EXHIBIT 10-3
SPLIT-DOLLAR INSURANCE AGREEMENT
(Endorsement Method)
THIS AGREEMENT is entered into this 5th day of October, 1995 by and between
Derby Savings Bank, a state-chartered stock savings bank, hereinafter called
Employer, and Xxxxxx X. Xxxxxxx, hereinafter called Employee.
WHEREAS, Employee, is a valued employee of Employer and Employer wishes to
retain him in its employ, and
WHEREAS, Employer, as an inducement to such continued employment, wishes to
assist Employee with his personal life insurance program.
NOW, THEREFORE, Employer and Employee agree as follows:
1. The life insurance policy with which this Agreement deals is Policy
Number 020002973 (hereinafter called Policy) issued by Sun Life of Canada
(hereinafter called Insurer) on the life of Employee. Employer shall be the
sole Owner of the Policy and the direct beneficiary of the greater of an amount
of the death proceeds equal to (a) the cash value of the Policy as of the date
to which premiums have been paid, less any policy and premium loans and any
other indebtedness secured by the Policy, or (b) its premiums paid to Insurer.
Any indebtedness on the Policy will first be deducted from the proceeds payable
to the Employer. Also, any collateral assignment made by the Employer will be
deducted from the proceeds payable to it.
2. Employee shall have the right to designate and change direct and
contingent beneficiaries of any remaining proceeds and to elect and change a
payment plan for such beneficiaries. Any assignment of the proceeds by the
Employee shall be limited to the death proceeds only.
3. The entire premium on the Policy shall be paid by Employer as it
becomes due.
4. Policy dividends shall be applied to purchase paid-up additional
insurance protection.
5. Employer shall not sell, surrender or change the Insured while this
Agreement is in effect without first giving Employee the option to purchase the
Policy during a period of 30 days from notice to Employee of such intention.
The purchase price of the Policy shall be the greater of (a) the cash value of
the Policy as of the date of transfer to Employee, less any policy and premium
loans and any other indebtedness secured by the Policy, or (b) the premiums paid
by the Employer to Insurer. This restriction shall not impair the right of
Employer to terminate this Agreement pursuant to Section 6 hereof. The exercise
by the Employer of the right to surrender the Policy or to change the Insured
will terminate the rights of the Employee.
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6. This Agreement may be terminated by either party hereto, with or
without the consent of the other, by giving notice of termination in writing to
the other party. This Agreement shall terminate automatically upon termination
of Employee's employment with Employer for any reason whatsoever other than
Employee's death. In the event of termination of the Agreement, Employee shall
have the right to purchase the Policy from Employer on the same terms and
conditions as specified in Section 5 hereof.
7. The Insurer shall be bound only by the provisions of any endorsements
on the Policy, and any payments made or action taken by it in accordance
therewith shall fully discharge it from all claims, suits and of all persons
whatsoever.
8. The Employee shall not have the right to assign any part or all of the
Employee's interest in the Policy and this Agreement to any person, entity or
trust, except with the prior written approval of the Employer and by execution
of a written assignment delivered to the Employer and to the Insurer.
9. The Employer and Employee can mutually agree to amend this Agreement
and such amendment shall be in writing and signed by the Employer and Employee.
10. This Agreement shall bind and insure to the benefit of the Employer
and its successors and assigns; the Employee and his heirs, executors,
administrators and assigns; and any Policy beneficiary.
11. The following provisions are part of this Agreement and are intended
to meet the requirements of the Employee Retirement Income Security Act of 1974:
(a) The named fiduciary: The Employer.
(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 Sun Life of
Canada.
(i) If for any reason a claim for benefits under this Plan is denied by
the Employer, 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
orally in writing to the Claims Manager.
(B) The Claims Manager's explanation shall be in writing delivered
to the claimant within 90 days of the date the claim is filed.
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(ii) The claimant shall have 60 days following his receipt of the
denial of the claim to file with the Claims 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.
(iii) The Claims 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 parties have signed and sealed this Agreement.
In the presence of DERBY SAVINGS BANK
/S/ XXX X. XXXXXX BY: /S/ Xxxxx X. XxXxxxx Xx.
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Witness
Name: Xxxxx X. XxXxxxx Xx.
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Title: President & CEO
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October 5, 1995 /S/ Xxxxxx X. Xxxxxxx
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Date Employee
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