EX-10.4(B) 9 f8k012218cex10-4b_sbfinan.htm 2017 SPLIT DOLLAR AGREEMENT AND ENDORSEMENT, DATED AS OF JANUARY 22, 2018, BETWEEN THE STATE BANK AND TRUST COMPANY AND ANTHONY V. COSENTINO The State Bank and Trust Company
Exhibit 10.4(b)
The State Bank and Trust Company
2017 Split Dollar Agreement and Endorsement
This 2017 Split Dollar Agreement and Endorsement (this “Agreement”) is entered into as of this 22nd day of January, 2018 by and between The State Bank and Trust Company, an Ohio-chartered bank (the “Bank”), and Xxxxxxx X. Xxxxxxxxx, Chief Financial Officer of the Bank (the “Executive”). This Agreement shall append the Split Dollar Policy Endorsement entered into on even date herewith or as subsequently amended, by and between the aforementioned parties.
Whereas, the Bank will pay life insurance premiums from its general assets, and
Article 1
Capitalized terms not otherwise defined in this Agreement are used herein as defined in the Amended Supplemental Executive Retirement Plan Agreement between SB Financial Group, Inc. and the Executive. The following terms shall have the meanings specified.
1.1 Administrator means the administrator described in Article 7.
1.2 Executive’s Interest means the benefit set forth in section 2.2.
1.3 Insured means the Executive.
1.4 Insurer means each life insurance carrier for which there is a Split Dollar Policy Endorsement attached to this Agreement.
1.5 Net Death Proceeds means the total death proceeds of the Policy minus the cash surrender value.
1.6 Policy means the specific life insurance policy or policies issued by the Insurer(s).
1.7 Separation from Service means separation from service as defined in Internal Revenue Code section 409A and rules, regulations, and guidance of general application thereunder issued by the Department of the Treasury, including termination for any reason of the Executive’s service as an executive and independent contractor to the Bank and any member of a controlled group, as defined in Code section 414, other than because of a leave of absence approved by the Bank or the Executive’s death.
1.8 Split Dollar Policy Endorsement means the form required by the Administrator or the Insurer to indicate the Executive’s interest, if any, in a Policy on such Executive’s life.
1.9 Amended Supplemental Executive Retirement Plan Agreement means the Supplemental Executive Retirement Plan Agreement between SB Financial Group, Inc. and the Executive, as the same may hereafter be amended.
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Article 2
Policy Ownership/Interests
2.1 Bank Ownership. The Bank is the sole owner of the Policy and shall have the right to exercise all incidents of ownership. The Bank shall be the beneficiary of the remaining death proceeds of the Policy after the Executive’s interest is paid according to section 2.2 below.
2.2 Death Benefit. Provided the Executive’s death occurs before the Executive’s Separation from Service, at the Executive’s death the Executive’s beneficiaries designated in accordance with the Split Dollar Policy Endorsement(s) shall collectively be entitled to Policy proceeds in an amount equal to $649,790 but not to exceed 100% of the Net Death Proceeds (the “Executive’s Interest”). The Executive’s Interest shall be extinguished on the date of the Executive’s Separation from Service, and the Executive’s beneficiaries shall be entitled to no benefits under this Agreement for the Executive’s death occurring thereafter. The Executive shall have the right to designate the beneficiaries of the Executive’s Interest.
2.3 Option to Purchase. The Bank shall not sell, surrender, or transfer ownership of the Policy without first giving the Executive or the Executive’s transferee the option to purchase the Policy 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 Policy.
2.4 Comparable Coverage. The Bank may replace the Policy with a comparable insurance policy to cover the benefit provided under this Agreement, in which case the Bank and the Executive shall execute a new Split Dollar Policy Endorsement for the comparable insurance policy.
2.5 Internal Revenue Code Section 1035 Exchanges. The Executive recognizes and agrees that the Bank may after this Agreement is adopted wish to exchange the Policy of life insurance on the Executive’s life for another contract of life insurance insuring the Executive’s life. Provided that the Policy is replaced (or intended to be replaced) with a comparable policy of life insurance, the Executive agrees to provide medical information and cooperate with medical insurance-related testing required by a prospective insurer for implementing the Policy or, if necessary, for modifying or updating to a comparable insurer.
Article 3
Premiums
3.1 Premium Payment. The Bank shall pay any premiums due on the Policy.
3.2 Economic Benefit. The Administrator shall annually determine the economic benefit attributable to the Executive based on the life insurance premium factor for the Executive’s age multiplied by the aggregate death benefit payable to the Executive’s beneficiary. The “life insurance premium factor” is the minimum factor applicable under guidance published pursuant to Treasury Reg. section 1.61-22(d)(3)(ii) or any subsequent authority.
3.3 Imputed Income. The Bank shall impute the economic benefit to the Executive on an annual basis by adding the economic benefit to the Executive’s W-2, or if applicable, Form 1099.
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Article 4
The Executive may irrevocably assign without consideration all of the Executive’s interest in the Policy and in this Agreement to any person, entity, or trust established by the Executive or the Executive’s spouse. If the Executive transfers all of the Executive’s interest in the Policy, all of the Executive’s interest in the Policy 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 this Agreement.
Article 5
The Insurer shall be bound by the terms of the Policy only. 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
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Article 7
Article 8
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8.5 Applicable Law. This 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.
Executive: | Bank: | ||
The State Bank and Trust Company | |||
/s/ Xxxxxxx X. Xxxxxxxxx | By: | /s/ Xxxx X. Xxxxx | |
Xxxxxxx X. Xxxxxxxxx | |||
Title: | President and CEO |
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Agreement to Cooperate with Insurance Underwriting Incident to Internal Revenue Code section 1035 Exchange
I acknowledge that I have read the 2017 Split Dollar Agreement and Endorsement and agree to be bound by its terms, particularly the covenant on my part set forth in section 2.5 of the 2017 Split Dollar Agreement and Endorsement to provide medical information and cooperate with medical insurance-related testing required by an insurer to issue a comparable insurance policy to cover the benefit provided under this 2017 Split Dollar Agreement and Endorsement.
Witness | Xxxxxxx X. Xxxxxxxxx |
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Split Dollar Policy Endorsement
Insured: | Xxxxxxx X. Xxxxxxxxx |
Insurer: | Massachusetts Mutual Life Insurance Company |
Policy No. | 39138503 |
According to the terms of The State Bank and Trust Company 2017 Split Dollar Agreement and Endorsement dated as of January 22, 2018, the undersigned Owner requests that the above-referenced policy issued by the Insurer provide for the following beneficiary designation and limited contract ownership rights to the Insured:
1. Upon the death of the Insured, proceeds shall be paid in one sum to the Owner, its successors or assigns, to the extent of the Owner’s interest in the policy. It is hereby provided that the Insurer may rely solely upon a statement from the Owner concerning the amount of proceeds it is entitled to receive under this paragraph.
2. Any proceeds at the death of the Insured in excess of the amount paid under the provisions of the preceding paragraph shall be paid in one sum to:
Primary Beneficiary, Relationship/Social Security Number |
|
Contingent Beneficiary, Relationship/Social Security Number |
The exclusive rights to change the beneficiary for the proceeds payable under this paragraph and to assign all rights and interests granted under this paragraph are hereby granted to the Insured. The sole signature of the Insured shall be sufficient to exercise the rights. The Owner retains all contract rights not granted to the Insured under this paragraph.
3. It is agreed by the undersigned that this designation and limited assignment of rights shall be subject in all respects to the contractual terms of the policy.
4. Any payment directed by the Owner under this endorsement shall be a full discharge of the Insurer, and such discharge shall be binding on all parties claiming any interest under the policy.
The undersigned for the Owner is signing in a representative capacity and warrants that he or she has the authority to bind the entity on whose behalf this document is executed.
Signed at , Ohio this day of , 20 .
Insured: | Owner: | ||
The State Bank and Trust Company | |||
By: | |||
Xxxxxxx X. Xxxxxxxxx | |||
Its: |
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