RIVER VALLEY FINANCIAL BANK SUPPLEMENTAL LIFE INSURANCE AGREEMENT
EXHIBIT
10.2
RIVER
VALLEY FINANCIAL BANK
THIS
SUPPLEMENTAL LIFE INSURANCE AGREEMENT (the “Agreement”) is adopted this 25th day
of January, 2007, by and between RIVER VALLEY FINANCIAL BANK, a savings
association located in Madison, Indiana (the “Bank”), and XXXXXXX XXXXXXXXX (the
“Executive”).
The
purpose of this Agreement is to retain and reward the Executive by dividing
the
death proceeds of certain life insurance policies which are owned by the
Bank on
the life of the Executive with the designated beneficiary of the Executive.
The
Bank will pay the life insurance premiums from its general assets.
Article
1
Definitions
Whenever
used in this Agreement, the following terms shall have the meanings
specified:
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1.1
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“Bank’s
Interest”
means the benefit set forth in Section
2.1.
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1.2
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“Beneficiary”
means each designated person, or the estate of the deceased Executive,
entitled to benefits, if any, upon the death of the
Executive.
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1.3
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“Beneficiary
Designation Form”
means the form established from time to time by the Plan Administrator
that the Executive completes, signs and returns to the Plan Administrator
to designate one or more
Beneficiaries.
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1.4
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“Board”
means the Board of Directors of the Bank as from time to time
constituted.
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1.5
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“Code”
means the Internal Revenue Code of 1986, as
amended.
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1.6
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“Effective
Date”
means January 1, 2007.
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1.7
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“Executive’s
Interest”
means the benefit set forth in Section
2.2.
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1.8
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“Insurer”
means the insurance company issuing the Policy on the life of the
Executive.
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1.9
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“Net
Death Proceeds”
means the total death proceeds of the Policy minus the greater
of (i) the
cash surrender value or (ii) the aggregate premiums paid by the
Bank.
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1.10
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“Plan
Administrator”
means the plan administrator described in Article
10.
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1.11
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“Policy”
or “Policies”
means the individual insurance policy or policies adopted by the
Bank for
purposes of insuring the Executive’s life under this
Agreement.
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1
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1.12
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“Separation
from Service”
means the termination of the Executive’s employment with the Bank for
reasons other than death. Whether a Separation from Service takes
place is
determined in accordance with the requirements of Code Section
409A based
on the facts and circumstances surrounding the termination of the
Executive’s employment and whether the Bank and the Executive intended for
the Executive to provide significant services for the Bank following
such
termination. A Separation from Service will not have occurred
if:
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(a)
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the
Executive continues to provide services as an employee of the Bank
at an
annual rate that is twenty percent (20%) or more of the services
rendered,
on average, during the immediately preceding three (3) full calendar
years
of employment (or, if employed less than three (3) years, such
lesser
period) and the annual remuneration for such services is twenty
percent
(20%) or more of the average annual remuneration earned during
the final
three (3) full calendar years of employment (or, if less, such
lesser
period), or
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(b)
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the
Executive continues to provide services to the Bank in a capacity
other
than as an employee of the Bank at an annual rate that is fifty
percent
(50%) or more of the services rendered, on average, during the
immediately
preceding three (3) full calendar years of employment (or if employed
less
than three (3) years, such lesser period) and the annual remuneration
for
such services is fifty percent (50%) or more of the average annual
remuneration earned during the final three (3) full calendar years
of
employment (or if less, such lesser period).
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The
Executive’s employment relationship will be treated as continuing intact while
the Executive is on military leave, sick leave or other bona fide leave of
absence if the period of such leave of absence does not exceed six (6) months,
or if longer, so long as the Executive’s right to reemployment with the Bank is
provided either by statute or by contract. If the period of leave exceeds
six
(6) months and there is no right to reemployment, a Separation from Service
will
be deemed to have occurred as of the first date immediately following such
six
(6) month period.
Article
2
Policy
Ownership/Interests
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2.1
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Bank’s
Interest.
The Bank shall own the Policies and shall have the right to exercise
all
incidents of ownership, and the Bank may terminate a Policy without
the
consent of the Executive. The Bank shall be the beneficiary of
the
remaining death proceeds of the Policies after the Executive’s Interest is
determined according to Section
2.2.
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2.2
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Executive’s
Interest.
The Executive, or the Executive’s assignee, shall have the right to
designate the Beneficiary of an amount of death proceeds as specified
in
Section 2.2.1. The Executive shall also have the right to elect
and change
settlement options with respect to the Executive’s Interest by providing
written notice to the Bank and the Insurer.
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2
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2.2.1
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Death
Prior to Separation from Service.
If the Executive dies while employed by the Bank, the Executive’s
Beneficiary shall be entitled to a benefit equal to fifty percent
(50%) of
the Net Death Proceeds.
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2.2.2
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Death
After Separation from Service.
If the Executive dies after Separation from Service, the Beneficiary
will
not be entitled to a benefit under this
Agreement
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Article
3
Premiums
and Imputed Income
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3.1
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Premium
Payment.
The Bank shall pay all premiums due on all Policies.
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3.2
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Economic
Benefit.
The Bank shall 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 Beneficiary.
The “life insurance premium factor’ is the minimum factor applicable under
guidance published pursuant to Treasury Reg. § 1.61-22(d)(3)(ii) or any
subsequent authority.
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3.3
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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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3.4
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Reimbursement.
The Bank shall pay to the Executive on an annual basis an amount
equal to
the federal and state income taxes paid by the Executive on the
economic
benefit reported pursuant to Section
3.3.
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Article
4
General
Limitations
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4.1
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Removal.
Notwithstanding any provision of this Agreement to the contrary,
the
Executive’s rights in the Agreement shall terminate if the Executive is
subject to a final removal or prohibition order issued by an appropriate
federal banking agency pursuant to Section 8(e) of the Federal
Deposit
Insurance Act (“FDIA”).
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Article
5
Beneficiaries
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5.1
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Beneficiary.
The Executive shall have the right, at any time, to designate a
Beneficiary(ies) to receive any benefits payable under the Agreement
upon
the death of the Executive. The Beneficiary designated under this
Agreement may be the same as or different from the beneficiary
designation
under any other Agreement of the Bank in which the Executive
participates.
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5.2
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Beneficiary
Designation; Change.
The Executive shall designate a Beneficiary by completing and signing
the
Beneficiary Designation Form, and delivering it to the
Bank
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3
or
its
designated agent. The Executive’s beneficiary designation shall be deemed
automatically revoked if the Beneficiary predeceases the Executive or if
the
Executive names a spouse as Beneficiary and the marriage is subsequently
dissolved. The Executive shall have the right to change a Beneficiary by
completing, signing, and otherwise complying with the terms of the Beneficiary
Designation Form and the Bank’s rules and procedures, as in effect from time to
time. Upon the acceptance by the Bank of a new Beneficiary Designation Form,
all
Beneficiary designations previously filed shall be cancelled. The Bank shall
be
entitled to rely on the last Beneficiary Designation Form filed by the Executive
and accepted by the Bank prior to the Executive’s death.
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5.3
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Acknowledgment.
No designation or change in designation of a Beneficiary shall
be
effective until received, accepted and acknowledged in writing
by the Bank
or its designated agent.
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5.4
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No
Beneficiary Designation.
If the Executive dies without a valid designation of beneficiary,
or if
all designated Beneficiaries predecease the Executive, then the
Executive’s surviving spouse shall be the designated Beneficiary. If the
Executive has no surviving spouse, the benefits shall be made payable
to
the personal representative of the Executive’s
estate.
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5.5
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Facility
of Payment.
If the Bank determines in its discretion that a benefit is to be
paid to a
minor, to a person declared incompetent, or to a person incapable
of
handling the disposition of that person’s property, the Bank may direct
payment of such benefit to the guardian, legal representative or
person
having the care or custody of such minor, incompetent person or
incapable
person. The Bank may require proof of incompetence, minority or
guardianship as it may deem appropriate prior to distribution of
the
benefit. Any payment of a benefit shall be a payment for the account
of
the Executive and the Executive’s Beneficiary, as the case may be, and
shall be a complete discharge of any liability under the Agreement
for
such payment amount.
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Article
6
Assignment
The
Executive may irrevocably assign without consideration all of the Executive’s
Interest in this Agreement to any person, entity or trust. In the event the
Executive shall transfer all of the Executive’s Interest, then all of the
Executive’s Interest in this 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
7
Insurer
The
Insurer shall be bound only by the terms of its given Policy. The Insurer
shall
not be bound by or deemed to have notice of the provisions of this Agreement.
The Insurer shall have the right to rely on the Bank’s representations with
regard to any definitions, interpretations or Policy interests as specified
under this Agreement.
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Article
8
Claims
And Review Procedure
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8.1
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Claims
Procedure.
The Executive or Beneficiary (“claimant”) who has not received benefits
under the Agreement that he or she believes should be paid shall
make a
claim for such benefits as follows:
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8.1.1
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Initiation
- Written Claim.
The claimant initiates a claim by submitting to the Plan Administrator
a
written claim for the benefits. If such a claim relates to the
contents of
a notice received by the claimant, the claim must be made within
sixty
(60) days after such notice was received by the claimant. All other
claims must be made within one hundred eighty (180) days of the date
on which the event that caused the claim to arise occurred. The
claim must
state with particularity the determination desired by the
claimant.
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8.1.2
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Timing
of Bank Response.
The Bank shall respond to such claimant within 90 days after receiving
the
claim. If the Bank determines that special circumstances require
additional time for processing the claim, the Bank 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 Bank expects to render
its
decision.
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8.1.3
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Notice
of Decision.
If the Bank denies part or all of the claim, the Bank shall notify
the
claimant in writing of such denial. The Bank shall write the notification
in a manner calculated to be understood by the claimant. The notification
shall set forth:
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(a)
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The
specific reasons for the denial;
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(b)
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A
reference to the specific provisions of the Agreement on which
the denial
is based;
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(c)
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A
description of any additional information or material necessary
for the
claimant to perfect the claim and an explanation of why it is needed;
and
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(d)
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An
explanation of the Agreement’s review procedures and the time limits
applicable to such procedures.
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8.2
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Review
Procedure.
If the Bank denies part or all of the claim, the claimant shall
have the
opportunity for a full and fair review by the Bank of the denial,
as
follows:
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8.2.1
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Initiation
- Written Request.
To initiate the review, the claimant, within 60 days after receiving
the
Bank’s notice of denial, must file with the Bank a written request for
review.
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8.2.2
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Additional
Submissions - Information Access.
The claimant shall then have the opportunity to submit written
comments,
documents, records and other
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5
information
relating to the claim. The Bank shall also provide the claimant, upon request
and free of charge, reasonable access to, and copies of, all documents, records
and other information relevant to the claimant’s claim for
benefits.
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8.2.3
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Considerations
on Review.
In considering the review, the Bank 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.
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8.2.4
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Timing
of Bank’s Response.
The Bank shall respond in writing to such claimant within 60 days
after
receiving the request for review. If the Bank determines that special
circumstances require additional time for processing the claim,
the Bank
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 Bank expects
to render
its decision.
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8.2.5
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Notice
of Decision.
The Bank shall notify the claimant in writing of its decision on
review.
The Bank shall write the notification in a manner calculated to
be
understood by the claimant. The notification shall set
forth:
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(a)
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The
specific reasons for the denial;
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(b)
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A
reference to the specific provisions of the Agreement on which
the denial
is based; and
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(c)
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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 to the claimant’s claim for
benefits.
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Article
9
Amendments
And Termination
The
Bank
may amend or terminate the Agreement at any time, or may amend or terminate
the
Executive’s rights under the Agreement at any time prior to the Executive’s
death, by providing written notice of such to the Executive. In the event
that
the Bank decides to maintain the Policy after termination of the Agreement,
the
Bank shall be the direct beneficiary of the entire death proceeds of the
Policy.
Article
10
Administration
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10.1
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Plan
Administrator Duties.
This Agreement shall be administered by a Plan Administrator which
shall
consist of the Board, or such committee or persons as the Board
may
choose. The Plan Administrator shall also have the discretion and
authority to (i) make, amend, interpret and enforce all appropriate
rules
and regulations for the administration of this Agreement and (ii)
decide
or resolve any and all ques-tions including interpretations of
this
Agreement, as may arise in connection with
this
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6
Agreement.
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10.2
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Agents.
In the administration of this Agreement, the Plan Administrator
may employ
agents and delegate to them such administrative duties as it sees
fit,
(including acting through a duly appointed representative), and
may from
time to time consult with counsel who may be counsel to the
Bank.
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10.3
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Binding
Effect of Decisions.
The decision or action of the Plan Administrator with respect to
any
question arising out of or in connection with the administration,
interpretation and application of this Agreement and the rules
and
regulations promulgated hereunder shall be final and conclusive
and
binding upon all persons having any interest in this
Agreement.
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10.4
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Indemnity
of Plan Administrator.
The Bank shall indemnify and hold harmless the members of the Plan
Administrator against any and all claims, losses, damages, expenses
or
liabilities arising from any action or failure to act with respect
to this
Agreement, except in the case of willful misconduct by the Plan
Administrator or any of its
members.
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10.5
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Information.
To enable the Plan Administrator to perform its functions, the
Bank shall
supply full and timely information to the Plan Administrator on
all
matters relating to the date and circumstances of the retirement,
disability, death or Separation from Service of the Executive,
and such
other pertinent information as the Plan Administrator may reasonably
require.
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Article
11
Miscellaneous
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11.1
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Binding
Effect.
This Agreement shall bind the Executive and the Bank, their beneficiaries,
survivors, executors, administrators, and transferees and any
Beneficiary.
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11.2
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No
Guarantee of Employment.
This Agreement is not a contract for employment. It does not give
the
Executive the right to remain as an employee of the Bank, nor does
it
interfere with the Bank'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.
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11.3
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Applicable
Law.
The Agreement and all rights hereunder shall be governed by and
construed
according to the laws of the State of Indiana, except to the extent
preempted by the laws of the United States of
America.
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11.4
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Reorganization.
The Bank 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 Bank
under
this Agreement. Upon the occurrence of such event, the term “Bank” as used
in this Agreement shall be deemed to refer to the successor or
survivor
company.
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7
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11.5
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Notice.
Any notice or filing required or permitted to be given to the Bank
under
this Agreement shall be sufficient if in writing and hand-delivered,
or
sent by registered or certified mail, to the address
below:
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000
Xxxxxx Xxxxx
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X.X.
Xxx 0000
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Xxxxxxx,
Xxxxxxx 00000
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Such
notice shall be deemed given as of the date of delivery or, if delivery is
made
by mail, as of the date shown on the postmark or the receipt for registration
or
certification.
Any
notice or filing required or permitted to be given to the Executive under
this
Agreement shall be sufficient if in writing and hand-delivered, or sent by
mail,
to the last known address of the Executive.
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11.6
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Entire
Agreement.
This Agreement, along with the Executive’s Beneficiary Designation Form,
constitutes the entire agreement between the Bank and the Executive
as to
the subject matter hereof. No rights are granted to the Executive
under
this Agreement other than those specifically set forth
herein.
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
indicated above.
EXECUTIVE: RIVER
VALLEY FINANCIAL BANK
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________________________________
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By
____________________________________
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Xxxxxxx
Xxxxxxxxx
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Title
____________________________________
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8
{ } New
Designation
{ } Change
in
Designation
I,
Xxxxxxx Xxxxxxxxx, designate the following as Beneficiary under the
Agreement:
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Primary:
___________________________________________________________
___________________________________________________________
___________________________________________________________
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_____%
_____%
_____%
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Contingent:
___________________________________________________________
___________________________________________________________
___________________________________________________________
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_____%
_____%
_____%
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Notes:
| · |
Please
PRINT CLEARLY or TYPE the names of the
beneficiaries.
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| · |
To
name a trust as beneficiary, please provide the name of the trustee(s)
and
the exact
name and date of the trust
agreement.
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| · |
To
name your estate as beneficiary, please write “Estate of
_[your
name]_”.
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| · |
Be
aware that none of the contingent beneficiaries will receive anything
unless ALL of the primary beneficiaries predecease
you.
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I
understand that I may change these beneficiary designations by delivering
a new
written designation to the Plan Administrator, which shall be effective only
upon receipt and acknowledgment by the Plan Administrator prior to my death.
I
further understand that the designations will be automatically revoked if
the
beneficiary predeceases me, or, if I have named my spouse as beneficiary
and our
marriage is subsequently dissolved.
Name:
_______________________________
Signature: _______________________________ Date: _______
Received
by the Plan Administrator this ________ day of ___________________,
20___
By: _________________________________
Title:
_________________________________
POLICY
ENDORSEMENT
Contract
Owner: RIVER VALLEY FINANCIAL BANK
The
undersigned Owner requests that the policies shown in the attached Schedule
Page
issued by Great-West Life & Annuity Insurance Company (the “Insurer”)
provide for the following beneficiary designation:
1.
Upon
the death of the Insured, proceeds shall be paid in one sum to the Owner,
its
successors or assigns, as Beneficiary, to the extent claimed by said Owner.
2.
Any
proceeds at the death of the Insured in excess of the amount paid under the
provisions of paragraph 1 of this Policy Endorsement shall be paid in one
sum in
accordance with the written direction of the Owner. Such direction will be
provided to the Insurer at the time of claim. The Insurer will be protected
in
relying solely on the Owner to provide the name(s) of the party(ies) to pay
any
excess not paid under paragraph 1. If the Owner fails to provide the name(s)
of
the party(ies) at the time of claim, then any proceeds payable under this
paragraph shall be paid in one sum to the Beneficiary.
3.
It is
hereby provided that (i) any payment made to the Beneficiary or other party
under paragraph 2 of this Policy Endorsement shall be a full discharge of
the
Insurer to the extent thereof; (ii) such discharge shall be binding on all
parties claiming any interest under the Policy; and (iii) the Insurer shall
have
no responsibility with respect to the amounts so claimed.
4.
It is
agreed by the undersigned that this designation shall be subject in all respects
to the contractual terms of the Policy.
The
undersigned is signing in a representative capacity for the Owner and warrants
that he or she has the authority to bind the entity on whose behalf this
document is being executed.
Signed
at
Madison, Indiana this 25th
day of
January, 2007.
OWNER:
RIVER
VALLEY FINANCIAL BANK
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By:
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____________________________
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By:
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_____________________________
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(Signature:
Bank Officer #1)
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(Signature
Bank Officer #2)
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____________________________
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_____________________________
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(Printed)
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(Printed)
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||
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Title:
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__________________________________
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Title:
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___________________________________
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1
of
2
Schedule
Page
Policies
Subject to Policy Endorsement
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Policy
Number
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Insured
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Xxxxxxx
Xxxxxxxxx
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Xxxxxxx
Xxxxxxxxx
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2
of
2
