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Exhibit
10.7
THE COMMUNITY BANK, A
MASSACHUSETTS
COOPERATIVE BANK,
EMPLOYEE
SEVERANCE COMPENSATION
PLAN
The primary purpose of The
Community Bank Employee Severance Compensation Plan (the
“Plan”) is to ensure the successful continuation of the
business of The Community Bank, a Massachusetts Cooperative Bank
(the “Bank”) and the fair and equitable treatment of
the Bank’s employees in the event of a Change in Control (as
defined below).
Subject to paragraph C below,
any employee of the Bank with at least one year of service as of
his or her termination date (“Eligible Employee”) 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 Eligible Employee’s employment with
the Bank is involuntarily terminated, or (ii) the Eligible
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 or |
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Management Restructuring Benefits. |
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(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 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 any holding company of the Bank (the
“Company”). |
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(2) |
For purposes of this Plan, a termination of employment for
“Cause” shall include termination because of the
employee’s act of dishonesty, 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 minor traffic violations or similar
offenses), any felony conviction, any violation of law involving
moral turpitude, or final cease-and-desist order issued by a bank
regulatory agency, or material breach of any provision of the
Plan. |
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(3) |
For purposes of this Plan, a “Comparable Position”
shall mean a position that would (a) 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;
(b) 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
(c) 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. |
Definitions of Change in Control. |
For purposes of this Plan,
“Change in Control” means the occurrence of any one or
more of the following events:
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(1) |
Merger : The Company merges into, or consolidated 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) |
Acquisition of Significant Share Ownership : There is
filed, or required to be filed, a report on Schedule 13D, 13G or
another form or schedule required under Sections 13(d), 13(g) or
14(d) of the Securities Exchange Act of 1934, which 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. |
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(3) |
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, 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) |
Sale of Assets : The Company sells to a third party all,
or substantially all, of its assets. |
| E. |
Determination of the Change in Control Severance
Benefit. |
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(1) |
The Change in Control Severance Benefit payable to an Eligible
Employee under this Plan shall be determined under the following
schedule: |
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(a) |
An Eligible Employee (other than an officer of the Bank or
Company at the Vice President level or higher) shall receive a
Change in Control Severance Benefit equal to the product of
(i) the Eligible Employee’s years of service from his or
her hire date (including partial years) through the termination
date and (ii) an amount equal to two (2) weeks of the
employee’s Base Compensation (as defined below), subject to
the limitations set forth in the third paragraph below. A
“year of service” shall mean each 12-month period of
service following the hire date determined without regard the
number of hours worked during such period(s). The minimum payment
to an Eligible Employe |
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