KEYSTONE FINANCIAL, INC. / (Bank)
EXECUTIVE SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is made and entered into effective this 1st day of January, 1998,
by and between KEYSTONE FINANCIAL, INC. ("Sponsor) through one of its
affililated companies _________________________ , ("Employer"), a Pennsylvania
corporation, and _______________ ("Executive") an employee of the Employer, and
represents the final understanding of the parties regarding the benefits
provided hereunder.
W I T N E S S E T H
WHEREAS, the Executive is insured under Policy Number _________________ (the
"Policy") issued by Metropolitan Life Insurance Company ("Metropolitan"); and
WHEREAS, the owner of the Policy (the "Owner") shall be the Executive or the
person or other entity to whom the Executive assigns the Policy pursuant to
Section 4; and
WHEREAS, Sponsor and Employer highly values Executive's efforts, abilities, and
accomplishments; and
WHEREAS, Executive is deemed a member of a select group of management and/or one
of the highly compensated employees of the Employer; and
WHEREAS, Employer wishes to provide Executive with permanent life insurance as
an additional employment benefit and is willing to assist in the payment of
premiums under the Policy as provided in this Agreement; and
WHEREAS, the Executive has agreed to assign an interest in the Policy to Sponsor
as collateral security for such premium payments, at the time of the first
premium payment, on a form of agreement approved by Metropolitan (the
"Collateral Assignment Agreement"); and
WHEREAS, in order to be eligible for such benefit, Executive agrees to the terms
hereinafter provided;
NOW, THEREFORE, Employer and Executive ("Parties"), in consideration of the
mutual covenants and agreements described below, hereby agree as follows:
SECTION 1
Payment of Premiums
1.1 The Employer shall pay the premiums on the Policy, less the amount paid by
the Executive pursuant to Section 1.4, until the termination of this Agreement,
pursuant to Section 5. The Employer may increase or decrease the scheduled
premium for any year after the first year. Each premium for the Policy following
execution of this Agreement will be remitted by the Employer to Metropolitan
within thirty-one (31) days following the anniversary date of the Policy.
1.2 The premium payment periods may also be changed by the Employer to the
extent necessary to maintain compliance of the Policy with Sections 7702 and
7702A of the Internal Revenue Code and the regulations thereunder.
1.3 No payment of interest by the Executive will be due on the premium amounts
paid by the Employer.
1.4 The Executive shall pay that portion of the premium in amount that for
federal income tax purposes is equal to the value of the "economic benefit" of
the life insurance protection enjoyed by the Executive each year. The "economic
benefit" is to be determined by reference to IRS Rev. Ruls. 64-328 and 66-110,
or any rulings which may substitute, supercede, replace, or amend them,
governing the federal income tax consequences of split dollar arrangements. The
Executive has been rated by Metropolitan Life Insurance Company less favorably
than "standard non-smoker". Since the Employer is contributing to the premium
based on a standard non-smoker classification, if the rating continues, the
policy at program maturity date will likely not have sufficient cash value to
realize the objective described in Section 1.7B below. Therefore, if the
Executive wishes to attain this objective, Executive may, in his or her
discretion, make additional premium payments in amounts as may be indicated from
time to time by Metropolitan Life Insurance Company as necessary to create the
augmented value in the policy to realize such objective.
1.5 The Employer shall continue to pay its portion of the premium if the Execu-
tive is disabled while actively employed.
1.6 "Disability", for the purpose of this Agreement means, that the Executive
has met the requirements for disability under the Employer's Long Term
Disability Plan, is not eligible for full retirement, and is incapable of
fulfilling job duties due to mental or physical disability.
1.7 "Premium", for the purpose of this Agreement, means the sum paid to
Metropolitan Life Insurance Company as consideration for the individual
Universal Life Policy specifically referred to in this Agreement. Premiums paid
are scheduled to be in an amount so as to accumulate policy values at the
program maturity date as if the Executive were to receive a standard nonsmoker
classification sufficient to:
A. Provide total death benefits equal to at least two times the Executive's
annual base salary plus the accumulated premiums paid by the Employer during the
Executive's active employment and equal to at least one (1) times the
Executive's final annual base salary plus accumulated premiums paid by the
Employer after the Executive's active employment and prior to termination of
this Agreement;
B. Keep the policy in force after the program maturity date with a death
benefit equal to one (1) times the Executive's final annual base salary until
the Executive attains the age of ninety-five (95); and
C. Prior to the program maturity date, withdraw an amount to be paid to the
Employer equal to the accumulated premiums paid by the Employer.
The sufficiency of the amount needed to meet the provisions above shall
be determined as of the program maturity date and shall be based on the
insurer's current interest crediting and mortality rates as of that same date.
The Employer shall not be responsible for events occurring subsequent to the
program maturity date which may result in an insufficient level of funding to
meet the provisions above.
SECTION 2
Policy Beneficiary Designation
2.1 The right to designate and change the beneficiary of the Policy and to
elect an optional mode of settlement is reserved to the person who would be the
Owner of the Policy in the absence of the Collateral Assignment Agreement. Such
Owner of the Policy shall have the right to designate and change the
beneficiaries and contingent beneficiaries and to elect an optional mode of
settlement subject to the interest of the Employer as Assignee under the
Collateral Assignment Agreement, and the Employer will make the Policy available
to the Owner, if required, for endorsement of a change of beneficiary.
SECTION 3
Payment of Policy Proceeds in Event of Death of Employee
3.1 If the Executive dies (other than by suicide within two (2) years from the
Policy issue date) while the Policy and this Agreement are in force, the
proceeds of the Policy shall be payable as follows:
A. Part shall be payable to the Employer; this part shall be equal to the
proceeds of the Policy not payable to the beneficiary pursuant to paragraph B or
paragraph C of this section.
B. The designated beneficiary of the Executive shall be paid an amount
equal to two (2) times the Executive's annual base salary if the Executive dies
while actively employed by Employer, subject, however, to satisfying any
applicable underwriting restrictions or guidelines existing at the time of
adjustment.
C. The designated beneficiary of the Executive shall be paid an amount
equal to one (1) times annual base salary, subject, however, to satisfying any
applicable underwriting restrictions or guidelines at the time of adjustment if
the Executive dies after terminating active employment with Employer due to
Disability or Normal Retirement, provided that the termination of active
employment occurs prior to the termination of this Agreement.
(1) The benefit paid if the Executive dies after terminating active
employment with Employer due to Disability is based on the Executive's
annual base salary at the time the Disability occurred.
3.2 Insurance proceeds will not be paid if the Executive commits suicide, while
sane or insane, within two (2) years from the date of the policy. Instead, an
amount equal to all premiums paid, without interest, will be paid under the
terms of this Agreement.
3.3 "Normal Retirement", for the purpose of this Agreement, means attaining the
age of sixty-five (65).
3.4 "Annual Base Salary", for the purpose of this Agreement, means the
Executive's regular salary, without bonus, as of the date Executive was actively
at work.
SECTION 4
Exercise of Rights
4.1 The Employer, during the lifetime of the Executive and prior to the
termination of this Agreement, may exercise any of its rights as Assignee of the
Policy only upon thirty (30) days written notice to the Executive. Such notice
shall be given to the Executive either in person or by mailing as provided for
in Section 8.1 of this Agreement.
4.2 Subject to the Employer's rights as Assignee, the Owner retains all rights
as Owner of the Policy. Notwithstanding the aforementioned, neither the Owner
nor the Employer shall withdraw, surrender, borrow against, or pledge as
security for a loan any portion of the Policy while this Agreement is in effect.
SECTION 5
Termination of Agreement
5.1 This Agreement shall terminate if any of the following takes place:
A. Termination of the Executive's employment with the Employer prior to
the Executive's becoming eligible for disability benefits under a Disability
plan of the Employer or for a Normal Retirement benefit under any qualified
pension plan maintained by the Employer; or
B. Demotion of the Executive to a position which is not part of the group
of Employees eligible to participate in the Employer's Split Dollar Insurance
Program as determined by the Employer; or
C. The bankruptcy of the Employer; or
D. The failure of the Employer or the Executive to pay their respective
share of the premium under Section 1 of this Agreement; or
E. Payment to the Employer of the aggregate amount of the premiums paid
either directly by the Executive or by a withdrawal from the Policy.
F. Termination of this Agreement pursuant to Section 12.3; or
G. The death of the Executive; or
H. Program Maturity Date. This occurs the year in which sufficient funds
will have accumulated in the Policy to sustain the projected death benefit
amount as if the Executive were to have received a standard nonsmoker classifi-
cation, or when the Executive attains the age of sixty-five (65), whichever
occurs later.
5.2 In the event of termination of this Agreement, the lesser of the aggregate
of the premiums paid by the Employer pursuant to this Agreement, or the net cash
value in the Policy, shall become due and payable to the Employer, except as
provided for herein. Upon payment of such amount from the Policy, from the
Executive, or from whatever other source, the Employer shall execute a release
of the Collateral Assignment Agreement and deliver such release and the Policy
to the Owner.
5.3 In the event of a Change of Control, as defined in the written severance
policy in effect at that time, such severance policy shall thereafter remain in
force for purposes of this Agreement. In the event of a Change of Control and
the Executive is entitled to benefits for termination of employment under such
severance policy, then, in addition, he shall have no obligation to repay
premiums to the Employer as stated in Section 5.2.
SECTION 6
Taxation
6.1 All income taxes attributable to the Executive which are relevant to the
Policy or this Agreement, whether federal, state or local, which may be due or
may become due, are the sole responsibility of the Executive, or the Executive's
beneficiary, while this Agreement is in force and after it has terminated for
any reason.
SECTION 7
Insurer Not a Party
7.1 Metropolitan shall not be deemed to be a party to this Agreement for any
purpose nor shall it be deemed in any way responsible for its validity.
Metropolitan shall not be obligated to inquire as to the distribution or
application of any monies payable or paid by it under the Policy, and Payments
or other performance of its contract obligations in accordance with the terms of
the Policy shall fully discharge Metropolitan from any and all liability under
the Policy.
SECTION 8
Notices
8.1 Any notices required or permitted to be given under this Agreement shall be
in writing and shall be deemed properly given if sent by registered or certified
mail, addressed as follows:
(1) Notices to Executive:
(2) Notices to Employer: _____________________________ (Bank)
c/o ▇. ▇. ▇▇▇▇▇▇▇▇
Keystone Financial, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Either party may, from time to time, change the address to which
notices shall be mailed by giving notice of such address in the manner provided
herein.
SECTION 9
Other Benefits
9.1 Participation in this Program is designed to supersede and render void the
group term life insurance currently provided to the Executive. In all other
respects, the benefits described herein are in addition to any other benefits
the Executive may have under any plan or program of the Employer, and, except as
aforementioned or otherwise expressly provided for herein, shall supplement and
shall not supersede any other agreement between the Employer and the Executive
or any provision contained therein.
SECTION 10
Named Fiduciary
10.1 The Employer is hereby designated as the Named Fiduciary of this Split
Dollar Insurance Program, in accordance with the Employee Retirement Income
Security Act of 1974. The business address and telephone number of the Named
Fiduciary are:
___________________________ (Bank)
c/o ▇. ▇. ▇▇▇▇▇▇▇▇
Keystone Financial, Inc.
One Keystone ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
The Named Fiduciary shall have the authority to control and manage the
operation and administration of this Program. However, the Named Fiduciary may
allocate its responsibilities for the operation and administration of this
Program, including the designation of persons who are not Named Fiduciaries, to
carry out fiduciary responsibilities.
The Named Fiduciary of this Program shall be responsible for making
timely delivery of any required premiums to the Insurer.
All pertinent documents shall be retained by the Named Fiduciary and
made available for examination at the above indicated business address. Upon
written request, the Program document and other information shall be provided to
the Parties of this Program.
SECTION 11
Claims Procedure
11.1 Benefits shall be payable in accordance with the Agreement provisions.
Should the Executive or beneficiary fail to receive benefits to which such
Executive or beneficiary believes he or she is entitled, a claim may be filed.
Any claim for a Program benefit hereunder shall be filed by the Executive or
beneficiary (claimant) of this Program by written communication, which is made
by the claimant or the claimant's authorized representative, which is reasonably
calculated to bring the claim to the attention of the Named Fiduciary.
If a claim for a Program benefit is wholly or partially denied, a
written notice of the decision shall be furnished to the claimant by the Named
Fiduciary or his designee within a reasonable period of time after receipt of
the claim by the Program, which notice shall include the following information:
(A) The specific reason or reasons for the denial;
(B) Specific reference to the pertinent Agreement provisions upon which the
denial is based;
(C) A description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and
(D) An explanation of the Program's claim review procedures.
In order that a claimant may appeal a denial of a claim, a claimant or
his duly authorized representative:
(A) May request a review by written application to the Named Fiduciary or his
designee not later than 60 days after receipt by the claimant of written
notification of denial of a claim;
(B) May review pertinent documents; and
(C) May submit issues and comments in writing.
A decision of review of a denied claim shall be made not later than 60
days after the Program's receipt of a request for review, unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered within a reasonable period of time, but not later
than 120 days after receipt of a request for review. The decision on review
shall be in writing and shall include the specific reason(s) for the decision
and the specific reference(s) to the pertinent Agreement provisions on which the
decision is based.
Notwithstanding anything contained in this Section to the contrary, any
claim for a death benefit under an insurance policy under this Program shall be
filed with the Insurer by the claimant or the claimant's authorized
representative on the form or forms prescribed for such purpose by the Insurer.
The Insurer shall have sole authority for determining whether a death claim
shall or shall not be paid, either in whole or in part, in accordance with the
terms of such insurance contract which may have been purchased on the life of
the Executive.
SECTION 12
Amendment and Assignment of Agreement
12.1 This Agreement shall not be modified or amended except in writing signed by
the Parties hereto.
12.2 This Agreement is binding upon the heirs, administrators or assigns of each
Party.
12.3 Subject to provisions of any written Employment Agreement, this Agreement
may be terminated by either Party with thirty (30) days' written notice to the
other.
SECTION 13
Employment
13.1 This Agreement shall not in any way constitute an employment agreement
between the Executive and the Employer and shall in no way obligate the Employer
to continue the employment of Executive with the Employer, nor shall this
Agreement limit the right of the Employer to terminate Executive's employment
with the Employer for any reason.
SECTION 14
Jurisdiction
14.1 The Parties hereto consent to the exclusive jurisdiction of the courts of
the Commonwealth of Pennsylvania in any and all actions arising hereunder.
SECTION 15
State Law
15.1 This Agreement, all matters involving its validity, effect and
interpretation, and the rights of the Parties hereunder, shall be governed by
and construed pursuant to the laws of the Commonwealth of Pennsylvania.
SECTION 16
Interpretation
16.1 Where appropriate, words used in the singular shall include the plural and
words used in the masculine shall include the feminine and vice versa.
IN WITNESS WHEREOF, the Parties hereto intending to be legally bound, have
executed this Agreement as of the day and year first above written.
KEYSTONE FINANCIAL, INC.
By: ____________________________
Authorized Representative
(Bank)
By: _____________________________
WITNESS: Authorized Representative
------------------------------ -----------------------------------------
Employee
KEYSTONE FINANCIAL, INC./(Bank)
EXECUTIVE SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is made and entered into effective this 1st day of January, 1998,
by and between KEYSTONE FINANCIAL,INC. ("Sponsor") through one of its affiliated
companies __________________ , ("Employer"), a Pennsylvania corporation, and
___________________ ("Executive") an employee of the Employer, and represents
the final understanding of the parties regarding the benefits provided
hereunder.
W I T N E S S E T H
WHEREAS, the Executive is insured under Policy Number ________________ (the
"Policy") issued by Metropolitan Life Insurance Company ("Metropolitan"); and
WHEREAS, the owner of the Policy (the "Owner") shall be the Executive or the
person or other entity to whom the Executive assigns the Policy pursuant to
Section 4; and
WHEREAS, Sponsor and Employer highly values Executive's efforts, abilities, and
accomplishments; and
WHEREAS, Executive is deemed a member of a select group of management and/or one
of the highly compensated employees of the Employer; and
WHEREAS, Employer wishes to provide Executive with permanent life insurance as
an additional employment benefit and is willing to assist in the payment of
premiums under the Policy as provided in this Agreement; and
WHEREAS, the Executive has agreed to assign an interest in the Policy to Sponsor
as collateral security for such premium payments, at the time of the first
premium payment, on a form of agreement approved by Metropolitan (the
"Collateral Assignment Agreement"); and
WHEREAS, in order to be eligible for such benefit, Executive agrees to the terms
hereinafter provided;
NOW, THEREFORE, Employer and Executive ("Parties"), in consideration of the
mutual covenants and agreements described below, hereby agree as follows:
SECTION 1
Payment of Premiums
1.1 The Employer shall pay the premiums on the Policy, less the amount paid by
the Executive pursuant to Section 1.4, until the termination of this Agreement,
pursuant to Section 5. The Employer may increase or decrease the scheduled
premium for any year after the first year. Each premium for the Policy following
execution of this Agreement will be remitted by the Employer to Metropolitan
within thirty-one (31) days following the anniversary date of the Policy.
1.2 The premium payment periods may also be changed by the Employer to the
extent necessary to maintain compliance of the Policy with Sections 7702 and
7702A of the Internal Revenue Code and the regulations thereunder.
1.3 No payment of interest by the Executive will be due on the premium amounts
paid by the Employer.
1.4 The Executive shall pay that portion of the premium in amount that for
federal income tax purposes is equal to the value of the "economic benefit" of
the life insurance protection enjoyed by the Executive each year. The "economic
benefit" is to be determined by reference to IRS Rev. Ruls. 64-328 and 66-110,
or any rulings which may substitute, supercede, replace, or amend them,
governing the federal income tax consequences of split dollar arrangements. The
Executive has been rated by Metropolitan Life Insurance Company less favorably
than "standard non-smoker". Since the Employer is contributing to the premium
based on a standard non-smoker classification, if the rating continues, the
policy at program maturity date will likely not have sufficient cash value to
realize the objective described in Section 1.7B below. Therefore, if the
Executive wishes to attain this objective, Executive may, in his or her
discretion, make additional premium payments in amounts as may be indicated from
time to time by Metropolitan Life Insurance Company as necessary to create the
augmented value in the policy to realize such objective.
1.5 The Employer shall continue to pay its portion of the premium if the
Executive is disabled while actively employed.
1.6 "Disability", for the purpose of this Agreement means, that the Executive
has met the requirements for disability under the Employer's Long Term
Disability Plan, is not eligible for full retirement, and is incapable of
fulfilling job duties due to mental or physical disability.
1.7 "Premium", for the purpose of this Agreement, means the sum paid to
Metropolitan Life Insurance Company as consideration for the individual
Universal Life Policy specifically referred to in this Agreement. Premiums paid
are scheduled to be in an amount so as to accumulate policy values at the
program maturity date as if the Executive were to receive a standard nonsmoker
classification sufficient to:
A. Provide total death benefits equal to at least two times the
Executive's annual base salary plus the accumulated premiums paid by the
Employer during the Executive's active employment and equal to at least two (2)
times the Executive's final annual base salary plus accumulated premiums paid by
the Employer after the Executive's active employment and prior to termination of
this Agreement;
B. Keep the policy in force after the program maturity date with a death
benefit equal to two (2) times the Executive's final annual base salary until
the Executive attains the age of ninety-five (95); and
C. Prior to the program maturity date, withdraw an amount to be paid to
the Employer equal to the accumulated premiums paid by the Employer.
The sufficiency of the amount needed to meet the provisions above shall
be determined as of the program maturity date and shall be based on the
insurer's current interest crediting and mortality rates as of that same date.
The Employer shall not be responsible for events occurring subsequent to the
program maturity date which may result in an insufficient level of funding to
meet the provisions above.
SECTION 2
Policy Beneficiary Designation
2.1 The right to designate and change the beneficiary of the Policy and to
elect an optional mode of settlement is reserved to the person who would be the
Owner of the Policy in the absence of the Collateral Assignment Agreement. Such
Owner of the Policy shall have the right to designate and change the
beneficiaries and contingent beneficiaries and to elect an optional mode of
settlement subject to the interest of the Employer as Assignee under the
Collateral Assignment Agreement, and the Employer will make the Policy available
to the Owner, if required, for endorsement of a change of beneficiary.
SECTION 3
Payment of Policy Proceeds in Event of Death of Employee
3.1 If the Executive dies (other than by suicide within two (2) years from the
Policy issue date) while the Policy and this Agreement are in force, the
proceeds of the Policy shall be payable as follows:
A. Part shall be payable to the Employer; this part shall be equal to the
proceeds of the Policy not payable to the beneficiary pursuant to paragraph B or
paragraph C of this section.
B. The designated beneficiary of the Executive shall be paid an amount
equal to two (2) times the Executive's annual base salary if the Executive dies
while actively employed by Employer, subject, however, to satisfying any
applicable underwriting restrictions or guidelines existing at the time
of adjustment.
C. The designated beneficiary of the Executive shall be paid an amount
equal to two (2) times annual base salary, subject, however, to satisfying any
applicable underwriting restrictions or guidelines at the time of adjustment if
the Executive dies after terminating active employment with Employer due to
Disability or Normal Retirement, provided that the termination of active
employment occurs prior to the termination of this Agreement.
(1) The benefit paid if the Executive dies after terminating active
employment with Employer due to Disability is based on the Executive's annual
base salary at the time the Disability occurred.
3.2 Insurance proceeds will not be paid if the Executive commits suicide, while
sane or insane, within two (2) years from the date of the policy. Instead, an
amount equal to all premiums paid, without interest, will be paid under the
terms of this Agreement.
3.3 "Normal Retirement", for the purpose of this Agreement, means attaining the
age of sixty-five (65).
3.4 "Annual Base Salary", for the purpose of this Agreement, means the
Executive's regular salary, without bonus, as of the date Executive was actively
at work.
SECTION 4
Exercise of Rights
4.1 The Employer, during the lifetime of the Executive and prior to the
termination of this Agreement, may exercise any of its rights as Assignee of the
Policy only upon thirty (30) days written notice to the Executive. Such notice
shall be given to the Executive either in person or by mailing as provided for
in Section 8.1 of this Agreement.
4.2 Subject to the Employer's rights as Assignee, the Owner retains all rights
as Owner of the Policy. Notwithstanding the aforementioned, neither the Owner
nor the Employer shall withdraw, surrender, borrow against, or pledge as
security for a loan any portion of the Policy while this Agreement is in effect.
SECTION 5
Termination of Agreement
5.1 This Agreement shall terminate if any of the following takes place:
A. Termination of the Executive's employment with the Employer prior to
the Executive's becoming eligible for disability benefits under a Disability
plan of the Employer or for a Normal Retirement benefit under any qualified
pension plan maintained by the Employer; or
B. Demotion of the Executive to a position which is not part of the group
of Employees eligible to participate in the Employer's Split Dollar Insurance
Program as determined by the Employer; or
C. The bankruptcy of the Employer; or
D. The failure of the Employer or the Executive to pay their respective
share of the premium under Section 1 of this Agreement; or
E. Payment to the Employer of the aggregate amount of the premiums paid
either directly by the Executive or by a withdrawal from the Policy.
F. Termination of this Agreement pursuant to Section 12.3; or
G. The death of the Executive; or
H. Program Maturity Date. This occurs the year in which sufficient funds
will have accumulated in the Policy to sustain the projected death benefit
amount as if the Executive were to have received a standard nonsmoker
classification, or when the Executive attains the age of sixty-five (65),
whichever occurs later.
5.2 In the event of termination of this Agreement, the lesser of the aggregate
of the premiums paid by the Employer pursuant to this Agreement, or the net cash
value in the Policy, shall become due and payable to the Employer, except as
provided for herein. Upon payment of such amount from the Policy, from the
Executive, or from whatever other source, the Employer shall execute a release
of the Collateral Assignment Agreement and deliver such release and the Policy
to the Owner.
5.3 In the event of a Change of Control as defined in the Executive's written
Employment Agreement then in effect and the Executive is entitled to benefits
for termination of employment as a result of a Change of Control, then in
addition, he shall have no obligation to repay premiums to the Employer as
stated in Section 5.2.
SECTION 6
Taxation
6.1 All income taxes attributable to the Executive which are relevant to the
Policy or this Agreement, whether federal, state or local, which may be due or
may become due, are the sole responsibility of the Executive, or the Executive's
beneficiary, while this Agreement is in force and after it has terminated for
any reason.
SECTION 7
Insurer Not a Party
7.1 Metropolitan shall not be deemed to be a party to this Agreement for any
purpose nor shall it be deemed in any way responsible for its validity.
Metropolitan shall not be obligated to inquire as to the distribution or
application of any monies payable or paid by it under the Policy, and Payments
or other performance of its contract obligations in accordance with the terms of
the Policy shall fully discharge Metropolitan from any and all liability under
the Policy.
SECTION 8
Notices
8.1 Any notices required or permitted to be given under this Agreement shall be
in writing and shall be deemed properly given if sent by registered or certified
mail, addressed as follows:
(1) Notices to Executive:
(2) Notices to Employer: ________________________ (Bank)
c/o ▇. ▇. ▇▇▇▇▇▇▇▇
Keystone Financial, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Either party may, from time to time, change the address to which
notices shall be mailed by giving notice of such address in the manner provided
herein.
SECTION 9
Other Benefits
9.1 Participation in this Program is designed to supersede and render void the
group term life insurance currently provided to the Executive. In all other
respects, the benefits described herein are in addition to any other benefits
the Executive may have under any plan or program of the Employer, and, except as
aforementioned or otherwise expressly provided for herein, shall supplement and
shall not supersede any other agreement between the Employer and the Executive
or any provision contained therein.
SECTION 10
Named Fiduciary
10.1 The Employer is hereby designated as the Named Fiduciary of this Split
Dollar Insurance Program, in accordance with the Employee Retirement Income
Security Act of 1974. The business address and telephone number of the Named
Fiduciary are:
________________________ (Bank)
c/o ▇. ▇. ▇▇▇▇▇▇▇▇
Keystone Financial, Inc.
One Keystone ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
The Named Fiduciary shall have the authority to control and manage the
operation and administration of this Program. However, the Named Fiduciary may
allocate its responsibilities for the operation and administration of this
Program, including the designation of persons who are not Named Fiduciaries, to
carry out fiduciary responsibilities.
The Named Fiduciary of this Program shall be responsible for making
timely delivery of any required premiums to the Insurer.
All pertinent documents shall be retained by the Named Fiduciary and
made available for examination at the above indicated business address. Upon
written request, the Program document and other information shall be provided to
the Parties of this Program.
SECTION 11
Claims Procedure
11.1 Benefits shall be payable in accordance with the Agreement provisions.
Should the Executive or beneficiary fail to receive benefits to which such
Executive or beneficiary believes he or she is entitled, a claim may be filed.
Any claim for a Program benefit hereunder shall be filed by the Executive or
beneficiary (claimant) of this Program by written communication, which is made
by the claimant or the claimant's authorized representative, which is reasonably
calculated to bring the claim to the attention of the Named Fiduciary.
If a claim for a Program benefit is wholly or partially denied, a
written notice of the decision shall be furnished to the claimant by the Named
Fiduciary or his designee within a reasonable period of time after receipt of
the claim by the Program, which notice shall include the following information:
(A) The specific reason or reasons for the denial;
(B) Specific reference to the pertinent Agreement provisions upon which the
denial is based;
(C) A description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material or
information is necessary; and
(D) An explanation of the Program's claim review procedures.
In order that a claimant may appeal a denial of a claim, a claimant or
his duly authorized representative:
(A) May request a review by written application to the Named Fiduciary or
his designee not later than 60 days after receipt by the claimant of written
notification of denial of a claim;
(B) May review pertinent documents; and
(C) May submit issues and comments in writing.
A decision of review of a denied claim shall be made not later than 60
days after the Program's receipt of a request for review, unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered within a reasonable period of time, but not later
than 120 days after receipt of a request for review. The decision on review
shall be in writing and shall include the specific reason(s) for the decision
and the specific reference(s) to the pertinent Agreement provisions on which the
decision is based.
Notwithstanding anything contained in this Section to the contrary, any
claim for a death benefit under an insurance policy under this Program shall be
filed with the Insurer by the claimant or the claimant's authorized
representative on the form or forms prescribed for such purpose by the Insurer.
The Insurer shall have sole authority for determining whether a death claim
shall or shall not be paid, either in whole or in part, in accordance with the
terms of such insurance contract which may have been purchased on the life of
the Executive.
SECTION 12
Amendment and Assignment of Agreement
12.1 This Agreement shall not be modified or amended except in writing signed by
the Parties hereto.
12.2 This Agreement is binding upon the heirs, administrators or assigns of each
Party.
12.3 Subject to provisions of any written Employment Agreement, this Agreement
may be terminated by either Party with thirty (30) days' written notice to the
other.
SECTION 13
Employment
13.1 This Agreement shall not in any way constitute an employment agreement
between the Executive and the Employer and shall in no way obligate the Employer
to continue the employment of Executive with the Employer, nor shall this
Agreement limit the right of the Employer to terminate Executive's employment
with the Employer for any reason.
SECTION 14
Jurisdiction
14.1 The Parties hereto consent to the exclusive jurisdiction of the courts of
the Commonwealth of Pennsylvania in any and all actions arising hereunder.
SECTION 15
State Law
15.1 This Agreement, all matters involving its validity, effect and
interpretation, and the rights of the Parties hereunder, shall be governed by
and construed pursuant to the laws of the Commonwealth of Pennsylvania.
SECTION 16
Interpretation
16.1 Where appropriate, words used in the singular shall include the plural and
words used in the masculine shall include the feminine and vice versa.
IN WITNESS WHEREOF, the Parties hereto intending to be legally bound, have
executed this Agreement as of the day and year first above written.
KEYSTONE FINANCIAL, INC.
By: _____________________________________
Authorized Representative
(Bank)
By: ___________________________________
WITNESS: Authorized Representative
------------------------------ -----------------------------------------
Employee
KEYSTONE FINANCIAL, INC. / (Bank)
EXECUTIVE SPLIT DOLLAR AGREEMENT
THIS AGREEMENT made and entered into effective this 1st day of January, 1998, by
and between KEYSTONE FINANCIAL, INC. ("Sponsor") through one of its affiliated
companies ________________ , ("Employer"), a Pennsylvania corporation, and
____________ ("Executive") an employee of the Employer, and represents the final
understanding of the parties regarding the benefits provided hereunder.
W I T N E S S E T H
WHEREAS, the Executive is insured under Policy Number_______________ (the
"Policy") issued by Metropolitan Life Insurance Company ("Metropolitan"); and
WHEREAS, the owner of the Policy (the "Owner") shall be the Executive or the
person or other entity to whom the Executive assigns the Policy pursuant to
Section 4; and
WHEREAS, Sponsor and Employer highly values Executive's efforts, abilities, and
accomplishments; and
WHEREAS, Executive is deemed a member of a select group of management and/or one
of the highly compensated employees of the Employer; and
WHEREAS, Employer wishes to provide Executive with permanent life insurance as
an additional employment benefit and is willing to assist in the payment of
premiums under the Policy as provided in this Agreement; and
WHEREAS, the Executive has agreed to assign an interest in the Policy to Sponsor
as collateral security for such premium payments, at the time of the first
premium payment, on a form of agreement approved by Metropolitan (the
"Collateral Assignment Agreement"); and
WHEREAS, in order to be eligible for such benefit, Executive agrees to the terms
hereinafter provided;
NOW, THEREFORE, Employer and Executive ("Parties"), in consideration of the
mutual covenants and agreements described below, hereby agree as follows:
SECTION 1
Payment of Premiums
1.1 The Employer shall pay the premiums on the Policy, less the amount paid by
the Executive pursuant to Section 1.4, until the termination of this Agreement,
pursuant to Section 5. The Employer may increase or decrease the scheduled
premium for any year after the first year. Each premium for the Policy following
execution of this Agreement will be remitted by the Employer to Metropolitan
within thirty-one (31) days following the anniversary date of the Policy.
1.2 The premium payment periods may also be changed by the Employer to the
extent necessary to maintain compliance of the Policy with Sections 7702 and
7702A of the Internal Revenue Code and the regulations thereunder.
1.3 No payment of interest by the Executive will be due on the premium amounts
paid by the Employer.
1.4 The Executive shall pay a portion of the premium in an amount that for
federal income tax purposes is equal to the value of the "economic benefit" of
the life insurance protection enjoyed by the Executive each year. The "economic
benefit" is to be determined by reference to IRS Rev. Ruls. 64-328 and 66-110,
or any rulings which may substitute, supercede, replace, or amend them,
governing the federal income tax consequences of split dollar arrangements. At
the inception of this Agreement, Metropolitan Life Insurance Company has rated
the Executive as "standard non-smoker". The Agreement provides that if the
Annual Base Salary of the Executive increases, there will be a corresponding
adjustment to the benefit hereunder. Depending on the amount of increase and
frequency of such, the placement of the additional coverage may require new
underwriting. If this occurs, and if at that time, Metropolitan Life Insurance
Company rates the Executive less favorably than "standard non-smoker", the
Employer will contribute to the additional premium as herein provided, however,
based on a standard non-smoker classification. Consequently, if the rating
continues as to such excess, the policy at program maturity date may not have
sufficient cash value to realize the objective described in Section 1.7B below.
Therefore, if the Executive wishes to attain this objective, Executive may, in
his or her discretion, make additional premium payments in amounts as may be
indicated from time to time by Metropolitan Life Insurance Company as necessary
to create the augmented value in the policy to realize such objective.
1.5 The Employer shall continue to pay its portion of the premium if the
Executive is disabled while actively employed.
1.6 "Disability", for the purpose of this Agreement means, that the Executive
has met the requirements for disability under the Employer's Long Term
Disability Plan, is not eligible for full retirement, and is incapable of
fulfilling job duties due to mental or physical disability.
1.7 "Premium", for the purpose of this Agreement, means the sum paid to
Metropolitan Life Insurance Company as consideration for the individual
Universal Life Policy specifically referred to in this Agreement. Premiums paid
are scheduled to be in an amount, assuming that the Executive has underwriting
status of "standard non-smoker", so as to accumulate policy values at the
program maturity date sufficient to:
A. Provide total death benefits equal to at least two times the Executive's
annual base salary plus the accumulated premiums paid by the Employer during
the Executive's active employment and equal to at least one (1) times the
Executive's final annual base salary plus accumulated premiums paid by the
Employer after the Executive's active employment and prior to termination of
this Agreement;
B. Keep the policy in force after the program maturity date with a death
benefit equal to one (1) times the Executive's final annual base salary until
the Executive attains the age of ninety-five (95); and
C. Prior to the program maturity date, withdraw an amount to be paid to the
Employer equal to the accumulated premiums paid by the Employer.
The sufficiency of the amount needed to meet the provisions above shall
be determined as of the program maturity date and shall be based on the
insurer's current interest crediting and mortality rates as of that same date.
The Employer shall not be responsible for events occurring subsequent to the
program maturity date which may result in an insufficient level of funding to
meet the provisions above.
SECTION 2
Policy Beneficiary Designation
2.1 The right to designate and change the beneficiary of the Policy and to
elect an optional mode of settlement is reserved to the person who would be the
Owner of the Policy in the absence of the Collateral Assignment Agreement. Such
Owner of the Policy shall have the right to designate and change the
beneficiaries and contingent beneficiaries and to elect an optional mode of
settlement subject to the interest of the Employer as Assignee under the
Collateral Assignment Agreement, and the Employer will make the Policy available
to the Owner, if required, for endorsement of a change of beneficiary.
SECTION 3
Payment of Policy Proceeds in Event of Death of Employee
3.1 If the Executive dies (other than by suicide within two (2) years from the
Policy issue date) while the Policy and this Agreement are in force, the
proceeds of the Policy shall be
payable as follows:
A. Part shall be payable to the Employer; this part shall be equal to the
proceeds of the Policy not payable to the beneficiary pursuant to paragraph B or
paragraph C of this section.
B. The designated beneficiary of the Executive shall be paid an amount
equal to two (2) times the Executive's annual base salary if the Executive dies
while actively employed by Employer, subject, however, to satisfying any
applicable underwriting restrictions or guidelines existing at the time of
adjustment.
C. The designated beneficiary of the Executive shall be paid an amount
equal to one (1) times annual base salary, subject, however, to satisfying any
applicable underwriting restrictions or guidelines existing at the time of
adjustment, if the Executive dies after terminating active employment with
Employer due to Disability or Normal Retirement, provided that the termination
of active employment occurs prior to the termination of this Agreement.
(1) The benefit paid if the Executive dies after terminating active
employment with Employer due to Disability is based on the Executive's annual
base salary at the time the Disability occurred.
3.2 Insurance proceeds will not be paid if the Executive commits suicide, while
sane or insane, within two (2) years from the date of the policy. Instead, an
amount equal to all premiums paid, without interest, will be paid under the
terms of this Agreement.
3.3 "Normal Retirement", for the purpose of this Agreement, means attaining the
age of sixty-five (65).
3.4 "Annual Base Salary", for the purpose of this Agreement, means the
Executive's regular salary, without bonus, as of the date Executive was actively
at work.
SECTION 4
Exercise of Rights
4.1 The Employer, during the lifetime of the Executive and prior to the
termination of this Agreement, may exercise any of its rights as Assignee of the
Policy only upon thirty (30) days written notice to the Executive. Such notice
shall be given to the Executive either in person or by mailing as provided for
in Section 8.1 of this Agreement.
4.2 Subject to the Employer's rights as Assignee, the Owner retains all rights
as Owner of the Policy. Notwithstanding the aforementioned, neither the Owner
nor the Employer shall withdraw, surrender, borrow against, or pledge as
security for a loan any portion of the Policy while this Agreement is in effect.
SECTION 5
Termination of Agreement
5.1 This Agreement shall terminate if any of the following takes place:
A. Termination of the Executive's employment with the Employer prior to the
Executive's becoming eligible for disability benefits under a Disability plan of
the Employer or for a Normal Retirement benefit under any qualified pension plan
maintained by the Employer; or
B. Demotion of the Executive to a position which is not part of the group
of Employees eligible to participate in the Employer's Split Dollar Insurance
Program as determined by the Employer; or
C. The bankruptcy of the Employer; or
D. The failure of the Employer or the Executive to pay their respective
share of the premium under Section 1 of this Agreement; or
E. Payment to the Employer of the aggregate amount of the premiums paid
either directly by the Executive or by a withdrawal from the Policy.
F. Termination of this Agreement pursuant to Section 12.3; or
G. The death of the Executive; or
H. Program Maturity Date. This occurs the year in which sufficient funds
will have, or should have, accumulated assuming that the Executive has at all
times been classified as standard non-smoker, whether or not so classified, in
the Policy to sustain the projected death benefit amount, or when the Executive
attains the age of sixty-five (65), whichever occurs later.
5.2 In the event of termination of this Agreement, the lesser of the aggregate
of the premiums paid by the Employer pursuant to this Agreement, or the net cash
value in the Policy, shall become due and payable to the Employer, except as
provided for herein. Upon payment of such amount from the Policy, from the
Executive, or from whatever other source, the Employer shall execute a release
of the Collateral Assignment Agreement and deliver such release and the Policy
to the Owner.
5.3 In the event of a Change of Control, as defined in the written severance
policy in effect at that time, such severance policy shall thereafter remain in
force for purposes of this Agreement. In the event of a Change of Control and
the Executive is entitled to benefits for termination of employment under such
severance policy, then, in addition, he shall have no obligation to repay
premiums to the Employer as stated in Section 5.2
SECTION 6
Taxation
6.1 All income taxes attributable to the Executive which are relevant to the
Policy or this Agreement, whether federal, state or local, which may be due or
may become due, are the sole responsibility of the Executive, or the Executive's
beneficiary, while this Agreement is in force and after it has terminated for
any reason.
SECTION 7
Insurer Not a Party
7.1 Metropolitan shall not be deemed to be a party to this Agreement for any
purpose nor shall it be deemed in any way responsible for its validity.
Metropolitan shall not be obligated to inquire as to the distribution or
application of any monies payable or paid by it under the Policy, and Payments
or other performance of its contract obligations in accordance with the terms of
the Policy shall fully discharge Metropolitan from any and all liability under
the Policy.
SECTION 8
Notices
8.1 Any notices required or permitted to be given under this Agreement shall be
in writing and shall be deemed properly given if sent by registered or certified
mail, addressed as follows:
(1) Notices to Executive:
(2) Notices to Employer: _______________________ (Bank)
c/o ▇. ▇. ▇▇▇▇▇▇▇▇
Keystone Financial, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Either party may, from time to time, change the address to which
notices shall be mailed by giving notice of such address in the manner provided
herein.
SECTION 9
Other Benefits
9.1 Participation in this Program is designed to supersede and render void the
group term life insurance currently provided to the Executive. In all other
respects, the benefits described herein are in addition to any other benefits
the Executive may have under any plan or program of the Employer, and, except as
aforementioned or otherwise expressly provided for herein, shall supplement and
shall not supersede any other agreement between the Employer and the Executive
or any provision contained therein.
SECTION 10
\Named Fiduciary
10.1 The Employer is hereby designated as the Named Fiduciary of this Split
Dollar Insurance Program, in accordance with the Employee Retirement Income
Security Act of 1974. The business address and telephone number of the Named
Fiduciary are:
________________________ (Bank)
c/o ▇. ▇. ▇▇▇▇▇▇▇▇
Keystone Financial, Inc.
One Keystone ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
The Named Fiduciary shall have the authority to control and manage the
operation and administration of this Program. However, the Named Fiduciary may
allocate its responsibilities for the operation and administration of this
Program, including the designation of persons who are not Named Fiduciaries, to
carry out fiduciary responsibilities.
The Named Fiduciary of this Program shall be responsible for making
timely delivery of any required premiums to the Insurer.
All pertinent documents shall be retained by the Named Fiduciary and
made available for examination at the above indicated business address. Upon
written request, the Program document and other information shall be provided to
the Parties of this Program.
SECTION 11
Claims Procedure
11.1 Benefits shall be payable in accordance with the Agreement provisions.
Should the Executive or beneficiary fail to receive benefits to which such
Executive or beneficiary believes he or she is entitled, a claim may be filed.
Any claim for a Program benefit hereunder shall be filed by the Executive or
beneficiary (claimant) of this Program by written communication, which is made
by the claimant or the claimant's authorized representative, which is reasonably
calculated to bring the claim to the attention of the Named Fiduciary.
If a claim for a Program benefit is wholly or partially denied, a
written notice of the decision shall be furnished to the claimant by the Named
Fiduciary or his designee within a reasonable period of time after receipt of
the claim by the Program, which notice shall include the following information:
(A) The specific reason or reasons for the denial;
(B) Specific reference to the pertinent Agreement provisions upon which the
denial is based;
(C) A description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material or
information is necessary; and
(D) An explanation of the Program's claim review procedures.
In order that a claimant may appeal a denial of a claim, a claimant or
his duly authorized representative:
(A) May request a review by written application to the Named Fiduciary or
his designee not later than 60 days after receipt by the claimant of written
notification of denial of a claim;
(B) May review pertinent documents; and
(C) May submit issues and comments in writing.
A decision of review of a denied claim shall be made not later than 60
days after the Program's receipt of a request for review, unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered within a reasonable period of time, but not later
than 120 days after receipt of a request for review. The decision on review
shall be in writing and shall include the specific reason(s) for the decision
and the specific reference(s) to the pertinent Agreement provisions on which the
decision is based.
Notwithstanding anything contained in this Section to the contrary, any
claim for a death benefit under an insurance policy under this Program shall be
filed with the Insurer by the claimant or the claimant's authorized
representative on the form or forms prescribed for such purpose by the Insurer.
The Insurer shall have sole authority for determining whether a death claim
shall or shall not be paid, either in whole or in part, in accordance with the
terms of such insurance contract which may have been purchased on the life of
the Executive.
SECTION 12
Amendment and Assignment of Agreement
12.1 This Agreement shall not be modified or amended except in writing signed by
the Parties hereto.
12.2 This Agreement is binding upon the heirs, administrators or assigns of each
Party.
12.3 Subject to provisions of any written severance policy then in existence,
this Agreement may be terminated by either Party with thirty (30) days' written
notice to the other.
SECTION 13
Employment
13.1 This Agreement shall not in any way constitute an employment agreement
between the Executive and the Employer and shall in no way obligate the Employer
to continue the employment of Executive with the Employer, nor shall this
Agreement limit the right of the Employer to terminate Executive's employment
with the Employer for any reason.
SECTION 14
Jurisdiction
14.1 The Parties hereto consent to the exclusive jurisdiction of the courts of
the Commonwealth of Pennsylvania in any and all actions arising hereunder.
SECTION 15
State Law
15.1 This Agreement, all matters involving its validity, effect and
interpretation, and the rights of the Parties hereunder, shall be governed by
and construed pursuant to the laws of the Commonwealth of Pennsylvania.
SECTION 16
Interpretation
16.1 Where appropriate, words used in the singular shall include the plural and
words used in the masculine shall include the feminine and vice versa.
IN WITNESS WHEREOF, the Parties hereto intending to be legally bound, have
executed this Agreement as of the day and year first above written.
KEYSTONE FINANCIAL, INC.
By: __________________________________
Authorized Representative
(Bank)
By: ___________________________________
WITNESS: Authorized Representative
------------------------------ -----------------------------------------
Employee
KEYSTONE FINANCIAL, INC. / (Bank)
EXECUTIVE SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is made and entered into effective this 1st day of January, 1998,
by and between KEYSTONE FINANCIAL, INC.("Sponsor") through one of its affiliated
companies _____________________ , ("Employer"), a Pennsylvania corporation, and
____________________ ("Executive") an employee of the Employer, and represents
the final understanding of the parties regarding the benefits provided
hereunder.
W I T N E S S E T H
WHEREAS, the Executive is insured under Policy Number _______________ (the
"Policy") issued by Metropolitan Life Insurance Company ("Metropolitan"); and
WHEREAS, the owner of the Policy (the "Owner") shall be the Executive or the
person or other entity to whom the Executive assigns the Policy pursuant to
Section 4; and
WHEREAS, Sponsor and Employer highly values Executive's efforts, abilities, and
accomplishments; and
WHEREAS, Executive is deemed a member of a select group of management and/or one
of the highly compensated employees of the Employer; and
WHEREAS, Employer wishes to provide Executive with permanent life insurance as
an additional employment benefit and is willing to assist in the payment of
premiums under the Policy as provided in this Agreement; and
WHEREAS, the Executive has agreed to assign an interest in the Policy to Sponsor
as collateral security for such premium payments, at the time of the first
premium payment, on a form of agreement approved by Metropolitan (the
"Collateral Assignment Agreement"); and
WHEREAS, in order to be eligible for such benefit, Executive agrees to the terms
hereinafter provided;
NOW, THEREFORE, Employer and Executive ("Parties"), in consideration of the
mutual covenants and agreements described below, hereby agree as follows:
SECTION 1
Payment of Premiums
1.1 The Employer shall pay the premiums on the Policy, less the amount paid by
the Executive pursuant to Section 1.4, until the termination of this Agreement,
pursuant to Section 5. The Employer may increase or decrease the scheduled
premium for any year after the first year. Each premium for the Policy following
execution of this Agreement will be remitted by the Employer to Metropolitan
within thirty-one (31) days following the anniversary date of the Policy.
1.2 The premium payment periods may also be changed by the Employer to the
extent necessary to maintain compliance of the Policy with Sections 7702 and
7702A of the Internal Revenue Code and the regulations thereunder.
1.3 No payment of interest by the Executive will be due on the premium amounts
paid by the Employer.
1.4 The Executive shall pay a portion of the premium in an amount that for
federal income tax purposes is equal to the value of the "economic benefit" of
the life insurance protection enjoyed by the Executive each year. The "economic
benefit" is to be determined by reference to IRS Rev. Ruls. 64-328 and 66-110,
or any rulings which may substitute, supercede, replace, or amend them,
governing the federal income tax consequences of split dollar arrangements. At
the inception of this agreement, Metropolitan Life Insurance Company has rated
the Executive as "standard non-smoker". The Agreement provides that if the
Annual Base Salary of the Executive increases, there will be a corresponding
adjustment to the benefit hereunder. Depending on the amount of the increase and
frequency of such, the placement of the additional coverage may require new
underwriting. If this occurs, and if at that time, Metropolitan Life Insurance
Company rates the Executive less favorably than "standard non-smoker", the
Employer will contribute to the additional premium as herein provided, however,
based on a standard non-smoker classification. Consequently, if the rating
continues as to such excess, the policy at program maturity date may not have
sufficient cash value to realize the objective described in Section 1.7B below.
Therefore, if the Executive wishes to attain this objective, Executive may, in
his or her discretion, make additional premium payments in amounts as may be
indicated from time to time by Metropolitan Life Insurance Company as necessary
to create the augmented value in the policy to realize such objective.
1.5 The Employer shall continue to pay its portion of the premium if the
Executive is disabled while actively employed.
1.6 "Disability", for the purpose of this Agreement means, that the Executive
has met the requirements for disability under the Employer's Long Term
Disability Plan, is not eligible for full retirement, and is incapable of
fulfilling job duties due to mental or physical disability.
1.7 "Premium", for the purpose of this Agreement, means the sum paid to
Metropolitan Life Insurance Company as consideration for the individual
Universal Life Policy specifically referred to in this Agreement. Premiums paid
are scheduled to be in an amount, assuming that the Executive has the
underwriting status of "standard non-smoker", so as to accumulate policy values
at the program maturity date sufficient to:
A. Provide total death benefits equal to at least two times the
Executive's annual base salary plus the accumulated premiums paid by the
Employer during the Executive's active employment and equal to at least two (2)
times the Executive's final annual base salary plus accumulated premiums paid by
the Employer after the Executive's active employment and prior to termination of
this Agreement;
B. Keep the policy in force after the program maturity date with a death
benefit equal to two (2) times the Executive's final annual base salary until
the Executive attains the age of ninety-five (95); and
C. Prior to the program maturity date, withdraw an amount to be paid to
the Employer equal to the accumulated premiums paid by the Employer.
The sufficiency of the amount needed to meet the provisions above shall
be determined as of the program maturity date and shall be based on the
insurer's current interest crediting and mortality rates as of that same date.
The Employer shall not be responsible for events occurring subsequent to the
program maturity date which may result in an insufficient level of funding to
meet the provisions above.
SECTION 2
Policy Beneficiary Designation
2.1 The right to designate and change the beneficiary of the Policy and to
elect an optional mode of settlement is reserved to the person who would be the
Owner of the Policy in the absence of the Collateral Assignment Agreement. Such
Owner of the Policy shall have the right to designate and change the
beneficiaries and contingent beneficiaries and to elect an optional mode of
settlement subject to the interest of the Employer as Assignee under the
Collateral Assignment Agreement, and the Employer will make the Policy available
to the Owner, if required, for endorsement of a change of beneficiary.
SECTION 3
Payment of Policy Proceeds in Event of Death of Employee
3.1 If the Executive dies (other than by suicide within two (2) years from the
Policy issue date) while the Policy and this Agreement are in force, the
proceeds of the Policy shall be payable as follows:
A. Part shall be payable to the Employer; this part shall be equal to the\
proceeds of the Policy not payable to the beneficiary pursuant to paragraph B or
paragraph C of this section.
B. The designated beneficiary of the Executive shall be paid an amount
equal to two (2) times the Executive's annual base salary if the Executive dies
while actively employed by Employer, subject, however, to satisfying any
applicable underwriting restrictions or guidelines existing at the time of
adjustment.
C. The designated beneficiary of the Executive shall be paid an amount
equal to two (2) times annual base salary, subject, however, to satisfying any
applicable underwriting restrictions or guidelines at the time of adjustment if
the Executive dies after terminating active employment with Employer due to
Disability or Normal Retirement, provided that the termination of active
employment occurs prior to the termination of this Agreement.
(1) The benefit paid if the Executive dies after terminating active
employment with Employer due to Disability is based on the Executive's annual
base salary at the time the Disability occurred.
3.2 Insurance proceeds will not be paid if the Executive commits suicide, while
sane or insane, within two (2) years from the date of the policy. Instead, an
amount equal to all premiums paid, without interest, will be paid under the
terms of this Agreement.
3.3 "Normal Retirement", for the purpose of this Agreement, means attaining the
age of sixty-five (65).
3.4 "Annual Base Salary", for the purpose of this Agreement, means the
Executive's regular salary, without bonus, as of the date Executive was actively
at work.
SECTION 4
Exercise of Rights
4.1 The Employer, during the lifetime of the Executive and prior to the
termination of this Agreement, may exercise any of its rights as Assignee of the
Policy only upon thirty (30) days written notice to the Executive. Such notice
shall be given to the Executive either in person or by mailing as provided for
in Section 8.1 of this Agreement.
4.2 Subject to the Employer's rights as Assignee, the Owner retains all rights
as Owner of the Policy. Notwithstanding the aforementioned, neither the Owner
nor the Employer shall withdraw, surrender, borrow against, or pledge as
security for a loan any portion of the Policy while this Agreement is in effect.
SECTION 5
Termination of Agreement
5.1 This Agreement shall terminate if any of the following takes place:
A. Termination of the Executive's employment with the Employer prior to the
Executive's becoming eligible for disability benefits under a Disability plan of
the Employer or for a Normal Retirement benefit under any qualified pension plan
maintained by the Employer; or
B. Demotion of the Executive to a position which is not part of the group
of Employees eligible to participate in the Employer's Split Dollar Insurance
Program as determined by the Employer; or
C. The bankruptcy of the Employer; or
D. The failure of the Employer or the Executive to pay their respective
share of the premium under Section 1 of this Agreement; or
E. Payment to the Employer of the aggregate amount of the premiums paid
either directly by the Executive or by a withdrawal from the Policy.
F. Termination of this Agreement pursuant to Section 12.3; or
G. The death of the Executive; or
H. Program Maturity Date. This occurs the year in which sufficient funds
will have, or should have, accumulated assuming that the Executive has at all
times been classified as standard non-smoker, whether or not so classified in
the Policy to sustain the projected death benefit amount, or when the Executive
attains the age of sixty-five (65), whichever occurs later.
5.2 In the event of termination of this Agreement, the lesser of the aggregate
of the premiums paid by the Employer pursuant to this Agreement, or the net cash
value in the Policy, shall become due and payable to the Employer, except as
provided for herein. Upon payment of such amount from the Policy, from the
Executive, or from whatever other source, the Employer shall execute a release
of the Collateral Assignment Agreement and deliver such release and the Policy
to the Owner.
5.3 In the event of a Change of Control as defined in the Executive's written
Employment Agreement then in effect and the Executive is entitled to benefits
for termination of employment as a result of a Change of Control, then in
addition, he shall have no obligation to repay premiums to the Employer as
stated in Section 5.2.
SECTION 6
Taxation
6.1 All income taxes attributable to the Executive which are relevant to the
Policy or this Agreement, whether federal, state or local, which may be due or
may become due, are the sole responsibility of the Executive, or the Executive's
beneficiary, while this Agreement is in force and after it has terminated for
any reason.
SECTION 7
Insurer Not a Party
7.1 Metropolitan shall not be deemed to be a party to this Agreement for any
purpose nor shall it be deemed in any way responsible for its validity.
Metropolitan shall not be obligated to inquire as to the distribution or
application of any monies payable or paid by it under the Policy, and Payments
or other performance of its contract obligations in accordance with the terms of
the Policy shall fully discharge Metropolitan from any and all liability under
the Policy.
SECTION 8
Notices
8.1 Any notices required or permitted to be given under this Agreement shall be
in writing and shall be deemed properly given if sent by registered or certified
mail, addressed as follows:
(1) Notices to Executive:
(2) Notices to Employer: _________________ (Bank)
c/o ▇. ▇. ▇▇▇▇▇▇▇▇
Keystone Financial, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Either party may, from time to time, change the address to which
notices shall be mailed by giving notice of such address in the manner provided
herein.
SECTION 9
Other Benefits
9.1 Participation in this Program is designed to supersede and render void the
group term life insurance currently provided to the Executive. In all other
respects, the benefits described herein are in addition to any other benefits
the Executive may have under any plan or program of the Employer, and, except as
aforementioned or otherwise expressly provided for herein, shall supplement and
shall not supersede any other agreement between the Employer and the Executive
or any provision contained therein.
SECTION 10
Named Fiduciary
10.1 The Employer is hereby designated as the Named Fiduciary of this Split
Dollar Insurance Program, in accordance with the Employee Retirement Income
Security Act of 1974. The business address and telephone number of the Named
Fiduciary are:
________________________ (Bank)
c/o ▇. ▇. ▇▇▇▇▇▇▇▇
Keystone Financial, Inc.
One Keystone ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
The Named Fiduciary shall have the authority to control and manage the
operation and administration of this Program. However, the Named Fiduciary may
allocate its responsibilities for the operation and administration of this
Program, including the designation of persons who are not Named Fiduciaries, to
carry out fiduciary responsibilities.
The Named Fiduciary of this Program shall be responsible for making
timely delivery of any required premiums to the Insurer.
All pertinent documents shall be retained by the Named Fiduciary and
made available for examination at the above indicated business address. Upon
written request, the Program document and other information shall be provided to
the Parties of this Program.
SECTION 11
Claims Procedure
11.1 Benefits shall be payable in accordance with the Agreement provisions.
Should the Executive or beneficiary fail to receive benefits to which such
Executive or beneficiary believes he or she is entitled, a claim may be filed.
Any claim for a Program benefit hereunder shall be filed by the Executive or
beneficiary (claimant) of this Program by written communication, which is made
by the claimant or the claimant's authorized representative, which is reasonably
calculated to bring the claim to the attention of the Named Fiduciary.
If a claim for a Program benefit is wholly or partially denied, a
written notice of the decision shall be furnished to the claimant by the Named
Fiduciary or his designee within a reasonable period of time after receipt of
the claim by the Program, which notice shall include the following information:
(A) The specific reason or reasons for the denial;
(B) Specific reference to the pertinent Agreement provisions upon which the
denial is based;
(C) A description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material or
information is necessary; and
(D) An explanation of the Program's claim review procedures.
In order that a claimant may appeal a denial of a claim, a claimant or
his duly authorized representative:
(A) May request a review by written application to the Named Fiduciary or
his designee not later than 60 days after receipt by the claimant of written
notification of denial of a claim;
(B) May review pertinent documents; and
(C) May submit issues and comments in writing.
A decision of review of a denied claim shall be made not later than 60
days after the Program's receipt of a request for review, unless special
circumstances require an extension of time for processing, in which case a
decision shall be rendered within a reasonable period of time, but not later
than 120 days after receipt of a request for review. The decision on review
shall be in writing and shall include the specific reason(s) for the decision
and the specific reference(s) to the pertinent Agreement provisions on which the
decision is based.
Notwithstanding anything contained in this Section to the contrary, any
claim for a death benefit under an insurance policy under this Program shall be
filed with the Insurer by the claimant or the claimant's authorized
representative on the form or forms prescribed for such purpose by the Insurer.
The Insurer shall have sole authority for determining whether a death claim
shall or shall not be paid, either in whole or in part, in accordance with the
terms of such insurance contract which may have been purchased on the life of
the Executive.
SECTION 12
Amendment and Assignment of Agreement
12.1 This Agreement shall not be modified or amended except in writing signed by
the Parties hereto.
12.2 This Agreement is binding upon the heirs, administrators or assigns of each
Party.
12.3 Subject to provisions of any written Employment Agreement, this Agreement
may be terminated by either Party with thirty (30) days' written notice to the
other.
SECTION 13
Employment
13.1 This Agreement shall not in any way constitute an employment agreement
between the Executive and the Employer and shall in no way obligate the Employer
to continue the employment of Executive with the Employer, nor shall this
Agreement limit the right of the Employer to terminate Executive's employment
with the Employer for any reason.
SECTION 14
Jurisdiction
14.1 The Parties hereto consent to the exclusive jurisdiction of the courts of
the Commonwealth of Pennsylvania in any and all actions arising hereunder.
SECTION 15
State Law
15.1 This Agreement, all matters involving its validity, effect and
interpretation, and the rights of the Parties hereunder, shall be governed by
and construed pursuant to the laws of the Commonwealth of Pennsylvania.
SECTION 16
Interpretation
16.1 Where appropriate, words used in the singular shall include the plural and
words used in the masculine shall include the feminine and vice versa.
IN WITNESS WHEREOF, the Parties hereto intending to be legally bound, have
executed this Agreement as of the day and year first above written.
KEYSTONE FINANCIAL, INC.
By:_____________________________________
Authorized Representative
(Bank)
By: ___________________________________
WITNESS: Authorized Representative
_________________________________ _______________________________________
Employee
KEYSTONE FINANCIAL, INC.
COLLATERAL ASSIGNMENT AGREEMENT
1. For value received, the undersigned (the "Policyowner"), as owner of Policy
Number 200950011U (the "Policy") issued by Metropolitan Life Insurance
Company (the "Insurer"), hereby assigns, sets over and transfers the Policy
to Keystone Financial, Inc. and its affiliated companies (the Assignee"),
a corporation organized under the laws of the Commonwealth of Pennsylvania,
as collateral security for those liabilities as may arise under the terms
of the Split Dollar Agreement between the Policyowner and Assignee dated as
of January 1, 2000 (the "Split Dollar Agreement"), subject to the terms and
conditions in the Policy and to all superior liens, if any, which the
Insurer has or may have against the Policy.
2. The collateral assignment being made pursuant to this Agreement is solely
for the purpose of assuring the Assignee of payment of the liabilities
under the terms of the Split Dollar Agreement.
3. The Policyowner and the Assignee expressly agree, without detracting from
the generality of the foregoing, that the following rights are included in
this Agreement and pass to the Assignee by virtue hereof:
A. The right to collect the proceeds of the Policy, up to its interest,
from the Insurer when the Policy becomes a claim by death or becomes
due in accordance with the Split Dollar Agreement.
B. The right to surrender the Policy and receive the cash surrender value,
up to its interest, pursuant to the Policy
provisions and in accordance with Paragraph 5(D) of this Agreement.
C. The right to assign, sell or convey only the amount of its interest in
the Policy, subject to the interest of the Policyowner, to a successor
company in the event of a Change of Control as defined in the Split
Dollar Agreement. In the event of such assignment, sale or conveyance
Assignee must provide the Policyowner with written notice at least
thirty (30) days prior to said assignment, sale or conveyance, either
in person or by mail as provided for in the Split Dollar Agreement.
4. The Policyowner and the Assignee expressly agree that as long as the Policy
has not been surrendered, the following rights are reserved by the
Policyowner and excluded from this assignment, and do not pass by virtue
hereof.
A. The sole right to designate and change the beneficiary.
B. The sole right to elect any Optional Mode of Settlement permitted by
the Policy or permitted by the Insurer
5. The Assignee covenants and agrees with the Policyowner:
A. That the Insurer, in the event of a death claim, shall be authorized
to issue separate checks to pay the amounts due to each party, up to
their interests, and in accordance with this Agreement and the Split
Dollar Agreement.
B. That any amounts due to be paid by the Insurer pursuant to the terms
of the Policy and this Agreement in excess of the then existing
liabilities of the Policyowner under the Split Dollar Agreement shall
be paid by the Insurer to the persons entitled thereto under the
Policy had this Agreement not been executed, provided however, any
amount in excess of the entitlement of the policyowner under the Split
Dollar Agreement shall be paid to the assignee.
C. In the event any amounts are paid to the Assignee by the Insurer to
which the Assignee is not entitled pursuant to the terms of the Policy
and this Agreement, said amounts are to be immediately forwarded to
the persons entitled thereto. If this is not done within ten (10) days
the persons so entitled to the benefits may initiate legal action in a
court of competent jurisdiction as provided for in the Split Dollar
Agreement. Any and all reasonable legal fees and expenses incurred by
the entitled persons to enforce their rights to receive such benefits
shall be the sole responsibility of the Assignee.
D. That the Assignee will not exercise either the right to surrender or
withdraw from the Policy unless and until there has been an occurrence
of some event specifically stated in the Split Dollar Agreement which
calls for the Assignee to recover amounts to which the Assignee is
entitled under the Policy. In any event, the Assignee shall not
exercise any of its rights under the Policy until thirty (30) days
after the Assignee shall have mailed, by registered or certified mail,
to the Policyowner at the address last supplied to the Assignee,
specifically referring to this assignment, notice of intention to
exercise such right.
Upon the full payment of all liabilities under the Split Dollar Agreement by the
Policyowner to the Assignee, the Assignee shall execute an appropriate
instrument of release of this assignment .
The Insurer shall be fully protected and discharged from further obligation by
paying in reliance upon the terms of the Policy and/or the terms of this
Agreement. The Insurer shall not be bound by the terms of the Split Dollar
Agreement and may rely on any written assurance concerning such Agreement
provided to the Insurer by the Policyowner or the Assignee. Any conflicts
between this assignment and any other agreement, with respect to the rights of
the Assignee under the Policy, shall be resolved in accordance with the terms of
this assignment.
By their signatures to this Agreement, the parties acknowledge that (1) neither
the Insurer which is the issuer of the Policy, nor any agent thereof, nor any
person acting on its behalf, has given any legal or tax advice concerning this
Agreement; and (2) that the execution of this document has legal and tax
consequences and should not be signed without the advice of their own attorneys.
ATTEST: KEYSTONE FINANCIAL, INC.
__________________________________ By: _________________________________
WITNESS:
__________________________________ _________________________________
Executive
