EXHIBIT 10.9
LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
Insurer: Xxxxxxxxx Xxxxxxxx Life Insurance
Lincoln Benefit Life Insurance
Southland Life Insurance
Policy Number: AH5061756
0600086729
U0295644
Bank: Enfield Federal Savings & Loan Association
Insured: Xxxxx X'Xxxxxx
Relationship of Insured to Bank: Executive
The respective rights and duties of the Bank and the Insured in the
above-referenced policy shall be pursuant to the terms set forth below:
1. DEFINITIONS
Refer to the policy contract for the definition of all terms in this
Agreement.
2. POLICY TITLE AND OWNERSHIP
Title and ownership shall reside in the Bank for its use and for the
use of the Insured all in accordance with this Agreement. The Bank
alone may, to the extent of its interest, exercise the right to borrow
or withdraw on the policy cash values. Where the Bank 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 Bank may have in such proceeds, as provided in this Agreement.
IV. PREMIUM PAYMENT METHOD
The Bank 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 Bank (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. Upon the death of the Insured, 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. The Bank shall be entitled to the remainder of such proceeds.
C. The Bank 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 Bank 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 Bank 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
Bank'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.
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IX. TERMINATION OF AGREEMENT
This Agreement shall terminate if the Insured shall be discharged from
employment with the Bank for cause. The term "for cause" shall mean the
conviction of a felony or gross misdemeanor involving moral turpitude,
fraud, dishonesty or willful violation of any law that results in any
adverse effect on the Bank.
Upon such termination, the Insured (or assignee) shall have a
forty-five (45) day option to receive from the Bank an absolute
assignment of the policy in consideration of a cash payment to the
Bank, whereupon this Agreement shall terminate. Such cash payment
referred to hereinabove shall be the greater of:
1. The Bank's share of the cash value of the policy on the date of
such assignment, as defined in this Agreement; or
2. The amount of the premiums which have been paid by the Bank prior
to the date of such assignment.
If, within said forty-five (45) 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.
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 Bank, 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.
XI. AGREEMENT BINDING UPON THE PARTIES
This Agreement shall bind the Insured and the Bank, their heirs,
successors, personal representatives and assigns.
XII. NAMED XXXXXXXXX AND PLAN ADMINISTRATOR
Enfield Federal Savings & Loan Association is hereby designated the
"Named Fiduciary" until resignation or removal by the Board of
Directors. As Named Fiduciary, the Bank shall be responsible for the
management, control, and administration of this Split Dollar Plan as
established herein. The Named Fiduciary may allocate to others certain
aspects of the
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management and operation responsibilities of the Plan,
including the employment of advisors and the delegation of any
ministerial duties to qualified individuals.
XIII. FUNDING POLICY
The funding policy for this Split Dollar Plan shall be to maintain the
subject policy in force by paying, when due, all premiums required.
XIV CLAIM PROCEDURES FOR LIFE INSURANCE POLICY AND SPLIT DOLLAR PLAN
Claim forms or claim information as to the subject policy can be
obtained by contacting The Benefit Marketing Group, Inc.
(770-952-1529). 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 as to payment.
If the claim is payable, a benefit check will be issued to the Named
Fiduciary.
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 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.
XV. 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.
XVI. 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
for any and all liability.
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Executed at Enfield, Connecticut this 19th day of August, 1999.
ENFIELD FEDERAL SAVINGS & LOAN
ASSOCIATION, Enfield, Connecticut
______________________________ By: _______________________________
Witness Title
____________________________ ___________________________________
Witness Xxxxx X'Xxxxxx
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