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EXHIBIT 10(e)
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
XXXXXX X. XXXXXXX
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SPLIT DOLLAR LIFE INSURANCE AGREEMENT
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(COLLATERAL ASSIGNMENT APPROACH)
This Agreement is made and entered into effective April 16, 1997
between The Strongsville Savings Bank (the "Bank"), a corporation organized and
existing under the laws of the State of Ohio with its principal office at 00000
Xxxxx Xxxx, Xxxxxxxxxxxx, Xxxx, and Xxxxxx X. Xxxxxxx (the "Executive").
WHEREAS, the Executive is and has been an employee of the Bank for
years and is presently serving as the Bank's President; and
WHEREAS, the Executive has rendered valuable and loyal services to the
Bank and as a result has made a substantial contribution to the success and
growth of the Bank; and
WHEREAS, the Executive's services are invaluable to the continued
growth and success of the Bank; and
WHEREAS, the Bank wishes to retain the services of the Executive, to
reward him for future contributions to the Bank, and to assist him in providing
life insurance protection for the security of his family.
IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES:
ARTICLE 1. LIFE INSURANCE POLICY
The Executive will apply to The Berkshire Life Insurance Company (the
"Insurer") for a life insurance policy on his life in the amount of $1,500,000.
The Executive will be the owner of the policy and retain the right to name and
change the life policy beneficiary; however, he agrees to limit his right to:
(a) Surrender the policy for its cash value;
(b) Make policy loans or cash withdrawals;
(c) Assign the policy as collateral;
(d) Change ownership of the policy, unless approved by the Bank..
The approval of the Bank will no longer be required on or
after the first to occur of:
(i) Executive's sixty-fifth (65th) birthday,
(ii) Elimination of the collateral assignment or
(iii) Insolvency or dissolution of the Bank.
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ARTICLE 2. PREMIUM PAYMENTS
On behalf of the Executive, each year the Bank will forward an amount
equal to the premium to the Insurer. Payment of an amount equal to the
"economic benefit" (PS-58 cost) shall be the responsibility of the Executive.
ARTICLE 3. COLLATERAL ASSIGNMENT
As security for the Executive's indebtedness to the Bank under this
plan, the Executive shall execute a collateral assignment in favor of
the Bank. The Executive will be free to exercise all rights, options
and privileges of ownership not otherwise limited by the collateral
assignment, or Article 1 of this Agreement.
ARTICLE 4. DIVIDEND OPTION
The parties recognize that the payment and application of dividends can
have a dramatic impact on the benefits of this Split Dollar Life Insurance
Plan. The parties intend that if any dividends are paid under this life
insurance policy, they will be added to the values of the base policy by the
purchase of additional paid-up insurance;
ARTICLE 5. TERMINATION AT DEATH
In the event of the Executive's death, the Bank will be entitled to a
return of any and all amounts it contributed to the plan as advances from the
policy death proceeds. The balance of the death proceeds shall be payable to
the beneficiaries designated by the Executive, or the Executive's estate if a
qualified beneficiary has not survived the Executive.
ARTICLE 6. TERMINATION DURING LIFE
During the Executives lifetime, this Agreement may only be terminated
at the executive's sixty-fifth (65th) birthday and the Bank agrees to limit its
right to make policy loans, unless approved by the Executive. Termination of
the Agreement will trigger repayment to the Bank of all amounts advanced or
alternate arrangement as agreed to by the parties. If the Executive does not
repay the Bank or make other arrangements with the Bank, the Bank may exercise
any of its rights under the collateral assignment. Upon settlement of the
obligation by the Executive, the Bank will release its collateral interest in
the policy.
ARTICLE 7. TERMINATION OF EMPLOYER ADVANCES
Termination of Bank advances to this plan does not of itself trigger
termination of the plan. If the Bank can no longer make payments, does not wish
to make additional payments, the policy itself does not require further
payments, or the Executive does not wish the Bank to make further payments
under this plan, the party terminating Bank payments (the Executive or the
Bank) will advise the other. Either party can then elect whether or not to
terminate the plan under Paragraph 6 above. This plan shall continue unless and
until one or both parties take
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affirmative steps to terminate the plan or circumstances so dictate.
Termination of the employment relationship due to retirement, disability or
other circumstances shall be deemed to terminate the plan. Under such
circumstances, the Executive shall continue with individual ownership of the
life insurance policy as if this plan did not exist.
ARTICLE 8. INSURER NOT A PARTY
Berkshire Life Insurance Company shall not be deemed to be a party to
this Agreement for any purpose and has not made any representations with
respect to its validity.
ARTICLE 9. CHANGE IN CONTROL OF THE BANK
In the event that there is a change in control of the Bank or the
Bank's parent company (Emerald Financial Corp. "Corporation") during the first
seven (7) years of this Split Dollar Agreement, the Bank shall contribute the
following sum of money to the policy to complete its obligation under the plan:
Year Amount To Be Contributed
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1 $ 380,679
2 $ 336,266
3 $ 285,153
4 $ 226,697
5 $ 160,199
6 $ 84,906
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For purposes of this Agreement, a change in control shall mean:
(i) The acquisition by a person or persons acting in
concert of the power to vote twenty-five percent (25%) or
more of a class of the Corporation's voting securities, or
the acquisition by a person of the power to direct the
Corporation's management or policies, if the Board of
Directors or the Office of Thrift Supervision or successor
regulatory agency has made a determination that such
acquisition constitutes or will constitute an acquisition of
control of the Corporation for the purposes of the Savings
and Loan Holding Company Act or the Change in Bank Control
Act and the regulations thereunder;
(ii) during any period of two (2) consecutive years
during the term of this Agreement, individuals who at the
beginning of such period constitute the Board of Directors of
the Bank or Corporation cease for any reason to constitute at
least a majority thereof, unless the election of each
director who was not a director at the beginning of such
period has been approved in advance by directors representing
at least two thirds (2/3) of the directors then in office who
were directors in office at the beginning of the period:
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(iii) the Corporation shall have merged into or
consolidated with another corporation, or merged another
corporation into the Corporation, on a basis whereby less
than fifty percent (50%) of the total voting power of the
surviving corporation is represented by shares held by former
shareholders of the Corporation prior to such merger or
consolidation: or
(iv) the Corporation shall have sold substantially
all of its assets to another person. The term "person" refers
to an individual, corporation, partnership, trust,
association, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization or other entity.
ARTICLE 10 THE FOLLOWING PROVISIONS ARE PART OF THIS AGREEMENT AND
ARE INTENDED TO MEET THE SECURITY ACT OF 1974 REQUIREMENTS OF
THE EMPLOYEE RETIREMENT INCOME.
(a) The named fiduciary: The Strongsville Savings Bank
(b) The funding policy under this plan is that all premiums on
the Policy be remitted to the Insurer when due.
(c) Direct payment by the Insurer is the basis of payment of
benefits under this Plan, with those benefits in turn being
based on the payment of premiums as provided in the Plan.
(d) For claims procedure purposes, the "Claims Manager" shall be
the Secretary of the Bank.
(i) If for any reason a claim for benefit under this Plan is
denied by the Bank, the Claims Manager shall deliver to the
claimant a written explanation setting forth the specific
reasons for the denial, pertinent references to the Plan
section on which the denial is based, such other data as may
be pertinent and information on the procedures to be followed
by the claimant in obtaining a review of his claim, all
written in a manner calculated to be understood by the
claimant. For this purpose:
(A) The claimant's claim shall be deemed filed when
presented in writing to the Claims Manager.
(B) The Claim's Manager's explanation shall be in
writing delivered to the claimant within 90 days of
the date the claim is filed.
(ii) The claimant shall have 60 days following his receipt of
the denial of the claim to file with the Claim Manager a
written request for review of the denial. For such review,
the claimant or his representative may submit pertinent
documents and written issues and comments.
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(iii) The Claim Manager shall decide the issue on review and
furnish the claimant with a copy within 60 days of receipt of
the claimant's request for review of his claim. The decision
on review shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to
be understood by the claimant, as well as specific references
to the pertinent Plan provisions on which the decision is
based. If a copy of the decision is not so furnished to the
claimant within such 60 days, the claim shall be deemed
denied on review.
IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed, sealed
and attested on its behalf by its duly authorized officers and the Executive
has hereunto set his/her hand as of the day and year first above written.
ATTEST: THE STRONGSVILLE SAVINGS BANK
\s\ XXXXX X. XXXXX \s\ XXXX X. XXXXXXX
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BY: Xxxx X. Xxxxxxx
Executive Vice President
[Corporate Seal]
WITNESS:
\s\ XXXXX X. XXXXX \s\ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
Executive
