Exhibit 10.4
EXECUTIVE
SALARY CONTINUATION PLAN
AGREEMENT
BETWEEN
OSAGE FEDERAL SAVINGS AND LOAN ASSOCIATION OF PAWHUSKA
AND
XXX XXXXX XXXXX
EXECUTIVE SALARY CONTINUATION PLAN AGREEMENT OF
OSAGE FEDERAL SAVINGS AND LOAN ASSOCIATION OF
PAWHUSKA
This Agreement is made and entered into on the 16th day of April, 2004, by
and between Osage Federal Savings and Loan Association of Pawhuska, hereinafter
referred to as the "Institution," and Xxx Xxxxx Xxxxx, hereinafter referred to
as the "Employee".
W I T N E S S E T H:
WHEREAS, the Employee has been employed by the Institution and is currently
employed in an executive capacity;
WHEREAS, the Institution desires to retain the valuable services and
business counsel of the Employee and to induce the Employee to remain in an
executive capacity with the Institution;
WHEREAS, the Employee is considered a highly compensated Employee or member
of a select management group of the Institution; and
NOW, THEREFORE, the Institution promises to pay the benefits provided
herein, subject to the terms and conditions of this Agreement, in consideration
for the Employee's promise to remain in the continuous employment of the
Institution until retirement. The parties hereto agree that the following shall
constitute the terms of this Agreement.
SECTION 1. Definitions.
-----------
For the purposes of this Agreement, whenever the context so indicates, the
singular or plural number and the masculine, feminine, or neuter gender shall be
deemed to include the other. The definitions below shall apply only to this
Agreement and shall not be construed as applying to a qualified employee benefit
plan under Section 401(a) of the Internal Revenue Code of 1986, as amended.
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Beneficiary
-----------
Beneficiary shall mean the person or persons the Employee has designated in
writing to the Institution, if none, the Employee's Spouse, Children, or Estate
(in that order).
Retirement Benefit
------------------
Retirement Benefit shall mean the benefit provided to the Employee at his
retirement, provided he has satisfied the conditions and terms of this
Agreement.
Estate
------
Estate shall mean the estate of the Employee.
Normal Retirement Age
---------------------
Normal Retirement Age shall mean age sixty-five (65) or later if permitted
by the Institution's Board of Directors.
Spouse
------
Spouse shall mean the person to whom the Employee is legally married at the
time of the Employee's death.
Early Retirement Date
---------------------
Early Retirement Date shall mean a retirement from service which is
effective prior to the Normal Retirement Age stated herein, provided the
Employee has attained age sixty-two (62).
Benefit Accounting
------------------
The Institution shall account for this benefit using the regulatory
accounting principles of the Institution's primary federal regulator. The
Institution shall establish an accrued liability retirement account for the
Employee into which appropriate reserves shall be accrued.
Discharge For Cause
-------------------
The term "for cause" shall mean any of the following that result in an
adverse effect on the Institution: (i) gross negligence or gross neglect; (ii)
the commission of a felony or gross misdemeanor involving moral turpitude,
fraud, or dishonesty; (iii) the willful violation of any law, rule, or
regulation (other than a traffic violation or similar offense); (iv) an
intentional failure to perform stated duties; or (v) a breach of fiduciary duty
involving personal profit.
SECTION 2. Conditions.
----------
(a) Normal Employment. The payment of benefits under this Agreement to the
-----------------
Employee or Beneficiary are conditioned upon the continuous employment
(including authorized
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leaves of absence as described by this Agreement) of the Employee by the
Institution from date of execution of this Agreement until attaining Retirement
Age.
(b) Noncompetition. Payment of benefits is further conditioned upon the
--------------
Employee not acting in any similar employment capacity for any business
enterprise which competes to a substantial degree with the Institution, nor
engaging in any activity involving substantial competition with the Institution
during employment or after retirement, while receiving benefits under this
Agreement without the prior written consent of the Institution. In the event of
violation of these provisions, all future payments shall be cancelled and
discontinued.
SECTION 3. Retirement Benefit.
------------------
(a) At Normal Retirement Age, if the Employee is still covered by this
Agreement, the Institution shall commence payments as provided in this Section.
Subject to the provisions and limitations of this Agreement, the Institution
shall pay to the Employee a monthly benefit which shall commence the first day
of the second month following the Employee's Retirement Age and shall be payable
monthly thereafter until the Employee's death. The amount of such benefit will
be determined as of the Employee's date of retirement as follows:
Once the Employee reaches Normal Retirement Age and has maintained
continuous Years of Service with the Institution from the date of execution of
this Agreement to the Normal Retirement Age (including authorized leaves of
absence as described in this Agreement), he shall receive compensation at the
annualized rate of Nineteen Thousand and 00/100th Dollars ($19,000.00) per year.
This compensation to be paid on a monthly basis as set forth above, until the
death of the Executive.
(b) Retirement Prior to Age 65. The Employee may retire after the age of
---------------------------
sixty-two (62) and receive an early retirement benefit based upon the accrued
liability balance at date of early retirement.
Should the Employee elect Early Retirement or be discharged without cause
by the Institution subsequent to the Early Retirement Date [Section 1], the
Employee shall be entitled to receive an annual benefit payment of Nineteen
Thousand and 00/100th Dollars ($19,000.00) actuarially reduced based on the
liability account balance. Said benefit shall be paid in equal monthly
installments (each 1/12th of the annual benefit) on the first day of the second
month following the Early Retirement Date. In the event the Employee should die
and there is a balance in the accrued liability account, the Institution shall
pay such balance, in a lump sum or in equal monthly installments (1/12th of the
annual benefit), at the discretion of the Institution, to such individual or
individuals the Employee may have designated in writing and filed with the
Institution. In the absence of any effective beneficiary designation, any such
amounts becoming due and payable upon the death of the Employee shall be payable
to the duly qualified executor or administrator of the Employee's estate. Said
payments due hereunder shall begin the first day of the second month following
the decease of the Employee.
(c) Termination Before Normal Retirement Age After Merger, Conversion, or a
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Change of Control After Conversion. If the Employee is terminated within three
-----------------------------------
years after the
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Institution is merged into another Institution, or undergoes a stock conversion,
or after a stock conversion, there is a Change of Control as defined below and
the Employee is terminated for any reason other than discharge for cause or his
base salary is reduced without his consent prior to Normal Retirement Age, the
Employee shall be entitled to complete payment of benefits under the applicable
provision below:
(i) if the Employee has reached an age which would permit an early
retirement benefit under Subsection (b) above, the Employee will receive the
benefit permitted under the Agreement for his attained age with no other
conditions being applicable;
(ii) if the Employee has reached an age which would not yet permit an early
retirement benefit under the terms above, the Employee will receive a benefit
equal to the minimum early retirement benefit with no other requirements being
applicable. Payments to be made as if the Employee had attained earliest
permitted retirement age.
(iii) For the purposes of this subsection, Change of Control shall mean any
time ten percent (10%) or more of the voting stock of the Institution shall be
transferred by any means other than by will or intestate and acquired by one
party or parties acting in concert. This shall not apply to any transfer of
stock to a trust for the benefit of the Institution's employees.
(d) Termination Before Age 62. If the Employee is terminated by action of
--------------------------
the Institution before age sixty-two (62) for any reason other than a discharge
for cause, the Employee shall be entitled to a lump sum payment of the accrued
liability balance at said termination
(e) Discharge For Cause. In the event the Employee shall be discharged for
-------------------
cause at any time, all benefits provided herein shall be forfeited.
(f) Termination of Service. Subject to Subparagraph 3 (e) hereinabove,
----------------------
should the Employee suffer a termination of service, he shall be vested in
accordance with the following vesting schedule:
Total Years of Employment
with the Institution since the
Effective Date of this Agreement Vested (to a maximum of 100%)
-------------------------------- -----------------------------
less than 6 full years 0%
6 10%
7 20%
8 30%
9 40%
10 50%
11 60%
12 70%
13 80%
14 90%
15 100%
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SECTION 4. Death Benefit.
-------------
(a) In the event of the death of the Employee prior to retirement and the
conditions of Section 2 of this Agreement being effective up to the time of
death, the beneficiary shall receive the balance of the Employee's accrued
liability retirement account on the date of death payable in one (1) lump sum to
such individual or individuals as the Employee may have designated in writing
and filed with the Institution. Such payment shall be paid beginning no later
than the latest of:
(i) January 1 of the year after the death of the Employee, or
(ii) the first day of the third month after the death of the Employee.
(b) In the event of the death of the Employee after retirement, the
Beneficiary shall receive the balance of the Employee's accrued liability
retirement account on the date of death. The payment shall be made in the same
manner and form as provided for in Article 4 (a) hereinabove.
SECTION 5. Named Fiduciary and Claims Procedure.
------------------------------------
(a) The Institution is hereby designated as the named fiduciary under this
Agreement. The named fiduciary shall have authority to control and manage the
operation and administration of this Agreement, and it shall be responsible for
establishing and carrying out a funding policy and method consistent with the
objectives of this Agreement.
(b) Any decision by the Institution denying a claim by the Employee or a
Beneficiary for benefits under this Agreement shall be in writing and delivered
or mailed to the Employee or Beneficiary. Such statement shall set forth the
specific reasons for the denial. In addition, the Institution shall afford a
reasonable opportunity to the Employee or Beneficiary for a full and fair review
of the decision denying such claim.
SECTION 6. Funding.
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The Institution's obligations under this Agreement shall be an unfunded and
unsecured promise to pay. The Institution shall not be obligated under any
circumstances to fund its obligations under this Agreement. The Institution may,
however, at its sole and exclusive option, elect to fund this Agreement in whole
or in part.
SECTION 7. Employee's Right to Assets.
--------------------------
The rights of the Employee or his Beneficiaries shall be solely those of an
unsecured general creditor of the Institution. The Employee or his Beneficiaries
shall only have the right to receive from the Institution those payments as
specified under this Agreement. The Employee agrees that neither he nor his
Beneficiaries shall have any rights or interests whatsoever in any assets of the
Institution. Any asset used or acquired by the Institution in connection with
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the liabilities the Institution has assumed under this Agreement, except as
expressly provided, shall not be deemed to be held under any Trust for the
benefit of the Employee or his Beneficiaries, nor shall it be considered
security for the performance of the obligations of the Institution. It shall be,
and remain, a general, unpledged, and unrestricted asset of the Institution.
SECTION 8. Acceleration of Payment.
-----------------------
The Institution may, only upon the mutual written consent of the Employee,
or if deceased, Employee's Beneficiaries, accelerate the payment of any benefits
payable under this Agreement. In the event it is agreed to accelerate these
payments, the present value of all future payments shall be paid to the Employee
or his Beneficiaries. The then current Federal Reserve discount rate which is
charged on loans to depository institutions by the New York Federal Reserve Bank
shall be used in discounting any payments as determined by the Institution.
SECTION 9. Leaves of Absence and Disability.
--------------------------------
(a) The Institution may, in its sole discretion, permit the Employee to
take a leave of absence for a period not to exceed one year. During such leave,
the Employee shall be considered to be in the continuous employment of the
Institution for purposes of this Agreement.
(b) In the event that there is any finding of disability of the Employee,
the Institution will pay an amount equal to the accrued liability retirement
account balance to the Employee. No other benefits will be owed to the Employee
under this Agreement.
The Employee will be considered to be disabled or under a Period of Disability
if he or she has physical or mental impairment or combination of impairments of
such severity that the Employee is not only unable to continue in his or her
regular course of employment, but also cannot, considering the Employee's age,
education and work experience, engage in any other kind of substantial gainful
work which exists in the national economy, regardless of whether such work
exists in the immediate area in which the Employee lives, or whether a specific
job vacancy exists for him or whether he would be hired if the Employee applied
for work. If there is a dispute regarding whether the Employee is disabled, such
dispute shall be resolved by a physician selected by the Institution and such
resolution shall be binding upon all parties to this Agreement.
SECTION 10. Assignability.
-------------
Except insofar as this provision may be contrary to applicable law, no
sale, transfer, alienation, or assignment, pledge, collateralization, or
attachment of any benefits under this Agreement shall be valid or recognized by
the Institution.
SECTION 11. Amendment.
---------
This Agreement can be amended by the mutual written agreement of both
parties. The Institution shall have the power to terminate this Agreement
completely by giving proper notice
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of not less than sixty days. However, upon such a termination, the Employee
shall be entitled to complete payment of benefits under the applicable provision
below:
(i) if the Employee has reached an age which would allow a retirement
benefit under any terms of the Agreement, the Employee will receive the maximum
benefit permitted under the Agreement for his attained age with no other
conditions being applicable.
(ii) if the Employee has not yet reached an age which would allow a
retirement benefit under any terms of the Agreement, the Employee will receive
the minimum benefit permitted under the Agreement for the earliest possible
early retirement benefit with no other conditions being applicable.
Such payments upon termination may be accelerated only by the procedure of
Section 8 of this Agreement.
SECTION 12. Enforcement.
-----------
This Agreement shall be governed by the laws of the State of Oklahoma. This
Agreement is solely between the Institution and the Employee. Furthermore, the
Employee or his Beneficiaries shall only have recourse against the Institution
for enforcement of the Agreement. However, it shall be binding upon the
Beneficiaries, heirs, executors, and administrators of the Employee, and upon
any and all successors and assigns of the Institution.
SECTION 13. Severability.
------------
In the event that any of the provisions of this Agreement or portion
thereof, are held to be inoperative or invalid by any court of competent
jurisdiction, then (1) insofar as is reasonable, effect will be given to the
intent manifested in the provisions held invalid or inoperative and (2) the
validity and enforceability of the remaining provisions will not be affected
thereby.
SECTION 14. Payments to Beneficiaries.
-------------------------
For the purposes of this Agreement, Beneficiaries shall mean the person or
person designated by the Employee in writing on forms furnished by the
Institution. Such Employee may then from time to time change the designated
Beneficiaries by written notice to the Institution, and upon such change the
rights of all previously designated Beneficiaries to receive any benefits under
this Agreement shall cease. If, at the date of death of the Employee, no
properly designated Beneficiary exists, then for the purposes of this Agreement,
the legally recognized Spouse of the Employee living at his death, shall be the
Beneficiary; if none, then the Children, natural and adopted, then living of the
Employee; if none, then the Employee's Estate.
SECTION 15. Incompetency.
------------
If the Institution shall find that any person to whom any payment is
payable under this Agreement is unable to care for their affairs due an illness
or accident, or is a minor, payment due (unless a prior claim therefore shall
have been made by a duly appointed guardian,
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committee, or other legal representative) may be paid to the Spouse, a child, a
parent, a brother or sister, or a custodian determined pursuant to the Uniform
Gift to Minors Act, the Uniform Transfer to Minors Act, or to any person deemed
by the Institution to have incurred expense for such person otherwise entitled
to payment, in such manner and proportions as the Institution may determine. Any
such payments made under this Section in good faith shall be a complete
discharge of the liabilities of the Institution under this Agreement.
SECTION 16. Right of Employment.
-------------------
Nothing contained in this Agreement shall be construed to be a contract of
employment for any term of years, nor as conferring upon the Employee the right
to continue in the employment of the Institution in the Employee's present
capacity, or in any other capacity. It is expressly understood by the parties
hereto that this Agreement relates exclusively to additional compensation for
the Employee's services, which compensation is payable after the end of active
employment service and is not intended to be an employment contract.
SECTION 17. Scope of Agreement.
------------------
Nothing contained in this Agreement shall be construed as limiting or
restricting any benefit to the Employee, his designated beneficiary, or their
estates, under any pensions, profit-sharing, or similar retirement plan, or
under any group life, or group health or accident, or other plan of the
Institution, for the benefit of its employees generally or a group of them, now
or here after in existence, nor shall any payment under this Agreement to any
person entitled to such hereunder be deemed to constitute payment to such person
in lieu of or in reduction of any benefit or payment under any such plan.
SECTION 18. Consultation.
------------
In the event that the Employee furnishes his services subsequent to his
retirement of an advisory or consulting nature, the Employee shall be
compensated in an amount mutually agreed upon by the parties prior to the
rendering of such services. Payments under other Sections of this Agreement
shall in no manner be construed as compensation for the services provided by the
Employee of an advisory or consulting nature after retirement.
SECTION 19. Regulatory Compliance.
--------------------
Notwithstanding any other provisions of this Agreement, no payment shall be
paid by the Institution under this Agreement if such payment would be in
violation of any order or regulation of the Institution's primary regulator or
any secondary financial institution regulatory body having jurisdiction over the
Institution.
SECTION 20. Conversions.
-----------
In the event the Institution undergoes a conversion from mutual to stock
form, the provisions of this Agreement shall remain binding and enforceable upon
both parties. The parties may elect to amend this Agreement under the provision
of Section 11 for the purpose of
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more accurately representing the intentions of the parties in terminology more
applicable to the Institution's new form.
SECTION 21. 12 U.S.C. ss. 1828(k).
--------------------
Any payments made to the Employee pursuant to this Plan, or otherwise, are
subject to and conditioned upon their compliance with 12 U.S.C. ss. 1828(k) or
any regulations promulgated thereunder.
SECTION 22. Effective Date.
--------------
The Effective Date of this Agreement shall be January 1, 2004.
SECTION 23. Execution.
---------
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
this 16th day of April, 2004.
/s/Xxx Xxxxx Xxxxx
-----------------------------------
Xxx Xxxxx Xxxxx
Osage Federal Savings and Loan
Association of Pawhuska
By: /s/Xxxx X. Xxxxx
-----------------------------
Title: President/CEO
-----------------------------
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BENEFICIARY DESIGNATION FORM FOR THE NON-QUALIFIED
RETIREMENT PLAN
BETWEEN
OSAGE FEDERAL SAVINGS AND LOAN ASSOCIATION OF PAWHUSKA
AND
XXX XXXXX XXXXX
I. PRIMARY DESIGNATION
-------------------
(You may refer to the beneficiary designation information prior to
completion.)
A. PERSON(S) AS A PRIMARY DESIGNATION:
----------------------------------
(Please indicate the percentage for each beneficiary.)
Name Xxxxxx Xxxxx Xxxxx Relationship daughter / 100%
--------------------------------- ---------------- --------
Address: 0000 Xxxxxxxxx Xxxxxxxxxxxx XX 00000
------------------------------------------------------------------------
(Street) (City) (State) (Zip)
Name __________________________________________ Relationship__________/_______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
Name __________________________________________ Relationship__________/_______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
Name __________________________________________ Relationship__________/_______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
B. ESTATE AS A PRIMARY DESIGNATION:
-------------------------------
My Primary Beneficiary is The Estate of __________________________________ as
set forth in the last will and testament dated the _____ day of _____________,
_______ and any codicils thereto.
C. TRUST AS A PRIMARY DESIGNATION:
-------------------------------
Name of the Trust: ____________________________________________________________
Execution Date of the Trust: _____ / _____ / _________
Name of the Trustee: ___________________________________________________________
Beneficiary(ies) of the Trust
(please indicate the percentage for each beneficiary):
________________________________________________________________________________
________________________________________________________________________________
Is this an Irrevocable Life Insurance Trust? ________ Yes ________ No (If yes
and this designation is for a Split Dollar agreement, an Assignment of Rights
form should be completed.)
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II. SECONDARY (CONTINGENT) DESIGNATION
----------------------------------
A. PERSON(S) AS A SECONDARY (CONTINGENT) DESIGNATION:
-------------------------------------------------
(Please indicate the percentage for each beneficiary.)
Name Xxxxxx X. Xxxxx III Relationship spouse / 100%
----------------------------------- --------------- --------
Address: 0000 X. 00xx X. Xxxxxx #X Xxxxx XX 00000
------------------------------------------------------------------------
(Street) (City) (State) (Zip)
Name __________________________________________ Relationship__________/_______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
Name __________________________________________ Relationship__________/_______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
Name __________________________________________ Relationship__________/_______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
B. ESTATE AS A SECONDARY (CONTINGENT) DESIGNATION:
----------------------------------------------
My Secondary Beneficiary is The Estate of ________________________ as set forth
in my last will and testament dated the _____ day of _____________, _____ and
any codicils thereto.
C. TRUST AS A SECONDARY (CONTINGENT) DESIGNATION:
----------------------------------------------
Name of the Trust: ____________________________________________________________
Execution Date of the Trust: _____ / _____ / _________
Name of the Trustee: ___________________________________________________________
Beneficiary(ies) of the Trust
(please indicate the percentage for each beneficiary):
________________________________________________________________________________
________________________________________________________________________________
All sums payable under the Executive Salary Continuation Plan Agreement by
reason of my death shall be paid to the Primary Beneficiary(ies), if he or she
survives me, and if no Primary Beneficiary(ies) shall survive me, then to the
Secondary (Contingent) Beneficiary(ies). This beneficiary designation is valid
until the participant notifies the Institution in writing.
/s/Xxx Xxxxx Xxxxx 4/16/04
---------------------------- ------------
Xxx Xxxxx Xxxxx Date
LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
Insurer: New York Life Insurance Company
Northwestern Mutual Life Insurance
Policy Number: 56607397
16688054
Institution: Osage Federal Savings and Loan
Association of Pawhuska
Insured: Xxx Xxxxx Xxxxx
Relationship of Insured to Institution: Executive
The respective rights and duties of the Institution and the Insured in the
above-referenced policy shall be pursuant to the terms set forth below:
I. DEFINITIONS
Refer to the policy contract for the definition of any terms in this
Agreement that are not defined herein. If the definition of a term in
the policy is inconsistent with the definition of a term in this
Agreement, then the definition of the term as set forth in this
Agreement shall supersede and replace the definition of the terms as
set forth in the policy.
II. POLICY TITLE AND OWNERSHIP
Title and ownership shall reside in the Institution for its use and for
the use of the Insured all in accordance with this Agreement. The
Institution alone may, to the extent of its interest, exercise the
right to borrow or withdraw on the policy cash values. Where the
Institution and the Insured (or assignee, with the consent of the
Insured) mutually agree to exercise the right to increase the coverage
under the subject Split Dollar policy, then, in such event, the rights,
duties and benefits of the parties to such increased coverage shall
continue to be subject to the terms of this Agreement.
III. BENEFICIARY DESIGNATION RIGHTS
The Insured (or assignee) shall have the right and power to designate a
beneficiary or beneficiaries to receive the Insured's share of the
proceeds payable upon the death of the Insured, and to elect and change
a payment option for such beneficiary, subject to any right or interest
the Institution may have in such proceeds, as provided in this
Agreement.
IV. PREMIUM PAYMENT METHOD
Subject to the Institution's absolute right to surrender or terminate
the policy at any time and for any reason, the Institution shall pay an
amount equal to the planned premiums and any other premium payments
that might become necessary to keep the policy in force.
V. TAXABLE BENEFIT
Annually the Insured will receive a taxable benefit equal to the
assumed cost of insurance as required by the Internal Revenue Service.
The Institution (or its administrator) will report to the Insured the
amount of imputed income each year on Form W-2 or its equivalent.
VI. DIVISION OF DEATH PROCEEDS
Subject to Paragraphs VII and IX herein, the division of the death
proceeds of the policy is as follows:
A. Should the Insured be employed by the Institution at the time
of death, or be retired or terminated due to disability at the
time of death, the Insured's beneficiary(ies), designated in
accordance with Paragraph III, shall be entitled to an amount
equal to twenty-five percent (25%) of the net-at-risk
insurance portion of the proceeds. The net-at-risk insurance
portion is the total proceeds less the cash value of the
policy.
B. Should the Insured not be employed by the Institution at the
time of his or her death, the Insured's beneficiary(ies),
designated in accordance with Paragraph III, shall be entitled
to the percentage as set forth hereinbelow of the proceeds
described in Subparagraph VI (A) above that corresponds to the
number of full years the Insured has been employed by the
Institution since the Effective Date of this Agreement.
2
Total Years of Employment
with the Institution since the
Effective Date of this Agreement Vested (to a maximum of 100%)
-------------------------------- -----------------------------
less than 6 full years $20,000
6 10%
7 20%
8 30%
9 40%
10 50%
11 60%
12 70%
13 80%
14 90%
15 100%
C. The Institution shall be entitled to the remainder of such
proceeds.
D. The Institution and the Insured (or assignees) shall share in
any interest due on the death proceeds on a pro rata basis as
the proceeds due each respectively bears to the total
proceeds, excluding any such interest.
VII. DIVISION OF THE CASH SURRENDER VALUE OF THE POLICY
The Institution shall at all times be entitled to an amount equal to
the policy's cash value, as that term is defined in the policy
contract, less any policy loans and unpaid interest or cash withdrawals
previously incurred by the Institution and any applicable surrender
charges. Such cash value shall be determined as of the date of
surrender or death as the case may be.
VIII. RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION EXISTS
In the event the policy involves an endowment or annuity element, the
Institution's right and interest in any endowment proceeds or annuity
benefits, on expiration of the deferment period, shall be determined
under the provisions of this Agreement by regarding such endowment
proceeds or the commuted value of such annuity benefits as the policy's
cash value. Such endowment proceeds or annuity benefits shall be
considered to be like death proceeds for the purposes of division under
this Agreement.
IX. TERMINATION OF AGREEMENT
This Agreement shall terminate upon the occurrence of any one of the
following:
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A. The Insured shall be discharged from employment with the
Institution for cause. The term "for cause" shall mean any of the
following that result in an adverse effect on the Institution:
(i) gross negligence or gross neglect; (ii) the commission of a
felony or gross misdemeanor involving fraud or dishonesty; (iii)
the willful violation of any law, rule, or regulation (other than
a traffic violation or similar offense); (iv) an intentional
failure to perform stated duties; or (v) a breach of fiduciary
duty involving personal profit; or
B. Surrender, lapse, or other termination of the Policy by the
Institution.
Upon such termination, the Insured (or assignee) shall have a fifteen
(15) day option to receive from the Institution an absolute assignment
of the policy in consideration of a cash payment to the Institution,
whereupon this Agreement shall terminate. Such cash payment referred
to hereinabove shall be the greater of:
A. The Institution's share of the cash value of the policy on the
date of such assignment, as defined in this Agreement; or
B. The amount of the premiums that have been paid by the Institution
prior to the date of such assignment.
If, within said fifteen (15) day period, the Insured fails to exercise
said option, fails to procure the entire aforestated cash payment, or
dies, then the option shall terminate and the Insured (or assignee)
agrees that all of the Insured's rights, interest and claims in the
policy shall terminate as of the date of the termination of this
Agreement.
The Insured expressly agrees that this Agreement shall constitute
sufficient written notice to the Insured of the Insured's option to
receive an absolute assignment of the policy as set forth herein.
Except as provided above, this Agreement shall terminate upon
distribution of the death benefit proceeds in accordance with
Paragraph VI above.
X. INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS
The Insured may not, without the written consent of the Institution,
assign to any individual, trust or other organization, any right,
title or interest in the subject policy nor any rights, options,
privileges or duties created under this Agreement.
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XI. AGREEMENT BINDING UPON THE PARTIES
This Agreement shall bind the Insured and the Institution, their heirs,
successors, personal representatives and assigns.
XII. ERISA PROVISIONS
The following provisions are part of this Agreement and are intended to
meet the requirements of the Employee Retirement Income Security Act of
1974 ("ERISA"):
A. Named Fiduciary and Plan Administrator.
--------------------------------------
The "Named Fiduciary and Plan Administrator" of this
Endorsement Method Split Dollar Agreement shall be Osage
Federal Savings and Loan Association of Pawhuska until its
resignation or removal by the Board of Directors. As Named
Fiduciary and Plan Administrator, the Institution shall be
responsible for the management, control, and administration of
this Split Dollar Plan as established herein. The Named
Fiduciary may delegate to others certain aspects of the
management and operation responsibilities of the Plan,
including the employment of advisors and the delegation of any
ministerial duties to qualified individuals.
B. Funding Policy.
--------------
Subject to the Institution's absolute right to surrender or
terminate the policy at any time and for any reason, the
funding policy for this Split Dollar Plan shall be to maintain
the subject policy in force by paying, when due, all premiums
required.
C. Basis of Payment of Benefits.
----------------------------
Direct payment by the Insurer is the basis of payment of
benefits under this Agreement, with those benefits in turn
being based on the payment of premiums as provided in this
Agreement.
D. Claim Procedures.
----------------
Claim forms or claim information as to the subject policy can
be obtained by contacting Benmark, Inc. (800-544-6079). When
the Named Fiduciary has a claim which may be covered under the
provisions described in the insurance policy, they should
contact the office named above, and they will either complete
a claim form and forward it to an authorized representative of
the Insurer or advise the named Fiduciary what further
requirements are necessary. The Insurer will evaluate and make
a decision
5
as to payment. If the claim is payable, a benefit check will
be issued in accordance with the terms of this Agreement.
In the event that a claim is not eligible under the policy,
the Insurer will notify the Named Fiduciary of the denial
pursuant to the requirements under the terms of the policy. If
the Named Fiduciary is dissatisfied with the denial of the
claim and wishes to contest such claim denial, they should
contact the office named above and they will assist in making
an inquiry to the Insurer. All objections to the Insurer's
actions should be in writing and submitted to the office named
above for transmittal to the Insurer.
XIII. GENDER
Whenever in this Agreement words are used in the masculine or neuter
gender, they shall be read and construed as in the masculine, feminine
or neuter gender, whenever they should so apply.
XIV. INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT
The Insurer shall not be deemed a party to this Agreement, but will
respect the rights of the parties as herein developed upon receiving an
executed copy of this Agreement. Payment or other performance in
accordance with the policy provisions shall fully discharge the Insurer
from any and all liability.
XV. CHANGE OF CONTROL
Change of Control shall be deemed to be the cumulative transfer of more
than ten percent (10%) of the voting stock of the Institution from the
date of this Agreement. For the purposes of this Agreement, transfers
on account of death or gifts, transfers between family members, or
transfers to a qualified retirement plan maintained by the Institution
shall not be considered in determining whether there has been a Change
of Control. Upon a Change of Control, if the Insured's employment is
subsequently terminated, except for cause, then the Insured shall be
one hundred percent (100%) vested in the benefits promised in this
Agreement and, therefore, upon the death of the Insured, the Insured's
beneficiary(ies) (designated in accordance with Paragraph III) shall
receive the death benefit provided herein as if the Insured had died
while employed by the Institution (see Subparagraphs VI [A] & [B]).
XVI. AMENDMENT OR REVOCATION
Subject to the Institution's absolute right to surrender or terminate
the policy at any time and for any reason, it is agreed by and between
the parties hereto that, during the lifetime of the Insured, this
Agreement may be amended or revoked at
6
any time or times, in whole or in part, by the mutual written consent
of the Insured and the Institution.
XVII. EFFECTIVE DATE
The Effective Date of this Agreement shall be January 1, 2004.
XVIII. SEVERABILITY AND INTERPRETATION
If a provision of this Agreement is held to be invalid or
unenforceable, the remaining provisions shall nonetheless be
enforceable according to their terms. Further, in the event that any
provision is held to be overbroad as written, such provision shall be
deemed amended to narrow its application to the extent necessary to
make the provision enforceable according to law and enforced as
amended.
XIX. APPLICABLE LAW
The validity and interpretation of this Agreement shall be governed by
the laws of the State of Oklahoma.
XX. CONVERSIONS
In the event the Institution undergoes a conversion from mutual to
stock form, the provisions of this Agreement shall remain binding and
enforceable upon both parties. The parties may elect to amend this
Agreement under the provision of Subparagraph XVI for the purpose of
more accurately representing the intentions of the parties in
terminology more applicable to the Institution's new form.
Executed at Pawhuska, Oklahoma this 16th day of April, 2004.
OSAGE FEDERAL SAVINGS AND LOAN
ASSOCIATION OF PAWHUSKA
Pawhuska, Oklahoma
/s/ Xxxxxxx Xxxxxxxx By: /s/Xxxx X. Xxxxx, President/CEO
--------------------- -------------------------------------------------
Witness (Institution Officer other than Insured) Title
/s/Xxxxxxx Xxxxxxxx /s/Xxx Xxxxx Xxxxx
-------------------- ----------------------------------------------------
Witness Xxx Xxxxx Xxxxx
7
BENEFICIARY DESIGNATION FORM
FOR THE LIFE INSURANCE ENDORSEMENT METHOD SPLIT
DOLLAR PLAN AGREEMENT
I. PRIMARY DESIGNATION
--------------------
(You may refer to the beneficiary designation information prior to
completion.)
A. PERSON(S) AS A PRIMARY DESIGNATION:
----------------------------------
(Please indicate the percentage for each beneficiary.)
Name Xxxxxx Xxxxx Xxxxx Relationship Daughter / 100%
------------------------------- ---------------- --------------
Address: 0000 Xxxxxxxxx Xxxxxxxxxxxxxx XX 00000
-----------------------------------------------------------------------
(Street) (City) (State) (Zip)
Name __________________________________________ Relationship__________/_______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
Name __________________________________________ Relationship__________/_______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
Name __________________________________________ Relationship__________/_______%
Address:________________________________________________________________________
(Street) (City) (State) (Zip)
B. ESTATE AS A PRIMARY DESIGNATION:
-------------------------------
My Primary Beneficiary is The Estate of _________________________________ as set
forth in the last will and testament dated the _____ day of _____________,
_______ and any codicils thereto.
C. TRUST AS A PRIMARY DESIGNATION:
------------------------------
Name of the Trust: __________________________________________________________
Execution Date of the Trust: _____ / _____ / _________
Name of the Trustee:___________________________________________________________
Beneficiary(ies) of the Trust
(please indicate the percentage for each beneficiary):
________________________________________________________________________________
________________________________________________________________________________
Is this an Irrevocable Life Insurance Trust? ________ Yes ________ No
(If yes and this designation is for a Split Dollar agreement, an Assignment of
Rights form should be completed.)
8
II. SECONDARY (CONTINGENT) DESIGNATION
----------------------------------
A. PERSON(S) AS A SECONDARY (CONTINGENT) DESIGNATION:
---------------------------------------------------
(Please indicate the percentage for each beneficiary.)
Name Xxxxx X. Xxxxx Relationship Brother / 100%
--------------------------- ------------- -------
Address: X.X. Xxx 0000 Xxxxxxxx XX 00000
-------------------------------------------------------------------
(Street) (City) (State) (Zip)
Name _____________________________________ Relationship__________/_______%
Address:___________________________________________________________________
(Street) (City) (State) (Zip)
Name _____________________________________ Relationship__________/_______%
Address:___________________________________________________________________
(Street) (City) (State) (Zip)
Name _____________________________________ Relationship__________/_______%
Address:___________________________________________________________________
(Street) (City) (State) (Zip)
B. ESTATE AS A SECONDARY (CONTINGENT) DESIGNATION:
----------------------------------------------
My Secondary Beneficiary is The Estate of ___________________________ as set
forth in my last will and testament dated the _____ day of ____________, _______
and any codicils thereto.
C. TRUST AS A SECONDARY (CONTINGENT) DESIGNATION:
----------------------------------------------
Name of the Trust: __________________________________________________________
Execution Date of the Trust: _____ / _____ / _________
Name of the Trustee: _________________________________________________________
Beneficiary(ies) of the Trust
(please indicate the percentage for each beneficiary):
________________________________________________________________________________
________________________________________________________________________________
All sums payable under the Life Insurance Endorsement Method Split Dollar Plan
Agreement by reason of my death shall be paid to the Primary Beneficiary(ies),
if he or she survives me, and if no Primary Beneficiary(ies) shall survive me,
then to the Secondary (Contingent) Beneficiary(ies). This beneficiary
designation is valid until the participant notifies the Institution in writing.
/s/Xxx Xxxxx Xxxxx 4/16/04
-------------------------- ------------------
Xxx Xxxxx Xxxxx Date
9
