HOME FEDERAL SAVINGS & LOAN ASSOCIATION
SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is made and entered into this _______ day of
_________________, 200_, by and between HOME FEDERAL SAVINGS & LOAN ASSOCIATION,
a federal mutual savings and loan located in Nampa, Idaho (the "Company"), and
__________________ (the "Director"). This Agreement shall append the Split
Dollar Endorsement entered into on even date herewith or as subsequently
amended, by and between the aforementioned parties.
INTRODUCTION
To encourage the Director to remain in the service of the Company, the
Company is willing to divide the death proceeds of a life insurance policy on
the Director's life. The Company will pay life insurance premiums from its
general assets.
Article 1
General Definitions
The following terms shall have the meanings specified:
1.1 "Insurer" means West Coast Life Insurance Company.
1.2 "Policy" means insurance policy no. _____________ issued by
the Insurer.
1.3 "Insured" means the Director.
1.4 "Normal Retirement Age" means the Director's 72nd birthday.
1.5 "Termination of Service" means the Director ceases to be a
member of the Company's Board of Directors for any reason whatsoever other than
death.
Article 2
Policy Ownership/Interests
2.1 Company Ownership. The Company is the sole owner of the Policy
and shall have the right to exercise all incidents of ownership. The Company
shall be the direct beneficiary of an amount of death proceeds equal to the
greater of: a) the cash surrender value of the policy, or b) the aggregate
premiums paid on the Policy by the Company less any outstanding indebtedness to
the Insurer.
2.2 Director's Interest. The Executive shall have the right to
designate the beneficiary of any remaining death proceeds of the Policy. The
Executive shall also have the right to elect and change settlement options that
may be permitted. Provided, however, the Executive, the Executive's transferee
or the Executive's beneficiary shall have no rights or interests in the Policy
with respect to that portion of the death proceeds designated in this section
2.2 upon the Executive's Termination
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of Employment prior to Normal Retirement Age.
2.3 Option to Purchase. The Company shall not sell, surrender or
transfer ownership of the Policy while this Agreement is in effect without first
giving the Director or the Director's transferee the option to purchase the
Policy for a period of 60 days from written notice of such intention. The
purchase price shall be an amount equal to the cash surrender value of the
Policy. This provision shall not impair the right of the Company to terminate
this Agreement.
Article 3
Premiums
3.1 Premium Payment. The Company shall pay any premiums due on the
Policy.
3.2 Imputed Income. The Company shall impute income to the
Director in an amount equal to the current term rate for the Director's age
multiplied by the aggregate death benefit payable to the Director's beneficiary.
The "current term rate" is the minimum amount required to be imputed under
Revenue Rulings 64-328 and 66-110, or any subsequent applicable authority.
Article 4
Assignment
The Director may assign without consideration all interests in the
Policy and in this Agreement to any person, entity or trust. In the event the
Director transfers all of the Director's interest in the Policy, then all of the
Director's interest in the Policy and in the Agreement shall be vested in the
Director's transferee, who shall be substituted as a party hereunder and the
Director shall have no further interest in the Policy or in this Agreement.
Article 5
Insurer
The Insurer shall be bound only by the terms of the Policy. Any
payments the Insurer makes or actions it takes in accordance with the Policy
shall fully discharge it from all claims, suits and demands of all entities or
persons. The Insurer shall not be bound by or be deemed to have notice of the
provisions of this Agreement.
Article 6
Claims Procedure
6.1 Claims Procedure. The Company shall notify any person or
entity that makes a claim under this Agreement (the "Claimant') in writing,
within 90 days of Claimant's written application for benefits, of his or her
eligibility or ineligibility for benefits under this Agreement. If the Company
determines that the Claimant is not eligible for benefits or full benefits, the
notice shall set forth (1) the specific reasons for such denial, (2) a specific
reference to the provisions of this Agreement on which the denial is based, (3)
a description of any additional information or material necessary for the
Claimant to perfect his or her claim, and a description of why it is needed, and
(4) an explanation of this Agreement's claims review procedure and other
appropriate information as to
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the steps to be taken if the Claimant wishes to have the claim reviewed. If the
Company determines that there are special circumstances requiring additional
time to make a decision, the Company shall notify the Claimant of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional 90 days.
6.2 Review Procedure. If the Claimant is determined by the Company
not to be eligible for benefits, or if the Claimant believes that he or she is
entitled to greater or different benefits, the Claimant shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within 60 days after receipt of the notice issued by the
Company. Said petition shall state the specific reasons, which the Claimant
believes entitle him or her to benefits or to greater or different benefits.
Within 60 days after receipt by the Company of the petition, the Company shall
afford the Claimant (and counsel, if any) an opportunity to present his or her
position to the Company verbally or in writing, and the Claimant (or counsel)
shall have the right to review the pertinent documents. The Company shall notify
the Claimant of its decision in writing within the sixty-day period, stating
specifically the basis of its decision, written in a manner to be understood by
the Claimant and the specific provisions of this Agreement on which the decision
is based. If, because of the need for a hearing, the 60-day period is not
sufficient, the decision may be deferred for up to another 60-day period at the
election of the Company, but notice of this deferral shall be given to the
Claimant.
Article 7
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Director.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Director and the
Company and their beneficiaries, survivors, executors, administrators and
transferees, and any Policy beneficiary.
8.2 No Guarantee of Service. This Agreement is not a contract for
services. It does not give the Director the right to remain in the service of
the Company, nor does it interfere with the shareholder's right to replace the
Director. It also does not require the Director to remain in the service of the
Company nor interfere with the Director's right to terminate service at any
time.
8.3 Applicable Law. The Agreement and all rights hereunder shall
be governed by and construed according to the laws of Idaho, except to the
extent preempted by the laws of the United States of America.
8.4 Reorganization. The Company shall not merge or consolidate
into or with another company, or reorganize, or sell substantially all of its
assets to another company, firm or person unless such succeeding or continuing
company, firm or person agrees to assume and discharge the obligations of the
Company.
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8.5 Notice. Any notice, consent or demand required or permitted to
be given under the provisions of this Split Dollar Agreement by one party to
another shall be in writing, shall be signed by the party giving or making the
same, and may be given either by delivering the same to such other party
personally, or by mailing the same, by United States certified mail, postage
prepaid, to such party, addressed to his or her last known address as shown on
the records of the Company. The date of such mailing shall be deemed the date of
such mailed notice, consent or demand.
8.6 Entire Agreement. This Agreement constitutes the entire
agreement between the Company and the Director as to the subject matter hereof.
No rights are granted to the Director by virtue of this Agreement other than
those specifically set forth herein.
8.7 Administration. The Company shall have powers which are
necessary to administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting
for the Agreement;
(c) Maintaining a record of benefit payments; and
(d) Establishing rules and prescribing any forms
necessary or desirable to administer the Agreement.
8.8 Named Fiduciary. The Company shall be the named fiduciary and
plan administrator under the Agreement. 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 ministerial
duties to qualified individuals
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
DIRECTOR: COMPANY:
HOME FEDERAL SAVINGS &
LOAN ASSOCIATION
__________________________________ By__________________________________
Title ______________________________
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