Exhibit 10.48
LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
Insurer: Union Central ("UC"); New York Life ("NYL")
Policy Number: UC: U2000014121; NYL: 00000000
Bank: The First National Bank of Litchfield (the "Bank")
Insured: Xxxxx Xxxxxxx
Relationship of Insured to Bank; Employee
The respective rights and duties of the Bank and the Insured in the
above-referenced Policy shall be pursuant to the terms set forth below:
I. DEFINITIONS
Refer to the Policy contract for the definition of all terms in this
Agreement.
II. POLICY TITLE AND OWNERSHIP
Title and ownership shall reside in the Bank for its use and for the use
of the Insured all in accordance with this Agreement. The Bank alone may,
to the extent of its interest, exercise the right to borrow or withdraw on
the Policy cash values. Where the Bank and the Insured (or assignee, with
the consent of the Insured) mutually agree to exercise the right to
increase the coverage under the subject Split Dollar Policy, then, in such
event, the rights, duties and benefits of the parties to such increased
coverage shall continue to be subject to the terms of this Agreement.
III. BENEFICIARY DESIGNATION RIGHTS
The Insured (or assignee) shall have the right and power to designate a
beneficiary or beneficiaries to receive the Insured's share of the
proceeds payable upon the death of the Insured and to elect and change a
payment option for such beneficiary, subject to any right or interest the
Bank may have in such proceeds, as provided in this agreement.
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IV. PREMIUM PAYMENT METHOD
The Bank shall pay an amount equal to the planned premiums and any other
premium payments that might become necessary to keep the Policy in force.
V. TAXABLE BENEFIT
Annually the Insured will receive a taxable benefit equal to the assumed
cost of insurance as required by the Internal Revenue Service. The Bank
(or its administrator) will report to the Insured the amount of imputed
income each year on Form W-2 or its equivalent.
VI. DIVISION OF DEATH PROCEEDS
Subject to Paragraphs VII and X herein, the division of the death proceeds
of the Policy is as follows:
A. Whether or not the Insured be employed by the Bank at the time of
death, the Insured's beneficiary(ies), designated in accordance with
Paragraph III, shall be entitled to an amount equal to $25,000 of
the net-at-risk insurance portion of the proceeds. The net-at-risk
insurance portion is the total proceeds less the cash value of the
policy.
B. The Bank shall be entitled to the remainder of such proceeds.
VII. DIVISION OF THE CASH SURRENDER VALUE OF THE POLICY
The Bank shall at all times be entitled to an amount equal to the Policy's
cash value, as that term is defined in the Policy contract, less any
Policy loans and unpaid interest or cash withdrawals previously incurred
by the Bank and any applicable surrender charges. Such cash value shall be
determined as of the date of surrender or death as the case may be.
VIII. TERMINATION OF AGREEMENT
This Agreement shall terminate upon the occurrence of any one of the
following:
A. The Insured shall leave the employment of the Bank (voluntarily or
involuntarily) prior to three (3) years from the Effective Date of
this Agreement; or
B. The Insured shall be discharged from employment with the Bank for
cause. The term "for cause" shall mean any of the following that
result in an adverse effect on the Bank: (i) gross negligence or
gross neglect; (ii) the commission of a felony or gross misdemeanor
involving moral turpitude, fraud, or dishonesty; (iii) the willful
violation of any law, rule, or regulation (other than a traffic
violation or similar offense); (iv) an intentional failure to
perform stated duties; or (v) a breach of fiduciary duty involving
personal profit; or
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X. Xxxxxxxxx, lapse, or other termination of the Policy by the Bank.
Upon such termination, the Insured (or assignee) shall have a fifteen (15)
day option to receive from the Bank an absolute assignment of the Policy
in consideration of a cash payment to the Bank, whereupon this Agreement
shall terminate. Such cash payment referred to hereinabove shall be the
greater of:
A. The Bank's share of the cash value of the Policy on the date of such
assignment, as defined in this Agreement; or
B. The amount of the premiums that have been paid by the Bank prior to
the date of such assignment.
If, within said fifteen (15) day period, the Insured fails to exercise
said option, fails to procure the entire aforestated cash payment, or
dies, then the option shall terminate and the Insured (or assignee) agrees
that all of the Insured's rights, interest and claims in the Policy shall
terminate as of the date of the termination of this Agreement.
The Insured expressly agrees that this Agreement shall constitute
sufficient written notice to the Insured of the Insured's option to
receive an absolute assignment of the Policy as set forth herein.
Except as provided above, this Agreement shall terminate upon distribution
of the death benefit proceeds in accordance with paragraph VI above.
X. INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS
The Insured may not, without the written consent of the Bank, assign to
any individual, trust or other organization, any right, title or interest
in the subject Policy, or any rights, options, privileges or duties
created under this Agreement.
XI. AGREEMENT BINDING UPON THE PARTIES
This Agreement shall bind the Insured and the Bank, their heirs,
successors, personal representative and assigns.
XII. ERISA PROVISIONS
The following provisions are part of this Agreement and are intended to
meet the requirements of the Employee Retirement Income Security Act of
1974 ("ERISA"):
A. Named Fiduciary and Plan Administrator.
The "Named Fiduciary and Plan Administrator" of this Endorsement
Method Split Dollar Plan Agreement shall be The First National Bank
of Litchfield until its
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resignation or removal by the Board of Directors. As Named Fiduciary
and Plan Administrator, the Bank shall be responsible for the
management, control, and administration of this Split Dollar Plan as
established herein. The Named Fiduciary may delegate to others
certain aspects of the management and operation responsibilities of
the Plan, including the employment of advisors and the delegation of
any ministerial duties to qualified individuals.
B. Funding Policy.
The funding policy for this Split Dollar Plan shall be to maintain
the subject Policy in force by paying, when due, all premiums
required.
C. Basis of Payment of Benefits.
Direct payment by the Insurer is the basis of payment of benefits
under this Agreement, with those benefits in turn being based on the
payment of premiums as provided in this Agreement.
D. Claim Procedures.
Claim forms or claim information as to the subject Policy can be
obtained by contacting Benmark, Inc. (800-544-6079). When the named
Fiduciary has a claim which may be covered under the provisions
described in the insurance Policy, they should contact the office
named above, and they will either complete a claim form and forward
it to an authorized representative of the Insurer or advise the
named Fiduciary what further requirements are necessary. The Insurer
will evaluate and make a decision as to payment. If the claim is
payable, a benefit check will be issued in accordance with the terms
of this Agreement.
In the event that a claim is not eligible under the Policy, the
Insurer will notify the Named Fiduciary of the denial pursuant to
the requirements under the terms of the Policy. If the Named
Fiduciary is dissatisfied with the denial of the claim and wishes to
contest such claim denial, they should contact the office named
above and they will assist in making an inquiry to the Insurer. All
objections to the Insurer's actions should be in writing and
submitted to the office named above for transmittal to the Insurer.
XIII. GENDER
Whenever in this Agreement 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.
XIV. INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT
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The Insurer shall not be deemed a party to this Agreement, but will
respect the rights of the parties as herein developed upon receiving an
executed copy of this Agreement. Payment or other performance in
accordance with the Policy provisions shall fully discharge the Insurer
from any and all liability.
XV. CHANGE OF CONTROL
Change of Control shall be deemed to be the cumulative transfer of more
than fifty percent (50%) of the voting stock of the Bank from the date of
this Agreement. For the purposes of this Agreement, transfers on account
of death 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 of Control. Upon a Change
of Control, if the Insured's employment is subsequently terminated, except
for cause, then the Insured shall be one hundred percent (100%) vested in
the benefits promised in this Agreement and, therefore, upon the death of
the Insured, the Insured's beneficiary(ies) (designated in accordance with
Paragraph III) shall receive the death benefit provided herein as if the
Insured had died while employed by the Bank (see Subparagraphs VI [A]
&[B].
XVI. AMENDMENT OR REVOCATION
It is agreed by and between the parties hereto that, during the lifetime
of the Insured, this Agreement may be amended or revoked at any time or
times, in whole or in part, by the mutual written consent of the Insured
and the Bank.
XVII. EFFECTIVE DATE
The effective Date of this Agreement shall be May 1, 2003.
XVIII. SEVERABILITY AND INTERPRETATION
If a provision of this Agreement is held to be invalid or unenforceable,
the remaining provisions shall nonetheless be enforceable according to
their terms. Further, in the event that any provision is held to be
overbroad as written, such provision shall be deemed amended to narrow its
application to the extent necessary to make the provision enforceable
according to law and enforced as amended.
XIX. APPLICABLE LAW
The validity and interpretation of this Agreement shall be governed by the
laws of the State of Connecticut.
Executed at Litchfield, Connecticut this 1st day of May, 2003.
THE FIRST NATIONAL BANK OF LITCHFIELD
Litchfield, Connecticut
/s/ Xxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxx, President
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Witness Title
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/s/ Xxxxxxxxxx Xxxxxxxxxxxx /s/ Xxxxx Xxxxxxx
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Witness Insured
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BENEFICIARY DESIGNATION FORM
FOR LIFE INSURANCE ENDORSEMENT METHOD
SPLIT DOLLAR PLAN AGREEMENT
PRIMARY DESIGNATION:
Name Address Relationship
---- ------- ------------
Xxxxxxx Xxxxxxx 12604 Xxxxxxxx Court Brother
Richmond, VA 23233
SECONDARY (CONTINGENT) DESIGNATION:
Xxxxxxxxx Xxxxx 000 Xxxx Xxxxxx Sister
Stirling, NJ 07980
All sums payable under the Life Insurance Endorsement Method Split Dollar Plan
Agreement by reason of my death shall be paid to the primary Beneficiary, if he
or she survives me, and if no Primary Beneficiary shall survive me, then to the
Secondary (Contingent) Beneficiary.
/s/ Xxxxx Xxxxxxx May 2, 2003
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Signature of Insured Date
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