LIFE INSURANCE ENDORSEMENT METHOD SPLIT DOLLAR PLAN AGREEMENT
EXHIBIT
10.3
LIFE
INSURANCE
ENDORSEMENT
METHOD SPLIT DOLLAR PLAN
AGREEMENT
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Insurer:
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Massachusetts
Mutual Life Insurance
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Policy
Number:
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_____________
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Bank:
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The
Centreville National Bank of Maryland
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Insured:
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Xxxxxx
X. Xxxxxx
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Relationship
of Insured to Bank:
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Director
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The
respective rights and duties of the Bank and the Insured in the subject policy
shall be as defined in the following:
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I.
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DEFINITIONS
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Refer
to
the policy contract for the definition of all terms in this
Agreement.
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II.
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POLICY
TITLE AND OWNERSHIP
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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.
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III.
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BENEFICIARY
DESIGNATION RIGHTS
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The
Insured (or assignee) shall have the right and power to designate a beneficiary
or beneficiaries to receive his 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.
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PREMIUM
PAYMENT METHOD
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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
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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 Employee the amount of imputed income received
each year on Form W-2 or its equivalent.
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VI.
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DIVISION
OF DEATH PROCEEDS
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Subject
to Paragraph VII herein, the division of the death proceeds of the policy
is as
follows:
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A.
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The
Insured's beneficiary(ies), designated in accordance with Paragraph
III,
shall be entitled to an amount equal to eighty percent (80%) 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.
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B.
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The
Bank shall be entitled to the remainder of such
proceeds.
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C.
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The
Bank and the Insured (or assignees) shall share in any interest
due on the
death proceeds on a pro rata basis as the proceeds due each respectively
bears to the total proceeds, excluding any such
interest.
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VII.
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DIVISION
OF THE CASH SURRENDER VALUE OF THE
POLICY
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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.
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VIII.
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PREMIUM
WAIVER
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If
the
policy contains a premium waiver provision, such waived amounts shall be
considered for all purposes of this Agreement as having been paid by the
Bank.
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IX.
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RIGHTS
OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION
EXISTS
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In
the
event the policy involves an endowment or annuity element, the Bank’s right and
interest in any endowment proceeds or annuity benefits, on expiration of
the
deferment period, shall be determined under the provisions of this Agreement
by
regarding such endowment proceeds or the commuted value of such annuity benefits
as the policy’s cash value. Such endowment proceeds or annuity benefits shall be
considered to be like death proceeds for the purposes of division under this
Agreement.
| X. |
TERMINATION
OF AGREEMENT
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This
Agreement shall terminate upon distribution of the death benefit proceeds
in
accordance with Paragraph VI above.
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XI.
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INSURED’S
OR ASSIGNEE’S ASSIGNMENT
RIGHTS
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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 nor any rights, options, privileges or duties created under
this
Agreement.
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XII.
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AGREEMENT
BINDING UPON THE PARTIES
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This
Agreement shall bind the Insured and the Bank, their heirs, successors, personal
representatives and assigns.
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XIII.
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NAMED
XXXXXXXXX AND PLAN
ADMINISTRATOR
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The
Centreville National Bank of Maryland is hereby designated the "Named Fiduciary"
until resignation or removal by the board of directors. As Named Fiduciary,
the
bank shall be responsible for the management, control, and administration
of
this Split Dollar Plan as established herein. The Named Fiduciary may allocate
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.
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XIV.
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FUNDING
POLICY
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The
funding policy for this Split Dollar Plan shall be to maintain the subject
policy in force by paying, when due, all premiums required.
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XV.
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CLAIM
PROCEDURES FOR LIFE INSURANCE POLICY AND SPLIT DOLLAR
PLAN
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Claim
forms or claim information as to the subject policy can be obtained by
contacting The Benefit Marketing Group, Inc. (__________). When the Named
Fiduciary has a claim which may be covered under the provisions described
in the
insurance policy, he 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 to the Named Fiduciary. 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, he should contact the office named above
and they will assist in making 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.
| XVI. |
GENDER
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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.
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XVII.
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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 for any and all
liability.
Executed
at Centreville, Maryland this 7th day of January, 1997.
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THE
CENTREVILLE NATIONAL BANK OF MARYLAND
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/s/
Xxxxxx X. Xxxxxxxx
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By:
/s/
Xxxxx
Xxxxxxxxxx
EVP/CFO
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Witness
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Title
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/s/
Xxxxxx X. Xxxxxxxx
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By:
/s/
Xxxxxx X. Xxxxxx
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Witness
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Xxxxxx
X. Xxxxxx
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