Care or Medicare Supplement Benefit shall
cease. Said benefit shall be for the life of the Executive and
the Executive's spouse.
G.
Change in Control:
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Change of Control shall be defined as the occurrence of any
one of the following:
a. the
acquisition of more than fifty percent (50%) of
the value or voting power of the Bank's stock by a
person or group;
b. the
acquisition in a period of twelve (12) months or
less of at least thirty-five percent (35%) of the
Bank's stock by a person or group;
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c. the
replacement of a majority of the Bank's board in
a period of twelve (12) months or less by Directors
who were not endorsed by a majority of the current
board members; or
d. the
acquisition in a period of twelve (12) months or
less of forty percent (40%) or more of the Bank's
assets by an unrelated entity.
For the purposes of this Agreement, transfers made on account
of deaths or gifts, transfers between family members or
transfers to a qualified retirement plan maintained by the
Bank shall not be considered in determining whether there has
been a Change in Control.
H.
Normal Retirement Age:
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Normal Retirement Age shall mean the date on which the
Executive attains age sixty-five (65).
I.
Disability or Disabled:
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"Disability or Disabled" shall mean the Executive is, by
reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than
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. Medical
determination of Disability or Disabled will be made by the
provider of an accident or health plan covering employees of
the Bank. Upon the request of the Plan Administrator, the
Executive must submit proof to the Plan Administrator of
Social Security Administration's or the provider's
determination.
II.
BENEFITS
A.
Benefits:
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Should the Executive remain in the employ of the Bank until
the Normal Retirement Age as stated in Subparagraph I (H), the
Executive shall be entitled to receive the Executive Health
Care or Medicare Supplement Benefit, beginning at Normal
Retirement Age until the Liability Reserve Account has a zero
(0) balance.
B.
Termination of Employment:
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Should the Executive suffer an Termination of Employment,
voluntary or involuntary, at anytime from the Effective Date
of this Agreement, the Executive shall be entitled to receive
the Executive Health Care or Medicare Supplement Benefit until
the Liability Reserve Account has a zero (0) balance. Said
coverage shall commence the first day of the first month
following the death of the Executive.
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In the event the Executive's death should occur after such
termination and there is a balance in the Liability Reserve
Account, the Executive's spouse shall be entitled to the
Executive Health Care or Medicare Supplement Benefit, until
the Liability Reserve Account has a zero balance. Upon the
spouse's death, subsequent to the Executive, this Agreement
shall terminate and no benefit shall be due. Said coverage
shall commence the first day of the first month following the
death of the Executive.
C.
Death Benefit:
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Should the Executive die while there is a balance in the
Liability Reserve Account, said unpaid balance of the
Executive's Liability Reserve Account shall be used to provide
the Executive Health Care or Medicare Supplement Benefit for
the Executive's spouse until said balance is zero dollars
($0). Upon the spouse's death, subsequent to the Executive,
this Agreement shall terminate and no benefit shall be due.
Said coverage shall commence the first day of the first month
following the death of the Executive.
D.
Discharge for Cause:
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Should the Executive be Discharged for Cause at any time, the
Bank Contribution shall cease on the date of said termination
and no coverage shall be provided. The term "for cause" shall
mean any of the following that result in an adverse effect on
the Bank: (i) the conviction of a felony or gross misdemeanor
involving fraud or dishonesty; (ii) the willful violation of
any Bank law, rule, or regulation; (iii) an intentional
failure to perform stated duties; or (iv) a breach of
fiduciary duty involving personal profit. If a dispute arises
as to discharge "for cause," such dispute shall be resolved by
arbitration as
set forth in this Executive Health Insurance
Plan.
III.
RESTRICTIONS UPON FUNDING
The Bank shall have no obligation to set aside, earmark or entrust
any
fund or money with which to pay its obligations under this
Executive
Health Insurance Plan. The Executive, their beneficiary(ies), or
any
successor in interest shall be and remain simply a general creditor
of
the Bank in the same manner as any other creditor having a
general
claim for matured and unpaid compensation.
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The Bank reserves the absolute right, at its sole discretion, to
either
fund the obligations undertaken by this Executive Health Insurance
Plan
or to refrain from funding the same and to determine the extent,
nature
and method of such funding. Should the Bank elect to fund this
Executive Health Insurance Plan, in whole or in part, through
the
purchase of life insurance, mutual funds, disability policies
or
annuities, the Bank reserves the absolute right, in its sole
discretion, to terminate such funding at any time, in whole or in
part.
At no time shall any Executive be deemed to have any lien nor
right,
title or interest in or to any specific funding investment or to
any
assets of the Bank.
If the Bank elects to invest in a life insurance, disability or
annuity
policy upon the life of the Executive, then the Executive shall
assist
the Bank by freely submitting to a physical exam and supplying
such
additional information necessary to obtain such insurance or
annuities.
IV. CHANGE IN
CONTROL
If the Executive suffers a Termination of Employment (voluntarily
or
involuntarily), except for cause, anytime subsequent to a Change
in
Control, then the Executive shall be entitled to receive the
Executive
Health Care or Medicare Supplement Benefit, commencing within
thirty
(30) days of said termination until the Liability Reserve Account
has a
zero (0) balance.
In the event the Executive's death should occur after such
termination
and there is a balance in the Liability Reserve Account, the
Executive's spouse shall be entitled to the Executive Health Care
or
Medicare Supplement Benefit, until the Liability Reserve Account
has a
zero balance. Upon the spouse's death, subsequent to the
Executive,
this Agreement shall terminate and no benefit shall be due.
V.
DISABILITY
In the event that there is a finding of any qualified period of
disability for the Executive, the Bank will pay the Health Care
Benefit
until the
