Exhibit 10.1
DESIGNATED PARTICIPANT
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
THIS SPLIT DOLLAR LIFE INSURANCE AGREEMENT ("the Agreement"), is made as
of , 1998 by and between "NAME" ("Executive") and
▇▇▇▇▇ BANK N.A., its affiliates and subsidiaries and its successors or
assigns ("▇▇▇▇▇"). The Agreement is effective as of
, 1998, without the consent of the
Executive, in accordance with Paragraph 9(a) of the Agreement and restates and
replaces any prior Split Dollar Agreement between ▇▇▇▇▇ and Executive.
RECITALS:
A. Executive is an employee of ▇▇▇▇▇, holding the title of senior vice
president or a more senior title and is (or was) a Designated Participant.
▇. ▇▇▇▇▇ has determined that it is in the best interest of ▇▇▇▇▇ and the
senior officers of ▇▇▇▇▇ to establish and maintain a split dollar life insurance
program. ▇▇▇▇▇ desires to encourage Executive to remain in ▇▇▇▇▇ employ by
entering into a split dollar life insurance agreement with Executive.
C. Executive consents to ▇▇▇▇▇' purchasing insurance on the life of
Executive and agrees to participate in the split dollar life insurance program
as hereinafter provided by entering into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. Purchase of Insurance. ▇▇▇▇▇ shall acquire a life insurance policy (the
"Policy") on the life of Executive with a face amount not less than an amount
sufficient to pay the Executive's Named Beneficiary (as defined in paragraph 4
below) the benefits described in paragraph 7(a)(i) below and to recover ▇▇▇▇▇'
Interest in the Policy (as defined in paragraph 7 below), which Policy is
described on the attached Schedule A (the issuer of the Policy shall hereinafter
be referred to as the "Insurer"). ▇▇▇▇▇ may increase or decrease the face amount
of the Policy from time to time and may apply earnings on the accumulating cash
value of the Policy in excess of the guaranteed rate for the purpose of carrying
out the objectives of this Agreement in such manner as it shall determine in its
sole discretion. In the event of such increased or decreased coverage, the
rights, duties and benefits of the parties to such coverage shall continue to be
subject to the terms of this Agreement.
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2. Application and Consent. Executive hereby consents to the purchase of
the Policy and agrees to answer all questions concerning his or her insurability
and to submit such evidence of insurability as may be required by the Insurer on
such form(s) as ▇▇▇▇▇ shall provide. If ▇▇▇▇▇ elects to increase the face amount
of the Policy for the purpose of carrying out the objectives of the Agreement,
Executive hereby agrees to answer all questions concerning his or her
insurability and to submit such evidence of insurability as may be required by
the Insurer (including such medical examinations as may be required) and to
execute any other documents as may be required by the Insurer to effectuate the
increase.
3. Ownership of Policy. The Policy shall be owned by ▇▇▇▇▇. Executive
shall have the beneficiary designation rights contained in paragraph 4 of this
Agreement, but except as otherwise provided herein, each and every other right
of ownership of the Policy shall be reserved to ▇▇▇▇▇ even though the exercise
of such right or rights would adversely affect or extinguish the payment of any
benefits to which Executive or the Executive's Named Beneficiary would otherwise
be entitled to under this Agreement or the Policy or the right of Executive to
designate a beneficiary pursuant to paragraph 4 hereof.
4. Beneficiary Designation Rights. Executive shall have the right and
power to designate, in writing and on such form(s) as ▇▇▇▇▇ shall provide, a
beneficiary or beneficiaries ("Executive's Named Beneficiary") to receive the
amounts described in paragraph 7, and to elect and change a payment option for
such beneficiary. Any change in beneficiary or payment option shall become
effective as provided in the terms of the Policy. If Executive fails to make a
valid notification or if the Executive's Named Beneficiary fails to survive
Executive or otherwise fails to receive the amounts described in paragraph 7,
Executive's Named Beneficiary shall be the personal representative of
Executive's estate.
5. Premium Payments. ▇▇▇▇▇ shall remit each premium due on the Policy in
accordance with the mode of premium payment as provided in the Policy on or
before the due date provided therein.
6. Policy Loans or Cash Withdrawals. ▇▇▇▇▇ alone shall have the right,
without the consent of Executive, to make policy loans or withdrawals of the
Policy cash value, but ▇▇▇▇▇ shall not permit the indebtedness on the Policy or
withdrawals to exceed ▇▇▇▇▇' Investment in the Policy (as defined in paragraph 7
below).
7. Division of Death Proceeds of Policy; Definitions. Except as provided
in paragraph 21 below, Policy Proceeds shall be divided as provided in this
paragraph 7.
(a) Pre-Retirement Division.
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(1) If Executive dies before Retirement, Executive's Named
Beneficiary shall be entitled to an amount of the Policy Proceeds equal to three
times Executive's Highest Base Annual Compensation.
(2) ▇▇▇▇▇ shall receive any remaining Policy Proceeds.
(b) Post-Retirement Division.
(1) If Executive dies on or after Retirement, Executive's Named
Beneficiary shall be entitled to an amount of the Policy Proceeds equal to one
and one-half times Executive's Highest Base Annual Compensation.
(2) ▇▇▇▇▇ shall receive any remaining Policy Proceeds.
(c) Certain Pre-Retirement Terminations, (Effective December 14,
1994):
(1) If Executive (i) is (or was) a Designated Participant, (ii)
terminates employment from ▇▇▇▇▇ before Retirement within the 6-month period
before or after the date of the public announcement of a Change of Control as a
result of either a termination by ▇▇▇▇▇ without Cause or a Termination for Good
Reason by the Executive, or after a Change of Control, and (iii) dies, then
Executive's Named Beneficiary shall be entitled to an amount of the Policy
Proceeds equal to one and one-half times Executive's Highest Base Annual
Compensation.
(2) ▇▇▇▇▇ shall receive any remaining Policy Proceeds.
(d) Definitions. For purposes of this Agreement (Effective December
14, 1994):
(1) "Cause" means any act materially detrimental to the best
interests of ▇▇▇▇▇ and that constitutes on the part of the Executive personal
dishonesty, willful misconduct in clear conflict with reasonable standards of
employee conduct, breach of fiduciary duty involving personal profit,
intentional failure to perform duties of the Executive's position, willful
violation of law, governmental rule or regulation (other than traffic violations
or similar offenses) or final cease and desist order, or for any reason which
would constitute grounds for removal from office by the appropriate Federal
banking agencies under applicable law.
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(2) "Change of Control" means (1) the sale of substantially all
of ▇▇▇▇▇ National Corporation its affiliates and subsidiaries ("RNC") assets (2)
the acquisition, whether directly, indirectly, beneficially (within the meaning
of Rule 13d-3 of the Securities Act of 1933 (the "Act"), or of record, of
securities of RNC representing twenty-five percent (25%) or more in the
aggregate voting power of RNC's then-outstanding Common Stock by any "person"
(within the meaning of Sections 13(d) and 14(d) of the Act), including any
corporation or group of associated persons acting in concert, other than (i) RNC
or its subsidiaries and/or (ii) any employee pension benefit plan (within the
meaning of Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) of RNC or of its subsidiaries, including a trust
established pursuant to any such plan; (3) RNC is merged or consolidated with or
into another corporation in any transaction or series of transactions, in which
either (A) the persons who were the beneficial owners of RNC's voting securities
immediately prior to such transaction do not beneficially own immediately after
such transaction at least fifty percent (50%) of the total outstanding voting
power of the surviving corporation or (B) any "person" (within the meaning of
Section 13(d) and 14(d) of the Act), including any corporation or group of
associated persons acting in concert is or becomes the direct, indirect or
beneficial owner (within the meaning of Rule 13d-3 of the Act) of twenty-five
percent (25%) or more of the aggregate voting power of resulting entity,
provided that such person was not a twenty-five percent (25%) or more owner of
RNC prior to the transaction nor transactions; or (4) RNC is liquidated or
dissolved or adopts a plan of liquidation or dissolution. Notwithstanding the
foregoing, a Change of Control will not result from (A) a transfer of RNC's
voting securities by a person who is the beneficial owner, directly or
indirectly, of twenty-five percent (25%) or more of the voting securities of RNC
(a "25 Percent Owner") to (i) a member of such 25 Percent Owner's immediate
family (within the meaning of Rule 16a-1(e) of the Act) either during such 25
Percent Owner's lifetime or by will or the laws of descent and distribution;
(ii) any trust as to which the 25 Percent Owner or a member (or members) of 25
Percent Owner's immediate family (within the meaning of Rule 16a-1(e) of the
Act) is the beneficiary; (iii) any trust as to which the 25 Percent Owner is the
settlor with sole power to revoke; or (iv) any entity over which such 25 Percent
Owner has the power, directly or indirectly, to direct or cause the direction of
the management and policies of the entity, whether through the ownership of
voting securities, by contract, or otherwise; or (v) any charitable trust,
foundation or corporation under Section 501(c)(3) of the Internal Revenue Code
of 1986, as amended (the "Code"), that is funded by the 25 Percent Owner; or (B)
the acquisition of voting securities of RNC or the resulting entity in the event
of a merger or consolidation by either (i) a person who was a 25 Percent Owner
on the effective date of the Plan or (ii) a person, trust or other entity
described in the foregoing clauses (a)(i)-(v) of this subsection.
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(3) "Highest Base Annual Compensation" shall mean Executive's
highest base salary during the period of employment with ▇▇▇▇▇ as a senior
executive officer, rounded to the next higher multiple of $500. Base annual
salary shall not include bonus and other contingent compensation.
(4) "Policy Proceeds" shall mean the death benefits payable
under the Policy, net of any outstanding policy loans or cash withdrawals.
(5) "▇▇▇▇▇' Investment in the Policy" shall mean an amount equal
to the premiums paid from ▇▇▇▇▇' funds less any policy loans, cash withdrawals,
or refund of unearned premiums.
(6) "Retirement" shall mean the first day of the month in which
Executive retires from employment with ▇▇▇▇▇ and such retirement is under the
terms of the ▇▇▇▇▇ Bank N.A. Amended Pension Plan (or its successor) either: (A)
on or after his or her normal retirement date with a normal or late retirement
pension; or (B) on or after attaining age 55, with at least ten years of
service. Executive shall not be deemed to have retired during the period of time
that he or she is receiving a disability benefit under such plan.
(7) "▇▇▇▇▇' Interest in the Policy" at any given time shall mean
an amount equal to the sum of: (A) ▇▇▇▇▇' Investment in the Policy at such time;
and (B) a return on ▇▇▇▇▇' Investment in the Policy as it may have existed from
time to time, calculated from the date of the first premium payment on the
policy until the date ▇▇▇▇▇ receives its share of the Policy Proceeds from the
insurer, at a rate equal to the greater of: seven percent per annum, compounded
annually, or a rate two hundred basis points below the crediting rate applied by
the Insurer to the accumulating cash value of the Policy, as determined from
time to time by the Insurer (such rate of return being adjusted so that ▇▇▇▇▇'
return rate is no less than the rate described in this sentence after the
payment of any and all income taxes payable by ▇▇▇▇▇ because of the receipt of
the Policy Proceeds, or payments made by Executive under paragraph 8 below,
assuming the maximum income tax rates payable by ▇▇▇▇▇ in the year such Policy
Proceeds or payments are included in taxable income by ▇▇▇▇▇).
(8) "Termination for Good Reason" shall mean a voluntary
termination by the Executive within six months of the date (i) ▇▇▇▇▇ has
notified the Executive that the Executive has been transferred to a position
with a permanent regular place of employment more than twenty-five (25) miles
from the Executive's prior permanent regular place of employment, (ii) a
material reduction by ▇▇▇▇▇ in the Executive's base rate of pay, or (iii) ▇▇▇▇▇,
without the consent of the Executive, implements a change in Executive's duties
or responsibilities in the nature of a demotion. Reducing an Executive's title
to below senior vice president (or equivalent title) shall in all cases be
treated as a change in duties in the nature of a demotion.
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(e) Any refund of unearned premium as provided in the Policy shall be
refunded in total to ▇▇▇▇▇.
8. Termination of Agreement. This Agreement shall terminate 31 days after
the first to occur of the following events: (A) the receipt of a written notice
of termination by either party from the other party to this Agreement, with or
without the consent of the other party; or (B) except as provided in paragraph
7(c), the date of Executive's termination of employment with ▇▇▇▇▇ for any
reason other than Retirement. If ▇▇▇▇▇ gives notice of its intent to terminate
this Agreement under clause (A) above or Executive terminates employment with
▇▇▇▇▇ under clause (B) above, Executive shall have the right, until the
termination of this Agreement, to purchase the Policy from ▇▇▇▇▇ by payment to
▇▇▇▇▇ of an amount equal to the greater of: (i) the cash surrender value of the
Policy; or (ii) ▇▇▇▇▇' Interest in the Policy. Upon receipt of the purchase
price, ▇▇▇▇▇ shall execute such documents as may be required by the Insurer to
transfer ownership of the Policy to Executive. Notwithstanding the first
sentence of this paragraph, this Agreement shall terminate immediately upon
receipt of the purchase price and transfer of ownership of the Policy to
Executive. In the event of the termination of this Agreement under any
circumstances whereby Executive cannot, or does not, purchase the Policy,
Executive agrees, upon request to him or her by ▇▇▇▇▇, to execute such documents
as may be required by the Insurer to designate ▇▇▇▇▇ as sole beneficiary of the
Policy (and Executive shall have no further right or interest in the Policy).
9. Amendment or Revocation of Agreement. Notwithstanding ▇▇▇▇▇' intent to
continue this Agreement indefinitely and notwithstanding any other provision of
this Agreement:
(a) Before Executive's Retirement, ▇▇▇▇▇ retains the right to amend
or terminate this Agreement at any time and for any reason, with or without the
consent of Executive or any other person, even though the exercise of such right
or rights would adversely affect or extinguish Executive's (or Executive's Named
Beneficiary's) right to receive any benefits under this Agreement or Executive's
right to change the Executive's Named Beneficiary under this Agreement; however,
▇▇▇▇▇ shall not terminate this Agreement or amend it in a manner that would
adversely affect Executive's rights hereunder without Executive's consent,
unless done in conjunction with a substantially similar amendment, or
termination, of the split dollar life insurance agreements of all or a
significant group of Executives who are parties to similar split dollar life
insurance agreements between ▇▇▇▇▇ and senior officers of ▇▇▇▇▇.
(b) On or after Executive's Retirement, ▇▇▇▇▇ shall not terminate
this Agreement or amend it in any manner that adversely affects Executive's
rights hereunder without Executive's consent.
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(c) Notwithstanding subparagraphs (a) and (b) above, no amendment or
termination effected after Executive's death shall adversely affect the rights
of Executive's Named Beneficiary under this Agreement, but an amendment or
termination may be effective up to 60 days before ▇▇▇▇▇ notifies Executive of
such action. See paragraph 16 below.
10. Change of Control (Effective December 14, 1994): Upon the Change of
Control of ▇▇▇▇▇, as defined in Paragraph 7, the rights and duties of ▇▇▇▇▇
shall be modified in accordance with the provisions of this paragraph if the
Executive is a Designated Participant.
(a) Notwithstanding the provisions of paragraph 5 above, as soon as
practicable after (but in no event later than 30 days following) a Change of
Control, ▇▇▇▇▇ shall make an irrevocable contribution to the trust maintained to
provide certain benefits under the SERP in an amount at least equal to the
present value of premiums payable under the Policy with a face amount sufficient
to pay the Executive's Named Beneficiary the benefits described in paragraph 7
above as of the date of the Change in Control.
(b) Notwithstanding the provisions of paragraph 1, after a Change of
Control, ▇▇▇▇▇ shall be limited in its ability to increase or decrease the face
amount of the Policy. The face amount of the Policy shall be maintained so that
it shall be not less than an amount sufficient to pay the Executive's Named
Beneficiary the benefits described in paragraph 7 above.
(c) Notwithstanding the provisions of paragraph 3 above, after a
Change of Control, ▇▇▇▇▇ shall not be permitted to surrender the Policy, or to
exercise any other ownership right in the Policy which would adversely affect or
extinguish the payment of any benefits to which either the Executive or the
Executive's Named Beneficiary would otherwise be entitled under this Agreement.
(d) Notwithstanding the provisions of paragraph 6 above, after a
Change of Control, ▇▇▇▇▇ shall not be permitted to make any further policy loans
or withdrawals of the Policy cash value for any purpose, including, without
limitation, the payment of premiums due or loan interest payments on outstanding
policy loans.
11. Rights Under the Agreement.
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(a) Nothing in this Agreement shall confer upon Executive the right
to continue in the employ of ▇▇▇▇▇ or shall interfere with or restrict in any
way the rights of ▇▇▇▇▇ to discharge Executive at any time for any reason
whatsoever, with or without good cause. Benefits payable under this Agreement
shall not be considered salary or other compensation to Executive for the
purpose of computing benefits to which Executive may be entitled under any
pension or profit-sharing plan or any other arrangement of ▇▇▇▇▇ for the benefit
of the Executive or for the benefit of its employees or any class of its
employees.
(b) The rights of Executive and Executive's Named Beneficiary under
this Agreement shall be limited to the right to death benefits pursuant to
paragraph 7, the right to designate a beneficiary for such benefits pursuant to
paragraph 4, and the rights to terminate this Agreement and purchase the Policy
pursuant to paragraph 8.
12. Assignment. Executive (or his or her assignee) may, at any time,
assign to any individual, trust or other organization all the Executive's right,
title and interest in the Policy and all rights, options, privileges and duties
created under this Agreement. All rights and obligations of this Agreement shall
be binding upon the parties hereto, their heirs, legal representatives,
successors or assigns.
13. Named Fiduciary. The ▇▇▇▇▇ Bank N.A. Pension and Benefits Committee
(or its successor) is hereby designated the "Named Fiduciary" until resignation
or removal by ▇▇▇▇▇' Board of Directors. The Named Fiduciary shall be
responsible for, and shall have the sole discretion to decide all matters
pertaining to the management, control, interpretation and administration of this
Agreement. Such discretion includes, but is not limited to, determining the
qualification for, and the amount of, benefits payable under this Agreement, and
employment or retirement status. The Named Fiduciary shall apply its discretion
in good faith and any decisions made in good faith shall be binding upon all
parties to this Agreement. The Named Fiduciary may delegate to others certain
aspects of the management and operational responsibilities of this Agreement,
including the employment of advisors and the delegation of any ministerial
duties to qualified individuals.
14. Claims Procedure.
(a) (i) Claim forms or claim information as to the Policy can be
obtained by contacting the Director of Human Resources of ▇▇▇▇▇ Bank N.A., at
the address listed in paragraph 15(a) of this Agreement.
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(ii) When a claimant has a claim which may be covered under the
Policy, he or she should contact the Named Fiduciary who will contact the office
or the person named above, who will either complete a claim form and forward it
to an authorized representative of the Insurer or advise the Named Fiduciary
what further requirements are necessary. Under normal circumstances, the Insurer
will evaluate the claim and make a decision as to payment within 45 days after
receipt of the claim. However, if special circumstances require an extension of
time to process a claim, a final decision may be deferred up to 90 days after
receipt of the claim if prior to the end of the initial 45-day period the Named
Fiduciary is furnished written notice of the special circumstances requiring the
extension and the anticipated date of a final decision. If the claim is denied
within the applicable period of time set out above, the Named Fiduciary shall
receive written notification of the denial, which notice shall set forth the
specific reasons for the denial, the relevant provisions of the Policy on which
the denial is based, and the claim review procedure under the Policy.
(iii)If the claim is payable, a benefit check will be issued to
Executive's Named Beneficiary in an amount equal to the benefits payable to such
person(s) pursuant to paragraph 7 above and a benefit check will be issued to
▇▇▇▇▇ in an amount equal to the remaining Policy Proceeds. Benefit checks will
be forwarded through the Director of Human Resources of ▇▇▇▇▇ Bank N.A.
(iv) In the event a claim is denied or in the event no action is
taken on the claim within the above-described period(s) of time, the following
procedure shall be used:
(A) First, in the event that the Named Fiduciary does
not timely receive the above-described written notification, the Named
Fiduciary's request for benefits shall be deemed to be denied as of the last day
of the relevant period.
(B) Second, the Named Fiduciary shall, in its
discretion, take any and all reasonable action as it deems necessary to
perfect the claim.
(b) (i) Once a decision has been rendered as to the distribution of
proceeds under the claim procedure described above as to the Policy, claims for
any benefits due under this Agreement may be made in writing by ▇▇▇▇▇ or the
Executive's Named Beneficiary, as the case may be, to the Named Fiduciary. Under
normal circumstances, a final decision on a claimant's request for benefits
shall be made within 45 days after receipt of the claim. However, if special
circumstances require an extension of time to process a claim, a final decision
may be deferred up to 90 days after receipt of the claim if prior to the end of
the initial 45-day period the claimant is furnished written notice of the
special circumstances requiring the extension and the anticipated date of a
final decision. If the claim is denied, in whole or in part, within the
applicable period of time set out above, the claimant shall receive written
notification of the denial, which notice shall set forth the specific reasons
for the denial, the relevant provisions of the Agreement on which the denial is
based, and the claim review procedure under the Agreement.
(ii) In the event a claim is denied or in the event no action is
taken on the claim within the above-described period(s) of time, the following
procedure shall be used:
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(A) First, in the event that the claimant does not
timely receive the above-described written notification, the claimant's request
for benefits shall be deemed to be denied as of the last day of the relevant
period.
(B) Second, a claimant is entitled to a full review of
his or her claim after actual or constructive notification of a denial. A
claimant desiring a review must make a written request to the Named Fiduciary
requesting such a review, which may include whatever comments or arguments the
claimant wishes to submit. Incident to the review, the claimant may represent
himself or herself or appoint a representative to do so, and will have the right
to inspect all documents pertaining to the issue. The Named Fiduciary, in its
sole discretion, may schedule any meeting(s) with the claimant and/or the
claimant's representative it deems necessary or appropriate to facilitate or
expedite its review of a denied claim.
(iii)A request for a review must be filed with the Named
Fiduciary within 60 days after the denial of the claim for benefits was actually
or constructively received by the claimant. If no request is received within the
60-day time limit, the denial of benefits will be final. However, if a request
for review of a denied claim is timely filed, the Named Fiduciary must render
its decision under normal circumstances within 45 days of the receipt of the
request for review. In special circumstances the decision may be delayed if
prior to expiration of the initial 45-day period the claimant is notified of the
extension, but must in any event be rendered no later than 90 days after the
receipt of the request. If the decision on review is not furnished to the
claimant within the applicable time period(s) set out above, the claim shall be
deemed denied on the last day of the relevant period. All decisions of the Named
Fiduciary shall be in writing and shall include specific reasons for whatever
action has been taken, and the provisions of the Agreement on which the decision
is based.
15. Notices. All notices required to be given hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
mailed (by registered or certified mail, return receipt requested and postage
prepaid) as follows:
(a) If to ▇▇▇▇▇, to:
▇▇▇▇▇ Bank N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention:Director of Human Resources
of ▇▇▇▇▇ Bank N.A.
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(b) If to Executive, to: The Executive at the last known address
contained in the records of ▇▇▇▇▇' Human Resources Department.
or to such other person at such other address as the party to whom notice is to
be given may have furnished to the other party in writing from time to time. If
mailed, any such communication shall be deemed to have been given on the third
business day following the date on which it was posted.
16. Entire Agreement. This Agreement sets forth the entire understanding
between the parties. No subsequent changes or amendments to this Agreement shall
be binding unless they are in writing, signed by ▇▇▇▇▇, and notice of such
change has been duly given to the Executive no later than 60 days following the
date of such action. If notice of a change or amendment is provided by the date
stipulated in the immediately preceding sentence, the effective date of such
change or amendment shall be as provided in the change or amendment, and shall
not be delayed until the date of the notice.
17. Severability and Enforcement. If any provision of this Agreement is
void or unenforceable, or so declared, that provision shall be severed from this
Agreement, which shall otherwise remain in full force and effect.
18. Governing Law. The provisions of this Agreement shall be construed and
enforced according to the laws of the District of Columbia.
19. Insurer Not A Party To Agreement. Insurer shall not be deemed a party
to this Agreement, but will respect the rights of the parties as herein
described upon receiving an executed copy of this Agreement. Payment or other
performance of its contract obligations in accordance with the terms of the
Policy shall completely discharge the Insurer from all claims, suits and demands
of all persons whatsoever.
20. Withholding. ▇▇▇▇▇ shall withhold from Executive's current
compensation or require Executive to remit to ▇▇▇▇▇ any amount required to be
withheld under applicable Federal, State, or local law during the term of this
Agreement.
21. Exclusions.
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(a) Except as expressly provided in this paragraph 21, Executive's
Named Beneficiary shall receive benefits under paragraph 7 of this Agreement
only from Policy Proceeds and ▇▇▇▇▇ shall have no liability or obligation other
than the duty to make premium payments as provided in paragraph 5 and 10(a) of
the Agreement. If the Insurer does not pay the full amount of the death benefit
otherwise due under the Policy, Policy Proceeds shall be divided as follows:
(i) If the reduced payment is because (A) misrepresentations,
whether or not intentional, have been made by Executive or someone acting on
behalf of Executive in the process of applying for the Policy, or (B) Executive,
whether sane or insane, dies by suicide within two years from the issue date of
the Policy (or within two years from the issue date of an Unscheduled Increase,
as defined in paragraph 21(b) below, in the face amount of the Policy),
Executive's Named Beneficiary shall be entitled to receive the lesser of (C) the
amount of Policy Proceeds applicable under paragraph 7, or (D) the amount of
Policy Proceeds payable in excess of ▇▇▇▇▇' Interest in the Policy, rather than
the otherwise applicable amount under paragraph 7.
(ii) If the reduced payment is due to a failure by ▇▇▇▇▇ to
comply with the terms of this Agreement, Executive's Named Beneficiary shall
receive benefits in accordance with paragraph 7.
(iii)If the cause of the reduced payments is not described in
either paragraphs 21(a)(i) or (ii) above and the amount of Policy Proceeds is
less than the sum of the amount described in paragraph 7, as the case may be,
and ▇▇▇▇▇' Interest in the Policy, ▇▇▇▇▇ and Executive's Named Beneficiary shall
divide the reduced payment in the same ratio as the Policy Proceeds would have
been divided under paragraph 7 had the amount of Policy Proceeds equaled the sum
of the amount described in paragraph 7, as the case may be, and ▇▇▇▇▇' Interest
in the Policy. If the cause of the reduced payments is not described in either
paragraph 21(a)(i) or (ii) above and the amount of Policy Proceeds is greater
than or equal to the sum of the amount described in paragraph 7, and ▇▇▇▇▇'
Interest in the Policy, Executive's Named Beneficiary shall receive benefits in
accordance with paragraph 7.
-12-
(b) ▇▇▇▇▇ will use its best efforts to maintain an amount of
insurance sufficient to pay Executive's Named Beneficiary the benefits described
in paragraph 7, and to recover ▇▇▇▇▇' Interest in the Policy. Accordingly, the
face amount of the Policy is scheduled to increase for estimated increases in
Executive's compensation and ▇▇▇▇▇' Interest in the Policy ("Scheduled
Increases"). ▇▇▇▇▇ may also attempt to cause Unscheduled Increases (increases in
the face amount of the Policy that are not Scheduled Increases) in the Policy if
necessary to maintain the appropriate face amount of insurance. If such an
Unscheduled Increase requires evidence of insurability and ▇▇▇▇▇ is unable to
purchase the increased coverage under the Policy with an underwriting rating no
worse than standard risk, or the rating used to initially purchase the Policy if
that rating was less favorable than standard risk, ▇▇▇▇▇ shall not be obligated
to purchase such increased coverage and Executive's Named Beneficiary shall be
entitled to receive the lesser of (i) the amount of Policy Proceeds described in
paragraph 7, as the case may be, or (ii) the amount of Policy Proceeds payable
in excess of ▇▇▇▇▇' Interest in the Policy, rather than the otherwise applicable
amount under paragraph 7.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"NAME"
-----------------------------
Executive's Signature
▇▇▇▇▇ BANK N.A.
By: __________________________
Title:
------------------------
-13-
SCHEDULE A
Pursuant to the SPLIT DOLLAR LIFE INSURANCE AGREEMENT (the "Agreement")
dated , 1998 by and between "NAME" ("Executive") and ▇▇▇▇▇ BANK N.A., the
following described or attached policy of life insurance shall be subject to the
provisions of the Agreement.
Insurer: ______________________________
Policy Number: ______________________________
Policy Issue Date: ______________________________
-14-
SENIOR EXECUTIVE
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
THIS SPLIT DOLLAR LIFE INSURANCE AGREEMENT ("the Agreement"), is made as
of , 1998 by and between ("Executive") and ▇▇▇▇▇ BANK N.A., its affiliates and
subsidiaries and its successors or assigns ("▇▇▇▇▇"). The Agreement is effective
as of , without the consent of the Executive, in accordance with Paragraph 9(a)
of the Agreement and restates and replaces any prior Split Dollar Agreement
between ▇▇▇▇▇ and Executive.
RECITALS:
Executive is an employee of ▇▇▇▇▇, or one of its affiliated companies
(collectively, "▇▇▇▇▇"), holding the title of senior vice president or a more
senior title.
▇▇▇▇▇ has determined that it is in the best interest of ▇▇▇▇▇ and the
senior officers of ▇▇▇▇▇ to establish and maintain a split dollar life insurance
program. ▇▇▇▇▇ desires to encourage Executive to remain in ▇▇▇▇▇ employ by
entering into a split dollar life insurance agreement with Executive.
Executive consents to ▇▇▇▇▇' purchasing insurance on the life of Executive
and agrees to participate in the split dollar life insurance program as
hereinafter provided by entering into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. Purchase of Insurance. ▇▇▇▇▇ shall acquire a life insurance policy (the
"Policy") on the life of Executive with a face amount not less than an
amount sufficient to pay the Executive's Named Beneficiary (as defined
in paragraph 4 below) the benefits described in paragraph 7(a)(i) below
and to recover ▇▇▇▇▇' Interest in the Policy (as defined in paragraph 7
below), which Policy is described on the attached Schedule A (the issuer
of the Policy shall hereinafter be referred to as the "Insurer"). ▇▇▇▇▇
may increase or decrease the face amount of the Policy from time to time
and may apply earnings on the accumulating cash value of the Policy in
excess of the guaranteed rate for the purpose of carrying out the
objectives of this Agreement in such manner as it shall determine in its
sole discretion. In the event of such increased or decreased coverage,
the rights, duties and benefits of the parties to such coverage shall
continue to be subject to the terms of this Agreement.
-15-
2. Application and Consent. Executive hereby consents to the purchase of
the Policy and agrees to answer all questions concerning his or her
insurability and to submit such evidence of insurability as may be
required by the Insurer on such form(s) as ▇▇▇▇▇ shall provide. If
▇▇▇▇▇ elects to increase the face amount of the Policy for the purpose
of carrying out the objectives of the Agreement, Executive hereby agrees
to answer all questions concerning his or her insurability and to submit
such evidence of insurability as may be required by the Insurer
(including such medical examinations as may be required) and to execute
any other documents as may be required by the Insurer to effectuate the
increase.
3. Ownership of Policy. The Policy shall be owned by ▇▇▇▇▇. Executive
shall have the beneficiary designation rights contained in paragraph 4
of this Agreement, but except as otherwise provided herein, each and
every other right of ownership of the Policy shall be reserved to ▇▇▇▇▇
even though the exercise of such right or rights would adversely affect
or extinguish the payment of any benefits to which Executive or the
Executive's Named Beneficiary would otherwise be entitled to under this
Agreement or the Policy or the right of Executive to designate a
beneficiary pursuant to paragraph 4 hereof.
4. Beneficiary Designation Rights. Executive shall have the right and
power to designate, in writing and on such form(s) as ▇▇▇▇▇ shall
provide, a beneficiary or beneficiaries ("Executive's Named
Beneficiary") to receive the amounts described in paragraph 7, and to
elect and change a payment option for such beneficiary. Any change in
beneficiary or payment option shall become effective as provided in the
terms of the Policy. If Executive fails to make a valid notification or
if the Executive's Named Beneficiary fails to survive Executive or
otherwise fails to receive the amounts described in paragraph 7,
Executive's Named Beneficiary shall be the personal representative of
Executive's estate.
5. Premium Payments. ▇▇▇▇▇ shall remit each premium due on the Policy in
accordance with the mode of premium payment as provided in the Policy on
or before the due date provided therein.
6. Policy Loans or Cash Withdrawals. ▇▇▇▇▇ alone shall have the right,
without the consent of Executive, to make policy loans or withdrawals of
the Policy cash value, but ▇▇▇▇▇ shall not permit the indebtedness on the
Policy or withdrawals to exceed ▇▇▇▇▇' Investment in the Policy (as
defined in paragraph 7 below).
7. Division of Death Proceeds of Policy; Definitions. Except as provided in
paragraph 20 below, Policy Proceeds shall be divided as provided in this
paragraph 7.
-16-
1. Pre-Retirement Division.
1. If Executive dies before Retirement, Executive's Named
Beneficiary shall be entitled to an amount of the Policy
Proceeds equal to three times Executive's Highest Base Annual
Compensation.
2. ▇▇▇▇▇ shall receive any remaining Policy Proceeds.
2. Post-Retirement Division.
1. If Executive dies on or after Retirement, Executive's Named
Beneficiary shall be entitled to an amount of the Policy
Proceeds equal to one and one-half times Executive's Highest
Base Annual Compensation.
2. ▇▇▇▇▇ shall receive any remaining Policy Proceeds.
3. Definitions. For purposes of this Agreement:
1. "Highest Base Annual Compensation" shall mean Executive's
highest base salary during the period of employment with ▇▇▇▇▇
as a senior executive officer, rounded to the next higher
multiple of $500. Base annual salary shall not include bonus and
other contingent compensation.
2. "Policy Proceeds" shall mean the death benefits payable under
the Policy, net of any outstanding policy loans or cash
withdrawals.
3. "▇▇▇▇▇' Investment in the Policy" shall mean an amount equal to
the premiums paid from ▇▇▇▇▇' funds less any policy loans, cash
withdrawals, or refund of unearned premiums.
4. "Retirement" shall mean the first day of the month in which Executive
retires from employment with ▇▇▇▇▇ and such retirement is
under the terms of the ▇▇▇▇▇ Bank N.A. Amended Pension Plan
(or its successor) either: (A) on or after his or her normal
retirement date with a normal or late retirement pension; or
(B) on or after attaining age 55, with at least ten years of
service. Executive shall not be deemed to have retired during
the period of time that he or she is receiving a disability
benefit under such plan.
-17-
5. "▇▇▇▇▇' Interest in the Policy" at any given time shall mean an amount
equal to the sum of: (A) ▇▇▇▇▇' Investment in the Policy at
such time; and (B) a return on ▇▇▇▇▇' Investment in the Policy
as it may have existed from time to time, calculated from the
date of the first premium payment on the policy until the date
▇▇▇▇▇ receives its share of the Policy Proceeds from the
insurer, at a rate equal to the greater of: seven percent per
annum, compounded annually, or a rate two hundred basis points
below the crediting rate applied by the Insurer to the
accumulating cash value of the Policy, as determined from time
to time by the Insurer (such rate of return being adjusted so
that ▇▇▇▇▇' return rate is no less than the rate described in
this sentence after the payment of any and all income taxes
payable by ▇▇▇▇▇ because of the receipt of the Policy
Proceeds, or payments made by Executive under paragraph 8
below, assuming the maximum income tax rates payable by ▇▇▇▇▇
in the year such Policy Proceeds or payments are included in
taxable income by ▇▇▇▇▇).
8. Termination of Agreement. This Agreement shall terminate 31 days after
the first to occur of the following events: (A) the receipt of a written
notice of termination by either party from the other party to this
Agreement, with or without the consent of the other party; or (B) the
date of Executive's termination of employment with ▇▇▇▇▇ for any reason
other than Retirement. If ▇▇▇▇▇ gives notice of its intent to terminate
this Agreement under clause (A) above or Executive terminates employment
with ▇▇▇▇▇ under clause (B) above, Executive shall have the right, until
the termination of this Agreement, to purchase the Policy from ▇▇▇▇▇ by
payment to ▇▇▇▇▇ of an amount equal to the greater of: (i) the cash
surrender value of the Policy; or (ii) ▇▇▇▇▇' Interest in the Policy.
Upon receipt of the purchase price, ▇▇▇▇▇ shall execute such documents
as may be required by the Insurer to transfer ownership of the Policy to
Executive. Notwithstanding the first sentence of this paragraph, this
Agreement shall terminate immediately upon receipt of the purchase price
and transfer of ownership of the Policy to Executive. In the event of
the termination of this Agreement under any circumstances whereby
Executive cannot, or does not, purchase the Policy, Executive agrees,
upon request to him or her by ▇▇▇▇▇, to execute such documents as may be
required by the Insurer to designate ▇▇▇▇▇ as sole beneficiary of the
Policy (and Executive shall have no further right or interest in the
Policy).
9. Amendment or Revocation of Agreement. Notwithstanding ▇▇▇▇▇' intent to
continue this Agreement indefinitely and notwithstanding any other
provision of this Agreement:
-18-
1. Before Executive's Retirement, ▇▇▇▇▇ retains the right to amend or
terminate this Agreement at any time and for any reason, with or
without the consent of Executive or any other person, even though
the exercise of such right or rights would adversely affect or
extinguish Executive's (or Executive's Named Beneficiary's) right
to receive any benefits under this Agreement or Executive's right
to change the Executive's Named Beneficiary under this Agreement;
however, ▇▇▇▇▇ shall not terminate this Agreement or amend it in a
manner that would adversely affect Executive's rights hereunder
without Executive's consent, unless done in conjunction with a
substantially similar amendment, or termination, of the split
dollar life insurance agreements of all or a significant group of
Executives who are parties to similar split dollar life insurance
agreements between ▇▇▇▇▇ and senior officers of ▇▇▇▇▇.
2. On or after Executive's Retirement, ▇▇▇▇▇ shall not terminate this
Agreement or amend it in any manner that adversely affects
Executive's rights hereunder without Executive's consent.
3. Notwithstanding subparagraphs (a) and (b) above, no amendment or
termination effected after Executive's death shall adversely affect
the rights of Executive's Named Beneficiary under this Agreement, but
an amendment or termination may be effective up to 60 days before
▇▇▇▇▇ notifies Executive of such action. See paragraph 15 below.
10. Rights Under the Agreement.
1. Nothing in this Agreement shall confer upon Executive the right to
continue in the employ of ▇▇▇▇▇ or shall interfere with or restrict
in any way the rights of ▇▇▇▇▇ to discharge Executive at any time
for any reason whatsoever, with or without good cause. Benefits
payable under this Agreement shall not be considered salary or
other compensation to Executive for the purpose of computing
benefits to which Executive may be entitled under any pension or
profit-sharing plan or any other arrangement of ▇▇▇▇▇ for the
benefit of the Executive or for the benefit of its employees or any
class of its employees.
2. The rights of Executive and Executive's Named Beneficiary under this
Agreement shall be limited to the right to death benefits pursuant to
paragraph 7, the right to designate a beneficiary for such benefits
pursuant to paragraph 4, and the rights to terminate this Agreement
and purchase the Policy pursuant to paragraph 8.
-19-
11. Assignment. Executive (or his or her assignee) may, at any time, assign to
any individual, trust or other organization all the Executive's rights,
title and interest in the Policy and all rights, options, privileges and
duties created under this Agreement. All rights and obligations of this
Agreement shall be binding upon the parties hereto, their heirs, legal
representatives, successors or assigns.
12. Named Fiduciary. The ▇▇▇▇▇ Bank N.A. Pension and Benefits Committee (or
its successor) is hereby designated the "Named Fiduciary" until
resignation or removal by ▇▇▇▇▇' Board of Directors. The Named
Fiduciary shall be responsible for, and shall have the sole discretion
to decide all matters pertaining to the management, control,
interpretation and administration of this Agreement. Such discretion
includes, but is not limited to, determining the qualification for, and
the amount of, benefits payable under this Agreement, and employment or
retirement status. The Named Fiduciary shall apply its discretion in
good faith and any decisions made in good faith shall be binding upon
all parties to this Agreement. The Named Fiduciary may delegate to
others certain aspects of the management and operational
responsibilities of this Agreement, including the employment of advisors
and the delegation of any ministerial duties to qualified individuals.
13. Claims Procedure.
1. i. Claim forms or claim information as to the Policy can be
obtained by contacting the Director of Human Resources of
▇▇▇▇▇ Bank N.A. at the address listed in paragraph 14(a) of
this Agreement.
-20-
ii. When a claimant has a claim which may be covered under the
Policy, he or she should contact the Named Fiduciary who will
contact the office or the person named above, who will either
complete a claim form and forward it to an authorized
representative of the Insurer or advise the Named Fiduciary
what further requirements are necessary. Under normal
circumstances, the Insurer will evaluate the claim and make a
decision as to payment within 45 days after receipt of the
claim. However, if special circumstances require an extension
of time to process a claim, a final decision may be deferred
up to 90 days after receipt of the claim if prior to the end
of the initial 45-day period the Named Fiduciary is furnished
written notice of the special circumstances requiring the
extension and the anticipated date of a final decision. If
the claim is denied within the applicable period of time set
out above, the Named Fiduciary shall receive written
notification of the denial, which notice shall set forth the
specific reasons for the denial, the relevant provisions of
the Policy on which the denial is based, and the claim review
procedure under the Policy.
iii. If the claim is payable, a benefit check will be issued to
Executive's Named Beneficiary in an amount equal to the benefits
payable to such person(s) pursuant to paragraph 7 above and a
benefit check will be issued to ▇▇▇▇▇ in an amount equal to the
remaining Policy Proceeds. Benefit checks will be forwarded
through the Director of Human Resources of ▇▇▇▇▇ Bank N.A.
iv. In the event a claim is denied or in the event no action is
taken on the claim within the above-described period(s) of time,
the following procedure shall be used:
(1) First, in the event that the Named Fiduciary does not
timely receive the above-described written notification,
the Named Fiduciary's request for benefits shall be deemed
to be denied as of the last day of the relevant period.
(2) Second, the Named Fiduciary shall, in its discretion, take
any and all reasonable action as it deems necessary to
perfect the claim.
2. i. Once a decision has been rendered as to the distribution of
proceeds under the claim procedure described above as to the
Policy, claims for any benefits due under this Agreement may
be made in writing by ▇▇▇▇▇ or the Executive's Named
Beneficiary, as the case may be, to the Named Fiduciary. Under
normal circumstances, a final decision on a claimant's request
for benefits shall be made within 45 days after receipt of the
claim. However, if special circumstances require an extension
of time to process a claim, a final decision may be deferred
up to 90 days after receipt of the claim if prior to the end
of the initial 45-day period the claimant is furnished written
notice of the special circumstances requiring the extension
and the anticipated date of a final decision. If the claim is
denied, in whole or in part, within the applicable period of
time set out above, the claimant shall receive written
notification of the denial, which notice shall set forth the
specific reasons for the denial, the relevant provisions of
the Agreement on which the denial is based, and the claim
review procedure under the Agreement.
-21-
ii. In the event a claim is denied or in the event no action is
taken on the claim within the above-described period(s) of time,
the following procedure shall be used:
(1) First, in the event that the claimant does not timely
receive the above-described written notification, the
claimant's request for benefits shall be deemed to be
denied as of the last day of the relevant period.
(2) Second, a claimant is entitled to a full review of his or
her claim after actual or constructive notification of a
denial. A claimant desiring a review must make a written
request to the Named Fiduciary requesting such a review,
which may include whatever comments or arguments the
claimant wishes to submit. Incident to the review, the
claimant may represent himself or herself or appoint a
representative to do so, and will have the right to inspect
all documents pertaining to the issue. The Named Fiduciary,
in its sole discretion, may schedule any meeting(s) with
the claimant and/or the claimant's representative it deems
necessary or appropriate to facilitate or expedite its
review of a denied claim.
iii. A request for a review must be filed with the Named Fiduciary
within 60 days after the denial of the claim for benefits was
actually or constructively received by the claimant. If no
request is received within the 60-day time limit, the denial of
benefits will be final. However, if a request for review of a
denied claim is timely filed, the Named Fiduciary must render
its decision under normal circumstances within 45 days of the
receipt of the request for review. In special circumstances the
decision may be delayed if prior to expiration of the initial
45-day period the claimant is notified of the extension, but
must in any event be rendered no later than 90 days after the
receipt of the request. If the decision on review is not
furnished to the claimant within the applicable time period(s)
set out above, the claim shall be deemed denied on the last day
of the relevant period. All decisions of the Named Fiduciary
shall be in writing and shall include specific reasons for
whatever action has been taken, and the provisions of the
Agreement on which the decision is based.
-22-
14. Notices. All notices required to be given hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally or
mailed (by registered or certified mail, return receipt requested and
postage prepaid) as follows:
1. If to ▇▇▇▇▇, to:
▇▇▇▇▇ Bank N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention:Director of Human Resources
of ▇▇▇▇▇ Bank N.A.
2. If to Executive, to:
The Executive at the last known address contained in the records of
▇▇▇▇▇ Bank N.A.'s Human Resources Department.
or to such other person at such other address as the party to whom notice
is to be given may have furnished to the other party in writing from time
to time. If mailed, any such communication shall be deemed to have been
given on the third business day following the date on which it was posted.
15. Entire Agreement. This Agreement sets forth the entire understanding
between the parties. No subsequent changes or amendments to this
Agreement shall be binding unless they are in writing, signed by ▇▇▇▇▇,
and notice of such change has been duly given to the Executive no later
than 60 days following the date of such action. If notice of a change
or amendment is provided by the date stipulated in the immediately
preceding sentence, the effective date of such change or amendment shall
be as provided in the change or amendment, and shall not be delayed
until the date of the notice.
16. Severability and Enforcement. If any provision of this Agreement is void
or unenforceable, or so declared, that provision shall be severed from
this Agreement, which shall otherwise remain in full force and effect.
17. Governing Law. The provisions of this Agreement shall be construed and
enforced according to the laws of the District of Columbia.
-23-
18. Insurer Not A Party To Agreement. Insurer shall not be deemed a party to
this Agreement, but will respect the rights of the parties as herein
described upon receiving an executed copy of this Agreement. Payment or
other performance of its contract obligations in accordance with the terms
of the Policy shall completely discharge the Insurer from all claims,
suits and demands of all persons whatsoever.
19. Withholding. ▇▇▇▇▇ shall withhold from Executive's current compensation or
require Executive to remit to ▇▇▇▇▇ any amount required to be withheld
under applicable Federal, state, or local law during the term of this
Agreement.
20. Exclusions.
1. Except as expressly provided in this paragraph 20, Executive's Named
Beneficiary shall receive benefits under paragraph 7 of this
Agreement only from Policy Proceeds and ▇▇▇▇▇ shall have no liability
or obligation other than the duty to make premium payments as
provided in paragraph 5 of the Agreement. If the Insurer does not pay
the full amount of the death benefit otherwise due under the Policy,
Policy Proceeds shall be divided as follows:
i. If the reduced payment is because (A) misrepresentations,
whether or not intentional, have been made by Executive or
someone acting on behalf of Executive in the process of
applying for the Policy, or (B) Executive, whether sane or
insane, dies by suicide within two years from the issue date
of the Policy (or within two years from the issue date of an
Unscheduled Increase, as defined in paragraph 20(b) below, in
the face amount of the Policy), Executive's Named Beneficiary
shall be entitled to receive the lesser of (C) the amount of
Policy Proceeds applicable under paragraph 7, or (D) the
amount of Policy Proceeds payable in excess of ▇▇▇▇▇' Interest
in the Policy, rather than the otherwise applicable amount
under paragraph 7.
ii. If the reduced payment is due to a failure by ▇▇▇▇▇ to comply
with the terms of this Agreement, Executive's Named Beneficiary
shall receive benefits in accordance with paragraph 7.
-24-
iii. If the cause of the reduced payments is not described in either
paragraphs 20(a)(i) or (ii) above and the amount of Policy
Proceeds is less than the sum of the amount described in
paragraph 7, as the case may be, and ▇▇▇▇▇' Interest in the
Policy, ▇▇▇▇▇ and Executive's Named Beneficiary shall divide the
reduced payment in the same ratio as the Policy Proceeds would
have been divided under paragraph 7 had the amount of Policy
Proceeds equaled the sum of the amount described in paragraph 7,
as the case may be, and ▇▇▇▇▇' Interest in the Policy. If the
cause of the reduced payments is not described in either
paragraph 20(a)(i) or (ii) above and the amount of Policy
Proceeds is greater than or equal to the sum of the amount
described in paragraph 7, and ▇▇▇▇▇' Interest in the Policy,
Executive's Named Beneficiary shall receive benefits in
accordance with paragraph 7.
2. ▇▇▇▇▇ will use its best efforts to maintain an amount of insurance
sufficient to pay Executive's Named Beneficiary the benefits
described in paragraph 7, and to recover ▇▇▇▇▇' Interest in the
Policy. Accordingly, the face amount of the Policy is scheduled to
increase for estimated increases in Executive's compensation and
▇▇▇▇▇' Interest in the Policy ("Scheduled Increases"). ▇▇▇▇▇ may
also attempt to cause Unscheduled Increases (increases in the face
amount of the Policy that are not Scheduled Increases) in the
Policy if necessary to maintain the appropriate face amount of
insurance. If such an Unscheduled Increase requires evidence of
insurability and ▇▇▇▇▇ is unable to purchase the increased coverage
under the Policy with an underwriting rating no worse than standard
risk, or the rating used to initially purchase the Policy if that
rating was less favorable than standard risk, ▇▇▇▇▇ shall not be
obligated to purchase such increased coverage and Executive's Named
Beneficiary shall be entitled to receive the lesser of (i) the
amount of Policy Proceeds described in paragraph 7, as the case may
be, or (ii) the amount of Policy Proceeds payable in excess of
▇▇▇▇▇' Interest in the Policy, rather than the otherwise applicable
amount under paragraph 7.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
------------------------------------------------
Executive's Signature
▇▇▇▇▇ BANK N.A.
By:
Title:
-25-
SCHEDULE A
Pursuant to the SPLIT DOLLAR LIFE INSURANCE AGREEMENT (the Agreement")
dated , 1998 by and between ("Executive") and
▇▇▇▇▇ BANK N.A. ("▇▇▇▇▇"), the following described or attached policy of life
insurance shall be subject to the provisions of the Agreement.
Insurer:
Policy Number:
-26-
SENIOR VICE PRESIDENT
SUPPLEMENTAL DEATH BENEFIT AGREEMENT
THIS SUPPLEMENTAL DEATH BENEFIT AGREEMENT (the "Agreement") is made as
of the day of , 1997, by and between "NAME"
("Executive") and ▇▇▇▇▇ BANK N.A. ("▇▇▇▇▇").
RECITALS:
A. Executive is an employee of ▇▇▇▇▇, or one of its wholly owned
subsidiaries (collectively, "▇▇▇▇▇"), currently holding the title of senior
vice-president or amore senior title and has been a full-time employee of ▇▇▇▇▇
for at least seven years.
▇. ▇▇▇▇▇ has determined that it is in the best interest of ▇▇▇▇▇ and the
vice-presidents of ▇▇▇▇▇ to establish this death benefit program for the
vice-presidents, which may provide the Executive's Named Beneficiary with a
supplemental death benefit in the event ▇▇▇▇▇ receives death benefits from the
life insurance policy that is the subject matter of the Senior Vice President
Split Dollar Life Insurance Agreement between Executive and ▇▇▇▇▇ of even date
therewith (the "Policy") in excess of a predetermined formula amount. ▇▇▇▇▇ also
desires to encourage Executive to remain in ▇▇▇▇▇' employ by entering into this
Agreement with Executive. Executive consents to ▇▇▇▇▇ purchasing such insurance.
C. Executive recognized that there may be no excess death benefits from
the Policy and no supplemental death benefits payable under this Agreement. In
addition, any benefits under this Agreement are unfunded and will be paid from
the general assets of ▇▇▇▇▇. Executive and Executive's Named Beneficiary (as
defined in paragraph 2 below) have no claim or right to any life insurance
policy, or proceeds therefrom, because of this Agreement and any reference to a
life insurance policy in this Agreement is only for purposes of measuring the
amount of the benefits, if any, payable by ▇▇▇▇▇.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. Death Benefits.
(a) Pre-Retirement Death Benefit.
If Executive dies before Retirement (as defined in paragraph 1(c)
(iv) below), ▇▇▇▇▇ shall pay to the Executive's Named Beneficiary (as defined in
paragraph 2 below) an amount equal to the lesser of:
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(i) one-half of Executive's Base Annual Compensation (as
defined in paragraph (1)(c)(i) below); or
(ii) the excess of the Policy Proceeds (as defined in paragraph
1 (c) (ii) below), if any, over the sum of:
(A) an amount equal to three time Executive's Base
Annual Compensation, less the amount payable to Executive's beneficiary under
any group term life insurance plan of ▇▇▇▇▇; and
(B) an amount equal to the sum of: (1) ▇▇▇▇▇'
Investment in the Policy at such time; and (2) a return on ▇▇▇▇▇' Investment in
the Policy as it may have existed from time to time, calculated from the date of
the first premium payment by ▇▇▇▇▇ on the Policy until the date ▇▇▇▇▇ receives
it share of the Policy Proceeds from the Insurer, at a rate equal to the greater
of: seven percent per annum, compounded annually, or a rate two hundred basis
points below the crediting rate applied by the Insurer to the accumulating cash
value of the Policy, as determined from time to time by the Insurer (such rate
of return being adjusted so that ▇▇▇▇▇' return rate is no less than the rate
described in this sentence after the payment of any and all income taxes payable
by ▇▇▇▇▇ because of the receipt of the Policy Proceeds, assuming the maximum
marginal income tax rate payable by ▇▇▇▇▇ in the year such proceeds are included
in taxable income by ▇▇▇▇▇).
(b) Post-Retirement Death Benefit.
If Executive dies on or after Retirement, ▇▇▇▇▇ shall pay to
Executive's Named Beneficiary an amount equal to the lesser of:
(i) one-half of Executive's Base Annual Compensation; or
(ii) the excess of the Policy Proceeds, if any over the sum of:
(A) an amount equal to one and one-half times
Executive's Base Annual Compensation determined as of Executive's date of
retirement, less the amount payable to Executive's beneficiary under any group
term life insurance plan of ▇▇▇▇▇; and
-28-
(B) an amount equal to the sum of: (1) ▇▇▇▇▇'
Investment in the Policy at such time; and (2) a return on ▇▇▇▇▇' Investment in
the Policy as it may have existed from time to time, calculated from the date of
the first premium payment by ▇▇▇▇▇ on the Policy until the date ▇▇▇▇▇ receives
its share of the Policy Proceeds from the Insurer, at a rate equal to the
greater of: seven percent per annum, compounded annually, or a rate two hundred
basis points below the crediting rate applied by the Insurer to the accumulating
cash value of the Policy, as determined from time to time by the Insurer (such
rate of return being adjusted so that ▇▇▇▇▇' return rate is no less than the
rate described in this sentence after the payment of any and all income taxes
payable by ▇▇▇▇▇ because of the receipt of the Policy Proceeds, assuming the
maximum marginal income tax rate payable by ▇▇▇▇▇ in the year such proceeds are
included in taxable income by ▇▇▇▇▇).
(c) For purpose of this Agreement:
(i) "Base Annual Compensation" shall mean Executive's annual
base salary excluding bonus and other contingent compensation, rounded to the
next higher multiple of $500, as of Executive's date of death if Executive dies
before Retirement and as of Retirement if Executive dies on or after Retirement.
(ii) "Policy Proceeds" shall mean the death benefits payable
under the life insurance policy purchased by ▇▇▇▇▇ on the life of the Executive
pursuant to the Split Dollar Life Insurance Agreement between Executive and
▇▇▇▇▇ executed on even date herewith, net of any outstanding policy loans or
cash withdrawals.
(iii)"Bank's Investment in the Policy" shall mean an amount
equal to the premiums paid from ▇▇▇▇▇
funds less any policy loans, cash
withdrawals or refunds of unearned premiums.
(iv) "Retirement" shall mean the first day of the month in which
Executive retires from employment with ▇▇▇▇▇ and on or prior to the date of
retirement, Executive either: (A) had attained age 65; or (B) had attained age
55 and been a full-time employee of ▇▇▇▇▇ for at least ten years. Executive
shall not be deemed to have retired during the period of time that he or she is
receiving a disability benefit under the terms of The ▇▇▇▇▇ National Bank
Amended Pension Plan (or its successor).
2. Executive's Designated Beneficiary. Executive shall have the right and
power to designate, in writing and on such form(s) as ▇▇▇▇▇ shall provide, a
beneficiary or beneficiaries ("Executive's Designated Beneficiary") to receive
the amounts described in paragraphs 1(a) or 1(b), as the case may be, and
Executive shall retain the right to change such beneficiary or beneficiaries at
any time prior to Executive's death. No beneficiary election or change of an
election shall be effective until received in writing by ▇▇▇▇▇. If Executive
fails to make a valid notification or if the Executive's Designated Beneficiary
fails to survive Executive or otherwise fails to receive the applicable amounts
described in paragraph 1, Executive's Designated Beneficiary shall be the
personal representative of Executive's estate.
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3. Termination of Agreement.This Agreement shall terminate 31 days after
the first to occur of the following events: (a) the receipt of a written notice
of termination by either party from the other party to this Agreement, with or
without the consent of the other party; or (b) the date of Executive's
termination of employment with ▇▇▇▇▇ for any reason other than Retirement.
Notwithstanding the immediately preceding sentence, this Agreement shall
terminate immediately upon the transfer to Executive of ownership of the life
insurance policy which is the subject of the Senior Vice President Split Life
Insurance Agreement between ▇▇▇▇▇ and Executive executed on even date herewith.
4. Amendment or Revocation of Agreement. Notwithstanding ▇▇▇▇▇' intent to
continue this Agreement indefinitely and notwithstanding any other provision of
this Agreement:
(a) ▇▇▇▇▇ retains the right to amend or terminate this Agreement at
any time and for any reason, without the consent of Executive or any other
person, even though the exercise of such right or rights would adversely affect
or extinguish ▇▇▇▇▇' obligation to pay any benefits pursuant to paragraph 1
hereof or Executive's right to change the Executive's Designated Beneficiary
pursuant to paragraph 2 hereof; however, ▇▇▇▇▇ shall not terminate this
Agreement or amend it in a manner that would adversely affect Executive's rights
hereunder, without Executive's consent, unless done in conjunction with a
substantially similar amendment, or termination, of the supplemental death
benefit agreements of all or a significant group of Executives who are parties
to similar supplemental death benefit agreements between ▇▇▇▇▇ and
vice-presidents of ▇▇▇▇▇.
(b) Notwithstanding subparagraph (a) above, no amendment or
termination effected after Executive's death shall adversely affect the rights
of Executive's Designated Beneficiary under this Agreement, but an amendment or
termination may be effective up to 60 days before ▇▇▇▇▇ notifies Executive of
such action. See paragraph 9 below.
5. Rights Under the Agreement.
-30-
(a) The rights of Executive and Executive's Designated Beneficiary
under this Agreement shall be limited to the right to death benefits pursuant to
paragraph 1 and the right to designate a beneficiary for such benefits pursuant
to paragraph 2. Participation in this Agreement and the right to receive
payments under this Agreement shall not give Executive or Executive's Designated
Beneficiary any proprietary interest in ▇▇▇▇▇ or any of its assets. Executive
and Executive's Designated Beneficiary have no claim or right to any life
insurance policy, or proceeds therefrom, because of this Agreement and any
reference to a life insurance policy in this Agreement is only for purposes of
measuring the amount of the benefits, if any, payable by ▇▇▇▇▇. No trust fund
shall be created in connection with this Agreement, and there shall be no
required funding of amounts that may become payable under this Agreement. No
fiduciary relationship between ▇▇▇▇▇ and Executive is created by this Agreement
and Executive and Executive's Designated Beneficiary shall, for all purposes, be
general creditors of ▇▇▇▇▇. The interest of Executive and Executive's Designated
Beneficiary in this Agreement cannot be assigned, anticipated, sold, encumbered
or pledged and shall not be subject to the claims of their creditors.
(b) Nothing in this Agreement shall confer upon Executive the right
to continue in the employ of ▇▇▇▇▇ or shall interfere with or restrict in any
way the rights of ▇▇▇▇▇ to discharge Executive at any time for any reason
whatsoever, with or without good cause.
(c) Benefits payable under this Agreement shall not be considered
salary or other compensation to Executive for the purpose of computing benefits
to which Executive may be entitled under any pension or profit-sharing plan or
any other arrangement of ▇▇▇▇▇ for the benefit of Executive or for the benefit
of its employees or any class of its employees.
6. Assignment. Subject to the provisions of paragraph 4(a), all rights and
obligations of this Agreement shall be binding upon the parties hereto, their
heirs, legal representatives, successors or assigns.
7. Administration.The ▇▇▇▇▇ Bank N.A. Committee (or its successor,
hereafter the "Administrator") shall be the "Named Fiduciary" and shall be
responsible for, and shall have the sole discretion to decide all matters
pertaining to, the management, control, interpretation and administration of
this Agreement. Such discretion includes, but is not limited to, determining the
qualification for, and the amount of benefits payable under this Agreement, and
employment or retirement status. The Administrator shall apply its discretion in
good faith and any decisions made in good faith shall be binding upon all
parties to this Agreement. The Administrator may delegate to others certain
aspects of the management and operational responsibilities of this Agreement,
including the employment of advisors and the delegation of any ministerial
duties to qualified individuals.
8. Claims Procedure.
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(a) When a claimant has a claim which may be covered under the
Agreement, a claim should be submitted to ▇▇▇▇▇' Human Resources office. Under
normal circumstances, a final decision on a claimant's request for benefits
shall be made within 45 days after receipt of the claim. However, if special
circumstances require an extension of time to process a claim, a final decision
may be deferred up to 90 days after receipt of the claim if prior to the end of
the initial 45-day period the claimant is furnished written notice of the
special circumstances requiring the extension and the anticipated date of a
final decision. If the claim is denied within the applicable period of time set
out above, the claimant shall receive written notification of the denial, which
notice shall set forth the specific reasons for the denial, the relevant
provisions of the Agreement on which the denial is based, and the claim review
procedure under the Agreement.
(b) In the event a claim is denied or in the event no action is taken
on the claim within the above-described period(s) of time, the following
procedure shall be used:
(i) First, in the event that the claimant does not timely
receive the above-described written notification, the claimant's request for
benefits shall be deemed to be denied as of the last day of the relevant period
and the claimant shall be entitled to a full review of his or her claim by the
Administrator.
(ii) Second, a claimant is entitled to a full review of his or
her claim after actual or constructive notification of a denial. A claimant
desiring a review must make a written request to the Administrator requesting
such a review, which may include whatever comments or arguments the claimant
wishes to submit. Incident to the review, the claimant may represent himself or
herself or appoint a representative to do so, and will have the right to inspect
all documents pertaining to the issue. The Administrator, in its sole
discretion, may schedule any meeting(s) with the claimant and/or the claimant's
representative it deems necessary or appropriate to facilitate or expedite its
review of a denied claim.
(c) A request for review must be filed with the Administrator within
60 days after the denial of the claim for benefits was actually or
constructively received by the claimant. If no request is received within the
60-day time limit, the denial of benefits will be final. However, if a request
for review of a denied claim is timely filed, the Administrator must render its
decision under normal circumstances within 45 days of the receipt of the request
for review. In special circumstances the decision may be delayed if prior to
expiration of the initial 45-day period the claimant is notified of the
extension, but must in any event be rendered no later than 90 days after the
receipt of the request. If the decision on review is not furnished the claimant
within the applicable time period(s) set out above, the claim shall be deemed
denied on the last day of the relevant period. All decisions of the
Administrator shall be in writing and shall include specific reasons for
whatever action has been taken, and the provisions of the Agreement on which the
decision is based.
(d) This Agreement shall be construed consistently with the
construction applied to the payments of death benefits under the Policy.
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9. Notices. All notices required to be given hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally or mailed
(by registered or certified mail, return receipt requested and postage prepaid)
as follows:
(a) If to ▇▇▇▇▇, to:
▇▇▇▇▇ Bank N.A.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇., ▇.▇.
5th Floor, Human Resources
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Director of Human Resources of
▇▇▇▇▇ Bank N.A.
(b) If to Executive, to:
The Executive at the last known address contained in the
records of ▇▇▇▇▇' Human Resources Department.
or to such other person at such other address as the party to whom notice is to
be given may have furnished to the other party in writing from time to time. If
mailed, any such communication shall be deemed to have been given on the third
business day following the date on which it was posted.
10. Entire Agreement. This Agreement sets forth the entire understanding
between the parties. No subsequent changes or amendments to this Agreement shall
be binding unless they are in writing, signed by ▇▇▇▇▇, and notice of such
change has been duly given to the Executive within 60 days of such action. If
notice of a change or amendment is provided by the date stipulated in the
immediately preceding sentence, the effective date of such change or amendment
shall be provided in the change or amendment, and shall not be delayed until the
date of the notice.
11. Severability and Enforcement. If any provision of this Agreement is
void or unenforceable, or so declared, that provision shall be severed from this
Agreement, which shall otherwise remain in full force and effect.
12. Governing Law. The provisions of this Agreement shall be construed and
enforced according to the laws of the District of Columbia.
13. Withholding. ▇▇▇▇▇ shall withhold any amounts required by applicable
Federal, state or local law to be withheld from payments due under this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"NAME"
------------------------------------
Executive's Signature
▇▇▇▇▇ BANK N.A.
By:
------------------------------
Title:
------------------------------
-34-
VICE PRESIDENT
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
Tier II
THIS SPLIT DOLLAR LIFE INSURANCE AGREEMENT ("the Agreement") is made as
of this day of , 1997 by and between "NAME"
("Executive") and ▇▇▇▇▇ BANK N.A. ("▇▇▇▇▇").
RECITALS:
A. Executive is an employee of ▇▇▇▇▇, or one of its wholly-owned
subsidiaries (collectively, "▇▇▇▇▇"), currently holding the title of
vice-president and has been a full-time employee of ▇▇▇▇▇ for at least seven
years.
▇. ▇▇▇▇▇ has determined that it is in the best interest of ▇▇▇▇▇ and the
vice-presidents of ▇▇▇▇▇ to establish a split-dollar life insurance program for
the vice-presidents. ▇▇▇▇▇ desires to encourage Executive to remain in ▇▇▇▇▇
employ by entering into a split-dollar life insurance agreement with Executive.
C. Executive consents to ▇▇▇▇▇' purchasing insurance on the life of
Executive and agrees to participate in the split dollar life insurance program
as hereinafter provided by entering into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. Purchase of Insurance. ▇▇▇▇▇ shall apply for a life insurance policy
(the "Policy") on the life of Executive with a face amount not less than an
amount sufficient to pay the Executive's Named Beneficiary (as defined in
paragraph 4 below) the benefits described in paragraph 7(a)(i) below and to
recover ▇▇▇▇▇' Interest in the Policy (as defined in paragraph 7(c)(v) below),
which Policy is described on the attached Schedule A (the issuer of the Policy
shall hereinafter be referred to as the "Insurer"). ▇▇▇▇▇ may increase or
decrease the face amount of the Policy from time to time and may apply earnings
on the accumulating cash value of the Policy in excess of the guaranteed rate
for the purpose of carrying out the objectives of this Agreement in such manner
as it shall determine in its sole discretion. In the event of such increased or
decreased coverage, the rights, duties and benefits of the parties to such
coverage shall continue to be subject to the terms of this Agreement.
-35-
2. Application and Consent. Executive hereby consents to the purchase of
the Policy and agrees to answer all questions concerning his or her insurability
and to submit such evidence of insurability as may be required by the Insurer on
such form(s) as ▇▇▇▇▇ shall provide. If ▇▇▇▇▇ elects to increase the face amount
of the Policy for the purpose of carrying out the objectives of the Agreement,
Executive hereby agrees to answer all questions concerning his or her
insurability and to submit such evidence of insurability as may be required by
the Insurer (including such medical examinations as may be required) and to
execute any other documents as may be required by the Insurer to effectuate the
increase.
3. Ownership of Policy. The Policy shall be owned by ▇▇▇▇▇. Executive
shall have the beneficiary designation rights contained in paragraph 4 of this
Agreement, but except as otherwise provided below, each and every other right of
ownership of the Policy shall be reserved to ▇▇▇▇▇ even though the exercise of
such right or rights would adversely affect or extinguish the payment of any
benefits to which Executive or the Executive's Named Beneficiary would otherwise
be entitled to under this Agreement or the Policy or the right of Executive to
designate a beneficiary pursuant to paragraph 4 hereof.
4. Beneficiary Designation Rights. Executive shall have the right and
power to designate, in writing and on such form(s) as ▇▇▇▇▇ shall provide, a
beneficiary or beneficiaries ("Executive's Named Beneficiary") to receive the
sum of the amounts described in paragraph 7(a)(i) or 7(b)(i), hereof, as the
case may be, and to elect and change a payment option for such beneficiary. Any
change in beneficiary or payment option shall become effective as provided in
the terms of the Policy. If Executive fails to make a valid notification or if
the Executive's Named Beneficiary fails to survive Executive or otherwise fails
to receive the amounts described in paragraph 7(a)(i) or 7(b)(i), hereof, as the
case may be, Executive's Named Beneficiary shall be the personal representative
of Executive's estate.
5. Premium Payments. ▇▇▇▇▇ shall remit each premium due on the Policy in
accordance with the mode of premium payment as provided in the Policy on or
before the due date provided therein.
6. Policy Loans or Cash Withdrawals. ▇▇▇▇▇ alone shall have the right,
without the consent of Executive, to make policy loans or withdrawals of the
Policy cash value, but ▇▇▇▇▇ shall not permit the indebtedness on the Policy or
withdrawals to exceed ▇▇▇▇▇' Investment in the Policy (as defined in paragraph
7(c)(iii) below).
7. Division of Death Proceeds of Policy. Except as provided in paragraph
20 below, Policy Proceeds (as defined in paragraph 7(c) below) shall be divided
as provided in this paragraph 7.
-36-
(a) Pre-Retirement Division.
(i) If Executive dies before Retirement (as defined in paragraph
7(c)(iv) below), Executive's Named Beneficiary shall be entitled to an amount of
the Policy Proceeds equal to three times Executive's Base Annual Compensation
(as defined in paragraph 7(c)(i) below).
(ii) ▇▇▇▇▇ shall receive any remaining Policy Proceeds.
(b) Post-Retirement Division.
(i) If Executive dies on or after Retirement, Executive's Named
Beneficiary shall be entitled to an amount of the Policy Proceeds equal to one
and one-half times Executive's Base Annual Compensation determined as of
Executive's date of retirement.
(ii) ▇▇▇▇▇ shall receive any remaining Policy Proceeds.
(c) For purposes of this Agreement:
(i) "Base Annual Compensation" shall mean Executive's annual
base salary excluding bonus and other contingent compensation, rounded to the
next higher multiple of $500, as of Executive's date of death if Executive dies
before Retirement and as of Retirement if Executive dies on or after Retirement.
(ii) "Policy Proceeds" shall mean the death benefits payable
under the Policy, net of any outstanding policy loans or cash withdrawals.
(iii) "▇▇▇▇▇' Investment in the Policy" shall mean an amount
equal to the premiums paid from ▇▇▇▇▇' funds less any policy loans, cash
withdrawals, or refund of unearned premiums.
(iv) "Retirement" shall mean the first day of the month in which
Executive retires from employment with ▇▇▇▇▇ and on or prior to the date of
retirement, Executive either: (A) had attained age 65; or (B) had attained age
55 and been a full-time employee of ▇▇▇▇▇ for at least ten years. Executive
shall not be deemed to have retired during the period of time that he or she is
receiving a disability benefit under the terms of the ▇▇▇▇▇ National Bank
Amended Pension Plan (or its successor).
-37-
(v) "▇▇▇▇▇' Interest in the Policy" at any given time shall mean
an amount equal to the sum of: (A) ▇▇▇▇▇' Investment in the Policy at such time;
and (B) a return on ▇▇▇▇▇' Investment in the Policy as it may have existed from
time to time, calculated from the date of the first premium payment by ▇▇▇▇▇ on
the policy until the date ▇▇▇▇▇ receives its share of the Policy Proceeds from
the insurer, at a rate equal to the greater of: seven percent per annum,
compounded annually, or a rate two hundred basis points below the crediting rate
applied by the Insurer to the accumulating cash value of the Policy, as
determined from time to time by the Insurer (such rate of return being adjusted
so that ▇▇▇▇▇' return rate is no less than the rate described in this sentence
after the payment of any and all income taxes payable by ▇▇▇▇▇ because of the
receipt of the Policy Proceeds, or payments made by Executive under paragraph 8
below, assuming the maximum income tax rates payable by ▇▇▇▇▇ in the year such
Policy Proceeds or payments are included in taxable income by ▇▇▇▇▇).
(d) Any refund of unearned premium as provided in the Policy shall be
refunded in total to ▇▇▇▇▇.
8. Termination of Agreement. This Agreement shall terminate 31 days after
the first to occur of the following events: (a) the receipt of a written notice
of termination by either party from the other party to this Agreement, with or
without the consent of the other party; or (b) the date of Executive's
termination of employment with ▇▇▇▇▇ for any reason other than Retirement. If
▇▇▇▇▇ gives notice of its intent to terminate this Agreement under clause (a)
above or Executive terminates employment with ▇▇▇▇▇ under clause (b) above,
Executive shall have the right, until the termination of this Agreement, to
purchase the Policy from ▇▇▇▇▇ by payment to ▇▇▇▇▇ of an amount equal to the
greater of: (i) the cash surrender value of the Policy; or (ii) ▇▇▇▇▇' Interest
in the Policy. Upon receipt of the purchase price, ▇▇▇▇▇ shall execute such
documents as may be required by the Insurer to transfer ownership of the Policy
to Executive. Notwithstanding the first sentence of this paragraph, this
Agreement shall terminate immediately upon receipt of the purchase price and
transfer of ownership of the Policy to Executive. In the event of the
termination of this Agreement under any circumstances whereby Executive cannot,
or does not, purchase the Policy, Executive agrees, upon request to him or her
by ▇▇▇▇▇, to execute such documents as may be required by the Insurer to
designate ▇▇▇▇▇ as sole beneficiary of the Policy (and Executive shall have no
further right or interest in the Policy).
9. Amendment or Revocation of Agreement. Notwithstanding ▇▇▇▇▇' intent to
continue this Agreement indefinitely and notwithstanding any other provision of
this Agreement:
-38-
(a) ▇▇▇▇▇ retains the right to amend or terminate this Agreement at
any time and for any reason, with or without the consent of Executive or any
other person, even though the exercise of such right or rights would adversely
affect or extinguish Executive's (or Executive's Named Beneficiary's) right to
receive any benefits under this Agreement or Executive's right to change the
Executive's Named Beneficiary under this Agreement; however, ▇▇▇▇▇ shall not
terminate this Agreement or amend it in a manner that would adversely affect
Executive's rights hereunder without Executive's consent, unless done in
conjunction with a substantially similar amendment, or termination, of the split
dollar life insurance agreements of all or a significant group of Executives who
are parties to similar split dollar life insurance agreements between ▇▇▇▇▇ and
vice-presidents of ▇▇▇▇▇.
(b) Notwithstanding subparagraph (a) above, no amendment or
termination effected after Executive's death shall adversely affect the rights
of Executive's Named Beneficiary under this Agreement, but an amendment or
termination may be effective up to 60 days before ▇▇▇▇▇ notifies Executive of
such action. See paragraph 15 below.
(c) Any termination of this Agreement shall not terminate Executive's
right to the benefits he or she would otherwise be entitled to, if any, under a
group term life insurance plan of ▇▇▇▇▇.
10. Rights Under the Agreement.
(a) Nothing in this Agreement shall confer upon Executive the right
to continue in the employ of ▇▇▇▇▇ or shall interfere with or restrict in any
way the rights of ▇▇▇▇▇ to discharge Executive at any time for any reason
whatsoever, with or without good cause. Benefits payable under this Agreement
shall not be considered salary or other compensation to Executive for the
purpose of computing benefits to which Executive may be entitled under any
pension or profit-sharing plan or any other arrangement of ▇▇▇▇▇ for the benefit
of the Executive or for the benefit of its employees or any class of its
employees.
(b) The rights of Executive and Executive's Named Beneficiary under
this Agreement shall be limited to the right to death benefits pursuant to
paragraph 7, the right to designate a beneficiary for such benefits pursuant to
paragraph 4, and the rights to terminate this Agreement and purchase the Policy
pursuant to paragraph 8.
11. Assignment. Executive (or his or her assignee) may, at any time,
assign to any individual, trust or other organization all the Executive's right,
title and interest in the Policy and all rights, options, privileges and duties
created under this Agreement. All rights and obligations of this Agreement shall
be binding upon the parties hereto, their heirs, legal representatives,
successors or assigns.
-39-
12. Named Fiduciary. The ▇▇▇▇▇ National Bank Pension Committee (or its
successor) is hereby designated the "Named Fiduciary" until resignation or
removal by ▇▇▇▇▇' Board of Directors. The Named Fiduciary shall be responsible
for, and shall have the sole discretion to decide all matters pertaining to the
management, control, interpretation and administration of this Agreement. Such
discretion includes, but is not limited to, determining the qualification for,
and the amount of, benefits payable under this Agreement, and employment or
retirement status. The Named Fiduciary shall apply its discretion in good faith
and any decisions made in good faith shall be binding upon all parties to this
Agreement. The Named Fiduciary may delegate to others certain aspects of the
management and operational responsibilities of this Agreement, including the
employment of advisors and the delegation of any ministerial duties to qualified
individuals.
13. Claims Procedure.
(a) (i) Claim forms or claim information as to the Policy can be
obtained by contacting the Director of Human Resources of ▇▇▇▇▇ Bank N.A. at the
address listed in paragraph 14(a) of this Agreement.
(ii) When a claimant has a claim which may be covered under the
Policy, he or she should contact the Named Fiduciary who will contact the office
or the person named above, who will either complete a claim form and forward it
to an authorized representative of the Insurer or advise the Named Fiduciary
what further requirements are necessary. Under normal circumstances, the Insurer
will evaluate the claim and make a decision as to payment within 45 days after
receipt of the claim. However, if special circumstances require an extension of
time to process a claim, a final decision may be deferred up to 90 days after
receipt of the claim if prior to the end of the initial 45-day period the Named
Fiduciary is furnished written notice of the special circumstances requiring the
extension and the anticipated date of a final decision. If the claim is denied
within the applicable period of time set out above, the Named Fiduciary shall
receive written notification of the denial, which notice shall set forth the
specific reasons for the denial, the relevant provisions of the Policy on which
the denial is based, and the claim review procedure under the Policy.
(iii) If the claim is payable, a benefit check will be issued to
Executive's Named Beneficiary in an amount equal to the benefits payable to such
person(s) pursuant to paragraph 7(a) or 7(b) above, as the case may be, and a
benefit check will be issued to ▇▇▇▇▇ in an amount equal to the remaining Policy
Proceeds. Benefit checks will be forwarded through the Director of Human
Resources of ▇▇▇▇▇ Bank N.A.
(iv) In the event a claim is denied or in the event no action is
taken on the claim within the above-described period(s) of time, the following
procedure shall be used:
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(A) First, in the event that the Named Fiduciary does not
timely receive the above-described written notification, the Named Fiduciary's
request for benefits shall be deemed to be denied as of the last day of the
relevant period.
(B) Second, the Named Fiduciary shall, in its discretion,
take any and all reasonable action as it deems necessary to perfect the claim.
(b) (i) Once a decision has been rendered as to the distribution of
proceeds under the claim procedure described above as to the Policy, claims for
any benefits due under this Agreement may be made in writing by ▇▇▇▇▇ or the
Executive's Named Beneficiary, as the case may be, to the Named Fiduciary. Under
normal circumstances, a final decision on a claimant's request for benefits
shall be made within 45 days after receipt of the claim. However, if special
circumstances require an extension of time to process a claim, a final decision
may be deferred up to 90 days after receipt of the claim if prior to the end of
the initial 45-day period the claimant is furnished written notice of the
special circumstances requiring the extension and the anticipated date of a
final decision. If the claim is denied, in whole or in part, within the
applicable period of time set out above, the claimant shall receive written
notification of the denial, which notice shall set forth the specific reasons
for the denial, the relevant provisions of the Agreement on which the denial is
based, and the claim review procedure under the Agreement.
(ii) In the event a claim is denied or in the event no action is
taken on the claim within the above-described period(s) of time, the following
procedure shall be used:
(A) First, in the event that the claimant does not timely
receive the above-described written notification, the claimant's request for
benefits shall be deemed to be denied as of the last day of the relevant period.
(B) Second, a claimant is entitled to a full review of his
or her claim after actual or constructive notification of a denial. A claimant
desiring a review must make a written request to the Named Fiduciary requesting
such a review, which may include whatever comments or arguments the claimant
wishes to submit. Incident to the review, the claimant may represent himself or
herself or appoint a representative to do so, and will have the right to inspect
all documents pertaining to the issue. The Named Fiduciary, in its sole
discretion, may schedule any meeting(s) with the claimant and/or the claimant's
representative it deems necessary or appropriate to facilitate or expedite its
review of a denied claim.
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(iii) A request for a review must be filed with the Named
Fiduciary within 60 days after the denial of the claim for benefits was actually
or constructively received by the claimant. If no request is received within the
60-day time limit, the denial of benefits will be final. However, if a request
for review of a denied claim is timely filed, the Named Fiduciary must render
its decision under normal circumstances within 45 days of the receipt of the
request for review. In special circumstances the decision may be delayed if
prior to expiration of the initial 45-day period the claimant is notified of the
extension, but must in any event be rendered no later than 90 days after the
receipt of the request. If the decision on review is not furnished to the
claimant within the applicable time period(s) set out above, the claim shall be
deemed denied on the last day of the relevant period. All decisions of the Named
Fiduciary shall be in writing and shall include specific reasons for whatever
action has been taken, and the provisions of the Agreement on which the decision
is based.
14. Notices. All notices required to be given hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
mailed (by registered or certified mail, return receipt requested and postage
prepaid) as follows:
(a) If to ▇▇▇▇▇, to:
▇▇▇▇▇ Bank N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
4th Floor, Human Resources
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Director of Human Resources
of the ▇▇▇▇▇ Bank N.A.
(b) If to Executive, to: The Executive at the last known address
contained in the records of ▇▇▇▇▇' Bank N.A. Human Resources
Department.
or to such other person at such other address as the party to whom notice is to
be given may have furnished to the other party in writing from time to time. If
mailed, any such communication shall be deemed to have been given on the third
business day following the date on which it was posted.
15. Entire Agreement. This Agreement sets forth the entire understanding
between the parties. No subsequent changes or amendments to this Agreement shall
be binding unless they are in writing, signed by ▇▇▇▇▇, and notice of such
change has been duly given to the Executive no later than 60 days following the
date of such action. If notice of a change or amendment is provided by the date
stipulated in the immediately preceding sentence, the effective date of such
change or amendment shall be as provided in the change or amendment, and shall
not be delayed until the date of the notice.
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16. Severability and Enforcement. If any provision of this Agreement is
void or unenforceable, or so declared, that provision shall be severed from this
Agreement, which shall otherwise remain in full force and effect.
17. Governing Law. The provisions of this Agreement shall be construed and
enforced according to the laws of the District of Columbia.
18. Insurer Not A Party To Agreement. Insurer shall not be deemed a party
to this Agreement, but will respect the rights of the parties as herein
described upon receiving an executed copy of this Agreement. Payment or other
performance of its contract obligations in accordance with the terms of the
Policy shall completely discharge the Insurer from all claims, suits and demands
of all persons whatsoever.
19. Withholding. ▇▇▇▇▇ shall withhold from Executive's current
compensation or require Executive to remit to ▇▇▇▇▇ any amount required to be
withheld under applicable Federal, state, or local law during the term of this
Agreement.
20. Exclusions.
(a) Except as expressly provided in this paragraph 20, Executive's
Named Beneficiary shall receive benefits under paragraph 7 of this Agreement
only from Policy Proceeds and ▇▇▇▇▇ shall have no liability or obligation other
than the duty to make premium payments as provided in paragraph 5 of the
Agreement. If the Insurer does not pay the full amount of the death benefit
otherwise due under the Policy, Policy Proceeds shall be divided as follows:
(i) If the reduced payment is because (A) misrepresentations,
whether or not intentional, have been made by Executive or someone acting on
behalf of Executive in the process of applying for the Policy, or (B) Executive,
whether sane or insane, dies by suicide within two years from the issue date of
the Policy (or within two years from the issue date of an Unscheduled Increase,
as defined in paragraph 20(b) below, in the face amount of the Policy),
Executive's Named Beneficiary shall be entitled to receive the lesser of (C) the
amount of Policy Proceeds described in paragraph 7(a)(i) or 7(b)(i), as the case
may be, or (D) the amount of Policy Proceeds payable in excess of ▇▇▇▇▇'
Interest in the Policy, rather than the otherwise relevant amount described in
paragraph 7.
(ii) If the reduced payment is due to a failure by ▇▇▇▇▇ to
comply with the terms of this Agreement, Executive's Named Beneficiary shall
receive benefits in accordance with paragraph 7.
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(iii) If the cause of the reduced payments is not described in
either paragraphs 20(a)(i) or (ii) above and the amount of Policy Proceeds is
less than the sum of the amount described in paragraph 7(a)(i) or 7 (b)(i), as
the case may be, and ▇▇▇▇▇' Interest in the Policy, ▇▇▇▇▇ and Executive's Named
Beneficiary shall divide the reduced payment in the same ratio as the Policy
Proceeds would have been divided under paragraph 7 had the amount of Policy
Proceeds equaled the sum of the amount described in paragraph 7(a)(i) or 7
(b)(i), as the case may be, and ▇▇▇▇▇' Interest in the Policy. If the cause of
the reduced payments is not described in either paragraphs 20(a)(i) or (ii)
above and the amount of Policy Proceeds is greater than or equal to the sum of
the amount described in paragraph 7(a)(i) or 7 (b)(i), as the case may be, and
▇▇▇▇▇' Interest in the Policy, Executive's Named Beneficiary shall receive
benefits in accordance with paragraph 7.
(b) ▇▇▇▇▇ will use its best efforts to maintain an amount of
insurance sufficient to pay Executive's Named Beneficiary the benefits described
in paragraph 7(a)(i) or 7(b)(i), as the case may be, and to recover ▇▇▇▇▇'
Interest in the Policy. Accordingly, the face amount of the Policy is scheduled
to increase for estimated increases in Executive's compensation and ▇▇▇▇▇'
Interest in the Policy ("Scheduled Increases"). ▇▇▇▇▇ may also attempt to cause
Unscheduled Increases (increases in the face amount of the Policy that are not
Scheduled Increases) in the Policy if necessary to maintain the appropriate face
amount of insurance. If such an Unscheduled Increase requires evidence of
insurability and ▇▇▇▇▇ is unable to purchase the increased coverage under the
Policy with an underwriting rating no worse than standard risk, or the rating
used to initially purchase the Policy if that rating was less favorable than
standard risk, ▇▇▇▇▇ shall not be obligated to purchase such increased coverage
and Executive's Named Beneficiary shall be entitled to receive the lesser of (i)
the amount of Policy Proceeds described in paragraph 7(a)(i) or 7(b)(i), as the
case may be, or (ii) the amount of Policy Proceeds payable in excess of ▇▇▇▇▇'
Interest in the Policy, rather than the otherwise relevant amount described in
paragraph 7.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"NAME"
-------------------------------------------------------
Executive's Signature
▇▇▇▇▇ BANK N.A.
By:
Title:
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SCHEDULE A
Pursuant to the SPLIT DOLLAR LIFE INSURANCE AGREEMENT (the "Agreement") dated
, 1997, by and between "NAME" ("Executive") and ▇▇▇▇▇ BANK N.A., the following
described or attached policy of life insurance shall be subject to the
provisions of the Agreement.
Insurer: ______________________________
Policy Number: ______________________________
Policy Issue Date: ______________________________
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VICE PRESIDENT
SUPPLEMENTAL DEATH BENEFIT AGREEMENT
THIS SUPPLEMENTAL DEATH BENEFIT AGREEMENT (the "Agreement") is made as
of the day of , 1997, by and between "NAME"
("Executive") and ▇▇▇▇▇ BANK N.A. ("▇▇▇▇▇").
RECITALS:
A. Executive is an employee of ▇▇▇▇▇, or one of its wholly owned
subsidiaries (collectively, "▇▇▇▇▇"), currently holding the title of
vice-president and has been a full-time employee of ▇▇▇▇▇ for at least seven
years.
▇. ▇▇▇▇▇ has determined that it is in the best interest of ▇▇▇▇▇ and the
vice-presidents of ▇▇▇▇▇ to establish this death benefit program for the
vice-presidents, which may provide the Executive's Named Beneficiary with a
supplemental death benefit in the event ▇▇▇▇▇ receives death benefits from the
life insurance policy that is the subject matter of the Vice President Split
Dollar Life Insurance Agreement between Executive and ▇▇▇▇▇ of even date
therewith (the "Policy") in excess of a predetermined formula amount. ▇▇▇▇▇ also
desires to encourage Executive to remain in ▇▇▇▇▇' employ by entering into this
Agreement with Executive. Executive consents to ▇▇▇▇▇ purchasing such insurance.
C. Executive recognized that there may be no excess death benefits from
the Policy and no supplemental death benefits payable under this Agreement. In
addition, any benefits under this Agreement are unfunded and will be paid from
the general assets of ▇▇▇▇▇. Executive and Executive's Named Beneficiary (as
defined in paragraph 2 below) have no claim or right to any life insurance
policy, or proceeds therefrom, because of this Agreement and any reference to a
life insurance policy in this Agreement is only for purposes of measuring the
amount of the benefits, if any, payable by ▇▇▇▇▇.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. Death Benefits.
(a) Pre-Retirement Death Benefit.
If Executive dies before Retirement (as defined in paragraph 1(c)
(iv) below), ▇▇▇▇▇ shall pay to the Executive's Named Beneficiary (as defined in
paragraph 2 below) an amount equal to the lesser of:
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(i) one-half of Executive's Base Annual Compensation (as
defined in paragraph (1)(c)(i) below); or
(ii) the excess of the Policy Proceeds (as defined in paragraph
1 (c) (ii) below), if any, over the sum of:
(A) an amount equal to three time Executive's Base
Annual Compensation, less the amount payable to Executive's beneficiary under
any group term life insurance plan of ▇▇▇▇▇; and
(B) an amount equal to the sum of: (1) ▇▇▇▇▇'
Investment in the Policy at such time; and (2) a return on ▇▇▇▇▇' Investment in
the Policy as it may have existed from time to time, calculated from the date of
the first premium payment by ▇▇▇▇▇ on the Policy until the date ▇▇▇▇▇ receives
it share of the Policy Proceeds from the Insurer, at a rate equal to the greater
of: seven percent per annum, compounded annually, or a rate two hundred basis
points below the crediting rate applied by the Insurer to the accumulating cash
value of the Policy, as determined from time to time by the Insurer (such rate
of return being adjusted so that ▇▇▇▇▇' return rate is no less than the rate
described in this sentence after the payment of any and all income taxes payable
by ▇▇▇▇▇ because of the receipt of the Policy Proceeds, assuming the maximum
marginal income tax rate payable by ▇▇▇▇▇ in the year such proceeds are included
in taxable income by ▇▇▇▇▇).
(b) Post-Retirement Death Benefit.
If Executive dies on or after Retirement, ▇▇▇▇▇ shall pay to
Executive's Named Beneficiary an amount equal to the lesser of:
(i) one-half of Executive's Base Annual Compensation; or
(ii) the excess of the Policy Proceeds, if any over the sum of:
(A) an amount equal to one and one-half times
Executive's Base Annual Compensation determined as of Executive's date of
retirement, less the amount payable to Executive's beneficiary under any group
term life insurance plan of ▇▇▇▇▇; and
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(B) an amount equal to the sum of: (1) ▇▇▇▇▇'
Investment in the Policy at such time; and (2) a return on ▇▇▇▇▇' Investment in
the Policy as it may have existed from time to time, calculated from the date of
the first premium payment by ▇▇▇▇▇ on the Policy until the date ▇▇▇▇▇ receives
its share of the Policy Proceeds from the Insurer, at a rate equal to the
greater of: seven percent per annum, compounded annually, or a rate two hundred
basis points below the crediting rate applied by the Insurer to the accumulating
cash value of the Policy, as determined from time to time by the Insurer (such
rate of return being adjusted so that ▇▇▇▇▇' return rate is no less than the
rate described in this sentence after the payment of any and all income taxes
payable by ▇▇▇▇▇ because of the receipt of the Policy Proceeds, assuming the
maximum marginal income tax rate payable by ▇▇▇▇▇ in the year such proceeds are
included in taxable income by ▇▇▇▇▇).
(c) For purpose of this Agreement:
(i) "Base Annual Compensation" shall mean Executive's annual
base salary excluding bonus and other contingent compensation, rounded to the
next higher multiple of $500, as of Executive's date of death if Executive dies
before Retirement and as of Retirement if Executive dies on or after Retirement.
(ii) "Policy Proceeds" shall mean the death benefits payable
under the life insurance policy purchased by ▇▇▇▇▇ on the life of the Executive
pursuant to the Split Dollar Life Insurance Agreement between Executive and
▇▇▇▇▇ executed on even date herewith, net of any outstanding policy loans or
cash withdrawals.
(iii)"Bank's Investment in the Policy" shall mean an amount
equal to the premiums paid from ▇▇▇▇▇' funds less any policy loans, cash
withdrawals or refunds of unearned premiums.
(iv) "Retirement" shall mean the first day of the month in which
Executive retires from employment with ▇▇▇▇▇ and on or prior to the date of
retirement, Executive either: (A) had attained age 65; or (B) had attained age
55 and been a full-time employee of ▇▇▇▇▇ for at least ten years. Executive
shall not be deemed to have retired during the period of time that he or she is
receiving a disability benefit under the terms of The ▇▇▇▇▇ National Bank
Amended Pension Plan (or its successor).
2. Executive's Designated Beneficiary. Executive shall have the right and
power to designate, in writing and on such form(s) as ▇▇▇▇▇ shall provide, a
beneficiary or beneficiaries ("Executive's Designated Beneficiary") to receive
the amounts described in paragraphs 1(a) or 1(b), as the case may be, and
Executive shall retain the right to change such beneficiary or beneficiaries at
any time prior to Executive's death. No beneficiary election or change of an
election shall be effective until received in writing by ▇▇▇▇▇. If Executive
fails to make a valid notification or if the Executive's Designated Beneficiary
fails to survive Executive or otherwise fails to receive the applicable amounts
described in paragraph 1, Executive's Designated Beneficiary shall be the
personal representative of Executive's estate.
-48-
3. Termination of Agreement.This Agreement shall terminate 31 days after
the first to occur of the following events: (a) the receipt of a written notice
of termination by either party from the other party to this Agreement, with or
without the consent of the other party; or (b) the date of Executive's
termination of employment with ▇▇▇▇▇ for any reason other than Retirement.
Notwithstanding the immediately preceding sentence, this Agreement shall
terminate immediately upon the transfer to Executive of ownership of the life
insurance policy which is the subject of the Vice President Split Life Insurance
Agreement between ▇▇▇▇▇ and Executive executed on even date herewith.
4. Amendment or Revocation of Agreement. Notwithstanding ▇▇▇▇▇' intent to
continue this Agreement indefinitely and notwithstanding any other provision of
this Agreement:
(a) ▇▇▇▇▇ retains the right to amend or terminate this Agreement at
any time and for any reason, without the consent of Executive or any other
person, even though the exercise of such right or rights would adversely affect
or extinguish ▇▇▇▇▇' obligation to pay any benefits pursuant to paragraph 1
hereof or Executive's right to change the Executive's Designated Beneficiary
pursuant to paragraph 2 hereof; however, ▇▇▇▇▇ shall not terminate this
Agreement or amend it in a manner that would adversely affect Executive's rights
hereunder, without Executive's consent, unless done in conjunction with a
substantially similar amendment, or termination, of the supplemental death
benefit agreements of all or a significant group of Executives who are parties
to similar supplemental death benefit agreements between ▇▇▇▇▇ and
vice-presidents of ▇▇▇▇▇.
(b) Notwithstanding subparagraph (a) above, no amendment or
termination effected after Executive's death shall adversely affect the rights
of Executive's Designated Beneficiary under this Agreement, but an amendment or
termination may be effective up to 60 days before ▇▇▇▇▇ notifies Executive of
such action. See paragraph 9 below.
5. Rights Under the Agreement.
-49-
(a) The rights of Executive and Executive's Designated Beneficiary
under this Agreement shall be limited to the right to death benefits pursuant to
paragraph 1 and the right to designate a beneficiary for such benefits pursuant
to paragraph 2. Participation in this Agreement and the right to receive
payments under this Agreement shall not give Executive or Executive's Designated
Beneficiary any proprietary interest in ▇▇▇▇▇ or any of its assets. Executive
and Executive's Designated Beneficiary have no claim or right to any life
insurance policy, or proceeds therefrom, because of this Agreement and any
reference to a life insurance policy in this Agreement is only for purposes of
measuring the amount of the benefits, if any, payable by ▇▇▇▇▇. No trust fund
shall be created in connection with this Agreement, and there shall be no
required funding of amounts that may become payable under this Agreement. No
fiduciary relationship between ▇▇▇▇▇ and Executive is created by this Agreement
and Executive and Executive's Designated Beneficiary shall, for all purposes, be
general creditors of ▇▇▇▇▇. The interest of Executive and Executive's Designated
Beneficiary in this Agreement cannot be assigned, anticipated, sold, encumbered
or pledged and shall not be subject to the claims of their creditors.
(b) Nothing in this Agreement shall confer upon Executive the right
to continue in the employ of ▇▇▇▇▇ or shall interfere with or restrict in any
way the rights of ▇▇▇▇▇ to discharge Executive at any time for any reason
whatsoever, with or without good cause.
(c) Benefits payable under this Agreement shall not be considered
salary or other compensation to Executive for the purpose of computing benefits
to which Executive may be entitled under any pension or profit-sharing plan or
any other arrangement of ▇▇▇▇▇ for the benefit of Executive or for the benefit
of its employees or any class of its employees.
6. Assignment. Subject to the provisions of paragraph 4(a), all rights and
obligations of this Agreement shall be binding upon the parties hereto, their
heirs, legal representatives, successors or assigns.
7. Administration.The ▇▇▇▇▇ National Bank Pension Committee (or its
successor, hereafter the "Administrator") shall be the "Named Fiduciary" and
shall be responsible for, and shall have the sole discretion to decide all
matters pertaining to, the management, control, interpretation and
administration of this Agreement. Such discretion includes, but is not limited
to, determining the qualification for, and the amount of benefits payable under
this Agreement, and employment or retirement status. The Administrator shall
apply its discretion in good faith and any decisions made in good faith shall be
binding upon all parties to this Agreement. The Administrator may delegate to
others certain aspects of the management and operational responsibilities of
this Agreement, including the employment of advisors and the delegation of any
ministerial duties to qualified individuals.
8. Claims Procedure.
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(a) When a claimant has a claim which may be covered under the
Agreement, a claim should be submitted to ▇▇▇▇▇' Human Resources office. Under
normal circumstances, a final decision on a claimant's request for benefits
shall be made within 45 days after receipt of the claim. However, if special
circumstances require an extension of time to process a claim, a final decision
may be deferred up to 90 days after receipt of the claim if prior to the end of
the initial 45-day period the claimant is furnished written notice of the
special circumstances requiring the extension and the anticipated date of a
final decision. If the claim is denied within the applicable period of time set
out above, the claimant shall receive written notification of the denial, which
notice shall set forth the specific reasons for the denial, the relevant
provisions of the Agreement on which the denial is based, and the claim review
procedure under the Agreement.
(b) In the event a claim is denied or in the event no action is taken
on the claim within the above-described period(s) of time, the following
procedure shall be used:
(i) First, in the event that the claimant does not timely
receive the above-described written notification, the claimant's request for
benefits shall be deemed to be denied as of the last day of the relevant period
and the claimant shall be entitled to a full review of his or her claim by the
Administrator.
(ii) Second, a claimant is entitled to a full review of his or
her claim after actual or constructive notification of a denial. A claimant
desiring a review must make a written request to the Administrator requesting
such a review, which may include whatever comments or arguments the claimant
wishes to submit. Incident to the review, the claimant may represent himself or
herself or appoint a representative to do so, and will have the right to inspect
all documents pertaining to the issue. The Administrator, in its sole
discretion, may schedule any meeting(s) with the claimant and/or the claimant's
representative it deems necessary or appropriate to facilitate or expedite its
review of a denied claim.
(c) A request for review must be filed with the Administrator within
60 days after the denial of the claim for benefits was actually or
constructively received by the claimant. If no request is received within the
60-day time limit, the denial of benefits will be final. However, if a request
for review of a denied claim is timely filed, the Administrator must render its
decision under normal circumstances within 45 days of the receipt of the request
for review. In special circumstances the decision may be delayed if prior to
expiration of the initial 45-day period the claimant is notified of the
extension, but must in any event be rendered no later than 90 days after the
receipt of the request. If the decision on review is not furnished the claimant
within the applicable time period(s) set out above, the claim shall be deemed
denied on the last day of the relevant period. All decisions of the
Administrator shall be in writing and shall include specific reasons for
whatever action has been taken, and the provisions of the Agreement on which the
decision is based.
(d) This Agreement shall be construed consistently with the
construction applied to the payments of death benefits under the Policy.
-51-
9. Notices. All notices required to be given hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally or mailed
(by registered or certified mail, return receipt requested and postage prepaid)
as follows:
(a) If to ▇▇▇▇▇, to:
▇▇▇▇▇ Bank N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention:Director of Human Resources of ▇▇▇▇▇ Bank N.A.
(b) If to Executive, to:
The Executive at the last known address contained in the records
of ▇▇▇▇▇' Human Resources Department.
or to such other person at such other address as the party to whom notice is to
be given may have furnished to the other party in writing from time to time. If
mailed, any such communication shall be deemed to have been given on the third
business day following the date on which it was posted.
10. Entire Agreement. This Agreement sets forth the entire understanding
between the parties. No subsequent changes or amendments to this Agreement shall
be binding unless they are in writing, signed by ▇▇▇▇▇, and notice of such
change has been duly given to the Executive within 60 days of such action. If
notice of a change or amendment is provided by the date stipulated in the
immediately preceding sentence, the effective date of such change or amendment
shall be provided in the change or amendment, and shall not be delayed until the
date of the notice.
11. Severability and Enforcement. If any provision of this Agreement is
void or unenforceable, or so declared, that provision shall be severed from this
Agreement, which shall otherwise remain in full force and effect.
12. Governing Law. The provisions of this Agreement shall be construed and
enforced according to the laws of the District of Columbia.
-52-
13. Withholding. ▇▇▇▇▇ shall withhold any amounts required by applicable
Federal, state or local law to be withheld from payments due under this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
"NAME"
Executive's Signature
▇▇▇▇▇ BANK N.A.
By:
Title:
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Exhibit 10.3
▇▇▇▇▇ NATIONAL CORPORATION
and
▇▇▇▇▇ BANK N.A.
DEFERRED COMPENSATION PLAN FOR DIRECTORS
(As Revised May 14, 1997)
ARTICLE I
INTRODUCTION
This Deferred Compensation Plan (the "Plan") is established by ▇▇▇▇▇
National Corporation (the "Company") and ▇▇▇▇▇ Bank N.A. (the "Bank") for the
benefit of their Directors and their Beneficiaries, and it shall be maintained
according to the terms hereof. The Plan allows Directors to defer receipt and
taxation of Director's Fees and to invest deferred fees in Shares of the
Company.
ARTICLE II
DEFINITIONS
0.1 DEFINITIONS. When used herein, the following words and phrases
shall have the meanings assigned to them, unless the context clearly indicates
otherwise:
(a) "Bank" means ▇▇▇▇▇ Bank N.A. (formerly known as The ▇▇▇▇▇ National
Bank of Washington, D.C.).
(b) "Beneficiary" means the person or persons, natural or otherwise,
designated by a Director under section 8.1 to receive any death benefit payable
under section 7.3.
(c) "Board of Directors" means the board of directors of the Company
unless otherwise stated.
(d) "Cash Deferred Fee Account" means an account established in the name
of a Director to which is credited any Director's Fees that are deferred by the
Director under section 3.1(a) and directed into the Cash Deferred Fee Account
under section 3.1(c), any Prior Deferred Fees which the Director elected to have
transferred to the Plan, any interest that is credited under section 5.1, any
dividends that are credited under sections 6.1(c) and 7.2(b) and from which is
debited payments made under Article VII.
(e) "Common Stock" means the common shares, $2.50 par value per share, of
the Company.
(f) "Company" means the ▇▇▇▇▇ National Corporation.
(g) "Deferred Fee Accounts" means a Director's Cash Deferred Fee Account
and Stock Deferred Fee Account.
(h) "Deferred Fee Agreement" means the written agreement, substantially in
the form of Exhibit A hereto, between the Director and the Company or the Bank,
as appropriate, that together with the Plan, governs the Director's rights to
payment of deferred Director's Fees (adjusted for investment performance) under
the Plan.
(i) "Director" means a non-employee member of the board of directors of
the Company, the Bank or any subsidiaries or affiliates whose participation is
approved by the board of directors of the Company.
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(j) "Director's Fees" means the retainer paid to a Director, any fees paid
to a Director for attending meetings of the board of directors or any committee
of the board of directors and any fees paid to a Director for serving as
chairman of a committee of the board of directors.
(k) "Fair Market Value" means, with respect to a share of the Common
Stock, (i) if the Common Stock is listed on a national securities exchange or
traded on the National Market System, the closing price of the Common Stock on
the determination date or if there are no sales on such date, then on the next
preceding date on which there were sales of Common Stock, all as published in
the Eastern Edition of The Wall Street Journal, (ii) if the Common Stock is not
listed on a national securities exchange or traded on the National Market
System, the closing price last reported by the National Association of
Securities Dealers, Inc. for the over-the-counter market on the determination
date or, if no sales are reported on such date, then on the next preceding date
on which there were such quotations, or (iii) if the Common Stock is not listed
on a national securities exchange or traded on the National Market System and
quotations for the Common Stock are not reported by the National Association of
Securities Dealers, Inc., the fair market value determined by Board of
Directors. In no case, however, shall the Fair Market Value be less than the par
value of the Common Stock.
(l) "Interest" means the amount of interest credited to a Director's Cash
Deferred Fee Account at an annual rate determined in accordance with section
5.2.
(m) "Plan" means the ▇▇▇▇▇ National Corporation and ▇▇▇▇▇ Bank N.A.
Deferred Compensation Plan for Directors set forth in this document, as amended
from time to time.
(n) "Plan Year" means the twelve-month period beginning January 1 and
ending the following December 31 (February 1 through January 31 for periods
prior to January 1, 1998).
(o) "Prior Deferred Fees" means Director's Fees earned prior to June 30,
1994 and deferred under a previous deferred compensation arrangement sponsored
by the Company or the Bank.
(p) "Quarterly Payment Period" means each quarterly period for which
Directors Fees are paid to a Director.
(q) "Shares" means the phantom shares of Common Stock credited to a
Director's Stock Deferred Fee Account.
(r) "Stock Deferred Fee Account" means an account established in the name
of a Director to which is credited Shares for any Director's Fees that are
deferred by the Director under section 3.1(a) and directed into the Stock
Deferred Fee Account under section 3.1(c), any Prior Deferred Fees that the
Director elected to have transferred to the Stock Deferred Fee Account and any
additional Shares that are credited under section 6.1(b) and from which are
debited payments made under Article VII.
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ARTICLE III
DEFERRAL OF DIRECTOR'S FEES
0.1 ELECTION TO DEFER FEES. (a) Before the beginning of a Quarterly
Payment Period, a Director may elect to defer all or part of his or her
Director's Fees to be earned in such Quarterly Payment Period and following
Quarterly Payment Periods. For a new Director, the election to defer Director's
Fees earned during his or her initial quarter of service shall be made within
thirty (30) days following the Director's election or appointment and shall be
effective for Director's Fees earned as of the first day of the month after the
election is made.
(b) Any election to defer shall continue in effect for subsequent
Quarterly Payment Periods unless modified or revoked in accordance with section
3.4.
(c) When a Director elects to defer Director's Fees under section 3.1(a)
the Director shall also elect whether amounts deferred should be credited to his
or her Cash Deferred Fee Account, to his or her Stock Deferred Fee Account, or
both, in the percentages authorized in the Director's Deferred Fee Agreement.
0.2 LIMITATION ON STOCK DEFERRED FEES. (a) A Director cannot elect to
credit more than $10,000 of Director's Fees each Plan Year to the Director's
Stock Deferred Fee Account. The $10,000 limit shall apply to the Plan Year
beginning February 1, 1997 and ending December 31, 1997, and each subsequent
Plan Year beginning on January 1 thereafter. The $10,000 limit shall not apply
to dividends credited to the Director's Stock Deferred Fee Account under section
6.1(b).
(b) In the event that a Director or Directors elect to defer Director's
Fees in the form of Shares and the total number of Shares to be credited to all
Directors' Stock Deferred Fee Accounts at such time exceeds the number of shares
of Common Stock then available under the Plan, the number of Shares credited to
each Director's Stock Deferred Fee Account shall be reduced on a pro rata basis
and the remaining Director's Fees shall be credited to the Director's Cash
Deferred Fee Account. The excess Director's Fees credited to the Director's Cash
Deferred Fee Account cannot thereafter be transferred to the Director's Stock
Deferred Fee Account.
(c) There is no limit on the amount of Director's Fees that can be
credited to the Director's Cash Deferred Fee Account.
0.3 CREDITING TO DEFERRED FEE ACCOUNTS. (a) When a Director elects under
section 3.1(c) to have Director's Fees credited to his or her Cash Deferred Fee
Account, the Director's Cash Deferred Fee Account shall be credited with the
amount of such Director's Fees as of the day such Director's Fees would have
been paid to the Director were they not deferred under the Plan.
(b) When a Director elects under section 3.1(c) to have Director's Fees
credited to his or her Stock Deferred Fee Account, the Director's Stock Deferred
Fee Account shall be credited with a number of Shares as of the day such
Director's Fees would have been paid to the Director were they not deferred
under the Plan. Subject to sections 3.2(a) and 3.2(b), the number of Shares
credited to the Stock Deferred Fee Account shall be the quotient of the amount
of Director's Fees to be credited to the Stock Deferred Fee Account divided by
the Fair Market Value of the Common Stock on such date.
0.4 MODIFICATION OR REVOCATION OF DEFERRAL. A Director may, on a
prospective basis for future Quarterly Payment Periods, change the amount of
Director's Fees to be deferred by executing a new Deferred Fee Agreement or
revoke his or her election to defer Director's Fees by executing a written
revocation to the Secretary of the Company, but no new Deferred Fee Agreement or
revocation of an election to defer Director's Fees shall be effective in the
Quarterly Payment Period in which it is executed.
0.5 MODIFICATION OF INVESTMENT DIRECTION. A Director may, on a prospective
basis for future Director's Fees, modify his or her election regarding the
Deferred Fee Accounts to which his or her deferred Director's Fees are credited,
but no modification of such an election shall affect amounts previously
deferred. Modifications must be made prior to the first day of the month of the
Quarterly Payment Period for which such election is effective.
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ARTICLE IV
CHANGE IN CAPITAL STRUCTURE
0.1 CHANGE IN CAPITAL STRUCTURE. If the Company shall effect a subdivision
or consolidation of shares or other capital readjustment, the payment of a stock
dividend, or other increase or reduction of the number of shares of the Common
Stock outstanding, without receiving compensation therefore in money, services
or property, then (i) the number, class, and per share price of shares of Common
Stock credited to the Director's Stock Deferred Fee Account shall be
appropriately adjusted in such a manner as to entitle the Director to receive
upon distribution the same total number and class of shares as he would have
received had the Director received the distribution of Common Stock under
section 7.1 immediately prior to the event requiring the adjustment; and (ii)
the number and class of shares then reserved for issuance under the Plan shall
be adjusted by substituting for the total number and class of shares of Common
Stock then reserved the number and class of shares of Common Stock that would
have been received by the owner of an equal number of outstanding shares of each
class of Common Stock as the result of the event requiring the adjustment.
ARTICLE V
INTEREST
0.1 INTEREST. Interest shall be credited to each Director's Cash Deferred
Fee Account, as of the end of each quarter, at an annual rate determined
pursuant to section 5.2. Interest shall be credited during each quarter that a
Director has any amount credited to his or her Cash Deferred Fee Account under
the Plan.
0.2 RATE OF INTEREST. Interest shall be credited during the Plan Year at a
rate equal to the interest rate paid by the Bank on its certificates of deposit
having a one-year maturity as of February 1 of that Plan Year for periods prior
to January 1, 1998 and as of January 1 of that Plan Year for periods after
December 31, 1997.
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ARTICLE VI
DIVIDENDS
0.1 CREDITING OF DIVIDENDS. (a) Each Director with shares credited to his
or her Stock Deferred Fee Account on the record date of a dividend on the Common
Stock shall be credited on the payment date of the dividend with an amount
determined by the product of the number of Shares credited to the Director's
Stock Deferred Fee Account on the dividend record date and the dividend per
share on the Common Stock.
(b) If the Director is currently deferring all or a portion of his or her
Director's Fees to the Director's Stock Deferred Fee Account, the Director's
Stock Deferred Fee Account shall be credited on the dividend payment date with a
number of Shares determined by dividing the amount of the dividends for the
Director as determined under section 6.1(a) by the Fair Market Value of the
Common Stock on the dividend payment date.
(c) If the Director is not currently deferring all or a portion of his or
her Director's Fees to the Director's Stock Deferred Fee Account, the amount of
dividends determined under section 6.1(a) shall be credited on the dividend
payment date to the Director's Cash Deferred Fee Account.
ARTICLE VII
PAYMENT OF DEFERRED FEES
0.1 FORM OF PAYMENT OF DEFERRED FEES. A Director shall be entitled to
receive a benefit equal to the amounts credited to his or her Deferred Fee
Accounts at the time or times specified in such Director's Deferred Fee
Agreement. Amounts credited to a Director's Cash Deferred Fee Account shall be
paid in cash. Shares credited to a Director's Stock Deferred Fee Account shall
be paid by the delivery by the Company of certificates representing a like
number of the Common Stock.
0.2 TIMING OF PAYMENT OF DEFERRED FEES. (a) At the election of a Director,
the amount credited to the Director's Cash Deferred Fee Account shall be paid in
a lump sum or in installments in accordance with the terms of such Director's
Deferred Fee Agreement. Amounts credited to a Director's Cash Deferred Fee
Account shall bear interest at the rate specified in section 5.2 during the
installment payout period.
(b) The Shares credited to the Director's Stock Deferred Fee Account shall
be issued to the Director in a lump sum. The Director's Cash Deferred Fee
Account shall be credited with dividends for Shares credited to a Director's
Stock Deferred Fee Account from the date on which the Director ceases to be a
Director until such lump sum payment is made.
(c) Notwithstanding the foregoing, no payment of Shares from a Director's
Stock Deferred Fee Account shall be made until at least six months and one day
that an individual ceases to be a Director. Furthermore, no payment of Shares
from a Director's Stock Deferred Fee Account shall be made unless the Company
may validly issue Common Stock at such time pursuant to all applicable rules and
regulations, including but not limited to corporate law, securities law and
stock exchange rules. If Common Stock may not be issued, subject to compliance
with applicable securities laws requirements, the Fair Market Value of the
Shares credited to a Director's Stock Deferred Fee Account shall be distributed
in cash.
0.3 DEATH OF A DIRECTOR. If a Director dies with any amount credited to
his or her Deferred Fee Accounts, then his or her Beneficiary shall be entitled
to receive the entire amount in a lump sum in cash and/or shares of common
stock, as appropriate. Such payment shall be made as soon as practicable after
the end of the calendar quarter in which the Director's death occurred.
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ARTICLE VIII
BENEFICIARIES
0.1 DESIGNATION OF BENEFICIARY. Each Director may designate from time to
time any person or persons, natural or otherwise, as his or her Beneficiary or
Beneficiaries to whom benefits under section 7.3 are to be paid if he or she
dies while entitled to benefits. Each Beneficiary designation shall be made
either in the Deferred Fee Agreement or on a form prescribed by the Secretary of
the Company and shall be effective only when filed with the Secretary during the
Director's lifetime. Each Beneficiary designation filed with the Secretary shall
revoke all Beneficiary designations previously made by the Director. The
revocation of a Beneficiary designation shall not require the consent of any
designated Beneficiary.
ARTICLE IX
ADMINISTRATION
0.1 SHARES AVAILABLE UNDER THE PLAN. (a) As of the effective date of the
Plan, 25,000 shares of Common Stock shall be available to be credited to the
Directors' Stock Deferred Fee Accounts and issued under the Plan.
(b) The number of shares of Common Stock available for crediting to the
Directors' Deferred Fee Accounts and issued under the Plan may be increased upon
the approval of the Shareholders of the Company.
0.2 RIGHT TO AMEND OR TERMINATE THE PLAN. The Company may amend or
terminate the Plan at any time in whole or in part. No amendment or termination
of the Plan shall reduce any amounts credited to a Director's Deferred Fee
Accounts, any amount owed to him or her as of the date of amendment or
termination, or the amount of Interest accrued or number of Shares to be
credited, as of such date, to his or her account.
0.3 NO FUNDING OBLIGATION. Obligations to pay any benefits under the Plan
shall be unfunded and unsecured, and any payments under the Plan shall be made
from the general assets of the Company or the Bank, as appropriate. The Company
or the Bank, as appropriate, in its discretion, may set aside assets or purchase
annuity or life insurance contracts to discharge all or part of the obligations
under the Plan. The assets set aside or the annuity or life insurance contracts
shall remain in the name of the Company or the Bank, as appropriate, and no
trust shall be created by setting aside the assets or purchasing annuity or life
insurance contracts. A Director's rights under the Plan are not assignable or
transferable other than by will or the laws of descent and distribution, and
such rights are exercisable during the Director's lifetime only by him or her,
or by his or her guardian or legal representative.
0.4 APPLICABLE LAW. This Plan shall be construed and enforced in
accordance with the laws of the District of Columbia, except to the extent
superseded by federal law.
0.5 ADMINISTRATION AND INTERPRETATION. The President of the Company shall
have the authority and responsibility to administer and interpret the Plan.
Benefits due and owing to a Director or Beneficiary under the Plan shall be paid
when due without any requirement that a claim for benefits be filed. However,
any Director or Beneficiary who has not received the benefits to which he or she
believes himself or herself entitled may file a written claim with the
President, who shall act on the claim within thirty days, and such action on any
such claim shall be conclusive.
0.6 EFFECTIVE DATE. This amended Plan shall become effective as of May 14,
1997 with respect to Directors of the Company and on the date the amended Plan
is approved by Directors of the Bank with respect to its Directors.
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EXHIBIT A
DEFERRED FEE AGREEMENT
This Agreement between ____________________ (the "Company/Bank") and
___________________________ (the "Director") is made the ___ day of ___________,
19__, under the ▇▇▇▇▇ National Corporation and ▇▇▇▇▇ Bank, N.A.
Deferred Compensation Plan for Directors (the "Plan").
1. DEFERRED FEE PLAN. The Director agrees to the terms and conditions of the
Plan, a copy of which has been delivered to the Director and constitutes a part
of this Agreement. Capitalized words and phrases in this Agreement shall have
the meaning given to them in the Plan, unless the context clearly indicates
otherwise.
2. ELECTION TO DEFER FEES. The Director authorizes and directs the Company/Bank
to defer ________________________ [insert percentage or dollar amount] of the
Director's Fees earned for the Quarterly Payment Period, beginning ____________
19__ and in each subsequent Quarterly Payment Period. The Director may at any
time change this election on a prospective basis for Quarterly Payment Periods
beginning after the date of such change or revocation by executing a new
Deferred Fee Agreement; the Director may at any time revoke this election on a
prospective basis for Quarterly Payment Periods beginning after the date of such
revocation by delivering to the Secretary of the Company a written revocation of
the election. No change or revocation shall be effective for the Quarterly
Payment Period in which it is executed.
3. INVESTMENT OF DEFERRED FEES. The Director elects to have his or her deferred
Director's Fees apportioned between the Cash and Stock Deferred Fee Accounts as
follows: (circle appropriate percentages):
Cash Deferred Fee Account: 0% 25% 50% 75% 100%
Stock Deferred Fee Account: 0% 25% 50% 75% 100%
4. FORM OF PAYMENT. (a) Cash Deferred Fees Account. The Director elects
to receive the amount of Director's Fees credited to his or her Cash Deferred
Fee Accounts pursuant to this Agreement in (check one):
( ) a lump sum; or
( ) substantially equal annual installments over a period of ___ years
(not to exceed ten).
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Payments shall commence (check one):
( ) _________________, 19__; or
( ) upon termination of service as director.
(b) Stock Deferred Fee Account. The Director shall receive the amount of
Director's Fees credited to his or her Stock Deferred Fee Account in a lump sum
no earlier than the date which is six (6) months and one day after the Director
ceases to be a Director.
5. BENEFICIARY. The Director requests that, upon his or her death, any
amounts remaining in his or her Deferred Fees Account be paid to the Beneficiary
or Beneficiaries he or she has designated in this Agreement or in a Notice of
Designation of Beneficiary filed with the Secretary of the Company. This
designation revokes all prior beneficiary designations.
Beneficiary Address Percentage of
Deferred Fees
Account
------------- -------------- -------------
------------- -------------- -------------
------------- -------------- -------------
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year written above.
----------------------------- -----------------------------
Witness Director
▇▇▇▇▇ NATIONAL CORPORATION
▇▇▇▇▇ BANK N.A.
By:____________________________
Name: _________________________
Title: __________________________
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Exhibit 10.4
1998 Senior Executive Incentive Plan
General Information: For those senior executives whose performance is key to
the organization, incentive awards will be determined
based on two components: the financial performance of
the Bank and a discretionary component based on the
executive=s overall contribution to the Bank.
Plan Features: Financial Measurements (50% of Incentive):
----------------------
ROA (50% weighting)
Net Income (30% weighting)
Fee Income (excluding security gains) (20% weighting)
Discretionary Component (50% of Incentive)
Plan Year: January 1, 1998 - December 31, 1998
Plan Management: Human Resources
1998 General Incentive Plan
General Information: The General Incentive Plan is based on the following
factors:
Bank Financial Performance
Individual Performance
Grade Level (55 - 61)
Length of Participation in the Plan (prorated by months)
Plan Features: The Bank uses the following measurements to
evaluate financial performance:
ROA
Net Income
Fee Income (excluding security gains)
Plan Year: January 1, 1998 - December 31, 1998
Participants: Employees in grade 55 and above are included
in one of the Bank=s incentive plans. Those employees
can either be exclusively a participant in the General
Incentive Plan, exclusively in another incentive plan,
or a combination of the plans.
An employees who joins ▇▇▇▇▇ or is promoted to a grade
55 or above during the period of performance is
eligible, but his/her incentive share is prorated to
reflect the number of full months he/she participates.
Participation for a new plan participant starts on the
first day of the first full month of employment.
Plan Management: Human Resources Division
Payout of Incentive: Incentive awards are a percentage of the
participant's market rate of pay. Referring to the Range
of Award table below, there is a percentage range
relative to each grade and corresponding performance
rating. For example, a grade 55 employee with a "4"
rating could be eligible for an incentive between 4 -
16% of that employee's market rate. Awards increase as
Bank performance increases.
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If the Bank meets its targeted budget goals, the
participant could be eligible for an award at the
minimum of the range, such as 4% of market rate for a
grade 55 rated a "4". As the Bank continues to exceed
its budget goals, the percentage of potential award
increases. For example, if the Bank far exceeds its
financial budget goals, the grade 55 employee with a "4"
rating could be eligible for an award of 16% of that
employee=s market rate.
Payouts will be paid to eligible plan participants
during the first quarter of 1999. To receive a payout,
participants must be actively employed by the Bank on
the date of distribution, unless the participant has
become totally disabled, deceased, or retired where the
payout is prorated for the period of active employment.
Range of Award*
Grade 3 - Rating 4 - Rating 5 - Rating
55 3 - 12% 4 - 16% 5 - 20%
56 3 - 12% 4 - 16% 5 - 20%
57 4.5 - 18% 6 - 24% 7.5 - 30%
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Exhibit 10.5
1999 Senior Executive Incentive Plan
General Information: For those senior executives whose performance is key to
the organization, incentive awards will be determined
based on two components: the financial performance of
the Bank and a discretionary component based on the
executive's overall contribution to the Bank.
Plan Features: Financial Measurements (50% of Incentive):
----------------------
ROA (50% weighting)
Net Income (30% weighting)
Fee Income (excluding security gains) (20% weighting)
Discretionary Component (50% of Incentive)
Plan Year: January 1, 1999 - December 31, 1999
Plan Management: Human Resources
1999 General Incentive Plan
General Information: The General Incentive Plan is based on the following
factors:
Bank Financial Performance
Individual Performance
Grade Level (55 - 61)
Length of Participation in the Plan (prorated by months)
Plan Features: The Bank uses the following measurements to evaluate
financial performance:
ROA
Net Income
Fee Income (excluding security gains)
Plan Year: January 1, 1999 - December 31, 1999
Participants: Employees in grade 55 and above are included in
one of the Bank's incentive plans. Those employees can
either be exclusively a participant in the General
Incentive Plan, exclusively in another incentive plan,
or a combination of the plans.
An employee who joins ▇▇▇▇▇ or is promoted to a grade 55
or above during the period of performance is eligible,
but his/her incentive share is prorated to reflect the
number of full months he/she participates. Participation
for a new plan participant starts on the first day of
the first full month of employment.
Plan Management: Human Resources Division
Payout of Incentive: Incentive awards are a percentage of the
participant's market rate of pay. Referring to the Range
of Award table below, there is a percentage range
relative to each grade and corresponding performance
rating. For example, a grade 55 employee with a "4"
rating could be eligible for an incentive between 4 -
16% of that employee's market rate. Awards increase as
Bank performance increases.
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If the Bank meets its targeted budget goals, the
participant could be eligible for an award at the
minimum of the range, such as 4% of market rate for a
grade 55 rated a "4". As the Bank continues to exceed
its budget goals, the percentage of potential award
increases. For example, if the Bank far exceeds its
financial budget goals, the grade 55 employee with a "4"
rating could be eligible for an award of 16% of that
employee's market rate.
Payouts will be paid to eligible plan participants
during the first quarter of 2000. To receive a payout,
participants must be actively employed by the Bank on
the date of distribution, unless the participant has
become totally disabled, deceased, or retired where the
payout is prorated for the period of active employment.
-----------------------------------------------------------------------------
Range of Award*
-----------------------------------------------------------------------------
Grade 3 - Rating 4 - Rating 5 - Rating
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
55 3 - 12% 4 - 16% 5 - 20%
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
56 3 - 12% 4 - 16% 5 - 20%
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
57 4.5 - 18% 6 - 24% 7.5 - 30%
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
58 4.5 - 18% 6 - 24% 7.5 - 30%
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
59 4.5 - 18% 6 - 24% 7.5 - 30%
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
60 6 - 24% 8 - 32% 10 - 40%
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
61 6 - 24% 8 - 32% 10 - 40%
-----------------------------------------------------------------------------
* The Bank's financial performance will determine the payout amount within each
designated range
58 4.5 - 18% 6 - 24% 7.5 - 30%
59 4.5 - 18% 6 - 24% 7.5 - 30%
60 6 - 24% 8 - 32% 10 - 40%
61 6 - 24% 8 - 32% 10 - 40%
* The Bank=s financial performance will determine the payout amount within each
designated range.
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Exhibit 10.6
▇▇▇▇▇ NATTONAL BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective January 1, 1993,
Amended and Restated As of July 12, 1995
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▇▇▇▇▇ NATIONAL BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Article I
Purpose, Effective Date
1.1 Purpose. The purpose of this Supplemental Executive Retirement Plan
(the "Plan"), as established by ▇▇▇▇▇ National Corporation (the "Corporation")
and initially effective as of January 1, 1993, and assumed by The ▇▇▇▇▇ National
Bank of Washington, D.C. and its subsidiaries and affiliates (the "Bank")
effective as of July 12, 1995, is to provide supplemental retirement benefits to
certain key employees of the Corporation and the Bank. It is intended that the
Plan will aid in retaining and attracting individuals of exceptional ability by
providing them with these benefits.
1.2 Effective Date. This Restated Plan shall be effective as of July
12, 1995.
Article II
Definitions
For the purposes of this Plan, the following terms shall have the
meanings indicated unless the context clearly indicates otherwise:
2.1 Administrative Committee. "Administrative Committee" means the
Pension and Benefits Committee of The ▇▇▇▇▇ National Bank of Washington, D.C.
or its successor committee as may be appointed by its Board to administer the
Plan pursuant to Article VII.
2.2 Beneficiary. "Beneficiary" means the person, persons or entity as
designated by the Participant, entitled under Article VI to receive any Plan
benefits payable after the Participant's death.
2.3 Board. "Board" means the Board of Directors of The ▇▇▇▇▇ National
Bank of Washington, D.C.
2.4 Cause. "Cause" means any act materially detrimental to the best
interests of the Employer and that constitutes on the part of the Participant
personal dishonesty, willful misconduct in clear conflict with reasonable
standards of employee conduct, breach of fiduciary duty involving personal
profit, intentional failure to perform duties of the Participant's position,
willful violation of law,, governmental rule or regulation (other than traffic
violations or similar offenses) or final cease and desist order, or for any
reason which would constitute grounds for removal from office by the appropriate
Federal banking agencies under applicable law.
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2.5 Change of Control. "Change of Control" means a sale of substantially
all of the Corporation's assets or the acquisition, whether directly,
indirectly, beneficially (within the meaning of Rule 13d-3 of the Securities Act
of 1933 (the "Act"), or of record, of securities of the corporation representing
twenty-five percent (25%) or more in the aggregate voting power of the
Corporation's then-outstanding Common Stock by any "person" (within the meaning
of Sections 13(d) and 14(d) of the Act), including any corporation or group of
associated persons acting in concert, other than (i) the Corporation or its
subsidiaries and/or (.ii) any employee pension benefit plan (within the meaning
of Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended (11ERISA11)) of the Corporation or of its subsidiaries, including a
trust established pursuant to any such plan; provided, that a Change of Control
will not result from (A) a transfer of the corporation's voting securities by a
person who is the beneficial owner, directly or indirectly, of twenty-five
percent (25%) or more of the voting securities of the Corporation (a 1125
Percent owner") to (i) a member of such 25 Percent Owner's immediate family
(within the meaning of Rule 16a-l(e) of the Act) either during such 25 Percent
owner's lifetime or by will or the laws of descent and distribution; (ii) any
trust as to which the 25 Percent owner or a member (or members) of 25 Percent
owner's immediate family (within the meaning of Rule 16a-l(e) of the Act) is the
beneficiary; (iii) any trust as to which the 25 Percent Owner is the settlor
with sole power to revoke; or (iv) any
entity over which such 25 Percent owner has the power, directly or indirectly,
to direct or cause the direction of the management and policies of the entity,
whether through the ownership of voting securities, by contract, or otherwise;
or (v) any charitable trust, foundation or corporation under Section 501 (c)(3)
of the Internal Revenue Code of 1986, as amended (the "Code"), which is funded
by the 25 Percent Owner; or (B) the acquisition of voting securities of the
Corporation by either (i) a person who was a 25 Percent Owner on the effective
date of the Plan or (ii) a person, trust or other entity described in the
foregoing clauses (A)(i)-(v) of this subsection.
2.6 Compensation Committee. "Compensation Committee" means the
compensation committee of the Bank.
2.7 "Designated Participant". "Designated Participant" means a
Participant who occupies one of the following positions or whose
Participation Agreement states that he is a Designated Participant:
Chairman of the Board of ▇▇▇▇▇ National Corporation or The ▇▇▇▇▇ National
Bank of Washington, D.C. President, ▇▇▇▇▇ National Corporation President, The
▇▇▇▇▇ National Bank of Washington, D.C.
The following personnel of The ▇▇▇▇▇ National Bank of
Washington, D.C.:
Chief Credit officer
Chief Financial officer
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Chief Technology officer General Counsel Head of Retail Banking Head of Risk
Management Head of Special Assets Head of Financial Services Head of Human
Resources Head of Relationship Banking Head of Marketing Head of communications
Head of CRA/Fair Lending
An employee who is a Designated Participant at any time during the six-month
period preceding the date of the public announcement of a Change of Control
shall continue to be treated as a Designated Participant for purposes of
Sections 5.2(c) and 10.5, notwithstanding any change in his employment status or
the terms and conditions of his employment during such period.
2.8 Disability. "Disability" in the case of a Participant covered by a
long-term disability plan maintained by the Employer shall mean that the
Participant has a disability qualifying for benefits under the long-term
disability plan covering such Participant. In the case of a Participant not
covered by a longterm disability plan maintained by the Employer, "Disability"
shall mean the Participant is unable as a result of medically
diagnosed disease, or injury, to perform the duties of the position which he or
she occupies with the Employer. For purposes of the preceding sentence, any
Disability which begins within twenty-four (24) months of the date of the
Participant's commencement of employment for the Employer will not be determined
to be a disability if it is caused, contriLbuted to by, or results from a
pre-existing condition. A pre-existing condition means any sickness or injury
for which the Participant has received medical treatment, consultation, care or
services, including diagnostic measures, or for which the Participant has taken
prescribed drugs or medicines within a twelve (12) month period prior to the
date of the Participant's commencement of employment. In no event shall a
Participant be treated as having a Disability if such disability results from a
self-inflicted injury, participation in a felony or service in the armed forces
of any country. The Administrative Committee shall determine the existence of a
Disability and may rely on advice from a medical examiner satisfactory to the
Administrative Committee in making the determination.
2.9 Eligible Employee. "Eligible Employee" means a key employee of the
Corporation or the Bank holding the title of senior vice-president or a more
senior title and who, if his or her first day of employment with an Employer
based on his or her most recent date of hire with an Employer, is on or after
December 1, 1992, has reached the first anniversary of his or her
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first day of employment.
2.10 Employer. "Employer" means the Corporation and the Bank, as the
case may be.
2.11 Joint Annuitant. "Joint Annuitant" means the person designated as
such by the Participant in this Plan under the joint and survivor life form
of payment.
2.12 Participant. "Participant" means any Employee who has been made
eligible pursuant to Article III to participate in this Plan, and who has not
yet received all of the benefits to which he is entitled hereunder.
2.13 Participation Agreement. "Participation Agreement" means the
agreement provided by the Compensation Committee (or its predecessor) and
agreed to by a Participant which entitles the Participant to participate in
the Plan.
2.14 Supmlemental Retirement Benefit. "Supplemental Retirement Benefit"
means the benefit stated in the Participation Agreement and payable under
Article V of this Plan.
2.15 Termination for Good Reascn. "Termination for Good Reason" shall
mean a voluntary termination by the Participant within six months of the date
(i) the Employer has notified the
Participant that the Participant has been transferred to a position with a
permanent regular place of employment more than twenty-five (25) miles from the
Participant's prior permanent regular place of employment, (ii) a material
reduction by the Employer in the Participant's base rate of pay, or (iii) the
Employer, without the consent of the Participant, implements a change in
Participant's duties or responsibilities in the nature of a demotion. Reducing a
Participant's title to below senior vice president (or equivalent title) shall
in all cases be treated as a change in duties in the nature of a demotion.
2.16 Years of Participation. "Years of Participation" means the number of
complete years of service by the Participant with the Employer beginning on the
date the Participant's participation in this Plan commences and ending on the
earlier of (i) the date the Participant terminates employment with the Employer
or (ii) as provided in Section 5.2(f), the date the Participant ceases to be an
Eligible Employee. A Participant who has incurred a Disability shall continue to
receive years of service during the period of such Disability for purposes of
determining his or her "Years of Participation."
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Article III
Eligibility and Participation
3.1 Eligibility. Eligibility to participate in the Plan shall be limited
to those Eligible Employees who are designated by management, from time to time,
and approved by the Compensation Committee.
3.2 Participation. The effective date of an Eligible Employee's
participation in the Plan shall be the date specified in the Participation
Agreement provided to the Employee by the Compensation Committee (or its
predecessor). An Eligible Employee shall become a Participant only if he or she
has executed the Participation Agreement and taken all other action required by
the Compensation Committee and the Administrative Committee to commence
participation.
Article IV
Death Benefits
4.1 Pre-Termination Death Benefit. If prior to the commencement date of a
Participant's Supplemental Retirement Benefit under Article V, a Participant
dies while employed by an Employer or during a period of Disability for which
the Participant continues to receive Years of Participation, the Corporation
shall pay a death benefit to the Participant's
Beneficiary. The pre-termination death benefit shall be payable monthly in equal
payments of one-twelfth the annual amount of the Participant's Supplemental
Retirement Benefit. The pre termination death benefit shall be payable to the
Participant's Beneficiary for a term certain of fifteen (15) years and shall
commence as soon as practical after death of the Participant, but in no event
later than ninety (90) days after the Administrative Committee receives notice
of the Participant's death.
4.2 Post-Termination Death Benefit. If a Participant with a vested
interest in his or her Supplemental Retirement Benefit dies following
termination of employment from the Employer, prior to the commencement date of
his or her benefit under Article V and with a surviving Beneficiary on the date
the Participant would have attained age sixty-two (62), the Corporation shall
pay a post-termination death benefit to the Participant's Beneficiary. The
annual amount of the post-termination death benefit is fifty percent (50%) of
the Participant's vested percentage of the annual amount of the Participant's
Supplemental Retirement Benefit (i.e., one-half the vested Supplemental
Retirement Benefit). The post-termination death benefit shall be made in equal
monthly payments of one-twelfth the annual amount. The post-termination death
benefit shall be payable to the Participant's Beneficiary commencing on the
first day of the month following the date on which the Participant would have
attained age sixty-two (62) and ending on the earlier of the
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Beneficiary's death or the payment of fifteen (15) years of payments. If a
Participant designates more than one person as a Beneficiary to share in his or
her post-termination death benefit, each person shall be treated as the
Beneficiary of that percentage of the post-termination death benefit as is
designated by the Participant and must survive until the Participant would have
attained age sixty-two (62) to receive the portion of the post-termination death
benefit for which such person is designated as Beneficiary. Any portion of the
post-termination benefit not payable to a Beneficiary as a result of such
Beneficiaryls'failure to survive until the Participant would have attained age
sixty-two (62) or failure to survive the fifteen (15) year payment period shall
not be payable to any other Beneficiary.
Article V
Supulemental Retirement Benefits
5.1 Supplemental Retirement Benefit. If a Participant terminates
employment with Employer prior to Disability or death, the Participant shall
receive the vested portion of the Supplemental Retirement Benefit provided for
in the Participant's Participation Agreement, payable as provided for in Section
5.3. The amount of the Participant's Supplemental Retirement Benefit shall be
specified by the Compensation Committee in the Participant's Participation
Agreement.
5.2 Vesting of Benefits.
a. Vesting Schedule for Initial Participants. Except as provided herein or
within the Participant's Participation Agreement, Participants whose effective
date of participation is January 1, 1993 shall become vested in the benefits
provided under this Plan based upon Years of Participation in the following
manner:
Years of ParticiT)ation Vested Percentage
Less than 5 0%
5 but less than 6 50%
6 but less than 7 60%
7 but less than 8 70%
8 but less than 9 80%
9 but less than 10 90%
10 or more 100%
b. Vesting Schedule for Other Participants. Except as provided herein or within
the Participant's Participation Agreement, Participants whose effective date of
participation is after January 1, 1993 shall become vested in benefits provided
under this Plan based upon Years of Participation in the following manner:
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Years of Participation Vested Percentage
Less than 10 0%
10 or more 100%
C. vesting of Designated Participants in Connection With Change of Control.
Notwithstanding subparagraphs a. and b. above, (i) in the event of a Designated
Participant's termination of employment from the Employer occurring within the
6-month period before or after the date of the public announcement of a Change
of Control as a result of either a termination by the Employer without Cause or
a Termination for Good Reason by the Employee, or (ii) in the event of a Change
of Control, the Designated Participant shall be 100% vested in his entire
Supplemental Retirement Benefit. For purposes of this Section 5.2(c), a
termination shall be deemed to occur within the 6-month period specified in the
preceding sentence if the Employee is notified of his termination during such
period, even if his employment terminates after the end of such period.
d. Vesting of Certain-Terminated Participants in Connection With Change of
Control. Notwithstanding subparagraphs a. and'b. above, in the event of a
Participant's termination of employment from the Employer occurring within the
one-year period after a Change of Control as a result of either (i) a
termination by the Employer without Cause, or (ii) a Termination for Good Reason
by the Employee, the Participant shall be 100% vested in his entire Supplemental
Retirement Benefit. For purposes of this subparagraph, a termination of a
Participant's employment by the Employer made within the 6-month period prior to
a Change of control shall be treated as occurring on the date of such Change of
Control.
e. Vesting Upon Death. Notwithstanding subparagraphs a. and b., above, in the
event of the Participant's termination of employment with an Employer due to the
Participant"s death, the Participant shall be 100% vested in the pre termination
death benefit as stated in Paragraph 4.1, above.
f. Change in Subsidiary. In the event a Participant is employed by an entity
which is not (or ceases to be) an Employer under the terms of the Plan, the
Participant shall be treated as continuing in employment with an Employer while
employed by such entity.
9. Demotion. In the event a Participant remains employed by the Employer, but
ceases to hold the title of senior vice president (or equivalent title) or
higher, the Participant shall cease to receive Years of Participation during the
period the Participant fails to hold such title, unless the Compensation
Committee, in its discretion, determines
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otherwise.
h. Accelerated Vesting. Notwithstanding any provision of this Plan to the
contrary, the Compensation Committee may, in its sole discretion, accelerate the
vesting of benefits for any Participant.
5.3 Form and Timing of Payment. The vested percentage of the Supplemental
Retirement Benefit specified in a Participant's Participation Agreement- is the
annual amount paid for the life of the Participant,*but for no more than fifteen
(15) years. The annual benefit shall be paid in monthly installments of
onetwelfth of the annual benefit and shall commence as soon as practicable after
the later of Participant's termination of employment from an Employer or
attainment of age sixty-two (62), but not later than ninety (90) days after all
information necessary to calculate the benefit amount has been received by
Employer. All payments shall be made as of first day of the month. If the
Participant elects to receive his or her vested benefit amount in unreduced form
as described in this paragraph, benefits are paid to the Participant for up to
fifteen (15) years and, in the event of the Participant's death before fifteen
(15) years of benefit payments, no further benefits will be paid.
The Participant may request benefits to be paid in reduced form through
a joint and survivor life type of payment. Any such
request must comply with any rules or regulations adopted by the Administrative
Committee. such rules and regulations may include deadlines for electing or
changing a Participant request for payment in the joint and survivor type. Under
the joint and survivor type of payment, the Participant shall receive a benefit
of seventy-five percent (75%) of his or her vested Supplemental Retirement
Benefit amount for his or her life, but not more than fifteen (15) years. In the
event of the Participant's death before fifteen (15) years of benefit payments,
the Participant's Joint Annuitant, if then living, shall receive a monthly
benefit of fifty percent (50%) of the Participant's vested benefit until the
earlier of the Joint Annuitant's death or payment of benefits for a period equal
to fifteen (15) years reduced by the number of years of payments to the
Participant.
For example, if a Participant's total vested benefit is $10,000 per year
and the Participant elects to receive a joint and survivor life type of.payment,
the Participant would receive $7,500 per year for life or fifteen (15) years,
whichever comes first. If the Participant dies prior to receipt of fifteen (15)
years of payments, the Participant's Joint Annuitant, if Surviving, would
receive $5,000 per year, until the end of the earlier of the remaining portion
of the fifteen (15) years or the Joint Annuitant's death.
For purposes of commencement of benefits, a Participant who
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is 100% vested and remains employed by an Employer after age 62, but for less
than 60 hours per month, shall be treated as having terminated employment. A
Participant who is receiving Supplemental Retirement Benefits and who is rehired
by an Employer and/or who performs more than 60 hours of service per month shall
at the discretion of the Administrative Committee have his or her benefit
payments suspended. Unless the Administrative Committee determines otherwise at
the time it determines to suspend a benefit payment, any payments suspended
shall not reduce the total payments to which the Participant or his or her
Beneficiary is entitled to receive from the Corporation under this Plan.
5.4 Disabled Participant. A Participant with a Disability shall be
eligible to elect to commence the vested percentage of his or her Supplemental
Retirement Benefit on the later of (i) attainment of age sixty-two (62), or (ii)
the first day of the month following the month during which the Participant
attains a more than a zero percent vested interest in his or her Supplemental
Retirement Benefit. If the Participant elects to commence benefits prior to the
date the Participant has attained a one-hundred percent (100%) vested interest,
the Participant shall be treated as no longer having a Disability and shall
receive no additional Years of Participation service.
Article VI
Beneficiary Designation
6.1 Beneficiary Desi nation. Each Participant shall have the right to
designate one (1) or more persons as Beneficiary (both primary as well as
secondary) to whom death benefits under Article IV of-this Plan shall be paid in
the event of a Participant's death. Each Beneficiary designation shall be in a
written form prescribed by the Administrative Committee and shall he effective
only when filed with the Administrative Committee during the Participant's
lifetime.
6.2 Changing Beneficiary. Any Beneficiary designation may be changed by a
Participant without the consent of the previously named Beneficiary by the
filing of a new Beneficiary designation with the Administrative committee. The
filing of a new designation shall cancel all designations previously filed.
6.3 No Beneficiary Designation. If any Participant fails to designate a
Beneficiary in the manner provided above, or if the designation is void, the
Participant's beneficiary shall be the person in the first of the following
classes in which there is a survivor:
(a) The Participant's surviving spouse.
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(b) The Participant's children in equal shares, except that if any of the
children predeceases the Participant but leaves issue surviving, then such issue
shall take the right of representation the share the deceased child would have
taken if living.
(c) The personal representative of the Participant's or Beneficiary's estate, as
the case may be.
6.4 Effect of Payment. Payment to the Beneficiary shall completely
discharge the Employer's obligations under this Plan.
Article VII
Administration
7.1 Committee. The Plan shall be administered by the Administrative
Committee, which shall be appointed by the Board The initial Administrative
Committee shall be the same as the Pension and Benefits Committee of The ▇▇▇▇▇
National Bank of Washington, D.C. (or its successor) and shall continue to serve
in this capacity until such time that it is replaced by its Board. A majority
vote of the Administrative Committee members shall control any decision. Members
of the Administrative Committee may be Participants under this Plan, provided
that no member of such Administrative Committee shall act on any matter directly
affecting such member's benefit entitlements under the
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Plan.
7.2 Duties.. The Administrative Committee shall have the authority to
make, amend, interpret, and enforce all appropriate rules and regulations for
the administration of the Plan and decide or resolve any and all questions,
including interpretations of the Plan, as may arise in such administration. Such
authority includes, but is not limited to, the authority to interpret and decide
all questions involving a Participant's vested interest in his or her
Supplemental Retirement Benefit under Section 5.2.
7.3 Agents. The Administrative Committee may, from time to time, employ
agents and delegate to them such administrative duties as it sees fit, and may
from time to time consult with counsel who may be counsel to the Employer.
7.4 Binding Effect of Decisions. The decision or action of the
Administrative Committee with respect to any question arising out of or in
connection with the administration, interpretation and application of the Plan
and the rules and regulations promulgated hereunder shall be final, conclusive
and binding upon all persons having any interest in the Plan.
Article VIII
Claims Procedure
8.1 Claim. Any person or entity claiming a benefit, requesting an
interpretation or ruling under the Plan, or requesting information under the
Plan (hereinafter referred to as "Claimant") shall present the request in
writing to the Administrative Committee, which shall respond in writing as soon
as practicable.
8.2 Denial of Claim. If the claim or request is denied, the written notice
of denial shall state:
(a) The reason for denial, with specific reference to the Plan provisions on
which the denial is based;
(b) A description of any additional material or information required and an
explanation of why it is necessary; and
(c) An explanation of the Plan's claims review procedures.
8.3 Review of Claim. Any Claimant whose claim or request is denied or who
has not received a response within sixty (60) days may request a review by
notice given in writing to the Administrative Committee. Such request must be
made within sixty (60) days after receipt by the Claimant of the written notice
of
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denial, or in the event Claimant has not received a response sixty (60) days
after receipt by the Administrative Committee of Claimant's claim or request.
The claim or request shall be reviewed by the Administrative Committee which
'may, but shall not be required to, grant the Claimant a hearing. on review, the
Claimant may have representation, examine pertinent documents, and submit issues
and comments in writing.
8.4 Final Decision. The decision on review shall normally be made within
sixty (60) days after the Administrative Committee's receipt of Claimant's claim
or request. 'If an extension of time is required for a hearing or other special
circumstances, the Claimant shall be notified and the time limit shall be one
hundred twenty (120) days. The decision shall be in writing and shall state the
reason and the relevant Plan provisions. All decisions on review shall be final
and bind all parties concerned.
Article IX
Termination, Suspension or Amendment
9.1 Termination, Suspension or Amendment of Plan. The Board may, in its
sole discretion, terminate or suspend the Plan at any time, in whole or in part.
The Board may amend the Plan at any time. Any amendment may provide different
benefits or amounts of benefits from those herein set forth. However, no
such termination, suspension or amendment (including an amendment to a
Participant's Participation Agreement) shall reduce or adversely affect benefits
in pay status or the Supplemental Retirement Benefit in which the Participant
has vested under any provision of Article 5. in connection with the termination
of the Plan, the Board may, in its sole discretion, accelerate vesting in some
or all Supplemental Retirement Benefits provided for in the Participation
Agreements in effect prior to the date of the termination and/or accelerate
payment of some or all benefits due under the Plan. If the Board elects to
accelerate payments due under the Plan, the lump-sum present value of benefits
due to a Participant under the Plan shall be determined by an actuary selected
by the Board, which actuary shall apply reasonable actuarial assumptions.
Payment by the Corporation to the Participant of the lump-sum present value
determined by the actuary shall discharge the Corporation from any further
liability to the Participant under the Plan.
Article X
Miscellaneous
10.1 Unfunded Plan. This Plan is intended to be an unfunded plan
maintained primarily to provide deferred compensation benefits for a select
group of "management or highly compensated employees" within the meaning of
Sections 201, 301, and 401 of ERISA, and therefore is exempt'from the provisions
of
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Parts 2, 3 and 4 of Title I of ERISA. Accordingly, to the extent necessary, the
Board may remove certain employees as Participants if it is determined by the
United States Department of Labor, a court of competent jurisdiction, or an
opinion of counsel that the Plan constitutes an employee pension benefit plan
within the meaning of Section 3(2) of ERISA (as currently in effect or hereafter
amended) which is not so exempt.
10.2 Exclusions; Misrepresentation. No benefit shall be paid to a
Participant's Beneficiary if the Participant's death occurs as a result of
injuries received from participation in a felony, as a result of attempted or
actual suicide or as a result of injuries received while serving in the armed
forces of any country. The Administrative Committee may also deny payment if the
Participant has made a material misrepresentation in any form or document
provided by the Participant to or for the benefit of the Corporation. A material
misrepresentation includes, but is not limited to, any statement or
representation to an insurance company from which an Employer purchases one or
more contracts as an investment in order to assist in meeting its contractual
promises under this Plan and which misrepresentation results in the failure or
refusal of such insurer to honor the terms of or pay the death benefit due under
such contract(s).
10.3 Sole Obliaation of the Employer. The obligation to make benefit
payments to any Participant under the Plan shall be an obligation solely of the
Employer and its successors and assigns, and shall not be an obligation of any
other person.
10.4 Unsecured General Creditor. Except as provided in Section 10.5,
Participants and Beneficiaries shall be unsecured general creditors, with no
secured or preferential right to any assets of any Employer or any other party
for payment of benefits under this Plan. Any property held by an Employer for
the purpose of generating the cash flow for benefit payments shall remain its
general, unpledged and unrestricted assets. An Employer's obligation under the
Plan shall be an unfunded and unsecured promise to pay money in the future.
10.5 Trust. The Employer shall be responsible for the payment of all
benefits provided under the Plan. At its discretion, an Employer may establish
(or jointly establish) one (1) or more trusts, with such trustees as the
Compensation Committee may approve, for the purpose of providing for the payment
of such benefits. Whether such trust is revocable or irrevocable, its assets
shall be held for payment of all the general creditors of the Employer in the
event of bankruptcy or insolvency. To the extent any benefits provided under the
Plan are paid from any such trust, the Employer shall have no further obligation
to pay that portion of the benefit due. If not paid from the trust, such
benefits shall remain the obligation of the Employer.
Notwithstanding any provision of the Plan to the
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contrary, upon a Change of Control, each Employer shall, as soon as possible,
but in no event later than 30 days following the change of Control, make
irrevocable contributions to the trust, in cash or property of any kind, in an
amount that is sufficient (taking into account the then current value of any
other assets held in such trust) to pay each Designated Participant (and
Beneficiary) the benefits in which each Designated Participant (and Beneficiary)
is vested pursuant to Article 5 of the Plan on the day after the Change of
Control has occurred.
10.6 Nonassignability. Neither a Participant, a. Beneficiary nor any other
person shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in
advance of actual receipt the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are, expressly declared to be
unassignable and nontransferable. No part of the amounts payable shall, prior to
actual payment, be subject to seizure or sequestration for the payment of any
debts, judgments, alimony or separate maintenance owed by a Participant, a
Beneficiary or any other person, nor be transferable by operation of law in the
event of a Participant's, a Beneficiary's or any other person's bankruptcy or
insolvency.
10.7 Not a Contract of Emolovment. This Plan shall not constitute a
contract of employment between Employer and the Participant. Nothing in this
Plan shall give a Participant the right to be retained in the service of
Employer or to interfere with the right of Employer to discipline or discharge a
Participant at any time.
10.8 Protective Provisions. A Participant shall cooperate with Employer by
furnishing any and all information requested by Employer in order to facilitate
the payment of benefits hereunder, and by taking such physical examinations as
Employer may deem necessary and by taking such other' action as may be
requested by Employer.
10.9 Governing Law. The provisions of this Plan shall be construed and
interpreted according to the laws of the District of Columbia, except as
preempted by federal law.
10.10 Validity. If any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein. In the event that
the Employer shall be prevented from making payment of benefits under this Plan
as a result of any law, regulation or other governmental action, the
Corporation, the Employer, the Administrative Committee, the Compensation
Committee, and the employees and officers of each shall have no'liability to any
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Participant or Beneficiary for any payments due under the Plan.
10.11 Notice. Any notice or filing required or permitted under the Plan
shall be sufficient if in writing and hand delivered or sent by registered or
certified mail. Such notice shall be deemed given as of the date of delivery or,
if delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification. Mailed notices shall be directed to the
following addresses:
(a) If to the Bank, to:
The ▇▇▇▇▇ National Bank of Washington, D.C.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: Director of Human Resources of
The ▇▇▇▇▇ National Bank of Washington, D.C.
(b) If to Participant or a Beneficiary, to:
The Participant or Beneficiary at the last known address contained in the
records of ▇▇▇▇▇' Human Resources department.
10-12 Withholding Payroll Taxes. The Employer shall withhold from payments
hereunder any taxes required to be withheld from such payments under local,
state or federal law. A Beneficiary may, if then permitted under applicable law,
elect not to have withholding of federal income tax pursuant to Section
3405(a)(2) of the Code, or any successor provision thereto.
10-13 Payment to Guardian. If a Plan benefit is payable to minor or a
person declared incompetent or a person incapable of handling the disposition of
property, the Administrative Committee may direct payment to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or person. The Administrative Committee may require proof of incompetency,
minority, incapacity or guardianship as it may deem appropriate prior to
distribution. Such distribution shall completely discharge the Administrative
Committee and the Employer from all liability with respect to such benefit.
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Exhibit 10.7
Trust Agreement
AGREEMENT, dated July 12, 1995 by and between ▇▇▇▇▇ National Corporation
("Corporation") and The ▇▇▇▇▇ National Bank of Washington, D.C. ("Bank"), each
being a District of Columbia corporation having its principal office in
Washington, D.C. (individually and collectively, the "Company"), as settlors,
and The ▇▇▇▇▇ National Bank of Washington, D.C., as trustee (the "Trustee").
WHEREAS, the ▇▇▇▇▇ National Bank Supplemental Executive Retirement Plan
and the ▇▇▇▇▇ National Bank Split Dollar Life Insurance and Supplemental Death
Benefit Plan for Senior Executive Officers (each a "Plan") provide for the
payment of benefits to certain present and former employees of the Company and
to beneficiaries designated by such employees (each such employee, and after his
death his beneficiary or each of his beneficiaries, are hereinafter referred to
as "Participant").
WHEREAS, Company wishes to establish a trust (hereinafter called "Trust")
and to contribute to the Trust assets that shall be held therein, subject to the
claims of creditors of the Company and any of its subsidiaries or affiliates in
the event of Insolvency of the Company or any of its subsidiaries and
affiliates, as herein defined, until paid to Plan Participants and their
beneficiaries in such manner and at such times as specified in each Plan;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement under the Internal Revenue Code of 1986, as
amended (the "Code") and shall not affect the status of each Plan as an unfunded
plan maintained for the purpose of providing deferred compensation or death
benefits for a select group of management or highly compensated employees for
purposes of Title I of the Employee Retirement Income Security Act of 1974, as
amended; and
WHEREAS, it is the intention of Company to make contributions to the Trust
to provide itself with a source of funds to assist it in meeting its liabilities
under each Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
Section1. Establishment of Trust
(a) Bank hereby deposits $100.00 with Trustee in trust, which shall
become the principal of the Trust to be held, administered and
disposed of by Trustee as provided in this Trust Agreement.
(b) The Trust hereby established is revocable by the Bank; it shall
become irrevocable upon a Change of Control, as defined herein.
(c) The Trust is intended to be a grantor trust, of which Company (and,
in the case of the Bank, its subsidiaries and affiliates) are the
grantors, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Code, and shall be construed
accordingly.
(d) The principal of the Trust, and any earnings thereon, shall
be held separate and apart from other assets of Company
and its subsidiaries and affiliates, and shall be used
exclusively for the uses and purposes of Plan
participants and general creditors as herein set
forth. Plan participants and their beneficiaries shall
have no preferred claim on, or any beneficial ownership
interest in, any assets of the Trust. Any rights
created under each Plan and this Trust Agreement shall
be mere unsecured contractual rights of Plan
participants and their beneficiaries against Company
and its subsidiaries and affiliates. Any assets held
by the Trust will be subject to the claims of general
creditors of the Company and its subsidiaries and
affiliates under federal and state law in the event of
insolvency, as defined in Section 3 (a) herein.
(e) Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property in trust
with Trustee to augment the principal to be held, administered and
disposed of by Trustee as provided in this Trust Agreement. Neither
Trustee nor any Plan participant or beneficiary shall have any right
to compel such additional deposits.
(f) Notwithstanding subsection (e), upon a Change of Control,
Company shall, as soon as possible, but in no event
later than 30 days following the Change of Control, as
defined herein, make irrevocable contributions, in cash
or property of any kind, to the Trust in an amount that
is sufficient (taking into account the then current
value of any other assets held hereunder) to pay each
Plan participant who is a Designated Participant of
that Company (as defined in the Supplemental Executive
Retirement Plan) or beneficiary the benefits to which
such Designated Participants or their beneficiaries
would be entitled pursuant to the terms of each Plan as
of the day after the Change of Control occurred.
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Section 2. Payments to Plan Participants and Their
Beneficiaries.
(a) Bank shall deliver to Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in
respect of each Plan participant (and his or her
beneficiaries), that provides a formula or other
instructions acceptable to Trustee for determining the
amounts so payable, the form in which such amount is to
be paid (as provided for or available under each Plan),
and the time of commencement for payment of such
amounts. Except as otherwise provided herein, Trustee
shall make payments to the Plan participants and their
beneficiaries in accordance with such Payment
Schedule. The Trustee shall make provision for the
reporting and withholding of any federal, state or
local taxes that may be required to be withheld with
respect to the payment of benefits pursuant to the
terms of each Plan and shall pay amounts withheld to
the appropriate taxing authorities or determine that
such amounts have been reported, withheld and paid by
Company.
(b) The entitlement of a Plan participant or his or her beneficiaries to
benefits under each Plan shall be determined by Company or such party
as it shall designate under each Plan, and any claim for such
benefits shall be considered and reviewed under the procedures set
out in each Plan.
(c) Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due
under the terms of each Plan. Company shall notify
Trustee of its decision to make payment of benefits
directly prior to the time amounts are payable to
participants or their beneficiaries. In addition, if
the principal of the Trust, and any earnings thereon,
are not sufficient to make payments of benefits in
accordance with the terms of each Plan, Company shall
make the balance of each such payment as it falls due.
Trustee shall notify Company where principal and
earnings are not sufficient.
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Section 3. Trustee Responsibility Regarding Payments To
Trust Beneficiary When Company or Any of Its Subsidiaries or
Affiliates is Insolvent.
(a) Trustee shall cease payment of benefits to Plan participants
and their beneficiaries if the Company or any of its
subsidiaries or affiliates is Insolvent. Company or
any of its subsidiaries or affiliates shall be
considered "Insolvent" for purposes of this Trust
Agreement if Company or any of its subsidiaries or
affiliates (i) is unable to pay its debts as they
become due, (ii) is subject to a pending proceeding as
a debtor under the United States Bankruptcy Code, or
(iii) is determined to be insolvent by any federal or
state banking authority to which it is subject.
(b) At all times during the continuance of this Trust, as provided in
Section 1 (d) hereof, the principal and income of the Trust shall be
subject to claims of general creditors of Company and its
subsidiaries and affiliates under federal and state law as set forth
below.
(1) The Board of Directors and the Chief Executive Officer of
Bank shall have the duty to inform Trustee in
writing of Insolvency of Company or any of its
subsidiaries or affiliates. If a person claiming
to be a creditor of Company alleges in writing to
Trustee that Company or any of its subsidiaries or
affiliates has become Insolvent, Trustee shall
determine whether Company or any of its
subsidiaries and affiliates is Insolvent and,
pending such determination, Trustee shall
discontinue payment of benefits to Plan
participants or their beneficiaries.
(2) Unless Trustee has actual knowledge of Insolvency of Company
or any of its subsidiaries or affiliates, or has
received notice from Company or a person claiming
to be a creditor alleging that Company or any of
its subsidiaries or affiliates is Insolvent,
Trustee shall have no duty to inquire whether
Company or any of its subsidiaries or affiliates
is Insolvent. Trustee may in all events rely on
such evidence concerning solvency of Company or
any of its subsidiaries or affiliates as may be
furnished to Trustee and that provides Trustee
with a reasonable basis for making a determination
concerning solvency of Company or any of its
subsidiaries or affiliates.
(3) If at any time Trustee has determined that Company or any of
its subsidiaries or affiliates is Insolvent,
Trustee shall discontinue payments to Plan
participants or their beneficiaries and shall hold
the assets of the Trust for the benefit of general
creditors of Company or its subsidiaries or
affiliates, as the case may be. Nothing in this
Trust Agreement shall in any way diminish any
rights of Plan participants or their beneficiaries
to pursue their rights as general creditors of
Company with respect to benefits due under each
Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with section 2
of this Trust Agreement only after Trustee has determined that
Company or any of its subsidiaries or affiliates is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee
discontinues the payment of benefits from the Trust
pursuant to Section 3 (b) hereof and subsequently
resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of
all payments due to Plan participants or their
beneficiaries under the terms of each Plan for the
period of such discontinuance, less the aggregate
amount of any payments made to Plan participants or
their beneficiaries by Company in lieu of the payments
provided for hereunder during any such period of
discontinuance.
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Section 4. Payments to Company.
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, Company shall have no right or power to direct Trustee to
return to Company or to divert to others any of the Trust assets before
all payments of benefits has been made to Plan participants and their
beneficiaries pursuant to the terms of each Plan.
Section 5. Investment Authority.
(a) Trustee shall have, with respect to the Trust, power in its
discretion to invest and reinvest in any property,
real, personal or mixed, wherever situated,
foreign or domestic, including, without
limitation, common and preferred stocks (including
stock of the Company), bonds, notes and debentures
(including obligations of the Company);
leaseholds; mortgages (including, without
limitation, any collective or part interest in any
bond and mortgage or note and mortgage);
certificates of deposit; insurance policies and
contracts; and oil, mineral or gas properties,
royalties, interests or rights (including
equipment pertaining thereto). All rights
associated with assets of the Trust shall be
exercised by Trustee or the person designated by
Trustee, and shall in no event be exercisable by
or rest with Plan participants, except that, with
respect to Trust assets, voting rights will be
exercised by, and dividend rights will rest with,
the Bank; provided, however, that the investment
authority exercised by the Trustee hereunder shall
be subject to any written investment policy
guidelines (which may include asset classes
specified therein) delivered by the Bank to the
Trustee.
(b) Company shall have the right at any time, and from time to time
in its sole discretion, to substitute assets of equal fair
market value for any asset held by the Trust. This right is
exercisable by Company in a nonfiduciary capacity without the
approval or consent of any person in a fiduciary capacity.
Section 6. Disposition of Income.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
Section 7. Accounting by Trustee.
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agree upon in writing between
Company and Trustee. Trustee shall maintain separate accounts for each Plan and
for each Participant of each such Plan; provided, however, that the maintenance
of such separate accounts shall not affect the ability of the Trustee to invest
Trust assets on a collective basis. Within 60 days following the close of each
calendar year and within 60 days after the removal or resignation of Trustee,
Trustee shall deliver to Company a written account of its administration of the
Trust during such year or during the period from the close of the last preceding
year to the date of such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions effected by it, including a
description of all securities and investments purchased and sold with the cost
or net proceeds of such purchases or sales (accrued interest paid or receivable
being shown separately), and showing all cash, securities and other property
held in the Trust at the end of such year or as of the date of such removal or
resignation, as the case may be.
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Section 8. Responsibility of Trustee.
(a) Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent
person acting in like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character
and with like aims, provided, however, the Trustee shall incur
no liability to any person for any action taken pursuant to a
direction, request or approval given by Company which is
contemplated by, and in conformity with, the terms of each Plan
or this Trust and is given in writing by Company. In the event
of a dispute between Company and a party, Trustee may apply to a
court of competent jurisdiction to resolve the dispute.
(b) If Trustee undertakes or defends any litigation arising in
connection with this Trust (other than any
litigation resulting from the gross negligence or
willful neglect of the Trustee), Company agrees to
indemnify Trustee against Trustee's costs,
expenses and liabilities (including, without
limitation, attorneys' fees and expenses) relating
thereto and to be primarily liable for such
payments. If Company does not pay such costs,
expenses and liabilities in a reasonably timely
manner, Trustee may obtain payment from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel
for Company generally) with respect to any of its duties or
obligations hereunder.
(d) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist
it in performing any of its duties or obligations hereunder and
charge the reasonable fees and expenses of such persons against
the assets of the Trust (unless paid by Company).
(e) Trustee shall have, without exclusion, all powers conferred
on Trustees by applicable law, unless expressly
provided otherwise herein, provided, however, that
if an insurance policy is held as an asset of the
Trust, Trustee shall have no power to name a
beneficiary of the policy, other than the Trust,
to assign the policy (as distinct from conversion
of the policy to a different form) other than to a
successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.
(f) Notwithstanding the provisions of Section 8 (e) above, Trustee
may loan to the Bank the proceeds of any borrowing against an
insurance policy held as an asset of the Trust.
(g) Notwithstanding any powers granted to Trustee pursuant to
this Trust Agreement or applicable law, Trustee
shall not have any power that could give this
Trust the objective of carrying on a business and
dividing the gains therefrom, within the meaning
of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to
the Internal Revenue Code.
Section 9. Compensation and Expenses of Trustee.
The Bank shall pay all administrative and Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid
from the Trust.
Section 10. Resignation and Removal of Trustee.
(a) Trustee may resign at any time by written notice to the
Bank, which shall be effective 60 days after receipt of such
notice unless Company and Trustee agree otherwise.
(b) Trustee may be removed by the Bank on 30 days notice or upon
shorter notice accepted by Trustee.
(c) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred
to the successor Trustee. The transfer shall be completed within
60 days after receipt of notices of resignation, removal or
transfer, unless Bank extends the time limit.
(d) If Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof,
by the effective date of resignation or removal
under paragraphs (a) or (b) of this section. If
no such appointment has been made, Trustee may
apply to a court of competent jurisdiction for
appointment of a successor or for instructions.
All expenses of Trustee in connection with the
proceeding shall be allowed as administrative
expenses of the Trust.
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Section 11. Appointment of Successor.
If Trustee resigns or is removed in accordance with Section
10 hereof, the Bank may appoint any third party, such as a bank trust department
or other party that may be granted corporate trustee powers under state law, to
replace Trustee upon resignation or removal. The appointment shall be effective
when accepted in writing by the new Trustee, who shall have all of the rights
and powers of the former Trustee, including ownership rights in the Trust
assets. The former Trustee shall execute any instrument necessary or reasonably
requested by Bank or the successor Trustee to evidence the transfer.
Section 12. Amendment or Termination.
(a) This Trust Agreement may be amended by a written instrument
executed by Trustee and the Bank. Notwithstanding the foregoing,
no such amendment shall conflict with the terms of each Plan or
shall make the Trust revocable after it has become irrevocable
in accordance with section 1 (b) hereof.
(b) The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to
any benefits pursuant to the terms of each Plan unless sooner
revoked in accordance with Section 1 (b) hereof. Upon
termination of the Trust, any assets remaining in the Trust
shall be returned to the Bank.
Section 13. Miscellaneous
(a) Any provision of this Trust agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without
invalidating the remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries
under this Trust Agreement may not be anticipated, assigned
(either at law or in equity), alienated, pledged, encumbered or
subjected to attachment, garnishment, levy, execution or other
legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the District of Columbia, to the
extent not preempted by federal law.
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(d) For purposes of this Trust Agreement, "Change of Control"
means a sale of substantially all of the
Corporation's assets or the acquisition, whether
directly, indirectly, beneficially (within the
meaning of Rule 13d-3 of the Securities Act of
1933 (the "Act"), or of record, of securities of
the Corporation representing twenty-five percent
(25%) or more in the aggregate voting power of the
Corporation's then-outstanding Common Stock by any
"person" (within the meaning of Sections 13 (d)
and 14 (d) of the Act), including any corporation
or group of associated persons acting in concert,
other than (i) the Corporation or its subsidiaries
and/or (ii) any employee pension benefit plan
(within the meaning of Section 3 (2) of the
Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) of the Corporation or of its
subsidiaries, including a trust established
pursuant to any such plan; provided, that a Change
of Control will not result from (A) a transfer of
the Corporation's voting securities by a person
who is the beneficial owner, directly or
indirectly, of twenty-five percent (25%) or more
of the voting securities of the Corporation (a "25
Percent Owner") to (i) a member of such 25 Percent
Owner's immediate family (within the meaning of
Rule 16a-1 (e) of the Act) either during such 25
Percent Owner's lifetime or by will or the laws of
descent and distribution; (ii) any trust as to
which the 25 Percent Owner or a member (or
members) of 25 Percent Owner's immediate family
(within the meaning of Rule 16a-1 (e) of the Act)
is the beneficiary; (iii) any trust as to which
the 25 Percent Owner is the settlor with sole
power to revoke; or (iv) any entity over which
such 25 Percent Owner has the power, directly or
indirectly, to direct or cause the direction of
the management and policies of the entity, whether
through the ownership of voting securities, by
contract, or otherwise; or (v) any charitable
trust, foundation or corporation under Section 501
(c) (3) of the Internal Revenue Code of 1986, as
amended (the "Code"), which is funded by the 25
Percent Owner; or (B) the acquisition of voting
securities of the Corporation by either (i) a
person who was a 25 Percent Owner on the effective
date of the Plan or (ii) a person, trust or other
entity described in the foregoing clauses (A)
(i)-(v) of this subsection.
(e) Any reference in this Trust to a subsidiary or affiliate of
Company shall not include any subsidiary or affiliate who has
not at any time employed an individual who is a Participant (or
beneficiary) in a Plan and who is or may be entitled to payment
hereunder.
IN WITNESS WHEREOF, ▇▇▇▇▇ National Corporation and the The ▇▇▇▇▇
National Bank of Washington, D.C. have executed this Agreement of Trust as
of the day and year first above written.
ATTEST: ▇▇▇▇▇ National Corporation
As Settlor
___________________ BY: _________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
Dated:______________
ATTEST: THE ▇▇▇▇▇ NATIONAL BANK
OF WASHINGTON, D.C.
As Settlor
___________________ BY: __________________
▇▇▇▇▇▇▇ ▇. Lex, Executive Vice
President & Chief Operating
Officer
Dated:______________
ATTEST: THE ▇▇▇▇▇ NATIONAL BANK
OF WASHINGTON, D.C.
As Trustee
____________________ BY: __________________
▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice
President & Chief Financial
Officer
Dated:_______________