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EXHIBIT 10.20
LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
Insurer/Policy Number: [Insurance Company/Policy Number]
Bank: Bank of Xxxxxxxxx, F.S.B
Insured: [Insert Insured Name]
Relationship of Insured to Bank: [Insert Employee or Director]
Date: ____________, 19__
The respective rights and duties of the Bank and the Insured in the above policy
("the Policy") shall be as follows:
I. DEFINITIONS
Refer to the Policy provisions for the definition of all terms of
this Agreement.
II. 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 the Policy cash values. Where the Bank and the
Insured (or beneficiary[ies] or assignee[s], 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 beneficiary[ies] or assignee[s]) shall have the
right and power to designate a beneficiary or beneficiaries to
receive his or her 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 maintain the
Policy in force.
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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 received each year on Form W-2 or its
equivalent.
VI. DIVISION OF DEATH PROCEEDS
Subject to Paragraph VII herein, the division of the death proceeds
of the Policy is as follows:
A. The Insured's beneficiary(ies) designated in accordance
with Paragraph III, shall be entitled to an amount equal
to the one hundred percent (100%) 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 beneficiary[ies] or
assignee[s]) shall share in any interest due on the
death proceeds on a pro rata basis in the ratio that the
proceeds due the Bank and the Insured, respectively,
bears to the total proceeds, excluding any such
interest.
D. In the event that either the Policies are terminated or
the proceeds of the Policies are insufficient to provide
the benefit specified herein, other than as a result of
(i) a termination of this Agreement pursuant to
paragraph X or (ii) any intentional act of the Insured
which results in the termination of the Policy, then the
Bank shall pay to the Insured's beneficiary(ies) an
amount which, when combined with the proceeds of the
Policy actually received, will provide a total death
benefit equal $69,000, after tax.
VII. DIVISION OF CASH SURRENDER VALUE
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, less any
Policy loans and unpaid interest or cash withdrawals previously
incurred by the Bank and any applicable Policy surrender charges.
Such cash value shall be determined as of the date of surrender of
the Policy or death of the Insured as the case my be.
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VIII. PREMIUM WAIVER
If the Policy contains a premium waiver provision, any such waived
amounts shall be considered for all purposes of this Agreement as
having been paid by the Bank.
IX. 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 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 treated like death proceeds for the
purposes of division under this Agreement.
X. TERMINATION OF AGREEMENT
This Agreement shall terminate at the option of the Bank following
thirty (30) days written notice to the Insured upon the happening of
any one of the following:
1. The Insured's right to receive benefits pursuant to the
terms and conditions of that certain Director
Supplemental Compensation Benefits Agreement effective
as of _________, 19__, shall terminate for any reason
other than the Insured's death; or
2. The Insured shall be discharged from service with the
Bank by removal for cause. The term "removal for cause"
shall have the meaning given that term in the Insured's
Director Supplemental Compensation Agreement effective
as of _____________, 19__.
Upon such termination, the Insured (or beneficiary[ies] or
assignee[s]) shall have a ninety (90) 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 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.
2. The amount of the premiums which have been paid by the
Bank prior to the date of such assignment.
Should the Insured (or beneficiary[ies] or assignee[s]) fail to
exercise this option within the prescribed ninety (90) day period,
the Insured (or beneficiary[ies] or assignee[s]) agrees that all of
his or her rights, interest and claims in the Policy shall terminate
as of the date of the termination of this Agreement.
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Except as provided above, this Agreement shall terminate upon
distribution of the death benefit proceeds in accordance with
Paragraph VI above.
XI. INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS
The Insured may not, without the prior written consent of the Bank,
assign to any individual, trust or other organization, any right,
title or interest in the Policy nor any rights, options, privileges
or duties created under this Agreement.
XII. AGREEMENT BINDING UPON THE PARTIES
This Agreement shall be binding upon the Insured and the Bank, and
their respective heirs, successors, personal representatives and
assigns, as applicable.
XIII. NAMED XXXXXXXXX AND PLAN ADMINISTRATOR
The Bank is hereby designated the "Named Fiduciary" until
resignation or removal by its Board of Directors. As Named
Fiduciary, the Bank shall be responsible for the management,
control, and administration of this Agreement as established herein.
The Named Fiduciary may allocate to others certain aspects of the
management and operations responsibilities of this Agreement,
including the employment of advisors and the delegation of any
ministerial duties to qualified individuals.
XIV. FUNDING POLICY
The funding Policy for this Agreement shall be to maintain the
Policy in force by paying, when due, all premiums required.
XV. CLAIM PROCEDURES
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 Policy, it 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, he or she 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.
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XVI. 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.
XVII. 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 set forth herein 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.
IN WITNESS WHEREOF, the Insured and a duly authorized Bank officer
have signed this Agreement as of the above written date.
BANK OF XXXXXXXXX, F.S.B. INSURED
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Ed. X. Xxxxxxx (Insured)
President and Chief
Executive Officer
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BENEFICIARY DESIGNATION FORM
PRIMARY DESIGNATION:
NAME RELATIONSHIP
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CONTINGENT DESIGNATION:
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______________________________ ____________, 1999
(Insured)
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