COOPERATIVE BANK FOR SAVINGS
DIRECTOR DEFERRED FEE AGREEMENT
THIS AGREEMENT is adopted this 17th day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, located in Wilmington, North Carolina (the
"Company"), and XXXX X. XXXXXX (the "Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide to the Director a deferred fee
opportunity. The Company will pay the Director's benefits from the Company's
general assets.
AGREEMENT
The Director and the Company agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall have
the meanings specified:
1.1 "Anniversary Date" means December 31 of each year.
1.2 "Change in Control" means the transfer of shares of the Company's
voting common stock such that one entity or one person acquires (or is deemed to
acquire when applying Section 318 of the Code) more than 25 percent of the
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Company's outstanding voting common stock followed within twelve (12) months by
the Director's Termination of Service for reasons other than death, Disability
or retirement.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Deferral Account" means the Company's accounting of the Director's
accumulated Deferrals plus accrued interest.
1.5 "Deferrals" means the amount of the Director's Fees, which the Director
elects to defer according to this Agreement.
1.6 "Disability" means, if the Director is covered by a Company-sponsored
disability policy, total disability as defined in such policy without regard to
any waiting period. If the Director is not covered by such a policy, Disability
means the Director suffering a sickness, accident or injury, which, in the
judgment of a physician who is satisfactory to the Company, prevents the
Director from performing substantially all of the Director's normal duties for
the Company. As a condition to any Disability benefits, the Company may require
the Director to submit to such physical or mental evaluations and tests as the
Company's Board of Directors deems appropriate and reasonable.
1.7 "Effective Date" means October 1, 2001.
1.8 "Election Form" means the Form attached as Exhibit 1.
1.9 "Fees" means the total fees payable to the Director during a Plan Year.
1.10 "Normal Retirement Age" means the Director's 72nd birthday.
Termination of Service is mandatory upon the Director attaining 72 years of age.
1
1.11 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Service.
1.12 "Plan Year" means the calendar year.
1.13 "Termination of Service" means that the Director ceases to be a member
of the Company's Board of Directors for any reason, voluntarily or
involuntarily, other than by reason of a leave of absence approved by the
Company.
ARTICLE 2
DEFERRAL ELECTION
2.1 Initial Election. The Director shall make an initial deferral election
under this Agreement by filing with the Company a signed Election Form within 30
days after the adopted date of this Agreement. The Election Form shall set forth
the amount of Fees to be deferred and shall be effective to defer only Fees
earned after the date the Election Form is received by the Company.
2.2 Election Changes
2.2.1 Generally. Upon the Company's approval, the Director may modify
the amount of Fees to be deferred annually by filing a new Election Form with
the Company prior to the beginning of the Plan Year in which the Fees are to be
deferred. The modified deferral election shall not be effective until the
calendar year following the year in which the subsequent Election Form is
received and approved by the Company.
2.2.2 Hardship. If an unforeseeable financial emergency arising from
the death of a family member, divorce, sickness, injury, catastrophe or similar
event outside the control of the Director occurs, the Director, by written
instructions to the Company, may reduce future deferrals under this Agreement.
ARTICLE 3
DEFERRAL ACCOUNT
3.1 Establishing and Crediting. The Company shall establish a Deferral
Account on its books for the Director and shall credit to the Deferral Account
the following amounts:
3.1.1 Deferrals. The Fees deferred by the Director as of the time the
Fees would have otherwise been paid to the Director.
3.1.2 Interest. On each Anniversary Date of this Agreement and
immediately prior to the payment of any benefits, but only until commencement of
the benefit payments under this Agreement, interest is to be credited on the
account balance at an annual rate equal to 10 percent, compounded monthly.
3.2 Statement of Accounts. The Company shall provide to the Director,
within 120 days after each Anniversary Date, a statement setting forth the
Deferral Account balance.
3.3 Accounting Device Only. The Deferral Account is solely a device for
measuring amounts to be paid under this Agreement. The Deferral Account is not a
trust fund of any kind. The Director is a general unsecured creditor of the
Company for the payment of benefits. The benefits represent the mere Company
promise to pay such benefits. The Director's rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Director's creditors.
ARTICLE 4
BENEFITS DURING LIFETIME
4.1 Normal Retirement Benefit. Upon the Normal Retirement Date, the Company
shall pay to the Director the benefit described in this Section 4.1 in lieu of
any other benefit under this Agreement.
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4.1.1. Amount of Benefit. The benefit under this Section 4.1 is the
Deferral Account balance at the Director's Normal Retirement Date.
4.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director in 120 monthly installments commencing on the month following the
Director's Normal Retirement Date. The Company shall credit interest pursuant to
Section 3.1.2 on the remaining account balance during any applicable installment
period.
4.2 Early Retirement Benefit. Upon Termination of Service prior to the
Normal Retirement Age for reasons other than death, Change of Control or
Disability, the Company shall pay to the Director the benefit described in this
Section 4.2 in lieu of any other benefit under this Agreement.
4.2.1 Amount of Benefit. The benefit under this Section 4.2 is the
Deferral Account balance at the Director's Termination of Service.
4.2.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.3 Disability Benefit. If the Director's Termination of Service prior to
Normal Retirement Age is due to Disability, the Company shall pay to the
Director the benefit described in this Section 4.3 in lieu of any other benefit
under this Agreement.
4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the
Deferral Account balance at the Directors' Termination of Service.
4.3.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4 Change of Control Benefit. Upon a Change of Control, the Company shall
pay to the Director the benefit described in this Section 4.4 in lieu of any
other benefit under this Agreement.
4.4.1 Amount of Benefit. The benefit under this Section 4.4 is the
greater of: (a) the Deferral Account balance at the Director's Termination of
Service; or (b) $169,748.
4.4.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4.3 Internal Revenue Service Section 280G Gross Up. If, as a result
of a Change of Control, the Director becomes entitled to acceleration of
benefits under this Agreement or under any other benefit, compensation or
incentive plan or arrangement with the Company (collectively, the "Total
Benefits"), and if any part of the Total Benefits is subject to the Excise Tax
under Section 280G and Section 4999 of the Internal Revenue Code (the "Excise
Tax"), the Company shall pay to the Director the following additional amounts,
consisting of (a) a payment equal to the Excise Tax payable by the Director on
the Total Benefits under Section 4999 of the Internal Revenue Code (the "Excise
Tax Payment"), and (b) a payment equal to the amount necessary to provide the
Excise Tax Payment net of all income, payroll and excise taxes. Payment of the
additional amounts described in clauses (a) and (b) shall be made in addition to
the Total Benefits.
4.5 Hardship Distribution. Upon the Board of Director's determination
(following petition by the Director) that the Director has suffered an
unforeseeable financial emergency as described in Section 2.2.2, the Company
shall distribute to the Director all or a portion of the Deferral Account
balance as determined by the Company, but in no event shall the distribution be
greater than is necessary to relieve the financial hardship.
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ARTICLE 5
DEATH BENEFITS
5.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 5.1 in lieu of any other benefit under this
Agreement.
5.1.1 Amount of Benefit. The benefit under this Section 5.1 is the
Deferral Account balance at the Director's death.
5.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director's beneficiary in a lump sum within 60 days following the Director's
death.
5.2 Death During Payment of a Benefit. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have been paid
to the Director had the Director survived.
5.3 Death After Termination of Service But Before Benefit Payments
Commence. If the Director is entitled to benefit payments under this Agreement,
but dies prior to the commencement of said benefit payments, the Company shall
pay the benefit payments to the Director's beneficiary that the Director was
entitled to prior to death except that the benefit payments shall commence on
the first day of the month following the date of the Director's death.
ARTICLE 6
BENEFICIARIES
6.1 Beneficiary Designations. The Director shall designate a beneficiary by
filing a written designation with the Company. The Director may revoke or modify
the designation at any time by filing a new designation. However, designations
will only be effective if signed by the Director and received by the Company
during the Director's lifetime. The Director's beneficiary designation shall be
deemed automatically revoked if the beneficiary predeceases the Director or if
the Director names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Director dies without a valid beneficiary designation, all
payments shall be made to the Director's estate.
6.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
ARTICLE 7
GENERAL LIMITATIONS
7.1 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not pay any benefit under this Agreement that
is in excess of the Director's Deferrals (i.e., the interest earned on the
Deferral Account) if the Company terminates the Director's service for:
(a) Gross negligence or gross neglect of duties to the Company;
(b) Commission of a felony or of a gross misdemeanor involving
moral turpitude in connection with the Director's service to the
Company; or
4
(c) Fraud, disloyalty, dishonesty or willful violation of
any law or significant Company policy committed in connection
with the Director's service and resulting in an adverse effect on
the Company.
7.2 Suicide or Misstatement. The Company shall not pay any benefit under
this Agreement if the Director commits suicide within three years after the date
of this Agreement. In addition, the Company shall not pay any benefit under this
Agreement if the Director has made any material misstatement of fact on a resume
provided to the Company, or on any application for any benefits provided by the
Company to the Director.
ARTICLE 8
CLAIMS AND REVIEW PROCEDURES
8.1 Claims Procedure. The Company shall notify any person or entity that
makes a claim against this Agreement (the "Claimant") in writing, within 90 days
of Claimant's written application for benefits, of his or her eligibility or
non-eligibility for benefits under the 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 the 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, (4) an explanation of the
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed and (5) a
time within which review must be requested. 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.
8.2 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 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 60-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the Claimant and
the specific provisions of the 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 days at the election of the
Company, but notice of this deferral shall be given to the Claimant.
ARTICLE 9
AMENDMENTS AND TERMINATION
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Director.
ARTICLE 10
MISCELLANEOUS
10.1 Binding Effect. This Agreement shall bind the Director and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.
10.2 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 shareholders' rights 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 services at any
time.
10.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
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10.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
10.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of North Carolina, except to the extent
preempted by the laws of the United States of America.
10.6 Unfunded Arrangement. The Director and the Director's beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Director's life is
a general asset of the Company to which the Director and the Director's
beneficiary have no preferred or secured claim.
10.7 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
under this Agreement. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.
10.8 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.
10.9 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.
10.10 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 Service of advisors and the delegation of ministerial duties to
qualified individuals.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
Director Company
COOPERATIVE BANK FOR SAVINGS
/s/ Xxxx X. Xxxxxx By /s/ Xxxxxxxxx Xxxxxxxx, III
------------------------------- -----------------------------------------
Xxxx X. Xxxxxx
Title President
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COOPERATIVE BANK FOR SAVINGS
DIRECTOR DEFERRED FEE AGREEMENT
THIS AGREEMENT is adopted this 17th day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, located in Wilmington, North Carolina (the
"Company"), and XXXXX X. XXXXXXX (the "Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide to the Director a deferred fee
opportunity. The Company will pay the Director's benefits from the Company's
general assets.
AGREEMENT
The Director and the Company agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall have
the meanings specified:
1.1 "Anniversary Date" means December 31 of each year.
1.2 "Change in Control" means the transfer of shares of the Company's
voting common stock such that one entity or one person acquires (or is deemed to
acquire when applying Section 318 of the Code) more than 25 percent of the
-----------
Company's outstanding voting common stock followed within twelve (12) months by
the Director's Termination of Service for reasons other than death, Disability
or retirement.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Deferral Account" means the Company's accounting of the Director's
accumulated Deferrals plus accrued interest.
1.5 "Deferrals" means the amount of the Director's Fees, which the Director
elects to defer according to this Agreement.
1.6 "Disability" means, if the Director is covered by a Company-sponsored
disability policy, total disability as defined in such policy without regard to
any waiting period. If the Director is not covered by such a policy, Disability
means the Director suffering a sickness, accident or injury, which, in the
judgment of a physician who is satisfactory to the Company, prevents the
Director from performing substantially all of the Director's normal duties for
the Company. As a condition to any Disability benefits, the Company may require
the Director to submit to such physical or mental evaluations and tests as the
Company's Board of Directors deems appropriate and reasonable.
1.7 "Effective Date" means October 1, 2001.
1.8 "Election Form" means the Form attached as Exhibit 1.
1.9 "Fees" means the total fees payable to the Director during a Plan Year.
1.10 "Normal Retirement Age" means the Director's 72nd birthday.
Termination of Service is mandatory upon the Director attaining 72 years of age.
1
1.11 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Service.
1.12 "Plan Year" means the calendar year.
1.13 "Termination of Service" means that the Director ceases to be a member
of the Company's Board of Directors for any reason, voluntarily or
involuntarily, other than by reason of a leave of absence approved by the
Company.
ARTICLE 2
DEFERRAL ELECTION
2.1 Initial Election. The Director shall make an initial deferral election
under this Agreement by filing with the Company a signed Election Form within 30
days after the adopted date of this Agreement. The Election Form shall set forth
the amount of Fees to be deferred and shall be effective to defer only Fees
earned after the date the Election Form is received by the Company.
2.2 Election Changes
2.2.1 Generally. Upon the Company's approval, the Director may modify
the amount of Fees to be deferred annually by filing a new Election Form with
the Company prior to the beginning of the Plan Year in which the Fees are to be
deferred. The modified deferral election shall not be effective until the
calendar year following the year in which the subsequent Election Form is
received and approved by the Company.
2.2.2 Hardship. If an unforeseeable financial emergency arising from
the death of a family member, divorce, sickness, injury, catastrophe or similar
event outside the control of the Director occurs, the Director, by written
instructions to the Company, may reduce future deferrals under this Agreement.
ARTICLE 3
DEFERRAL ACCOUNT
3.1 Establishing and Crediting. The Company shall establish a Deferral
Account on its books for the Director and shall credit to the Deferral Account
the following amounts:
3.1.1 Deferrals. The Fees deferred by the Director as of the time the
Fees would have otherwise been paid to the Director.
3.1.2 Interest. On each Anniversary Date of this Agreement and
immediately prior to the payment of any benefits, but only until commencement of
the benefit payments under this Agreement, interest is to be credited on the
account balance at an annual rate equal to 10 percent, compounded monthly.
3.2 Statement of Accounts. The Company shall provide to the Director,
within 120 days after each Anniversary Date, a statement setting forth the
Deferral Account balance.
3.3 Accounting Device Only. The Deferral Account is solely a device for
measuring amounts to be paid under this Agreement. The Deferral Account is not a
trust fund of any kind. The Director is a general unsecured creditor of the
Company for the payment of benefits. The benefits represent the mere Company
promise to pay such benefits. The Director's rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Director's creditors.
ARTICLE 4
BENEFITS DURING LIFETIME
4.1 Normal Retirement Benefit. Upon the Normal Retirement Date, the Company
shall pay to the Director the benefit described in this Section 4.1 in lieu of
any other benefit under this Agreement.
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4.1.1. Amount of Benefit. The benefit under this Section 4.1 is the
Deferral Account balance at the Director's Normal Retirement Date.
4.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director in 120 monthly installments commencing on the month following the
Director's Normal Retirement Date. The Company shall credit interest pursuant to
Section 3.1.2 on the remaining account balance during any applicable installment
period.
4.2 Early Retirement Benefit. Upon Termination of Service prior to the
Normal Retirement Age for reasons other than death, Change of Control or
Disability, the Company shall pay to the Director the benefit described in this
Section 4.2 in lieu of any other benefit under this Agreement.
4.2.1 Amount of Benefit. The benefit under this Section 4.2 is the
Deferral Account balance at the Director's Termination of Service.
4.2.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.3 Disability Benefit. If the Director's Termination of Service prior to
Normal Retirement Age is due to Disability, the Company shall pay to the
Director the benefit described in this Section 4.3 in lieu of any other benefit
under this Agreement.
4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the
Deferral Account balance at the Directors' Termination of Service.
4.3.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4 Change of Control Benefit. Upon a Change of Control, the Company shall
pay to the Director the benefit described in this Section 4.4 in lieu of any
other benefit under this Agreement.
4.4.1 Amount of Benefit. The benefit under this Section 4.4 is the
greater of: (a) the Deferral Account balance at the Director's Termination of
Service; or (b) $169,748.
4.4.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4.3 Internal Revenue Service Section 280G Gross Up. If, as a result
of a Change of Control, the Director becomes entitled to acceleration of
benefits under this Agreement or under any other benefit, compensation or
incentive plan or arrangement with the Company (collectively, the "Total
Benefits"), and if any part of the Total Benefits is subject to the Excise Tax
under Section 280G and Section 4999 of the Internal Revenue Code (the "Excise
Tax"), the Company shall pay to the Director the following additional amounts,
consisting of (a) a payment equal to the Excise Tax payable by the Director on
the Total Benefits under Section 4999 of the Internal Revenue Code (the "Excise
Tax Payment"), and (b) a payment equal to the amount necessary to provide the
Excise Tax Payment net of all income, payroll and excise taxes. Payment of the
additional amounts described in clauses (a) and (b) shall be made in addition to
the Total Benefits.
4.5 Hardship Distribution. Upon the Board of Director's determination
(following petition by the Director) that the Director has suffered an
unforeseeable financial emergency as described in Section 2.2.2, the Company
shall distribute to the Director all or a portion of the Deferral Account
balance as determined by the Company, but in no event shall the distribution be
greater than is necessary to relieve the financial hardship.
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ARTICLE 5
DEATH BENEFITS
5.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 5.1 in lieu of any other benefit under this
Agreement.
5.1.1 Amount of Benefit. The benefit under this Section 5.1 is the
Deferral Account balance at the Director's death.
5.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director's beneficiary in a lump sum within 60 days following the Director's
death.
5.2 Death During Payment of a Benefit. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have been paid
to the Director had the Director survived.
5.3 Death After Termination of Service But Before Benefit Payments
Commence. If the Director is entitled to benefit payments under this Agreement,
but dies prior to the commencement of said benefit payments, the Company shall
pay the benefit payments to the Director's beneficiary that the Director was
entitled to prior to death except that the benefit payments shall commence on
the first day of the month following the date of the Director's death.
ARTICLE 6
BENEFICIARIES
6.1 Beneficiary Designations. The Director shall designate a beneficiary by
filing a written designation with the Company. The Director may revoke or modify
the designation at any time by filing a new designation. However, designations
will only be effective if signed by the Director and received by the Company
during the Director's lifetime. The Director's beneficiary designation shall be
deemed automatically revoked if the beneficiary predeceases the Director or if
the Director names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Director dies without a valid beneficiary designation, all
payments shall be made to the Director's estate.
6.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
ARTICLE 7
GENERAL LIMITATIONS
7.1 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not pay any benefit under this Agreement that
is in excess of the Director's Deferrals (i.e., the interest earned on the
Deferral Account) if the Company terminates the Director's service for:
(a) Gross negligence or gross neglect of duties to the
Company;
(b) Commission of a felony or of a gross misdemeanor
involving moral turpitude in connection with the Director's
service to the Company; or
4
(c) Fraud, disloyalty, dishonesty or willful violation of
any law or significant Company policy committed in connection
with the Director's service and resulting in an adverse effect on
the Company.
7.2 Suicide or Misstatement. The Company shall not pay any benefit under
this Agreement if the Director commits suicide within three years after the date
of this Agreement. In addition, the Company shall not pay any benefit under this
Agreement if the Director has made any material misstatement of fact on a resume
provided to the Company, or on any application for any benefits provided by the
Company to the Director.
ARTICLE 8
CLAIMS AND REVIEW PROCEDURES
8.1 Claims Procedure. The Company shall notify any person or entity that
makes a claim against this Agreement (the "Claimant") in writing, within 90 days
of Claimant's written application for benefits, of his or her eligibility or
non-eligibility for benefits under the 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 the 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, (4) an explanation of the
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed and (5) a
time within which review must be requested. 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.
8.2 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 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 60-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the Claimant and
the specific provisions of the 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 days at the election of the
Company, but notice of this deferral shall be given to the Claimant.
ARTICLE 9
AMENDMENTS AND TERMINATION
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Director.
ARTICLE 10
MISCELLANEOUS
10.1 Binding Effect. This Agreement shall bind the Director and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.
10.2 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 shareholders' rights 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 services at any
time.
10.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
5
10.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
10.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of North Carolina, except to the extent
preempted by the laws of the United States of America.
10.6 Unfunded Arrangement. The Director and the Director's beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Director's life is
a general asset of the Company to which the Director and the Director's
beneficiary have no preferred or secured claim.
10.7 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
under this Agreement. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.
10.8 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.
10.9 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.
10.10 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 Service of advisors and the delegation of ministerial duties to
qualified individuals.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
DIRECTOR COMPANY
COOPERATIVE BANK FOR SAVINGS
/S/ XXXXX X. XXXXXXX BY /S/ XXXXXXXXX XXXXXXXX, III
------------------------------------- ---------------------------------------
XXXXX X. XXXXXXX
TITLE PRESIDENT
------------------------------------
6
COOPERATIVE BANK FOR SAVINGS
SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is adopted this 17th day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in Wilmington,
North Carolina (the "Company"), and XXXXX X. XXXXXXX (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 a member of the Company's Board of
Directors, 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.
AGREEMENT
The Company and the Director agree as follows:
ARTICLE I
GENERAL DEFINITIONS
The following terms shall have the meanings specified:
1.1 "Insurers" means Jefferson-Pilot Life Insurance Company and West Coast
Life Insurance Company.
1.2 "Policies" means insurance policy nos. JP5195513 and XXX000000 issued
by the respective Insurers.
1.3 "Insured" means the Director.
1.4 "Net Death Proceeds" means the total death proceeds of the Policy minus
the cash surrender value.
1.5 "Normal Retirement Age" means the Director's 72nd birthday. Termination
of Service is mandatory upon the Director attaining 72 years of age.
1.6 "Termination of Service" means the Director ceases to be a member of
the Company's Board of Directors for any reason, voluntary or involuntary, other
than by reason of a leave of absence approved by the Company or by death.
-1-
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 except as otherwise
said herein. The Company shall be the beneficiary of the death proceeds
remaining after the Director's interest has been paid according to Section 2.2
below.
2.2 Director's Interest. The Director shall have the right to designate the
beneficiary of an amount equal to 100 percent of the Net Death Proceeds of the
Policy. The Director shall also have the right to elect and change settlement
options that may be permitted.
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.
2.4 Comparable Coverage. Upon adoption and subject to the terms of this
Agreement, the Company shall maintain the Policy in full force and effect and in
no event shall the Company amend, terminate, or otherwise abrogate the
Director's interest in the Policy, unless the Company replaces the Policy with a
comparable insurance policy to cover the benefit provided under this Agreement,
amends the Split Dollar Agreement and executes a new Endorsement for said
comparable insurance policy. The Director agrees to provide the required medical
information to the Insurers for the implementation of this Agreement and agrees
to participate with the Company if the Company desires to obtain a comparable
insurance policy with another carrier, whether prior to or after Normal
Retirement Age. The Policy or any comparable policy shall be subject to the
claims of the Company's creditors.
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 of the Director's
interests in the Policy and in this Agreement to any person, entity or trust. In
the event the Director transfers all of the
-2-
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
INSURERS
The Insurers shall be bound only by the terms of their respective Policies.
Any payments the Insurers make or action the Insurers take in accordance with
their respective Policies shall fully discharge such Insurers from all claims,
suits and demands of all entities or persons. The Insurers shall not be bound by
or be deemed to have notice of the provisions of this Agreement.
ARTICLE 6
CLAIMS PROCEDURES
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, (4) an explanation of this
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed, and (5) a
time within which a review must be requested. 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 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.
-3-
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 shareholders' rights 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 services at any time.
8.3 Applicable Law. The Agreement and all rights hereunder shall be
governed by and construed according to the laws of the State of North Carolina,
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.
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;
-4-
(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 this 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:
COOPERATIVE BANK FOR SAVINGS
/s/ Xxxxx X. Xxxxxxx BY /s/ Xxxxxxxxx Xxxxxxxx, III
----------------------------- -------------------------------------------
XXXXX X. XXXXXXX
TITLE President
----------------------------------------
-5-
SPLIT DOLLAR POLICY ENDORSEMENT TO
COOPERATIVE BANK FOR SAVINGS SPLIT DOLLAR AGREEMENT
Policy No. JP5195513 Insured: Xxxxx X. Xxxxxxx
Supplementing and amending the application for insurance to Jefferson-Pilot Life
Insurance Company ("Insurer") on September 30, 2001, the applicant requests and
directs that:
BENEFICIARIES
-------------
1. COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in
Wilmington, North Carolina (the "Company"), shall be the beneficiary of the
death proceeds remaining after the Insured's interest has been paid according to
paragraph (2) below.
2. The Insured or the Insured's transferee shall designate the beneficiary
of an amount equal to 100 percent of the Net Death Proceeds of the Policy
(defined as the total death proceeds of the Policy minus the cash surrender
value).
OWNERSHIP
---------
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
---------------------------------------------------
Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
----------------
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer. The Insurer may rely
on a sworn statement in form satisfactory to it furnished by the Owner, its
successors or assigns, as to their interest, and any payments made pursuant to
such statement shall discharge the Insurer accordingly. The owner accepts and
agrees to this split dollar endorsement.
-6-
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
COOPERATIVE BANK FOR SAVINGS
By /s/ Xxxxxxxxx Xxxxxxxx, III
-----------------------------------------------
Title President
-----------------------------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
--------------------------------------
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship:__________________________________________________________
Contingent Beneficiary (if the Primary is deceased):____________________________
Relationship:__________________________________________________________
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
THE INSURED:
/s/ Xxxxx X. Xxxxxxx
--------------------------
Xxxxx X. Xxxxxxx
-7-
SPLIT DOLLAR POLICY ENDORSEMENT TO
COOPERATIVE BANK FOR SAVINGS SPLIT DOLLAR AGREEMENT
Policy No. XXX000000 Insured: Xxxxx X. Xxxxxxx
Supplementing and amending the application for insurance to West Coast Life
Insurance Company ("Insurer") on September 30, 2001, the applicant requests and
directs that:
BENEFICIARIES
-------------
1. COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in
Wilmington, North Carolina (the "Company"), shall be the beneficiary of the
death proceeds remaining after the Insured's interest has been paid according to
paragraph (2) below.
2. The Insured or the Insured's transferee shall designate the beneficiary
of an amount equal to 100 percent of the Net Death Proceeds of the Policy
(defined as the total death proceeds of the Policy minus the cash surrender
value).
OWNERSHIP
---------
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
---------------------------------------------------
Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
----------------
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer. The Insurer may rely
on a sworn statement in form satisfactory to it furnished by the Owner, its
successors or assigns, as to their interest, and any payments made pursuant to
such statement shall discharge the Insurer accordingly. The owner accepts and
agrees to this split dollar endorsement.
-8-
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
COOPERATIVE BANK FOR SAVINGS
By /s/ Xxxxxxxxx Xxxxxxxx, III
-----------------------------------------------
Title President
-----------------------------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
--------------------------------------
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship:__________________________________________________________
Contingent Beneficiary (if the Primary is deceased):____________________________
Relationship:__________________________________________________________
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
THE INSURED:
/s/ Xxxxx X. Xxxxxxx
-----------------------------------------------------
Xxxxx X. Xxxxxxx
-9-
COOPERATIVE BANK FOR SAVINGS
DIRECTOR DEFERRED FEE AGREEMENT
THIS AGREEMENT is adopted this 17th day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, located in Wilmington, North Carolina (the
"Company"), and O. XXXXXXX XXXXXX, JR. (the "Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide to the Director a deferred fee
opportunity. The Company will pay the Director's benefits from the Company's
general assets.
AGREEMENT
The Director and the Company agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall have
the meanings specified:
1.1 "Anniversary Date" means December 31 of each year.
1.2 "Change in Control" means the transfer of shares of the Company's
voting common stock such that one entity or one person acquires (or is deemed to
acquire when applying Section 318 of the Code) more than 25 percent of the
-----------
Company's outstanding voting common stock followed within twelve (12) months by
the Director's Termination of Service for reasons other than death, Disability
or retirement.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Deferral Account" means the Company's accounting of the Director's
accumulated Deferrals plus accrued interest.
1.5 "Deferrals" means the amount of the Director's Fees, which the Director
elects to defer according to this Agreement.
1.6 "Disability" means, if the Director is covered by a Company-sponsored
disability policy, total disability as defined in such policy without regard to
any waiting period. If the Director is not covered by such a policy, Disability
means the Director suffering a sickness, accident or injury, which, in the
judgment of a physician who is satisfactory to the Company, prevents the
Director from performing substantially all of the Director's normal duties for
the Company. As a condition to any Disability benefits, the Company may require
the Director to submit to such physical or mental evaluations and tests as the
Company's Board of Directors deems appropriate and reasonable.
1.7 "Effective Date" means October 1, 2001.
1.8 "Election Form" means the Form attached as Exhibit 1.
1.9 "Fees" means the total fees payable to the Director during a Plan Year.
1.10 "Normal Retirement Age" means the Director's 72nd birthday.
Termination of Service is mandatory upon the Director attaining 72 years of age.
1
1.11 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Service.
1.12 "Plan Year" means the calendar year.
1.13 "Termination of Service" means that the Director ceases to be a member
of the Company's Board of Directors for any reason, voluntarily or
involuntarily, other than by reason of a leave of absence approved by the
Company.
ARTICLE 2
DEFERRAL ELECTION
2.1 Initial Election. The Director shall make an initial deferral election
under this Agreement by filing with the Company a signed Election Form within 30
days after the adopted date of this Agreement. The Election Form shall set forth
the amount of Fees to be deferred and shall be effective to defer only Fees
earned after the date the Election Form is received by the Company.
2.2 Election Changes
2.2.1 Generally. Upon the Company's approval, the Director may modify
the amount of Fees to be deferred annually by filing a new Election Form with
the Company prior to the beginning of the Plan Year in which the Fees are to be
deferred. The modified deferral election shall not be effective until the
calendar year following the year in which the subsequent Election Form is
received and approved by the Company.
2.2.2 Hardship. If an unforeseeable financial emergency arising from
the death of a family member, divorce, sickness, injury, catastrophe or similar
event outside the control of the Director occurs, the Director, by written
instructions to the Company, may reduce future deferrals under this Agreement.
ARTICLE 3
DEFERRAL ACCOUNT
3.1 Establishing and Crediting. The Company shall establish a Deferral
Account on its books for the Director and shall credit to the Deferral Account
the following amounts:
3.1.1 Deferrals. The Fees deferred by the Director as of the time the
Fees would have otherwise been paid to the Director.
3.1.2 Interest. On each Anniversary Date of this Agreement and
immediately prior to the payment of any benefits, but only until commencement of
the benefit payments under this Agreement, interest is to be credited on the
account balance at an annual rate equal to 10 percent, compounded monthly.
3.2 Statement of Accounts. The Company shall provide to the Director,
within 120 days after each Anniversary Date, a statement setting forth the
Deferral Account balance.
3.3 Accounting Device Only. The Deferral Account is solely a device for
measuring amounts to be paid under this Agreement. The Deferral Account is not a
trust fund of any kind. The Director is a general unsecured creditor of the
Company for the payment of benefits. The benefits represent the mere Company
promise to pay such benefits. The Director's rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Director's creditors.
ARTICLE 4
BENEFITS DURING LIFETIME
4.1 Normal Retirement Benefit. Upon the Normal Retirement Date, the Company
shall pay to the Director the benefit described in this Section 4.1 in lieu of
any other benefit under this Agreement.
2
4.1.1. Amount of Benefit. The benefit under this Section 4.1 is the
Deferral Account balance at the Director's Normal Retirement Date.
4.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director in 120 monthly installments commencing on the month following the
Director's Normal Retirement Date. The Company shall credit interest pursuant to
Section 3.1.2 on the remaining account balance during any applicable installment
period.
4.2 Early Retirement Benefit. Upon Termination of Service prior to the
Normal Retirement Age for reasons other than death, Change of Control or
Disability, the Company shall pay to the Director the benefit described in this
Section 4.2 in lieu of any other benefit under this Agreement.
4.2.1 Amount of Benefit. The benefit under this Section 4.2 is the
Deferral Account balance at the Director's Termination of Service.
4.2.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.3 Disability Benefit. If the Director's Termination of Service prior to
Normal Retirement Age is due to Disability, the Company shall pay to the
Director the benefit described in this Section 4.3 in lieu of any other benefit
under this Agreement.
4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the
Deferral Account balance at the Directors' Termination of Service.
4.3.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4 Change of Control Benefit. Upon a Change of Control, the Company shall
pay to the Director the benefit described in this Section 4.4 in lieu of any
other benefit under this Agreement.
4.4.1 Amount of Benefit. The benefit under this Section 4.4 is the
greater of: (a) the Deferral Account balance at the Director's Termination of
Service; or (b) $169,748.
4.4.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4.3 Internal Revenue Service Section 280G Gross Up. If, as a result
of a Change of Control, the Director becomes entitled to acceleration of
benefits under this Agreement or under any other benefit, compensation or
incentive plan or arrangement with the Company (collectively, the "Total
Benefits"), and if any part of the Total Benefits is subject to the Excise Tax
under Section 280G and Section 4999 of the Internal Revenue Code (the "Excise
Tax"), the Company shall pay to the Director the following additional amounts,
consisting of (a) a payment equal to the Excise Tax payable by the Director on
the Total Benefits under Section 4999 of the Internal Revenue Code (the "Excise
Tax Payment"), and (b) a payment equal to the amount necessary to provide the
Excise Tax Payment net of all income, payroll and excise taxes. Payment of the
additional amounts described in clauses (a) and (b) shall be made in addition to
the Total Benefits.
4.5 Hardship Distribution. Upon the Board of Director's determination
(following petition by the Director) that the Director has suffered an
unforeseeable financial emergency as described in Section 2.2.2, the Company
shall distribute to the Director all or a portion of the Deferral Account
balance as determined by the Company, but in no event shall the distribution be
greater than is necessary to relieve the financial hardship.
3
ARTICLE 5
DEATH BENEFITS
5.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 5.1 in lieu of any other benefit under this
Agreement.
5.1.1 Amount of Benefit. The benefit under this Section 5.1 is the
Deferral Account balance at the Director's death.
5.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director's beneficiary in a lump sum within 60 days following the Director's
death.
5.2 Death During Payment of a Benefit. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have been paid
to the Director had the Director survived.
5.3 Death After Termination of Service But Before Benefit Payments
Commence. If the Director is entitled to benefit payments under this Agreement,
but dies prior to the commencement of said benefit payments, the Company shall
pay the benefit payments to the Director's beneficiary that the Director was
entitled to prior to death except that the benefit payments shall commence on
the first day of the month following the date of the Director's death.
ARTICLE 6
BENEFICIARIES
6.1 Beneficiary Designations. The Director shall designate a beneficiary by
filing a written designation with the Company. The Director may revoke or modify
the designation at any time by filing a new designation. However, designations
will only be effective if signed by the Director and received by the Company
during the Director's lifetime. The Director's beneficiary designation shall be
deemed automatically revoked if the beneficiary predeceases the Director or if
the Director names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Director dies without a valid beneficiary designation, all
payments shall be made to the Director's estate.
6.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
ARTICLE 7
GENERAL LIMITATIONS
7.1 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not pay any benefit under this Agreement that
is in excess of the Director's Deferrals (i.e., the interest earned on the
Deferral Account) if the Company terminates the Director's service for:
(a) Gross negligence or gross neglect of duties to the Company;
(b) Commission of a felony or of a gross misdemeanor involving
moral turpitude in connection with the Director's service to the
Company; or
4
(c) Fraud, disloyalty, dishonesty or willful violation of any
law or significant Company policy committed in connection with the
Director's service and resulting in an adverse effect on the Company.
7.2 Suicide or Misstatement. The Company shall not pay any benefit under
this Agreement if the Director commits suicide within three years after the date
of this Agreement. In addition, the Company shall not pay any benefit under this
Agreement if the Director has made any material misstatement of fact on a resume
provided to the Company, or on any application for any benefits provided by the
Company to the Director.
ARTICLE 8
CLAIMS AND REVIEW PROCEDURES
8.1 Claims Procedure. The Company shall notify any person or entity that
makes a claim against this Agreement (the "Claimant") in writing, within 90 days
of Claimant's written application for benefits, of his or her eligibility or
non-eligibility for benefits under the 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 the 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, (4) an explanation of the
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed and (5) a
time within which review must be requested. 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.
8.2 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 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 60-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the Claimant and
the specific provisions of the 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 days at the election of the
Company, but notice of this deferral shall be given to the Claimant.
ARTICLE 9
AMENDMENTS AND TERMINATION
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Director.
ARTICLE 10
MISCELLANEOUS
10.1 Binding Effect. This Agreement shall bind the Director and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.
10.2 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 shareholders' rights 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 services at any
time.
10.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
5
10.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
10.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of North Carolina, except to the extent
preempted by the laws of the United States of America.
10.6 Unfunded Arrangement. The Director and the Director's beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Director's life is
a general asset of the Company to which the Director and the Director's
beneficiary have no preferred or secured claim.
10.7 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
under this Agreement. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.
10.8 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.
10.9 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.
10.10 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 Service of advisors and the delegation of ministerial duties to
qualified individuals.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
DIRECTOR COMPANY
COOPERATIVE BANK FOR SAVINGS
/s/ O. XXXXXXX XXXXXX, JR. BY /s/ XXXXXXXXX XXXXXXXX, III
------------------------------- -------------------------------------------
O. XXXXXXX XXXXXX, JR.
TITLE PRESIDENT
-----------------------------------------
6
COOPERATIVE BANK FOR SAVINGS
SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is adopted this 17th day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in Wilmington,
North Carolina (the "Company"), and O. XXXXXXX XXXXXX, JR. (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 a member of the Company's Board of
Directors, 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.
AGREEMENT
The Company and the Director agree as follows:
ARTICLE I
GENERAL DEFINITIONS
The following terms shall have the meanings specified:
1.1 "Insurers" means Jefferson-Pilot Life Insurance Company and West Coast
Life Insurance Company.
1.2 "Policies" means insurance policy nos. JP5195518 and ZUA386785 issued
by the respective Insurers.
1.3 "Insured" means the Director.
1.4 "Net Death Proceeds" means the total death proceeds of the Policy minus
the cash surrender value.
1.5 "Normal Retirement Age" means the Director's 72nd birthday. Termination
of Service is mandatory upon the Director attaining 72 years of age.
1.6 "Termination of Service" means the Director ceases to be a member of
the Company's Board of Directors for any reason, voluntary or involuntary, other
than by reason of a leave of absence approved by the Company or by death.
-1-
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 except as otherwise
said herein. The Company shall be the beneficiary of the death proceeds
remaining after the Director's interest has been paid according to Section 2.2
below.
2.2 Director's Interest. The Director shall have the right to designate the
beneficiary of an amount equal to 100 percent of the Net Death Proceeds of the
Policy. The Director shall also have the right to elect and change settlement
options that may be permitted.
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.
2.4 Comparable Coverage. Upon adoption and subject to the terms of this
Agreement, the Company shall maintain the Policy in full force and effect and in
no event shall the Company amend, terminate, or otherwise abrogate the
Director's interest in the Policy, unless the Company replaces the Policy with a
comparable insurance policy to cover the benefit provided under this Agreement,
amends the Split Dollar Agreement and executes a new Endorsement for said
comparable insurance policy. The Director agrees to provide the required medical
information to the Insurers for the implementation of this Agreement and agrees
to participate with the Company if the Company desires to obtain a comparable
insurance policy with another carrier, whether prior to or after Normal
Retirement Age. The Policy or any comparable policy shall be subject to the
claims of the Company's creditors.
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 of the Director's
interests in the Policy and in this Agreement to any person, entity or trust. In
the event the Director transfers all of the
-2-
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
INSURERS
The Insurers shall be bound only by the terms of their respective Policies.
Any payments the Insurers make or action the Insurers take in accordance with
their respective Policies shall fully discharge such Insurers from all claims,
suits and demands of all entities or persons. The Insurers shall not be bound by
or be deemed to have notice of the provisions of this Agreement.
ARTICLE 6
CLAIMS PROCEDURES
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, (4) an explanation of this
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed, and (5) a
time within which a review must be requested. 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 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.
-3-
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 shareholders' rights 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 services at any time.
8.3 Applicable Law. The Agreement and all rights hereunder shall be
governed by and construed according to the laws of the State of North Carolina,
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.
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;
-4-
(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 this 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:
COOPERATIVE BANK FOR SAVINGS
/s/ O. Xxxxxxx Xxxxxx, Jr. BY /s/ Xxxxxxxxx Xxxxxxxx, III
------------------------------------ ----------------------------------
O. XXXXXXX XXXXXX, JR.
TITLE President
--------------------------------
-5-
SPLIT DOLLAR POLICY ENDORSEMENT TO
COOPERATIVE BANK FOR SAVINGS SPLIT DOLLAR AGREEMENT
Policy No. JP5195518 Insured: O. Xxxxxxx Xxxxxx, Jr.
Supplementing and amending the application for insurance to Jefferson-Pilot Life
Insurance Company ("Insurer") on September 28, 2001, the applicant requests and
directs that:
BENEFICIARIES
-------------
1. COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in
Wilmington, North Carolina (the "Company"), shall be the beneficiary of the
death proceeds remaining after the Insured's interest has been paid according to
paragraph (2) below.
2. The Insured or the Insured's transferee shall designate the beneficiary
of an amount equal to 100 percent of the Net Death Proceeds of the Policy
(defined as the total death proceeds of the Policy minus the cash surrender
value).
OWNERSHIP
---------
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
---------------------------------------------------
Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
----------------
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer. The Insurer may rely
on a sworn statement in form satisfactory to it furnished by the Owner, its
successors or assigns, as to their interest, and any payments made pursuant to
such statement shall discharge the Insurer accordingly. The owner accepts and
agrees to this split dollar endorsement.
-6-
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
COOPERATIVE BANK FOR SAVINGS
By /s/ Xxxxxxxxx Xxxxxxxx, III
-----------------------------------------------
Title President
-----------------------------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
--------------------------------------
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship:__________________________________________________________
Contingent Beneficiary (if the Primary is deceased):____________________________
Relationship:__________________________________________________________
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
THE INSURED:
/s/ O. Xxxxxxx Xxxxxx, Jr.
------------------------------------
O. Xxxxxxx Xxxxxx, Jr.
-7-
SPLIT DOLLAR POLICY ENDORSEMENT TO
COOPERATIVE BANK FOR SAVINGS SPLIT DOLLAR AGREEMENT
Policy No. ZUA386785 Insured: O. Xxxxxxx Xxxxxx, Jr.
Supplementing and amending the application for insurance to West Coast Life
Insurance Company ("Insurer") on September 28, 2001, the applicant requests and
directs that:
BENEFICIARIES
-------------
1. COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in
Wilmington, North Carolina (the "Company"), shall be the beneficiary of the
death proceeds remaining after the Insured's interest has been paid according to
paragraph (2) below.
2. The Insured or the Insured's transferee shall designate the beneficiary
of an amount equal to 100 percent of the Net Death Proceeds of the Policy
(defined as the total death proceeds of the Policy minus the cash surrender
value).
OWNERSHIP
---------
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
---------------------------------------------------
Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
----------------
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer. The Insurer may rely
on a sworn statement in form satisfactory to it furnished by the Owner, its
successors or assigns, as to their interest, and any payments made pursuant to
such statement shall discharge the Insurer accordingly. The owner accepts and
agrees to this split dollar endorsement.
-8-
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
COOPERATIVE BANK FOR SAVINGS
By /s/ Xxxxxxxxx Xxxxxxxx, III
-----------------------------------------------
Title President
-----------------------------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
--------------------------------------
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship:__________________________________________________________
Contingent Beneficiary (if the Primary is deceased):____________________________
Relationship:__________________________________________________________
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
THE INSURED:
/s/ O. Xxxxxxx Xxxxxx, Jr.
--------------------------------------------
O. Xxxxxxx Xxxxxx, Jr.
-9-
COOPERATIVE BANK FOR SAVINGS
DIRECTOR DEFERRED FEE AGREEMENT
THIS AGREEMENT is adopted this 22nd day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, located in Wilmington, North Carolina (the
"Company"), and XXXXXXX X. XXXXXX (the "Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide to the Director a deferred fee
opportunity. The Company will pay the Director's benefits from the Company's
general assets.
AGREEMENT
The Director and the Company agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall have
the meanings specified:
1.1 "Anniversary Date" means December 31 of each year.
1.2 "Change in Control" means the transfer of shares of the Company's
voting common stock such that one entity or one person acquires (or is deemed to
acquire when applying Section 318 of the Code) more than 25 percent of the
-----------
Company's outstanding voting common stock followed within twelve (12) months by
the Director's Termination of Service for reasons other than death, Disability
or retirement.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Deferral Account" means the Company's accounting of the Director's
accumulated Deferrals plus accrued interest.
1.5 "Deferrals" means the amount of the Director's Fees, which the Director
elects to defer according to this Agreement.
1.6 "Disability" means, if the Director is covered by a Company-sponsored
disability policy, total disability as defined in such policy without regard to
any waiting period. If the Director is not covered by such a policy, Disability
means the Director suffering a sickness, accident or injury, which, in the
judgment of a physician who is satisfactory to the Company, prevents the
Director from performing substantially all of the Director's normal duties for
the Company. As a condition to any Disability benefits, the Company may require
the Director to submit to such physical or mental evaluations and tests as the
Company's Board of Directors deems appropriate and reasonable.
1.7 "Effective Date" means October 1, 2001.
1.8 "Election Form" means the Form attached as Exhibit 1.
1.9 "Fees" means the total fees payable to the Director during a Plan Year.
1.10 "Normal Retirement Age" means the Director's 72nd birthday.
Termination of Service is mandatory upon the Director attaining 72 years of age.
1
1.11 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Service.
1.12 "Plan Year" means the calendar year.
1.13 "Termination of Service" means that the Director ceases to be a member
of the Company's Board of Directors for any reason, voluntarily or
involuntarily, other than by reason of a leave of absence approved by the
Company.
ARTICLE 2
DEFERRAL ELECTION
2.1 Initial Election. The Director shall make an initial deferral election
under this Agreement by filing with the Company a signed Election Form within 30
days after the adopted date of this Agreement. The Election Form shall set forth
the amount of Fees to be deferred and shall be effective to defer only Fees
earned after the date the Election Form is received by the Company.
2.2 Election Changes
2.2.1 Generally. Upon the Company's approval, the Director may modify
the amount of Fees to be deferred annually by filing a new Election Form with
the Company prior to the beginning of the Plan Year in which the Fees are to be
deferred. The modified deferral election shall not be effective until the
calendar year following the year in which the subsequent Election Form is
received and approved by the Company.
2.2.2 Hardship. If an unforeseeable financial emergency arising from
the death of a family member, divorce, sickness, injury, catastrophe or similar
event outside the control of the Director occurs, the Director, by written
instructions to the Company, may reduce future deferrals under this Agreement.
ARTICLE 3
DEFERRAL ACCOUNT
3.1 Establishing and Crediting. The Company shall establish a Deferral
Account on its books for the Director and shall credit to the Deferral Account
the following amounts:
3.1.1 Deferrals. The Fees deferred by the Director as of the time the
Fees would have otherwise been paid to the Director.
3.1.2 Interest. On each Anniversary Date of this Agreement and
immediately prior to the payment of any benefits, but only until commencement of
the benefit payments under this Agreement, interest is to be credited on the
account balance at an annual rate equal to 10 percent, compounded monthly.
3.2 Statement of Accounts. The Company shall provide to the Director,
within 120 days after each Anniversary Date, a statement setting forth the
Deferral Account balance.
3.3 Accounting Device Only. The Deferral Account is solely a device for
measuring amounts to be paid under this Agreement. The Deferral Account is not a
trust fund of any kind. The Director is a general unsecured creditor of the
Company for the payment of benefits. The benefits represent the mere Company
promise to pay such benefits. The Director's rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Director's creditors.
ARTICLE 4
BENEFITS DURING LIFETIME
4.1 Normal Retirement Benefit. Upon the Normal Retirement Date, the Company
shall pay to the Director the benefit described in this Section 4.1 in lieu of
any other benefit under this Agreement.
2
4.1.1. Amount of Benefit. The benefit under this Section 4.1 is the
Deferral Account balance at the Director's Normal Retirement Date.
4.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director in 120 monthly installments commencing on the month following the
Director's Normal Retirement Date. The Company shall credit interest pursuant to
Section 3.1.2 on the remaining account balance during any applicable installment
period.
4.2 Early Retirement Benefit. Upon Termination of Service prior to the
Normal Retirement Age for reasons other than death, Change of Control or
Disability, the Company shall pay to the Director the benefit described in this
Section 4.2 in lieu of any other benefit under this Agreement.
4.2.1 Amount of Benefit. The benefit under this Section 4.2 is the
Deferral Account balance at the Director's Termination of Service.
4.2.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.3 Disability Benefit. If the Director's Termination of Service prior to
Normal Retirement Age is due to Disability, the Company shall pay to the
Director the benefit described in this Section 4.3 in lieu of any other benefit
under this Agreement.
4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the
Deferral Account balance at the Directors' Termination of Service.
4.3.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4 Change of Control Benefit. Upon a Change of Control, the Company shall
pay to the Director the benefit described in this Section 4.4 in lieu of any
other benefit under this Agreement.
4.4.1 Amount of Benefit. The benefit under this Section 4.4 is the
greater of: (a) the Deferral Account balance at the Director's Termination of
Service; or (b) $169,748.
4.4.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4.3 Internal Revenue Service Section 280G Gross Up. If, as a result
of a Change of Control, the Director becomes entitled to acceleration of
benefits under this Agreement or under any other benefit, compensation or
incentive plan or arrangement with the Company (collectively, the "Total
Benefits"), and if any part of the Total Benefits is subject to the Excise Tax
under Section 280G and Section 4999 of the Internal Revenue Code (the "Excise
Tax"), the Company shall pay to the Director the following additional amounts,
consisting of (a) a payment equal to the Excise Tax payable by the Director on
the Total Benefits under Section 4999 of the Internal Revenue Code (the "Excise
Tax Payment"), and (b) a payment equal to the amount necessary to provide the
Excise Tax Payment net of all income, payroll and excise taxes. Payment of the
additional amounts described in clauses (a) and (b) shall be made in addition to
the Total Benefits.
4.5 Hardship Distribution. Upon the Board of Director's determination
(following petition by the Director) that the Director has suffered an
unforeseeable financial emergency as described in Section 2.2.2, the Company
shall distribute to the Director all or a portion of the Deferral Account
balance as determined by the Company, but in no event shall the distribution be
greater than is necessary to relieve the financial hardship.
3
ARTICLE 5
DEATH BENEFITS
5.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 5.1 in lieu of any other benefit under this
Agreement.
5.1.1 Amount of Benefit. The benefit under this Section 5.1 is the
Deferral Account balance at the Director's death.
5.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director's beneficiary in a lump sum within 60 days following the Director's
death.
5.2 Death During Payment of a Benefit. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have been paid
to the Director had the Director survived.
5.3 Death After Termination of Service But Before Benefit Payments
Commence. If the Director is entitled to benefit payments under this Agreement,
but dies prior to the commencement of said benefit payments, the Company shall
pay the benefit payments to the Director's beneficiary that the Director was
entitled to prior to death except that the benefit payments shall commence on
the first day of the month following the date of the Director's death.
ARTICLE 6
BENEFICIARIES
6.1 Beneficiary Designations. The Director shall designate a beneficiary by
filing a written designation with the Company. The Director may revoke or modify
the designation at any time by filing a new designation. However, designations
will only be effective if signed by the Director and received by the Company
during the Director's lifetime. The Director's beneficiary designation shall be
deemed automatically revoked if the beneficiary predeceases the Director or if
the Director names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Director dies without a valid beneficiary designation, all
payments shall be made to the Director's estate.
6.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
ARTICLE 7
GENERAL LIMITATIONS
7.1 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not pay any benefit under this Agreement that
is in excess of the Director's Deferrals (i.e., the interest earned on the
Deferral Account) if the Company terminates the Director's service for:
(a) Gross negligence or gross neglect of duties to the Company;
(b) Commission of a felony or of a gross misdemeanor involving
moral turpitude in connection with the Director's service to the
Company; or
4
(c) Fraud, disloyalty, dishonesty or willful violation of any
law or significant Company policy committed in connection with the
Director's service and resulting in an adverse effect on the Company.
7.2 Suicide or Misstatement. The Company shall not pay any benefit under
this Agreement if the Director commits suicide within three years after the date
of this Agreement. In addition, the Company shall not pay any benefit under this
Agreement if the Director has made any material misstatement of fact on a resume
provided to the Company, or on any application for any benefits provided by the
Company to the Director.
ARTICLE 8
CLAIMS AND REVIEW PROCEDURES
8.1 Claims Procedure. The Company shall notify any person or entity that
makes a claim against this Agreement (the "Claimant") in writing, within 90 days
of Claimant's written application for benefits, of his or her eligibility or
non-eligibility for benefits under the 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 the 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, (4) an explanation of the
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed and (5) a
time within which review must be requested. 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.
8.2 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 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 60-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the Claimant and
the specific provisions of the 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 days at the election of the
Company, but notice of this deferral shall be given to the Claimant.
ARTICLE 9
AMENDMENTS AND TERMINATION
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Director.
ARTICLE 10
MISCELLANEOUS
10.1 Binding Effect. This Agreement shall bind the Director and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.
10.2 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 shareholders' rights 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 services at any
time.
10.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
5
10.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
10.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of North Carolina, except to the extent
preempted by the laws of the United States of America.
10.6 Unfunded Arrangement. The Director and the Director's beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Director's life is
a general asset of the Company to which the Director and the Director's
beneficiary have no preferred or secured claim.
10.7 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
under this Agreement. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.
10.8 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.
10.9 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.
10.10 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 Service of advisors and the delegation of ministerial duties to
qualified individuals.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
DIRECTOR COMPANY
COOPERATIVE BANK FOR SAVINGS
/s/ XXXXXXX X. XXXXXX BY /s/ XXXXXXXXX XXXXXXXX, III
------------------------------ ----------------------------------------
XXXXXXX X. XXXXXX
TITLE PRESIDENT
-------------------------------------
6
COOPERATIVE BANK FOR SAVINGS
SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is adopted this 22nd day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in Wilmington,
North Carolina (the "Company"), and XXXXXXX X. XXXXXX (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 a member of the Company's Board of
Directors, 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.
AGREEMENT
The Company and the Director agree as follows:
ARTICLE I
GENERAL DEFINITIONS
The following terms shall have the meanings specified:
1.1 "Insurers" means Jefferson-Pilot Life Insurance Company and West Coast
Life Insurance Company.
1.2 "Policies" means insurance policy nos. XX0000000 and ZUA3866927 issued
by the respective Insurers.
1.3 "Insured" means the Director.
1.4 "Net Death Proceeds" means the total death proceeds of the Policy minus
the cash surrender value.
1.5 "Normal Retirement Age" means the Director's 72nd birthday. Termination
of Service is mandatory upon the Director attaining 72 years of age.
1.6 "Termination of Service" means the Director ceases to be a member of
the Company's Board of Directors for any reason, voluntary or involuntary, other
than by reason of a leave of absence approved by the Company or by death.
-1-
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 except as otherwise
said herein. The Company shall be the beneficiary of the death proceeds
remaining after the Director's interest has been paid according to Section 2.2
below.
2.2 Director's Interest. The Director shall have the right to designate the
beneficiary of an amount equal to 100 percent of the Net Death Proceeds of the
Policy. The Director shall also have the right to elect and change settlement
options that may be permitted.
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.
2.4 Comparable Coverage. Upon adoption and subject to the terms of this
Agreement, the Company shall maintain the Policy in full force and effect and in
no event shall the Company amend, terminate, or otherwise abrogate the
Director's interest in the Policy, unless the Company replaces the Policy with a
comparable insurance policy to cover the benefit provided under this Agreement,
amends the Split Dollar Agreement and executes a new Endorsement for said
comparable insurance policy. The Director agrees to provide the required medical
information to the Insurers for the implementation of this Agreement and agrees
to participate with the Company if the Company desires to obtain a comparable
insurance policy with another carrier, whether prior to or after Normal
Retirement Age. The Policy or any comparable policy shall be subject to the
claims of the Company's creditors.
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 of the Director's
interests in the Policy and in this Agreement to any person, entity or trust. In
the event the Director transfers all of the
-2-
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
INSURERS
The Insurers shall be bound only by the terms of their respective Policies.
Any payments the Insurers make or action the Insurers take in accordance with
their respective Policies shall fully discharge such Insurers from all claims,
suits and demands of all entities or persons. The Insurers shall not be bound by
or be deemed to have notice of the provisions of this Agreement.
ARTICLE 6
CLAIMS PROCEDURES
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, (4) an explanation of this
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed, and (5) a
time within which a review must be requested. 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 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.
-3-
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 shareholders' rights 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 services at any time.
8.3 Applicable Law. The Agreement and all rights hereunder shall be
governed by and construed according to the laws of the State of North Carolina,
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.
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;
-4-
(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 this 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:
COOPERATIVE BANK FOR SAVINGS
/s/ Xxxxxxx X. Xxxxxx By /s/ Xxxxxxxxx Xxxxxxxx, III
-------------------------------- ---------------------------------
Xxxxxxx X. Xxxxxx
Title President
------------------------------
-5-
SPLIT DOLLAR POLICY ENDORSEMENT TO
COOPERATIVE BANK FOR SAVINGS SPLIT DOLLAR AGREEMENT
Policy No. XX0000000 Insured: Xxxxxxx X. Xxxxxx
Supplementing and amending the application for insurance to Jefferson-Pilot Life
Insurance Company ("Insurer") on September 17, 2001, the applicant requests and
directs that:
BENEFICIARIES
-------------
1. COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in
Wilmington, North Carolina (the "Company"), shall be the beneficiary of the
death proceeds remaining after the Insured's interest has been paid according to
paragraph (2) below.
2. The Insured or the Insured's transferee shall designate the beneficiary
of an amount equal to 100 percent of the Net Death Proceeds of the Policy
(defined as the total death proceeds of the Policy minus the cash surrender
value).
OWNERSHIP
---------
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
---------------------------------------------------
Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
----------------
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer. The Insurer may rely
on a sworn statement in form satisfactory to it furnished by the Owner, its
successors or assigns, as to their interest, and any payments made pursuant to
such statement shall discharge the Insurer accordingly. The owner accepts and
agrees to this split dollar endorsement.
-6-
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at Wilmington, North Carolina, this 22nd day of January, 2002.
COOPERATIVE BANK FOR SAVINGS
By /s/ Xxxxxxxxx Xxxxxxxx, III
-----------------------------------------------
Title President
-----------------------------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
--------------------------------------
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship:__________________________________________________________
Contingent Beneficiary (if the Primary is deceased):____________________________
Relationship:__________________________________________________________
Signed at Wilmington, North Carolina, this 22nd day of January, 2002.
THE INSURED:
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
-7-
SPLIT DOLLAR POLICY ENDORSEMENT TO
COOPERATIVE BANK FOR SAVINGS SPLIT DOLLAR AGREEMENT
Policy No. ZUA3866927 Insured: Xxxxxxx X. Xxxxxx
Supplementing and amending the application for insurance to West Coast Life
Insurance Company ("Insurer") on September 17, 2001, the applicant requests and
directs that:
BENEFICIARIES
-------------
1. COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in
Wilmington, North Carolina (the "Company"), shall be the beneficiary of the
death proceeds remaining after the Insured's interest has been paid according to
paragraph (2) below.
2. The Insured or the Insured's transferee shall designate the beneficiary
of an amount equal to 100 percent of the Net Death Proceeds of the Policy
(defined as the total death proceeds of the Policy minus the cash surrender
value).
OWNERSHIP
---------
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
---------------------------------------------------
Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
----------------
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer. The Insurer may rely
on a sworn statement in form satisfactory to it furnished by the Owner, its
successors or assigns, as to their interest, and any payments made pursuant to
such statement shall discharge the Insurer accordingly. The owner accepts and
agrees to this split dollar endorsement.
-8-
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at Wilmington, North Carolina, this 22nd day of January, 2002.
COOPERATIVE BANK FOR SAVINGS
By /s/ Xxxxxxxxx Xxxxxxxx, III
-----------------------------------------------
Title President
-----------------------------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
--------------------------------------
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship:__________________________________________________________
Contingent Beneficiary (if the Primary is deceased):____________________________
Relationship:__________________________________________________________
Signed at Wilmington, North Carolina, this 22nd day of January, 2002.
THE INSURED:
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
-9-
COOPERATIVE BANK FOR SAVINGS
DIRECTOR DEFERRED FEE AGREEMENT
THIS AGREEMENT is adopted this 17th day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, located in Wilmington, North Carolina (the
"Company"), and X. XXXXXXXX KING, III (the "Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide to the Director a deferred fee
opportunity. The Company will pay the Director's benefits from the Company's
general assets.
AGREEMENT
The Director and the Company agree as follows:
Article 1
Definitions
Whenever used in this Agreement, the following words and phrases shall have
the meanings specified:
1.1 "Anniversary Date" means December 31 of each year.
1.2 "Change in Control" means the transfer of shares of the Company's
voting common stock such that one entity or one person acquires (or is deemed to
acquire when applying Section 318 of the Code) more than 25 percent of the
-----------
Company's outstanding voting common stock followed within twelve (12) months by
the Director's Termination of Service for reasons other than death, Disability
or retirement.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Deferral Account" means the Company's accounting of the Director's
accumulated Deferrals plus accrued interest.
1.5 "Deferrals" means the amount of the Director's Fees, which the Director
elects to defer according to this Agreement.
1.6 "Disability" means, if the Director is covered by a Company-sponsored
disability policy, total disability as defined in such policy without regard to
any waiting period. If the Director is not covered by such a policy, Disability
means the Director suffering a sickness, accident or injury, which, in the
judgment of a physician who is satisfactory to the Company, prevents the
Director from performing substantially all of the Director's normal duties for
the Company. As a condition to any Disability benefits, the Company may require
the Director to submit to such physical or mental evaluations and tests as the
Company's Board of Directors deems appropriate and reasonable.
1.7 "Effective Date" means October 1, 2001.
1.8 "Election Form" means the Form attached as Exhibit 1.
1.9 "Fees" means the total fees payable to the Director during a Plan Year.
1.10 "Normal Retirement Age" means the Director's 72nd birthday.
Termination of Service is mandatory upon the Director attaining 72 years of age.
1
1.11 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Service.
1.12 "Plan Year" means the calendar year.
1.13 "Termination of Service" means that the Director ceases to be a member
of the Company's Board of Directors for any reason, voluntarily or
involuntarily, other than by reason of a leave of absence approved by the
Company.
ARTICLE 2
DEFERRAL ELECTION
2.1 Initial Election. The Director shall make an initial deferral election
under this Agreement by filing with the Company a signed Election Form within 30
days after the adopted date of this Agreement. The Election Form shall set forth
the amount of Fees to be deferred and shall be effective to defer only Fees
earned after the date the Election Form is received by the Company.
2.2 Election Changes
2.2.1 Generally. Upon the Company's approval, the Director may modify
the amount of Fees to be deferred annually by filing a new Election Form with
the Company prior to the beginning of the Plan Year in which the Fees are to be
deferred. The modified deferral election shall not be effective until the
calendar year following the year in which the subsequent Election Form is
received and approved by the Company.
2.2.2 Hardship. If an unforeseeable financial emergency arising from
the death of a family member, divorce, sickness, injury, catastrophe or similar
event outside the control of the Director occurs, the Director, by written
instructions to the Company, may reduce future deferrals under this Agreement.
ARTICLE 3
DEFERRAL ACCOUNT
3.1 Establishing and Crediting. The Company shall establish a Deferral
Account on its books for the Director and shall credit to the Deferral Account
the following amounts:
3.1.1 Deferrals. The Fees deferred by the Director as of the time the
Fees would have otherwise been paid to the Director.
3.1.2 Interest. On each Anniversary Date of this Agreement and
immediately prior to the payment of any benefits, but only until commencement of
the benefit payments under this Agreement, interest is to be credited on the
account balance at an annual rate equal to 10 percent, compounded monthly.
3.2 Statement of Accounts. The Company shall provide to the Director,
within 120 days after each Anniversary Date, a statement setting forth the
Deferral Account balance.
3.3 Accounting Device Only. The Deferral Account is solely a device for
measuring amounts to be paid under this Agreement. The Deferral Account is not a
trust fund of any kind. The Director is a general unsecured creditor of the
Company for the payment of benefits. The benefits represent the mere Company
promise to pay such benefits. The Director's rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Director's creditors.
ARTICLE 4
BENEFITS DURING LIFETIME
4.1 Normal Retirement Benefit. Upon the Normal Retirement Date, the Company
shall pay to the Director the benefit described in this Section 4.1 in lieu of
any other benefit under this Agreement.
2
4.1.1. Amount of Benefit. The benefit under this Section 4.1 is the
Deferral Account balance at the Director's Normal Retirement Date.
4.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director in 120 monthly installments commencing on the month following the
Director's Normal Retirement Date. The Company shall credit interest pursuant to
Section 3.1.2 on the remaining account balance during any applicable installment
period.
4.2 Early Retirement Benefit. Upon Termination of Service prior to the
Normal Retirement Age for reasons other than death, Change of Control or
Disability, the Company shall pay to the Director the benefit described in this
Section 4.2 in lieu of any other benefit under this Agreement.
4.2.1 Amount of Benefit. The benefit under this Section 4.2 is the
Deferral Account balance at the Director's Termination of Service.
4.2.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.3 Disability Benefit. If the Director's Termination of Service prior to
Normal Retirement Age is due to Disability, the Company shall pay to the
Director the benefit described in this Section 4.3 in lieu of any other benefit
under this Agreement.
4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the
Deferral Account balance at the Directors' Termination of Service.
4.3.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4 Change of Control Benefit. Upon a Change of Control, the Company shall
pay to the Director the benefit described in this Section 4.4 in lieu of any
other benefit under this Agreement.
4.4.1 Amount of Benefit. The benefit under this Section 4.4 is the
greater of: (a) the Deferral Account balance at the Director's Termination of
Service; or (b) $169,748.
4.4.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4.3 Internal Revenue Service Section 280G Gross Up. If, as a result
of a Change of Control, the Director becomes entitled to acceleration of
benefits under this Agreement or under any other benefit, compensation or
incentive plan or arrangement with the Company (collectively, the "Total
Benefits"), and if any part of the Total Benefits is subject to the Excise Tax
under Section 280G and Section 4999 of the Internal Revenue Code (the "Excise
Tax"), the Company shall pay to the Director the following additional amounts,
consisting of (a) a payment equal to the Excise Tax payable by the Director on
the Total Benefits under Section 4999 of the Internal Revenue Code (the "Excise
Tax Payment"), and (b) a payment equal to the amount necessary to provide the
Excise Tax Payment net of all income, payroll and excise taxes. Payment of the
additional amounts described in clauses (a) and (b) shall be made in addition to
the Total Benefits.
4.5 Hardship Distribution. Upon the Board of Director's determination
(following petition by the Director) that the Director has suffered an
unforeseeable financial emergency as described in Section 2.2.2, the Company
shall distribute to the Director all or a portion of the Deferral Account
balance as determined by the Company, but in no event shall the distribution be
greater than is necessary to relieve the financial hardship.
3
ARTICLE 5
DEATH BENEFITS
5.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 5.1 in lieu of any other benefit under this
Agreement.
5.1.1 Amount of Benefit. The benefit under this Section 5.1 is the
Deferral Account balance at the Director's death.
5.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director's beneficiary in a lump sum within 60 days following the Director's
death.
5.2 Death During Payment of a Benefit. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have been paid
to the Director had the Director survived.
5.3 Death After Termination of Service But Before Benefit Payments
Commence. If the Director is entitled to benefit payments under this Agreement,
but dies prior to the commencement of said benefit payments, the Company shall
pay the benefit payments to the Director's beneficiary that the Director was
entitled to prior to death except that the benefit payments shall commence on
the first day of the month following the date of the Director's death.
ARTICLE 6
BENEFICIARIES
6.1 Beneficiary Designations. The Director shall designate a beneficiary by
filing a written designation with the Company. The Director may revoke or modify
the designation at any time by filing a new designation. However, designations
will only be effective if signed by the Director and received by the Company
during the Director's lifetime. The Director's beneficiary designation shall be
deemed automatically revoked if the beneficiary predeceases the Director or if
the Director names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Director dies without a valid beneficiary designation, all
payments shall be made to the Director's estate.
6.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
ARTICLE 7
GENERAL LIMITATIONS
7.1 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not pay any benefit under this Agreement that
is in excess of the Director's Deferrals (i.e., the interest earned on the
Deferral Account) if the Company terminates the Director's service for:
(a) Gross negligence or gross neglect of duties to the Company;
(b) Commission of a felony or of a gross misdemeanor involving
moral turpitude in connection with the Director's service to the
Company; or
4
(c) Fraud, disloyalty, dishonesty or willful violation of any
law or significant Company policy committed in connection with the
Director's service and resulting in an adverse effect on the Company.
7.2 Suicide or Misstatement. The Company shall not pay any benefit under
this Agreement if the Director commits suicide within three years after the date
of this Agreement. In addition, the Company shall not pay any benefit under this
Agreement if the Director has made any material misstatement of fact on a resume
provided to the Company, or on any application for any benefits provided by the
Company to the Director.
ARTICLE 8
CLAIMS AND REVIEW PROCEDURES
8.1 Claims Procedure. The Company shall notify any person or entity that
makes a claim against this Agreement (the "Claimant") in writing, within 90 days
of Claimant's written application for benefits, of his or her eligibility or
non-eligibility for benefits under the 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 the 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, (4) an explanation of the
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed and (5) a
time within which review must be requested. 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.
8.2 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 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 60-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the Claimant and
the specific provisions of the 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 days at the election of the
Company, but notice of this deferral shall be given to the Claimant.
ARTICLE 9
AMENDMENTS AND TERMINATION
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Director.
ARTICLE 10
MISCELLANEOUS
10.1 Binding Effect. This Agreement shall bind the Director and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.
10.2 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 shareholders' rights 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 services at any
time.
10.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
5
10.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
10.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of North Carolina, except to the extent
preempted by the laws of the United States of America.
10.6 Unfunded Arrangement. The Director and the Director's beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Director's life is
a general asset of the Company to which the Director and the Director's
beneficiary have no preferred or secured claim.
10.7 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
under this Agreement. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.
10.8 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.
10.9 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.
10.10 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 Service of advisors and the delegation of ministerial duties to
qualified individuals.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
Director Company
COOPERATIVE BANK FOR SAVINGS
/s/ X. XXXXXXXX XXXX, III BY /s/ XXXXXXXXX XXXXXXXX, III
---------------------------- ------------------------------------------
X. XXXXXXXX XXXX, III
TITLE PRESIDENT
---------------------------------------
6
COOPERATIVE BANK FOR SAVINGS
SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is adopted this 17th day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in Wilmington,
North Carolina (the "Company"), and X. XXXXXXXX KING, III (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 a member of the Company's Board of
Directors, 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.
AGREEMENT
The Company and the Director agree as follows:
ARTICLE I
GENERAL DEFINITIONS
The following terms shall have the meanings specified:
1.1 "Insurers" means Jefferson-Pilot Life Insurance Company and West Coast
Life Insurance Company.
1.2 "Policies" means insurance policy nos. JP5195514 and ZUA3866924 issued
by the respective Insurers.
1.3 "Insured" means the Director.
1.4 "Net Death Proceeds" means the total death proceeds of the Policy minus
the cash surrender value.
1.5 "Normal Retirement Age" means the Director's 72nd birthday. Termination
of Service is mandatory upon the Director attaining 72 years of age.
1.6 "Termination of Service" means the Director ceases to be a member of
the Company's Board of Directors for any reason, voluntary or involuntary, other
than by reason of a leave of absence approved by the Company or by death.
-1-
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 except as otherwise
said herein. The Company shall be the beneficiary of the death proceeds
remaining after the Director's interest has been paid according to Section 2.2
below.
2.2 Director's Interest. The Director shall have the right to designate the
beneficiary of an amount equal to 100 percent of the Net Death Proceeds of the
Policy. The Director shall also have the right to elect and change settlement
options that may be permitted.
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.
2.4 Comparable Coverage. Upon adoption and subject to the terms of this
Agreement, the Company shall maintain the Policy in full force and effect and in
no event shall the Company amend, terminate, or otherwise abrogate the
Director's interest in the Policy, unless the Company replaces the Policy with a
comparable insurance policy to cover the benefit provided under this Agreement,
amends the Split Dollar Agreement and executes a new Endorsement for said
comparable insurance policy. The Director agrees to provide the required medical
information to the Insurers for the implementation of this Agreement and agrees
to participate with the Company if the Company desires to obtain a comparable
insurance policy with another carrier, whether prior to or after Normal
Retirement Age. The Policy or any comparable policy shall be subject to the
claims of the Company's creditors.
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 of the Director's
interests in the Policy and in this Agreement to any person, entity or trust. In
the event the Director transfers all of the
-2-
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
INSURERS
The Insurers shall be bound only by the terms of their respective Policies.
Any payments the Insurers make or action the Insurers take in accordance with
their respective Policies shall fully discharge such Insurers from all claims,
suits and demands of all entities or persons. The Insurers shall not be bound by
or be deemed to have notice of the provisions of this Agreement.
ARTICLE 6
CLAIMS PROCEDURES
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, (4) an explanation of this
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed, and (5) a
time within which a review must be requested. 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 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.
-3-
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 shareholders' rights 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 services at any time.
8.3 Applicable Law. The Agreement and all rights hereunder shall be
governed by and construed according to the laws of the State of North Carolina,
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.
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;
-4-
(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 this 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:
COOPERATIVE BANK FOR SAVINGS
/s/ X. Xxxxxxxx Xxxx, III BY /s/ Xxxxxxxxx Xxxxxxxx, III
------------------------------------ ---------------------------------
X. XXXXXXXX XXXX, III
TITLE President
-------------------------------
-5-
SPLIT DOLLAR POLICY ENDORSEMENT TO
COOPERATIVE BANK FOR SAVINGS SPLIT DOLLAR AGREEMENT
Policy No. JP5195514 Insured: X. Xxxxxxxx King, III
Supplementing and amending the application for insurance to Jefferson-Pilot Life
Insurance Company ("Insurer") on September 20, 2001, the applicant requests and
directs that:
BENEFICIARIES
-------------
1. COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in
Wilmington, North Carolina (the "Company"), shall be the beneficiary of the
death proceeds remaining after the Insured's interest has been paid according to
paragraph (2) below.
2. The Insured or the Insured's transferee shall designate the beneficiary
of an amount equal to 100 percent of the Net Death Proceeds of the Policy
(defined as the total death proceeds of the Policy minus the cash surrender
value).
OWNERSHIP
---------
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
---------------------------------------------------
Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
----------------
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer. The Insurer may rely
on a sworn statement in form satisfactory to it furnished by the Owner, its
successors or assigns, as to their interest, and any payments made pursuant to
such statement shall discharge the Insurer accordingly. The owner accepts and
agrees to this split dollar endorsement.
-6-
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
COOPERATIVE BANK FOR SAVINGS
By /s/ Xxxxxxxxx Xxxxxxxx, III
-----------------------------------------------
Title President
-----------------------------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
--------------------------------------
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship:__________________________________________________________
Contingent Beneficiary (if the Primary is deceased):____________________________
Relationship:__________________________________________________________
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
THE INSURED:
/s/ X. Xxxxxxxx King, III
------------------------------------
X. Xxxxxxxx Xxxx, III
-7-
SPLIT DOLLAR POLICY ENDORSEMENT TO
COOPERATIVE BANK FOR SAVINGS SPLIT DOLLAR AGREEMENT
Policy No. ZUA3866924 Insured: X. Xxxxxxxx King, III
Supplementing and amending the application for insurance to West Coast Life
Insurance Company ("Insurer") on September 20, 2001, the applicant requests and
directs that:
BENEFICIARIES
-------------
1. COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in
Wilmington, North Carolina (the "Company"), shall be the beneficiary of the
death proceeds remaining after the Insured's interest has been paid according to
paragraph (2) below.
2. The Insured or the Insured's transferee shall designate the beneficiary
of an amount equal to 100 percent of the Net Death Proceeds of the Policy
(defined as the total death proceeds of the Policy minus the cash surrender
value).
OWNERSHIP
---------
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
---------------------------------------------------
Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
----------------
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer. The Insurer may rely
on a sworn statement in form satisfactory to it furnished by the Owner, its
successors or assigns, as to their interest, and any payments made pursuant to
such statement shall discharge the Insurer accordingly. The owner accepts and
agrees to this split dollar endorsement.
-8-
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
COOPERATIVE BANK FOR SAVINGS
By /s/ Xxxxxxxxx Xxxxxxxx, III
-----------------------------------------------
Title President
-----------------------------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
--------------------------------------
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship:__________________________________________________________
Contingent Beneficiary (if the Primary is deceased):____________________________
Relationship:__________________________________________________________
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
THE INSURED:
/s/ X. Xxxxxxxx King, III
--------------------------------------------
X. Xxxxxxxx Xxxx, III
-9-
COOPERATIVE BANK FOR SAVINGS
DIRECTOR DEFERRED FEE AGREEMENT
THIS AGREEMENT is adopted this 17th day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, located in Wilmington, North Carolina (the
"Company"), and XXXXXXX XXXXX (the "Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide to the Director a deferred fee
opportunity. The Company will pay the Director's benefits from the Company's
general assets.
AGREEMENT
The Director and the Company agree as follows:
Article 1
Definitions
Whenever used in this Agreement, the following words and phrases shall have
the meanings specified:
1.1 "Anniversary Date" means December 31 of each year.
1.2 "Change in Control" means the transfer of shares of the Company's
voting common stock such that one entity or one person acquires (or is deemed to
acquire when applying Section 318 of the Code) more than 25 percent of the
----------
Company's outstanding voting common stock followed within twelve (12) months by
the Director's Termination of Service for reasons other than death, Disability
or retirement.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Deferral Account" means the Company's accounting of the Director's
accumulated Deferrals plus accrued interest.
1.5 "Deferrals" means the amount of the Director's Fees, which the Director
elects to defer according to this Agreement.
1.6 "Disability" means, if the Director is covered by a Company-sponsored
disability policy, total disability as defined in such policy without regard to
any waiting period. If the Director is not covered by such a policy, Disability
means the Director suffering a sickness, accident or injury, which, in the
judgment of a physician who is satisfactory to the Company, prevents the
Director from performing substantially all of the Director's normal duties for
the Company. As a condition to any Disability benefits, the Company may require
the Director to submit to such physical or mental evaluations and tests as the
Company's Board of Directors deems appropriate and reasonable.
1.7 "Effective Date" means October 1, 2001.
1.8 "Election Form" means the Form attached as Exhibit 1.
1.9 "Fees" means the total fees payable to the Director during a Plan Year.
1.10 "Normal Retirement Age" means the Director's 72nd birthday.
Termination of Service is mandatory upon the Director attaining 72 years of age.
1.11 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Service.
1
1.12 "Plan Year" means the calendar year.
1.13 "Termination of Service" means that the Director ceases to be a member
of the Company's Board of Directors for any reason, voluntarily or
involuntarily, other than by reason of a leave of absence approved by the
Company.
ARTICLE 2
DEFERRAL ELECTION
2.1 Initial Election. The Director shall make an initial deferral election
under this Agreement by filing with the Company a signed Election Form within 30
days after the adopted date of this Agreement. The Election Form shall set forth
the amount of Fees to be deferred and shall be effective to defer only Fees
earned after the date the Election Form is received by the Company.
2.2 Election Changes
2.2.1 Generally. Upon the Company's approval, the Director may modify
the amount of Fees to be deferred annually by filing a new Election Form with
the Company prior to the beginning of the Plan Year in which the Fees are to be
deferred. The modified deferral election shall not be effective until the
calendar year following the year in which the subsequent Election Form is
received and approved by the Company.
2.2.2 Hardship. If an unforeseeable financial emergency arising from
the death of a family member, divorce, sickness, injury, catastrophe or similar
event outside the control of the Director occurs, the Director, by written
instructions to the Company, may reduce future deferrals under this Agreement.
ARTICLE 3
DEFERRAL ACCOUNT
3.1 Establishing and Crediting. The Company shall establish a Deferral
Account on its books for the Director and shall credit to the Deferral Account
the following amounts:
3.1.1 Deferrals. The Fees deferred by the Director as of the time the
Fees would have otherwise been paid to the Director.
3.1.2 Interest. On each Anniversary Date of this Agreement and
immediately prior to the payment of any benefits, but only until commencement of
the benefit payments under this Agreement, interest is to be credited on the
account balance at an annual rate equal to 10 percent, compounded monthly.
3.2 Statement of Accounts. The Company shall provide to the Director,
within 120 days after each Anniversary Date, a statement setting forth the
Deferral Account balance.
3.3 Accounting Device Only. The Deferral Account is solely a device for
measuring amounts to be paid under this Agreement. The Deferral Account is not a
trust fund of any kind. The Director is a general unsecured creditor of the
Company for the payment of benefits. The benefits represent the mere Company
promise to pay such benefits. The Director's rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Director's creditors.
ARTICLE 4
BENEFITS DURING LIFETIME
4.1 Normal Retirement Benefit. Upon the Normal Retirement Date, the Company
shall pay to the Director the benefit described in this Section 4.1 in lieu of
any other benefit under this Agreement.
4.1.1. Amount of Benefit. The benefit under this Section 4.1 is the
Deferral Account balance at the Director's Normal Retirement Date.
4.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director in 120 monthly installments commencing on the month following the
Director's Normal Retirement Date. The Company shall credit interest pursuant to
Section 3.1.2 on the remaining account balance during any applicable installment
period.
4.2 Early Retirement Benefit. Upon Termination of Service prior to the
Normal Retirement Age for reasons other than death, Change of Control or
Disability, the Company shall pay to the Director the benefit described in this
Section 4.2 in lieu of any other benefit under this Agreement.
4.2.1 Amount of Benefit. The benefit under this Section 4.2 is the
Deferral Account balance at the Director's Termination of Service.
4.2.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.3 Disability Benefit. If the Director's Termination of Service prior to
Normal Retirement Age is due to Disability, the Company shall pay to the
Director the benefit described in this Section 4.3 in lieu of any other benefit
under this Agreement.
4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the
Deferral Account balance at the Directors' Termination of Service.
4.3.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4 Change of Control Benefit. Upon a Change of Control, the Company shall
pay to the Director the benefit described in this Section 4.4 in lieu of any
other benefit under this Agreement.
4.4.1 Amount of Benefit. The benefit under this Section 4.4 is the
greater of: (a) the Deferral Account balance at the Director's Termination of
Service; or (b) $169,748.
4.4.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4.3 Internal Revenue Service Section 280G Gross Up. If, as a result
of a Change of Control, the Director becomes entitled to acceleration of
benefits under this Agreement or under any other benefit, compensation or
incentive plan or arrangement with the Company (collectively, the "Total
Benefits"), and if any part of the Total Benefits is subject to the Excise Tax
under Section 280G and Section 4999 of the Internal Revenue Code (the "Excise
Tax"), the Company shall pay to the Director the following additional amounts,
consisting of (a) a payment equal to the Excise Tax payable by the Director on
the Total Benefits under Section 4999 of the Internal Revenue Code (the "Excise
Tax Payment"), and (b) a payment equal to the amount necessary to provide the
Excise Tax Payment net of all income, payroll and excise taxes. Payment of the
additional amounts described in clauses (a) and (b) shall be made in addition to
the Total Benefits.
4.5 Hardship Distribution. Upon the Board of Director's determination
(following petition by the Director) that the Director has suffered an
unforeseeable financial emergency as described in Section 2.2.2, the Company
shall distribute to the Director all or a portion of the Deferral Account
balance as determined by the Company, but in no event shall the distribution be
greater than is necessary to relieve the financial hardship.
2
ARTICLE 5
DEATH BENEFITS
5.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 5.1 in lieu of any other benefit under this
Agreement.
5.1.1 Amount of Benefit. The benefit under this Section 5.1 is the
Deferral Account balance at the Director's death.
5.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director's beneficiary in a lump sum within 60 days following the Director's
death.
5.2 Death During Payment of a Benefit. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have been paid
to the Director had the Director survived.
5.3 Death After Termination of Service But Before Benefit Payments
Commence. If the Director is entitled to benefit payments under this Agreement,
but dies prior to the commencement of said benefit payments, the Company shall
pay the benefit payments to the Director's beneficiary that the Director was
entitled to prior to death except that the benefit payments shall commence on
the first day of the month following the date of the Director's death.
ARTICLE 6
BENEFICIARIES
6.1 Beneficiary Designations. The Director shall designate a beneficiary by
filing a written designation with the Company. The Director may revoke or modify
the designation at any time by filing a new designation. However, designations
will only be effective if signed by the Director and received by the Company
during the Director's lifetime. The Director's beneficiary designation shall be
deemed automatically revoked if the beneficiary predeceases the Director or if
the Director names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Director dies without a valid beneficiary designation, all
payments shall be made to the Director's estate.
6.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
ARTICLE 7
GENERAL LIMITATIONS
7.1 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not pay any benefit under this Agreement that
is in excess of the Director's Deferrals (i.e., the interest earned on the
Deferral Account) if the Company terminates the Director's service for:
(a) Gross negligence or gross neglect of duties to the Company;
(b) Commission of a felony or of a gross misdemeanor involving
moral turpitude in connection with the Director's service to the
Company; or
3
(c) Fraud, disloyalty, dishonesty or willful violation of any
law or significant Company policy committed in connection with the
Director's service and resulting in an adverse effect on the Company.
7.2 Suicide or Misstatement. The Company shall not pay any benefit under
this Agreement if the Director commits suicide within three years after the date
of this Agreement. In addition, the Company shall not pay any benefit under this
Agreement if the Director has made any material misstatement of fact on a resume
provided to the Company, or on any application for any benefits provided by the
Company to the Director.
ARTICLE 8
CLAIMS AND REVIEW PROCEDURES
8.1 Claims Procedure. The Company shall notify any person or entity that
makes a claim against this Agreement (the "Claimant") in writing, within 90 days
of Claimant's written application for benefits, of his or her eligibility or
non-eligibility for benefits under the 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 the 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, (4) an explanation of the
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed and (5) a
time within which review must be requested. 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.
8.2 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 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 60-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the Claimant and
the specific provisions of the 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 days at the election of the
Company, but notice of this deferral shall be given to the Claimant.
ARTICLE 9
AMENDMENTS AND TERMINATION
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Director.
ARTICLE 10
MISCELLANEOUS
10.1 Binding Effect. This Agreement shall bind the Director and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.
10.2 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 shareholders' rights 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 services at any
time.
10.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
4
10.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
10.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of North Carolina, except to the extent
preempted by the laws of the United States of America.
10.6 Unfunded Arrangement. The Director and the Director's beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Director's life is
a general asset of the Company to which the Director and the Director's
beneficiary have no preferred or secured claim.
10.7 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
under this Agreement. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.
10.8 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.
10.9 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.
10.10 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 Service of advisors and the delegation of ministerial duties to
qualified individuals.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
DIRECTOR COMPANY
COOPERATIVE BANK FOR SAVINGS
/S/ XXXXXXX XXXXX BY /S/ XXXXXXXXX XXXXXXXX, III
-------------------------- ------------------------------------------
XXXXXXX XXXXX
TITLE PRESIDENT
---------------------------------------
5
COOPERATIVE BANK FOR SAVINGS
SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is adopted this 17th day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in Wilmington,
North Carolina (the "Company"), and XXXXXXX XXXXX XXXXX (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 a member of the Company's Board of
Directors, 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.
AGREEMENT
The Company and the Director agree as follows:
ARTICLE I
GENERAL DEFINITIONS
The following terms shall have the meanings specified:
1.1 "Insurers" means Jefferson-Pilot Life Insurance Company and West Coast
Life Insurance Company.
1.2 "Policies" means insurance policy nos. JP5195517 and ZUA386786 issued
by the respective Insurers.
1.3 "Insured" means the Director.
1.4 "Net Death Proceeds" means the total death proceeds of the Policy minus
the cash surrender value.
1.5 "Normal Retirement Age" means the Director's 72nd birthday. Termination
of Service is mandatory upon the Director attaining 72 years of age.
1.6 "Termination of Service" means the Director ceases to be a member of
the Company's Board of Directors for any reason, voluntary or involuntary, other
than by reason of a leave of absence approved by the Company or by death.
-1-
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 except as otherwise
said herein. The Company shall be the beneficiary of the death proceeds
remaining after the Director's interest has been paid according to Section 2.2
below.
2.2 Director's Interest. The Director shall have the right to designate the
beneficiary of an amount equal to 100 percent of the Net Death Proceeds of the
Policy. The Director shall also have the right to elect and change settlement
options that may be permitted.
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.
2.4 Comparable Coverage. Upon adoption and subject to the terms of this
Agreement, the Company shall maintain the Policy in full force and effect and in
no event shall the Company amend, terminate, or otherwise abrogate the
Director's interest in the Policy, unless the Company replaces the Policy with a
comparable insurance policy to cover the benefit provided under this Agreement,
amends the Split Dollar Agreement and executes a new Endorsement for said
comparable insurance policy. The Director agrees to provide the required medical
information to the Insurers for the implementation of this Agreement and agrees
to participate with the Company if the Company desires to obtain a comparable
insurance policy with another carrier, whether prior to or after Normal
Retirement Age. The Policy or any comparable policy shall be subject to the
claims of the Company's creditors.
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 of the Director's
interests in the Policy and in this Agreement to any person, entity or trust. In
the event the Director transfers all of the
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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
INSURERS
The Insurers shall be bound only by the terms of their respective Policies.
Any payments the Insurers make or action the Insurers take in accordance with
their respective Policies shall fully discharge such Insurers from all claims,
suits and demands of all entities or persons. The Insurers shall not be bound by
or be deemed to have notice of the provisions of this Agreement.
ARTICLE 6
CLAIMS PROCEDURES
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, (4) an explanation of this
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed, and (5) a
time within which a review must be requested. 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 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.
-3-
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 shareholders' rights 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 services at any time.
8.3 Applicable Law. The Agreement and all rights hereunder shall be
governed by and construed according to the laws of the State of North Carolina,
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.
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;
-4-
(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 this 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:
COOPERATIVE BANK FOR SAVINGS
/s/ Xxxxxxx Xxxxx Xxxxx By /s/ Xxxxxxxxx Xxxxxxxx, III
------------------------------------ ---------------------------------
Xxxxxxx Xxxxx Xxxxx
Title President
------------------------------
-5-
SPLIT DOLLAR POLICY ENDORSEMENT TO
COOPERATIVE BANK FOR SAVINGS SPLIT DOLLAR AGREEMENT
Policy No. JP5195517 Insured: Xxxxxxx Xxxxx Xxxxx
Supplementing and amending the application for insurance to Jefferson-Pilot Life
Insurance Company ("Insurer") on September 20, 2001, the applicant requests and
directs that:
BENEFICIARIES
-------------
1. COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in
Wilmington, North Carolina (the "Company"), shall be the beneficiary of the
death proceeds remaining after the Insured's interest has been paid according to
paragraph (2) below.
2. The Insured or the Insured's transferee shall designate the beneficiary
of an amount equal to 100 percent of the Net Death Proceeds of the Policy
(defined as the total death proceeds of the Policy minus the cash surrender
value).
OWNERSHIP
---------
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
---------------------------------------------------
Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
----------------
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer. The Insurer may rely
on a sworn statement in form satisfactory to it furnished by the Owner, its
successors or assigns, as to their interest, and any payments made pursuant to
such statement shall discharge the Insurer accordingly. The owner accepts and
agrees to this split dollar endorsement.
-6-
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
COOPERATIVE BANK FOR SAVINGS
By /s/ Cooperative Bank for Savings
--------------------------------------
Title President
--------------------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
--------------------------------------
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship:__________________________________________________________
Contingent Beneficiary (if the Primary is deceased):____________________________
Relationship:__________________________________________________________
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
THE INSURED:
/s/ Xxxxxxx Xxxxx Xxxxx
----------------------------------
Xxxxxxx Xxxxx Xxxxx
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SPLIT DOLLAR POLICY ENDORSEMENT TO
COOPERATIVE BANK FOR SAVINGS SPLIT DOLLAR AGREEMENT
Policy No. ZUA386786 Insured: Xxxxxxx Xxxxx Xxxxx
Supplementing and amending the application for insurance to West Coast Life
Insurance Company ("Insurer") on September 20, 2001, the applicant requests and
directs that:
BENEFICIARIES
-------------
1. COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in
Wilmington, North Carolina (the "Company"), shall be the beneficiary of the
death proceeds remaining after the Insured's interest has been paid according to
paragraph (2) below.
2. The Insured or the Insured's transferee shall designate the beneficiary
of an amount equal to 100 percent of the Net Death Proceeds of the Policy
(defined as the total death proceeds of the Policy minus the cash surrender
value).
OWNERSHIP
---------
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
---------------------------------------------------
Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
----------------
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer. The Insurer may rely
on a sworn statement in form satisfactory to it furnished by the Owner, its
successors or assigns, as to their interest, and any payments made pursuant to
such statement shall discharge the Insurer accordingly. The owner accepts and
agrees to this split dollar endorsement.
-8-
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
COOPERATIVE BANK FOR SAVINGS
By /s/ Xxxxxxxxx Xxxxxxxx, III
-----------------------------------------------
Title President
-----------------------------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
--------------------------------------
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship:__________________________________________________________
Contingent Beneficiary (if the Primary is deceased):____________________________
Relationship:__________________________________________________________
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
THE INSURED:
/s/ Xxxxxxx Xxxxx Xxxxx
-------------------------------------
Xxxxxxx Xxxxx Xxxxx
-9-
COOPERATIVE BANK FOR SAVINGS
DIRECTOR DEFERRED FEE AGREEMENT
THIS AGREEMENT is adopted this 17th day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, located in Wilmington, North Carolina (the
"Company"), and XXXXXXX XXXXX XXXXXX, XX. (the "Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide to the Director a deferred fee
opportunity. The Company will pay the Director's benefits from the Company's
general assets.
AGREEMENT
The Director and the Company agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall have
the meanings specified:
1.1 "Anniversary Date" means December 31 of each year.
1.2 "Change in Control" means the transfer of shares of the Company's
voting common stock such that one entity or one person acquires (or is deemed to
acquire when applying Section 318 of the Code) more than 25 percent of the
----------
Company's outstanding voting common stock followed within twelve (12) months by
the Director's Termination of Service for reasons other than death, Disability
or retirement.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Deferral Account" means the Company's accounting of the Director's
accumulated Deferrals plus accrued interest.
1.5 "Deferrals" means the amount of the Director's Fees, which the Director
elects to defer according to this Agreement.
1.6 "Disability" means, if the Director is covered by a Company-sponsored
disability policy, total disability as defined in such policy without regard to
any waiting period. If the Director is not covered by such a policy, Disability
means the Director suffering a sickness, accident or injury, which, in the
judgment of a physician who is satisfactory to the Company, prevents the
Director from performing substantially all of the Director's normal duties for
the Company. As a condition to any Disability benefits, the Company may require
the Director to submit to such physical or mental evaluations and tests as the
Company's Board of Directors deems appropriate and reasonable.
1.7 "Effective Date" means October 1, 2001.
1.8 "Election Form" means the Form attached as Exhibit 1.
1.9 "Fees" means the total fees payable to the Director during a Plan Year.
1.10 "Normal Retirement Age" means the Director's 72nd birthday.
Termination of Service is mandatory upon the Director attaining 72 years of age.
1
1.11 "Normal Retirement Date" means the later of the Normal Retirement Age
or Termination of Service.
1.12 "Plan Year" means the calendar year.
1.13 "Termination of Service" means that the Director ceases to be a member
of the Company's Board of Directors for any reason, voluntarily or
involuntarily, other than by reason of a leave of absence approved by the
Company.
ARTICLE 2
DEFERRAL ELECTION
2.1 Initial Election. The Director shall make an initial deferral election
under this Agreement by filing with the Company a signed Election Form within 30
days after the adopted date of this Agreement. The Election Form shall set forth
the amount of Fees to be deferred and shall be effective to defer only Fees
earned after the date the Election Form is received by the Company.
2.2 Election Changes
2.2.1 Generally. Upon the Company's approval, the Director may modify
the amount of Fees to be deferred annually by filing a new Election Form with
the Company prior to the beginning of the Plan Year in which the Fees are to be
deferred. The modified deferral election shall not be effective until the
calendar year following the year in which the subsequent Election Form is
received and approved by the Company.
2.2.2 Hardship. If an unforeseeable financial emergency arising from
the death of a family member, divorce, sickness, injury, catastrophe or similar
event outside the control of the Director occurs, the Director, by written
instructions to the Company, may reduce future deferrals under this Agreement.
ARTICLE 3
DEFERRAL ACCOUNT
3.1 Establishing and Crediting. The Company shall establish a Deferral
Account on its books for the Director and shall credit to the Deferral Account
the following amounts:
3.1.1 Deferrals. The Fees deferred by the Director as of the time the
Fees would have otherwise been paid to the Director.
3.1.2 Interest. On each Anniversary Date of this Agreement and
immediately prior to the payment of any benefits, but only until commencement of
the benefit payments under this Agreement, interest is to be credited on the
account balance at an annual rate equal to 10 percent, compounded monthly.
3.2 Statement of Accounts. The Company shall provide to the Director,
within 120 days after each Anniversary Date, a statement setting forth the
Deferral Account balance.
3.3 Accounting Device Only. The Deferral Account is solely a device for
measuring amounts to be paid under this Agreement. The Deferral Account is not a
trust fund of any kind. The Director is a general unsecured creditor of the
Company for the payment of benefits. The benefits represent the mere Company
promise to pay such benefits. The Director's rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Director's creditors.
ARTICLE 4
BENEFITS DURING LIFETIME
4.1 Normal Retirement Benefit. Upon the Normal Retirement Date, the Company
shall pay to the Director the benefit described in this Section 4.1 in lieu of
any other benefit under this Agreement.
2
4.1.1. Amount of Benefit. The benefit under this Section 4.1 is the
Deferral Account balance at the Director's Normal Retirement Date.
4.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director in 120 monthly installments commencing on the month following the
Director's Normal Retirement Date. The Company shall credit interest pursuant to
Section 3.1.2 on the remaining account balance during any applicable installment
period.
4.2 Early Retirement Benefit. Upon Termination of Service prior to the
Normal Retirement Age for reasons other than death, Change of Control or
Disability, the Company shall pay to the Director the benefit described in this
Section 4.2 in lieu of any other benefit under this Agreement.
4.2.1 Amount of Benefit. The benefit under this Section 4.2 is the
Deferral Account balance at the Director's Termination of Service.
4.2.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.3 Disability Benefit. If the Director's Termination of Service prior to
Normal Retirement Age is due to Disability, the Company shall pay to the
Director the benefit described in this Section 4.3 in lieu of any other benefit
under this Agreement.
4.3.1 Amount of Benefit. The benefit under this Section 4.3 is the
Deferral Account balance at the Directors' Termination of Service.
4.3.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4 Change of Control Benefit. Upon a Change of Control, the Company shall
pay to the Director the benefit described in this Section 4.4 in lieu of any
other benefit under this Agreement.
4.4.1 Amount of Benefit. The benefit under this Section 4.4 is the
greater of: (a) the Deferral Account balance at the Director's Termination of
Service; or (b) $169,748.
4.4.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days following the Director's Termination of
Service.
4.4.3 Internal Revenue Service Section 280G Gross Up. If, as a result
of a Change of Control, the Director becomes entitled to acceleration of
benefits under this Agreement or under any other benefit, compensation or
incentive plan or arrangement with the Company (collectively, the "Total
Benefits"), and if any part of the Total Benefits is subject to the Excise Tax
under Section 280G and Section 4999 of the Internal Revenue Code (the "Excise
Tax"), the Company shall pay to the Director the following additional amounts,
consisting of (a) a payment equal to the Excise Tax payable by the Director on
the Total Benefits under Section 4999 of the Internal Revenue Code (the "Excise
Tax Payment"), and (b) a payment equal to the amount necessary to provide the
Excise Tax Payment net of all income, payroll and excise taxes. Payment of the
additional amounts described in clauses (a) and (b) shall be made in addition to
the Total Benefits.
4.5 Hardship Distribution. Upon the Board of Director's determination
(following petition by the Director) that the Director has suffered an
unforeseeable financial emergency as described in Section 2.2.2, the Company
shall distribute to the Director all or a portion of the Deferral Account
balance as determined by the Company, but in no event shall the distribution be
greater than is necessary to relieve the financial hardship.
3
ARTICLE 5
DEATH BENEFITS
5.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 5.1 in lieu of any other benefit under this
Agreement.
5.1.1 Amount of Benefit. The benefit under this Section 5.1 is the
Deferral Account balance at the Director's death.
5.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director's beneficiary in a lump sum within 60 days following the Director's
death.
5.2 Death During Payment of a Benefit. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have been paid
to the Director had the Director survived.
5.3 Death After Termination of Service But Before Benefit Payments
Commence. If the Director is entitled to benefit payments under this Agreement,
but dies prior to the commencement of said benefit payments, the Company shall
pay the benefit payments to the Director's beneficiary that the Director was
entitled to prior to death except that the benefit payments shall commence on
the first day of the month following the date of the Director's death.
ARTICLE 6
BENEFICIARIES
6.1 Beneficiary Designations. The Director shall designate a beneficiary by
filing a written designation with the Company. The Director may revoke or modify
the designation at any time by filing a new designation. However, designations
will only be effective if signed by the Director and received by the Company
during the Director's lifetime. The Director's beneficiary designation shall be
deemed automatically revoked if the beneficiary predeceases the Director or if
the Director names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Director dies without a valid beneficiary designation, all
payments shall be made to the Director's estate.
6.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
ARTICLE 7
GENERAL LIMITATIONS
7.1 Termination for Cause. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not pay any benefit under this Agreement that
is in excess of the Director's Deferrals (i.e., the interest earned on the
Deferral Account) if the Company terminates the Director's service for:
(a) Gross negligence or gross neglect of duties to the Company;
(b) Commission of a felony or of a gross misdemeanor involving
moral turpitude in connection with the Director's service to the
Company; or
4
(c) Fraud, disloyalty, dishonesty or willful violation of any
law or significant Company policy committed in connection with the
Director's service and resulting in an adverse effect on the Company.
7.2 Suicide or Misstatement. The Company shall not pay any benefit under
this Agreement if the Director commits suicide within three years after the date
of this Agreement. In addition, the Company shall not pay any benefit under this
Agreement if the Director has made any material misstatement of fact on a resume
provided to the Company, or on any application for any benefits provided by the
Company to the Director.
ARTICLE 8
CLAIMS AND REVIEW PROCEDURES
8.1 Claims Procedure. The Company shall notify any person or entity that
makes a claim against this Agreement (the "Claimant") in writing, within 90 days
of Claimant's written application for benefits, of his or her eligibility or
non-eligibility for benefits under the 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 the 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, (4) an explanation of the
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed and (5) a
time within which review must be requested. 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.
8.2 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 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 60-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the Claimant and
the specific provisions of the 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 days at the election of the
Company, but notice of this deferral shall be given to the Claimant.
ARTICLE 9
AMENDMENTS AND TERMINATION
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Director.
ARTICLE 10
MISCELLANEOUS
10.1 Binding Effect. This Agreement shall bind the Director and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.
10.2 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 shareholders' rights 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 services at any
time.
10.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
5
10.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
10.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of North Carolina, except to the extent
preempted by the laws of the United States of America.
10.6 Unfunded Arrangement. The Director and the Director's beneficiary are
general unsecured creditors of the Company for the payment of benefits under
this Agreement. The benefits represent the mere promise by the Company to pay
such benefits. The rights to benefits are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors. Any insurance on the Director's life is
a general asset of the Company to which the Director and the Director's
beneficiary have no preferred or secured claim.
10.7 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
under this Agreement. Upon the occurrence of such event, the term "Company" as
used in this Agreement shall be deemed to refer to the successor or survivor
company.
10.8 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.
10.9 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.
10.10 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 Service of advisors and the delegation of ministerial duties to
qualified individuals.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
Director Company
COOPERATIVE BANK FOR SAVINGS
/s/ Xxxxxxx Xxxxx Xxxxxx, Xx. By /s/ Xxxxxxxxx Xxxxxxxx, III
--------------------------------- ------------------------------------
Xxxxxxx Xxxxx Xxxxxx, Xx.
Title President
----------------------------------
6
COOPERATIVE BANK FOR SAVINGS
SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is adopted this 17th day of January, 2002, by and between
COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in Wilmington,
North Carolina (the "Company"), and XXXXXXX XXXXX XXXXXX, XX. (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 a member of the Company's Board of
Directors, 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.
AGREEMENT
The Company and the Director agree as follows:
ARTICLE I
GENERAL DEFINITIONS
The following terms shall have the meanings specified:
1.1 "Insurers" means Jefferson-Pilot Life Insurance Company and West Coast
Life Insurance Company.
1.2 "Policies" means insurance policy nos. JP5195509 and ZUA386790 issued
by the respective Insurers.
1.3 "Insured" means the Director.
1.4 "Net Death Proceeds" means the total death proceeds of the Policy minus
the cash surrender value.
1.5 "Normal Retirement Age" means the Director's 72nd birthday. Termination
of Service is mandatory upon the Director attaining 72 years of age.
1.6 "Termination of Service" means the Director ceases to be a member of
the Company's Board of Directors for any reason, voluntary or involuntary, other
than by reason of a leave of absence approved by the Company or by death.
-1-
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 except as otherwise
said herein. The Company shall be the beneficiary of the death proceeds
remaining after the Director's interest has been paid according to Section 2.2
below.
2.2 Director's Interest. The Director shall have the right to designate the
beneficiary of an amount equal to 100 percent of the Net Death Proceeds of the
Policy. The Director shall also have the right to elect and change settlement
options that may be permitted.
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.
2.4 Comparable Coverage. Upon adoption and subject to the terms of this
Agreement, the Company shall maintain the Policy in full force and effect and in
no event shall the Company amend, terminate, or otherwise abrogate the
Director's interest in the Policy, unless the Company replaces the Policy with a
comparable insurance policy to cover the benefit provided under this Agreement,
amends the Split Dollar Agreement and executes a new Endorsement for said
comparable insurance policy. The Director agrees to provide the required medical
information to the Insurers for the implementation of this Agreement and agrees
to participate with the Company if the Company desires to obtain a comparable
insurance policy with another carrier, whether prior to or after Normal
Retirement Age. The Policy or any comparable policy shall be subject to the
claims of the Company's creditors.
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 of the Director's
interests in the Policy and in this Agreement to any person, entity or trust. In
the event the Director transfers all of the
-2-
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
INSURERS
The Insurers shall be bound only by the terms of their respective Policies.
Any payments the Insurers make or action the Insurers take in accordance with
their respective Policies shall fully discharge such Insurers from all claims,
suits and demands of all entities or persons. The Insurers shall not be bound by
or be deemed to have notice of the provisions of this Agreement.
ARTICLE 6
CLAIMS PROCEDURES
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, (4) an explanation of this
Agreement's claims review procedure and other appropriate information as to the
steps to be taken if the Claimant wishes to have the claim reviewed, and (5) a
time within which a review must be requested. 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 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.
-3-
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 shareholders' rights 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 services at any time.
8.3 Applicable Law. The Agreement and all rights hereunder shall be
governed by and construed according to the laws of the State of North Carolina,
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.
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;
-4-
(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 this 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:
COOPERATIVE BANK FOR SAVINGS
/s/ Xxxxxxx Xxxxx Xxxxxx, Xx. By /s/ Xxxxxxxxx Xxxxxxxx, III
-------------------------------- -----------------------------------
Xxxxxxx Xxxxx Xxxxxx, Xx.
Title President
---------------------------------
-5-
SPLIT DOLLAR POLICY ENDORSEMENT TO
COOPERATIVE BANK FOR SAVINGS SPLIT DOLLAR AGREEMENT
Policy No. JP5195509 Insured: Xxxxxxx Xxxxx Xxxxxx, Xx.
Supplementing and amending the application for insurance to Jefferson-Pilot Life
Insurance Company ("Insurer") on September 21, 2001, the applicant requests and
directs that:
BENEFICIARIES
-------------
1. COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in
Wilmington, North Carolina (the "Company"), shall be the beneficiary of the
death proceeds remaining after the Insured's interest has been paid according to
paragraph (2) below.
2. The Insured or the Insured's transferee shall designate the beneficiary
of an amount equal to 100 percent of the Net Death Proceeds of the Policy
(defined as the total death proceeds of the Policy minus the cash surrender
value).
OWNERSHIP
---------
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
---------------------------------------------------
Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in (3) above shall be limited to the portion of
the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
----------------
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer. The Insurer may rely
on a sworn statement in form satisfactory to it furnished by the Owner, its
successors or assigns, as to their interest, and any payments made pursuant to
such statement shall discharge the Insurer accordingly. The owner accepts and
agrees to this split dollar endorsement.
-6-
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
COOPERATIVE BANK FOR SAVINGS
By /s/ Xxxxxxxxx Xxxxxxxx, III
-----------------------------------------------
Title President
-----------------------------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
--------------------------------------
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship:__________________________________________________________
Contingent Beneficiary (if the Primary is deceased):____________________________
Relationship:__________________________________________________________
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
THE INSURED:
/s/ Xxxxxxx Xxxxx Xxxxxx, Xx.
------------------------------------
Xxxxxxx Xxxxx Xxxxxx, Xx.
-7-
SPLIT DOLLAR POLICY ENDORSEMENT TO
COOPERATIVE BANK FOR SAVINGS SPLIT DOLLAR AGREEMENT
Policy No. ZUA386790 Insured: Xxxxxxx Xxxxx Xxxxxx, Xx.
Supplementing and amending the application for insurance to West Coast Life
Insurance Company ("Insurer") on September 21, 2001, the applicant requests and
directs that:
BENEFICIARIES
-------------
1. COOPERATIVE BANK FOR SAVINGS, a State/Stock Savings Bank located in
Wilmington, North Carolina (the "Company"), shall be the beneficiary of the
death proceeds remaining after the Insured's interest has been paid according to
paragraph (2) below.
2. The Insured or the Insured's transferee shall designate the beneficiary
of an amount equal to 100 percent of the Net Death Proceeds of the Policy
(defined as the total death proceeds of the Policy minus the cash surrender
value).
OWNERSHIP
---------
3. The Owner of the policy shall be the Company. The Owner shall have all
ownership rights in the Policy except as may be specifically granted to the
Insured or the Insured's transferee in paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign
his or her rights and interests in the Policy with respect to that portion of
the death proceeds designated in paragraph (2) of this endorsement, and to
exercise all settlement options with respect to such death proceeds.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
---------------------------------------------------
Upon the death of the Insured, the interest of any collateral assignee of
the Owner of the Policy designated in (3) above shall be limited to the portion
of the proceeds described in paragraph (1) above.
OWNERS AUTHORITY
----------------
The Insurer is hereby authorized to recognize the Owner's claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the Policy. The
signature of the Owner shall be sufficient for the exercise of any rights under
this Endorsement and the receipt of the Owner for any sums received by it shall
be a full discharge and release therefore to the Insurer. The Insurer may rely
on a sworn statement in form satisfactory to it furnished by the Owner, its
successors or assigns, as to their interest, and any payments made pursuant to
such statement shall discharge the Insurer accordingly. The owner accepts and
agrees to this split dollar endorsement.
-8-
Any transferee's rights shall be subject to this Endorsement.
The undersigned is signing in a representative capacity and warrants that he or
she has the authority to bind the entity on whose behalf this document is being
executed.
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
COOPERATIVE BANK FOR SAVINGS
By /s/ Xxxxxxxxx Xxxxxxxx, III
-----------------------------------------------
Title President
-----------------------------------------------
ACCEPTANCE AND BENEFICIARY DESIGNATION
--------------------------------------
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates the following as beneficiary(s) of the
portion of the proceeds described in paragraph (2) above:
Primary Beneficiary: ___________________________________________________________
Relationship:__________________________________________________________
Contingent Beneficiary (if the Primary is deceased):____________________________
Relationship:__________________________________________________________
Signed at Wilmington, North Carolina, this 17th day of January, 2002.
THE INSURED:
/s/ Xxxxxxx Xxxxx Xxxxxx, Xx.
--------------------------------------------
Xxxxxxx Xxxxx Xxxxxx, Xx.
-9-
