EXHIBIT 10.40
SPLIT-DOLLAR AGREEMENT
THIS AGREEMENT, made as of the 25th day of February 1999 by and between
ENTERPRISE BANK & TRUST COMPANY, a Massachusetts corporation (hereinafter
referred to as the "Employer"), and Xxxxxx X. Xxxxxx of Lowell, Massachusetts
(hereinafter referred to as the "Employee").
WITNESSETH THAT:
WHEREAS, the Employee is employed by the Employer, and
WHEREAS, the Employer is desirous of retaining the services of the Employee and
of assisting the Employee in paying for life insurance on his own life; and
WHEREAS, the Employer has determined that this assistance can be provided under
a split dollar life insurance arrangement; and
WHEREAS, the Employee has applied for, and is the owner of the insurance policy
or policies listed in the attached schedule hereto, hereinafter referred to as
the "Policy", and
WHEREAS, the Employer and the Employee agree to make the Policy subject to this
Agreement; and
WHEREAS, the Employee has assigned the Policy to the Employer as collateral for
amounts to be advanced by the Employer under this Agreement by an instrument of
assignment filed with the Insurer (hereinafter referred to as the "Assignment");
NOW, THEREFORE, in consideration of the promises and of the mutual covenants
herein contained, the Parties hereto hereby agree as follows:
1. The Parties hereto agree that the Policy shall be subject to the terms and
conditions of this Agreement and of the Assignment filed with the Insurer
relating to the Policy. The Employee shall be the sole and absolute owner
of the Policy and may exercise all ownership rights granted to the owner
thereof by the terms of the Policy, except as may be otherwise provided
herein and in the Assignment.
2. The premium for the Policy will be paid by the Employer during the
Employee's employment and for any period of time that it may have an
obligation to provide continuing fringe benefits thereafter. The premium
will be allocated between the Employee and the Employer. The Employee's
share of the premium (term insurance allocation) shall be paid by the
Employer as agent for the Employee and shall be charged to the Employee as
cash compensation, and for all purposes, including the Assignment, shall be
deemed cash compensation and not Employer paid premium.
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3. The Assignment shall not be terminated, altered or amended by the Employee
without the express written consent of the Employer. The Parties hereto
agree to take reasonable action to cause such Assignment to conform to the
provisions of this Agreement.
4. A. Except as otherwise provided herein, the Employee shall not sell,
assign, transfer, borrow against, surrender or cancel the Policy,
change the beneficiary designation provision thereof, in any such
case, without the express written consent of the Employer. Consent to
change the beneficiary designation shall not be unreasonably withheld.
Notwithstanding the forgoing, the Employee may borrow or withdraw cash
value of the Policy in excess of the collaterally assigned values of
the Employer without action of the Board of Directors. However, Policy
loan interest, if any, that may accrue on any such transaction shall
not reduce the collaterally assigned values of the Employer, or if
such may be the case, Employee will pay such Policy loan interest in
cash to the Insurer.
B. The Employer shall not borrow against the Policy without the express
written consent of the Employee.
C. Upon the Employee's termination of employment, the Employee shall have
the right to take any action with regard to the cash value of the
policy in excess of the collaterally assigned interest of the
Employer.
5. A. Upon the death of the Employee, the Employer shall promptly take all
action necessary to obtain its share of the death benefit provided
under the Policy.
B. The Employer shall have the unqualified right to receive a portion of
such Death Benefit equal to the total amount of its share of the
premiums paid by it hereunder, (hereinafter referred to as the "Net
Premium"). The balance of the Death Benefit provided under the Policy,
if any, shall be paid directly by the Insurer to the beneficiary or
beneficiaries and in the manner designated by the Employee. No amount
shall be paid from such death benefit to the beneficiary or
beneficiaries designated by the Employee until the Employer or Insurer
acknowledges in writing that the full amount due to the Employer
hereunder has been paid. The Parties hereto agree that the beneficiary
designation provision of the Policy shall conform to the provisions
hereof.
6. The Employer shall not merge or consolidate into or with another
organization, or reorganize, or sell substantially all of its assets to
another organization, firm or person unless and until such succeeding or
continuing organization, firm or person agrees to assume and discharge the
obligations of the Employer under this Agreement. Any such obligation will
be defined in either the Employees employee handbook or in any employment
contract between the Employee and the Employer. Upon the occurrence of such
event, the term "Employer" as used in this Agreement shall be deemed to
refer to such successor or survivor organization.
7. This Agreement shall terminate upon the Employee's death and the payment of
proceeds pursuant to Section 5 of this Agreement.
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8. A. If the Employee ceases to be employed by the Employer for whatever
reason, the Employee has the right to continue to keep the Policy in
force either individually or through a subsequent Employer, subject to
the requirement that the Policy cash value not be reduced through
loans, premium payment options, or in any other manner below the
amount needed to repay the Employer the Net Premiums paid by it
hereunder.
B. If the Employee continues to keep the Policy in force, termination of
this Agreement shall be pursuant to Section 7 of this Agreement.
C. If the Employee does not continue to keep the Policy in force, this
Agreement will terminate immediately and the Employer will be repaid
an amount equal to the lesser of Net Premiums paid by the Employer or
the cash surrender value as of the date of the Employee's termination
of Employment.
9. The Parties hereto agree that this Agreement shall take precedence over any
provisions of the Assignment. The Employer agrees not to exercise any right
possessed by it under the Assignment except in conformity with this
Agreement.
10. This Agreement may not be amended, altered or modified except by a written
instrument signed by both of the Parties hereto and may not be otherwise
terminated except as provided herein.
11. A. The split-dollar arrangement contemplated herein is an exempt welfare
plan under regulations promulgated under Title I of the Employee
Retirement Income Security Act of 1974 ("ERISA").
B. For purposes of ERISA, the Employer will be the "named fiduciary" and
"plan administrator" of the split-dollar arrangement contemplated
herein, and this Agreement is hereby designated as the written plan
instrument.
C. The Employee or any beneficiary of his may file a request for benefits
with the plan administrator. If a claim request is wholly or partially
denied, the plan administrator will furnish to the claimant a notice
of its decision within ninety (90) days in writing, and in a manner to
be understood by the claimant, which notice will contain the following
information:
I. The specific reason or reasons for the denial;
II. Specific reference to pertinent plan provisions upon which the
denial is based;
III. A description of any additional material or information necessary
for the claimant to perfect the claim and an explanation as to
why such material or information is necessary.
IV. An explanation of the plan's claim-review procedure describing
the steps to be taken by a claimant who wishes to submit his
claim for review.
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D. A claimant or his authorized representative may, with respect to any
denied claim,
I. Request a review upon written application filed within sixty (60)
days after receipt by the claimant of written notice of the
denial of his claim;
II. Review pertinent documents; and
III. Submit issues and comments in writing.
Any request or submission will be in writing and will be directed to the plan
administrator. The plan administrator will have the sole responsibility for the
review of any denied claim and will take all appropriate steps in light of its
findings. The plan administrator will render a decision upon review of a denied
claim within sixty (60) days after receipt of a request for review. If special
circumstances warrant additional time, the decision will be rendered as soon as
possible, but not later than one hundred twenty (120) days after receipt of
request for review. Written notice of any such extension will be furnished to
the claimant prior to the commencement of the extension. The decision on review
will be in writing and will include specific reasons for the decision written in
a manner to be understood by the claimant, as well as the specific references of
the pertinent provisions of the plan on which the decision is based. If the
decision on review is not furnished to the claimant within the time limits
described above, the claim will be deemed denied on review.
12. This Agreement shall be binding upon and inure to the benefit of the
Employer and its successors and assignees and the Employee and his
successors, assignees, heirs, executors, administrators and beneficiaries.
13. Except as may be preempted by ERISA, this Agreement, and the rights of the
Parties thereunder, shall be governed by and constructed in accordance with
the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed by its
officer thereunto duly authorized and the Employee has hereunto set his hand and
seal, all as of the day and year first above written.
ENTERPRISE BANK & TRUST COMPANY
_________________________________ By: ___________________________________
Witness
Title: ________________________________
_________________________________ _________________________________
Witness Xxxxxx X. Xxxxxx
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