EXHIBIT 10.1
THE OHIO VALLEY BANK COMPANY
EXECUTIVE GROUP LIFE SPLIT DOLLAR PLAN
THIS AGREEMENT is made and entered into this 29th day of April, 2003, by
and between THE OHIO VALLEY BANK COMPANY, an Ohio corporation located in
Gallipolis, Ohio (the "Company"), and XXXXXXX X. XXXXX (the "Executive"). This
Agreement shall append the Split Dollar Endorsements entered into on even date
herewith or as subsequently amended, by and between the aforementioned parties.
BACKGROUND
On November 1, 1996, the Company and the Executive entered into The Ohio
Valley Bank Company Executive Group Life Split Dollar Plan, and on March 24,
2000, the Company and the Executive entered into the First Amendment to The Ohio
Valley Bank Company Executive Group Life Split Dollar Plan. The Company and the
Executive now wish to amend and restate said Agreement document for the purpose
of (1) adding an additional policy to the Agreement, and (2) updating the terms
and conditions contained in the Agreement. This new Agreement shall rescind and
replace the existing Agreement.
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to divide the death proceeds of two life insurance policies
on the Executive's life. The Company will pay life insurance premiums from its
general assets.
AGREEMENT
The Company and the Executive agree as follows:
Article 1
General Definitions
The following terms shall have the meanings specified:
1.1 "Insured" means the Executive.
1.2 "Insurer" means each life insurance carrier that has a Split Dollar Policy
Endorsement attached to this Agreement.
1.3 "Normal Retirement Age" means the Executive's 65th birthday.
1.4 "Policy" means the specific life insurance policy issued by the Insurer.
1.5 "Termination of Employment" means the Executive ceasing to be employed by
the Company for any reason whatsoever, other than by reason of an approved
leave of absence.
Article 2
Policy Ownership/Interests
2.1 Company Ownership. The Company is the sole owner of the Policies and shall
have the right to exercise all incidents of ownership. The Company shall be
the direct beneficiary of the remaining death proceeds after the
Executive's interest has been paid under Section 2.2.
2.2 Executive's Interest. The death proceeds of each Policy shall be payable to
the beneficiary designated by the Executive to the extent of the lesser of:
(i) two times the Executive's highest Total Annual Compensation as
determined during either the current calendar year in which the Executive's
death occurs or any calendar year prior to the Executive's death; or (ii)
the face amount of each life insurance Policy on the life of the Executive
specified in the Split Dollar Endorsements attached to this Agreement.
"Total Annual Compensation" is defined as the aggregate of: (1) the
Executive's base salary for the current calendar year; (2) any Christmas
gift, Executive bonus and director fees and bonus (if applicable) from the
previous calendar year; and (3) any amounts described in (1) and (2) herein
that have been deferred under a qualified or non-qualified deferral plan.
The Executive shall also have the right to elect and change settlement
options that may be permitted.
2.3 Option to Purchase. The Company shall not sell, surrender or transfer
ownership of the Policies while this Agreement is in effect without first
giving the Executive or the Executive's transferee the option to purchase
the Policies for a period of 60 days from written notice of such intention.
The purchase price shall be an amount equal to the cash surrender value of
the Policies. This provision shall not impair the right of the Company to
terminate this Agreement.
Article 3
Premiums
3.1 Premium Payment. The Company shall pay any premiums due on the Policies.
3.2 Economic Benefit. The Company shall determine the economic benefit
attributable to the Executive based on the amount of the current term rate
for the Executive's age multiplied by the aggregate death benefit payable
to the Executive's beneficiary. The "current term rate" is the minimum
amount required to be imputed under Revenue Rulings 64-328 and 66-110, or
any subsequent applicable authority.
3.3 Imputed Income. The Company shall impute the economic benefit to the
Executive on an annual basis.
Article 4
Assignment
The Executive may assign without consideration all of the Executive's
interests in the Policies and in this Agreement to any person, entity or trust.
In the event the Executive transfers all of the Executive's interest in the
Policies, then all of the Executive's interest in the Policies and in the
Agreement shall be vested in the Executive's transferee, who shall be
substituted as a party hereunder and the Executive shall have no further
interest in the Policies or in this Agreement.
Article 5
Insurer
The Insurer shall be bound only by the terms of each Policy. Any payments
the Insurer makes or actions it takes in accordance with the Policy shall fully
discharge it from all claims, suits and demands of all entities or persons. The
Insurer shall not be bound by or be deemed to have notice of the provisions of
this Agreement.
Article 6
Claims Procedure
6.1 Claims Procedure. Any person or entity who has not received benefits under
this Agreement that he or she believes should be paid (the "claimant")
shall make a claim for such benefits as follows:
6.1.1 Initiation - Written Claim. The claimant initiates a claim by submitting
to the Company a written claim for the benefits.
6.1.2 Timing of Company Response. The Company shall respond to such claimant
within 90 days after receiving the claim. If the Company determines that
special circumstances require additional time for processing the claim, the
Company can extend the response period by an additional 90 days by
notifying the claimant in writing, prior to the end of the initial 90-day
period, that an additional period is required. The notice of extension must
set forth the special circumstances and the date by which the Company
expects to render its decision.
6.1.3 Notice of Decision. If the Company denies part or all of the claim, the
Company shall notify the claimant in writing of such denial. The Company
shall write the notification in a manner calculated to be understood by the
claimant. The notification shall set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of the Agreement on which the denial
is based,
(c) A description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is needed,
(d) An explanation of the Agreement's review procedures and the time limits
applicable to such procedures, and
(e) A statement of the claimant's right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on review.
6.2 Review Procedure. If the Company denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the
Company of the denial, as follows:
6.2.1 Initiation - Written Request. To initiate the review, the claimant, within
60 days after receiving the Company's notice of denial, must file with the
Company a written request for review.
6.2.2 Additional Submissions - Information Access. The claimant shall then have
the opportunity to submit written comments, documents, records and other
information relating to the claim. The Company shall also provide the
claimant, upon request and free of charge, reasonable access to, and copies
of, all documents, records and other information relevant (as defined in
applicable ERISA regulations) to the claimant's claim for benefits.
6.2.3 Considerations on Review. In considering the review, the Company shall
take into account all materials and information the claimant submits
relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination.
6.2.4 Timing of Company Response. The Company shall respond in writing to such
claimant within 60 days after receiving the request for review. If the
Company determines that special circumstances require additional time for
processing the claim, the Company can extend the response period by an
additional 60 days by notifying the claimant in writing, prior to the end
of the initial 60-day period, that an additional period is required. The
notice of extension must set forth the special circumstances and the date
by which the Company expects to render its decision.
6.2.5 Notice of Decision. The Company shall notify the claimant in writing of
its decision on review. The Company shall write the notification in a
manner calculated to be understood by the claimant. The notification shall
set forth:
(a) The specific reasons for the denial,
(b) A reference to the specific provisions of the Agreement on which the denial
is based,
(c) A statement that the claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations) to
the claimant's claim for benefits, and
(d) A statement of the claimant's right to bring a civil action under ERISA
Section 502(a).
Article 7
Amendments and Termination
The Company or the Executive may terminate this Agreement at any time by
giving written notice to the other party.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the Company and
their beneficiaries, survivors, executors, administrators and transferees,
and any Policy beneficiary.
8.2 No Guarantee of Employment. This Agreement is not an employment policy or
contract. It does not give the Executive the right to remain an employee of
the Company, nor does it interfere with the Company's right to discharge
the Executive. It also does not require the Executive to remain an employee
nor interfere with the Executive's right to terminate employment at any
time.
8.3 Applicable Law. The Agreement and all rights hereunder shall be governed by
and construed according to the laws of the State of Ohio, except to the
extent preempted by the laws of the United States of America.
8.4 Reorganization. The Company shall not merge or consolidate into or with
another company, or reorganize, or sell substantially all of its assets to
another company, firm or person unless such succeeding or continuing
company, firm or person agrees to assume and discharge the obligations of
the Company.
8.5 Notice. Any notice, consent or demand required or permitted to be given
under the provisions of this Split Dollar Agreement by one party to another
shall be in writing, shall be signed by the party giving or making the
same, and may be given either by delivering the same to such other party
personally, or by mailing the same, by United States certified mail,
postage prepaid, to such party, addressed to his or her last known address
as shown on the records of the Company. The date of such mailing shall be
deemed the date of such mailed notice, consent or demand.
8.6 Entire Agreement. This Agreement constitutes the entire agreement between
the Company and the Executive as to the subject matter hereof. No rights
are granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.
8.7 Administration. The Company shall have powers which are necessary to
administer this Agreement, including but not limited to:
(a) Interpreting the provisions of this Agreement;
(b) Establishing and revising the method of accounting for this Agreement;
(c) Maintaining a record of benefit payments; and
(d) Establishing rules and prescribing any forms necessary or desirable to
administer this Agreement.
8.8 Named Fiduciary. The Company shall be the named fiduciary and plan
administrator under the Agreement. 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
ministerial duties to qualified individuals.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written. EXECUTIVE: COMPANY:
THE OHIO VALLEY BANK COMPANY
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxx
Title: Chairman of the Board
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