Exhibit 10.06
1998 SPLIT-DOLLAR AGREEMENT
XXXXXX X. XXXXXX
THIS Agreement made is effective ___________________, _____, by and
between FNB Southeast or its successor (herein called the "Company"), a North
Carolina corporation having its principal office in Reidsville, North Carolina
(hereinafter called the "Company") and Xxxxxx X. Xxxxxx (hereinafter called the
"Employee");
R E C I T A L S
The Employee is a valued employee of the Company, and the Company desires
to retain him in its employ. As an inducement to such continued employment, the
Company wishes to assist the Employee with his personal life insurance program.
The Company has initiated a program to purchase a policy of insurance on the
lives of certain key employees. The Employee wishes to participate in the
program provided by the Company as described herein.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1 - Policy of Insurance
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The life insurance policy subject to this Agreement is Policy Number
[____] (hereinafter referred to as "the Policy") issued by the General American
Life Insurance Company (hereinafter called the "Insurer") on the life of the
Employee in the fact amount of $200,000.
Section 2 - Ownership of Insurance
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The Employee shall be the owner of the Policy, but as a condition of the
Agreement agrees to make a "Collateral Assignment" to the Company in an amount
equal to the sum of the cumulative annual premiums paid by the Company. The
Employee may exercise all rights of ownership with respect to the Policy, except
as otherwise hereinafter provided. It is the express intention of the parties to
reserve to the Employee certain rights in and to the Policy granted to it by the
terms of the Policy, but excluding the right to designate and change the
beneficiary of that portion of the proceeds to which the Company is entitled
under Section 5 hereunder.
Section 3 - Payment of Premiums on Policy and Annual Policy Dividends
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All premiums on the Policy shall be paid by the Company each year, until
the fifteenth (15th) Policy anniversary date unless this Agreement is terminated
as provided in Section 6 below. The Company shall pay each annual premium on or
before the premium date, or within the grace period allowed by the Policy for
the payment of the premium. Any annual dividend paid by the Insurer under the
Policy shall be used to purchase paid-up annual additions, which shall be used
to increase the face amount of the Policy.
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Section 4 - Loan and Surrender of Policy
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The Employee shall have the right at his discretion to borrow on the cash
value, subject to the Collateral Assignment in Section 2. In addition, the
Employee may surrender the Policy and receive the entire cash surrender value
thereof, subject to the Collateral Assignment in Section 2.
Section 5 - Death Claims
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(a) Company's Proceeds: When the Employee dies, the Company shall be
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entitled to receive from the Insurer that amount from the death benefit provided
under the Policy which is equal to the sum of the total premiums paid by the
Company, reduced by any Policy indebtedness under the Collateral Assignment
(policy loan) of the Company to the Insurer under;
(b) Employee's Proceeds: When the Employee dies, the beneficiary or
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beneficiaries named by the Employee shall be entitled to receive the balance of
the death benefit provided under the Policy in excess of the amount payable to
the Company under Section 5(a) above. This amount shall be paid under the
settlement option elected by the Employee or the Employee's beneficiary. If the
Employee has not named a beneficiary by the time of his death, or is no
beneficiary named by the Employee shall be living at the death of the Employee,
the beneficiary shall be the Employee's Estate.
Section 6 - Termination of Agreement Prior to Death of Employee
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This Agreement and Policy may not be terminated by the Company (or its
successor entity) prior to the death of the Employee, except in the event of (i)
bankruptcy of the Company, (ii) the mutual written agreement between the parties
(iii) the voluntary termination of employment by the Employee, or (iv) the
Employee is terminated "for cause." Retirement of Employee shall not terminate
this Agreement or Policy, but this Agreement and Policy shall remain in effect
until the death of the Employee.
Section 7 - Disposition of Policy on Termination of Agreement
If the Agreement is terminated under the provisions of Section 6, the
Employee shall have sixty (60) days in which to pay to the Company the amount
which the Company would be entitled to receive, said amount being the lesser of
(i) the cash surrender value of the policy, or (ii) the cumulative premiums paid
by the Employer under Section 5 (if the Employee's death had occurred at that
time). Upon receipt of this amount, the Company shall cancel any Collateral
Assignment made to it as a security interest in the Policy. If the Employee does
not pay such amount to the Company within sixty (60) days, the Company may
enforce any security interest it has through the Collateral Assignment, which it
has under the policy.
Section 8 - Insurance Company Not a Party
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The Insurer shall not be deemed to be a party to this Agreement for any
purpose and is not in any way responsible for its validity; shall not be
obligated to inquire as to the distribution of any monies payable or paid by it
under the Policy on the Employee's life acquired pursuant to the terms of the
Agreement; and shall be fully discharged from any and all liability under the
terms of any Policy issued by it upon payment or other performance of its
obligations in accordance with the terms of such Policy.
ection 9 - Amendment of Agreement
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This Agreement shall not be modified or amended except by mutual written
agreement as signed by the Company (or its successor) and the Employee. This
Agreement shall be binding upon the heirs, administrators or executors, and the
successors and assigns of each party to this Agreement.
Section 10 - Merger, Acquisition or Change in Control
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In the event that the Company is acquired by, merged with, or otherwise
has a "change in control" (change of 25% or more in its outstanding voting
shares of common stock), the successor entity shall be obligated to continue
this Agreement, unless otherwise mutually agreed in writing by the Employee and
the successor entity.
Section 11 - Applicable Law
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The Agreement shall be subject to and shall be construed under the laws of
the State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have executed the Agreement as of
this ___ day of ______________, ____.
ATTEST: FNB SOUTHEAST
/s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Asst. Secretary President/CEO
[Corporate Seal]
EMPLOYEE
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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