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EXHIBIT (10)E
SPLIT-DOLLAR AGREEMENT
AGREEMENT made and entered as of the 7th day of July, 1995, by
and between VALLEY NATIONAL BANCORPORATION, a New Jersey corporation, with
principal offices and place of business in the State of New Jersey (the
"Corporation"), VALLEY NATIONAL BANK AS TRUSTEE UNDER THE XXXXXX X. XXXXXX AND
XXXXX X. XXXXXX 1995 IRREVOCABLE TRUST AGREEMENT DATED JULY 7, 1995 (the
"Trust"), XXXXXX X. XXXXXX, an individual residing at 3 Stonehedge, Montville,
New Jersey (the "Employee") and XXXXX XXXXXX, his wife ("Xxx. Xxxxxx").
W I T N E S S E T H :
WHEREAS, the Employee is employed by the Corporation; and
WHEREAS, the Employee wishes to provide second to die life
insurance protection in the net amount of $1,000,000 for his estate in the event
of the death of Employee and his wife, which is described in Exhibit A attached
hereto and by this reference made a part hereof (the "Policy"), and which was
issued by The Guardian Life Insurance Company of America (the "Insurer"); and
WHEREAS, the Corporation is willing to pay the annual premiums
due on the Policy until it is fully paid, in return for a waiver by the Employee
of his coverage under the Corporation's group term policy, on the terms and
conditions hereinafter set forth; and
WHEREAS, the Policy was purchased by the Trust and the Trust
is the owner of the Policy and, as such, possesses all incidents of ownership in
and to the Policy; and
WHEREAS, the Corporation wishes to have the Policy
collaterally assigned to it by the Trust, in order to secure the repayment of
the amounts which it will pay toward the premiums on the Policy.
NOW, THEREFORE, in consideration of the premises and of the
mutual promises contained herein, the parties hereto agree as follows:
1. Policy and Assignment. The Trust has purchased the
Policy from the Insurer in the initial total face amount of $1,300,000. The
parties hereto have taken all necessary action to cause the Insurer to issue the
Policy, and shall take any further action which may be necessary to cause the
Policy to conform to the provisions of this Agreement. The parties hereto agree
that the
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Policy shall be subject to the terms and conditions of this Agreement and of the
collateral assignment filed with the Insurer relating to the Policy, a copy of
which is annexed hereto as Exhibit B (the "Assignment").
2. Trust Is Owner of Policy. The Trust 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 otherwise be
provided herein and in the Assignment.
3. Obligations.
(a) Corporation's Payment Obligations. On or
before the due date of each Policy premium, or within the grace period provided
therein, the Corporation shall pay the entire premium due to the Insurer, and
shall, upon request, promptly furnish the Employee evidence of timely payment of
such premium. The Corporation shall annually furnish the Employee a statement of
the amount of income reportable by the Employee for federal and state income tax
purposes, if any, as a result of its payment of such sum. The obligation of the
Corporation to pay the Policy premiums shall cease at the earlier of (the
"Payment Period") (i) the death of both the Employee and Xxx. Xxxxxx, or (ii)
the payment of Policy premiums for a number of years, such that the Policy is
fully paid (i.e., no further premiums are due thereunder to maintain a
$1,000,000 death benefit), the Corporation is repaid from the Policy all of the
Policy premiums it paid (without interest) and the Policy will pay a death
benefit to the beneficiaries of $1,000,000 (the "Fully Paid Period"). The Policy
illustrations show the Fully Paid Period to be eleven (11) years with a
repayment to the Corporation in year 15. The parties recognize that the Fully
Paid Period may be more or less than that shown in the illustrations. All the
Policy premiums paid by the Corporation hereunder are referred to as the
"Aggregate Policy Premiums". The Corporation shall pay the Policy premiums
hereunder, regardless of whether the Employee continues to be employed by the
Corporation, dies or the Corporation has any other offset to the payment;
provided, however, the Corporation may cease making the payments if the Employee
is terminated by the Corporation for "Cause", as defined in the
Change-in-Control Agreement (as hereafter defined in Section 11).
(b) Maintenance of Policy Until Repayment. The
Trust, the Employee and Xxx. Xxxxxx agree to maintain the Policy until the
Corporation is repaid from the Policy in full (without interest) the Aggregate
Policy Premiums.
4. Collateral Assignment of Policy to Corporation. To
secure the repayment to the Corporation of the amounts payable to it hereunder,
the Trust has, contemporaneously herewith, assigned the Policy to the
Corporation as collateral, a copy of which is
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annexed hereto as Exhibit B. The parties hereto agree to take all action
necessary to cause the Assignment to conform to the provisions of this Agreement
and the forms used by the Insurer.
5. Rights of Parties in Policy.
(a) Except as otherwise provided herein, the
Trust may not sell, assign, transfer, borrow against, surrender, cancel or
dispose of the Policy, nor make any election in respect thereof, without the
express written consent of the Corporation, and any such act shall be deemed to
be null and void.
(b) The Employee and Xxx. Xxxxxx have exercised
the right to absolutely and irrevocably give to the Trust all of their right,
title and interest in and to the Policy, subject to the Assignment. The
Corporation shall treat the Trust as the sole owner of all of the Employee's
right, title and interest in and to the Policy, subject to this Agreement and
the Corporation's rights under the Assignment. The Employee and Xxx. Xxxxxx have
no right, title or interest in and to the Policy, all such rights being vested
in and exercisable only by the Trust. The Trust shall have no further right to
give or otherwise transfer any interest in the Policy.
(c) During the term of this Agreement, except as
expressly provided herein, the Corporation agrees that it shall not be entitled
either to withdraw any of the cash surrender value ("Cash Value") from the
Policy, or borrow such funds, using the Policy as security therefor.
6. Death Benefits.
(a) Collection of Death Benefits. Upon the death
of the Employee and Xxx. Xxxxxx, the Corporation shall promptly take all action
necessary to obtain the death benefit (the "Death Benefit") provided under the
Policy.
(b) Repayment to the Corporation from Death
Benefits. The Corporation shall be entitled to receive that amount of the Death
Benefit equal to (the "Corporation Death Benefit Amount") the greater of (i) the
excess of the Death Benefit over $1,000,000, or (ii) the Aggregate Policy
Premiums (without interest). The balance of the Death Benefit, if any, shall be
paid directly to the beneficiary or beneficiaries ("Beneficiary") in the manner
and in the amount or amounts provided in the beneficiary designation provision
of the Policy. In no event shall the amount payable to the Corporation exceed
the Death Benefit. No amount shall be paid from the Death Benefit to the
Beneficiary until the Corporation has been paid the Corporation Death Benefit
Amount. The parties hereto agree that the beneficiary designation provision of
the Policy shall conform to the provisions hereof.
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7. Termination. This Agreement shall terminate upon the
earliest of the following event:
(a) Repayment to the Corporation from the Policy
of the Aggregate Policy Premiums at the end of the Fully Paid Period from the
Cash Value, or paid up Policy additions or a Policy loan or otherwise; or
(b) Repayment to the Corporation of the
Corporation Death Benefit Amount from the Death Benefit; or
(c) Mutual agreement of the Trust and the
Corporation, with the consent of the Employee (or Xxx. Xxxxxx if the Employee
has died).
8. Repayment to Corporation at End of Fully Paid Period.
If the Policy continues without the payment of the Death Benefit through the
Fully Paid Period, the Corporation shall be entitled to be repaid from the
Policy as soon as possible upon the occurrence of a Fully Paid Period, the
Aggregate Policy Premiums by means of the surrender of a portion of the Cash
Value or paid-up Policy additions or a Policy loan or otherwise. The parties
hereto agree to cause the Corporation to be so repaid as soon as possible after
the Fully Paid Period.
9. Insurer Rights. The Insurer shall be fully discharged
from its obligations under the Policy by payment of the Death Benefit to the
Beneficiary, subject to the terms and conditions of the Policy. In no event
shall the Insurer be considered a party to this Agreement, or any modification
or amendment hereof. No provision of this Agreement, nor of any modification or
amendment hereof, shall in any way be construed as enlarging, changing, varying,
or in any other way affecting the obligations of the Insurer as expressly
provided in the Policy, except insofar as the provisions hereof are made a part
of the Policy by the Collateral Assignment executed by the Employee and filed
with the Insurer in connection herewith.
10. Procedures.
(a) Valley National Bank is hereby designated
the "Named Fiduciary" under this Agreement.
(b) The Named Fiduciary shall control and manage
the Policy. Such responsibilities may be allocated to other persons, named in a
written instrument spelling out to whom and which responsibilities have been
delegated.
The following claims procedure are available for this Policy:
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(1) Claims Procedure. The Trust or the
Beneficiary and Corporation shall make claim and execute such forms as
required under the Policy and to be sent to the Insurer as required
under the Policy. Should the Insurer deny the claim, the parties may
request the Insurer to review the decision under the Insurer's standard
review procedures.
(2) Notification and Content of
Decision. Notice of the decision to deny the claim in whole or in part
shall be furnished to the claimant by the Insurer within a reasonable
period of time after the claim has been filed.
The notification shall set forth the
reason for the denial, reference to the pertinent part of the policy or
plan provisions on which the denial is based. The Claimant may request
a description of information necessary to perfect the claim and an
explanation of claim review procedures.
(3) Review Procedure. There is no
independent review procedure. The purpose of the review procedure set
forth herein is to provide a means to contest a claim denial under the
terms of the Policy. The Corporation, Trust or the Beneficiary may:
(A) Request a review upon written
application to the Insurer;
(B) Request a description of
information necessary to perfect the claim; and
(C) May submit issues and
comments in writing.
11. Employee Waiver of Other Insurance Rights. Subject to
the terms hereof, the Employee hereby waives any and all rights Employee has to
have the Corporation (or its subsidiaries) provide life insurance on the life of
the Employee during his employment with the Corporation (or its subsidiaries) or
thereafter, and any successor in interest to the Corporation, including, but not
limited to, any rights under a policy or employment manual, under the
Change-in-Control Agreement (the "Change-in-Control Agreement") between the
Corporation and the Employee dated January 1, 1995 (and any amendment or
supplement thereto) under the Severance Agreement (the "Severance Agreement"),
dated August 17, 1994, between the Corporation and the Employee and any other
claims arising out of such agreements due to the lack of such group life
insurance.
12. Taxes. The Employee recognizes that he or the Trust
may be required to pay federal, state and local income taxes on the value of the
benefits conveyed to him or the Trust hereunder, and the Corporation is not
liable to the Employee or the Trust for such taxes.
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13. Trust Agreement. The Corporation has agreed to cause
its attorneys to draft a trust agreement to create the Trust to which the
Employee has transferred the Policy, the preparation of the Trust to be at the
cost and expense of the Corporation. The Employee hereby assigns its rights to
have the Corporation pay the premiums on the Policy to the Trust.
14. Entire Agreement; Amendments. This Agreement and the
Assignment constitutes the entire agreement of the parties with respect to the
matters covered hereby and revokes any prior agreements or understandings
whether oral or written, with respect to the matters covered hereby. This
Agreement may not be amended, altered or modified, except by a written
instrument signed by the Trust, the Corporation and the Employee (except after
the death of the Employee, the consent of Xxx. Xxxxxx is required), or their
respective successors or assigns, and may not be otherwise terminated except as
provided herein.
15. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Corporation and its successors and
assigns, and the Employee, his successors, assigns, heirs, executors,
administrators and beneficiaries.
16. Notices. Any notice, consent or demand required or
permitted to be given under the provisions of this Agreement shall be in
writing, and shall be signed by the party giving or making the same. If such
notice, consent or demand is mailed to a party hereto, it shall be sent by
United States certified mail, postage prepaid, addressed to such party's last
known address as shown on the records of the Corporation. The date of such
mailing shall be deemed the date of notice, consent or demand.
17. Governing Law. This Agreement, and the rights of the
parties hereunder, shall be governed by and construed in accordance with the
laws of the State of New Jersey.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, in duplicate, as of the day and year first above written.
VALLEY NATIONAL BANCORPORATION
By: /s/ XXXXXX XXXXXXX
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Xxxxxx XxXxxxx, Chairman
of Compensation Committee
VALLEY NATIONAL BANK, AS TRUSTEE
UNDER THE XXXXXX X. XXXXXX AND
XXXXX X. XXXXXX 1995 IRREVOCABLE
TRUST AGREEMENT DATED JULY 7, 1995
By: /s/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx --
Senior Vice President
/s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
/s/ XXXXX XXXXXX
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Xxxxx Xxxxxx
