JOINT BENEFICIARY DESIGNATION AGREEMENT THAT SUPERCEDES AND REPLACES THE AMENDED AND RESTATED SPLIT DOLLAR AGREEMENT DATED JUNE 28, 2002
Exhibit
10.19
JOINT
BENEFICIARY DESIGNATION AGREEMENT THAT SUPERCEDES AND REPLACES THE AMENDED AND
RESTATED SPLIT DOLLAR AGREEMENT DATED JUNE 28, 2002
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Insurer:
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Relationship
of Insured to Bank:
Cigna
Life Insurance Company
Cigna
Life Insurance Company
Cigna
Life Insurance Company
Cigna
Life Instance Company
Cigna
Life Insurance Company
Cigna
Life Insurance Company
Travelers
Life and Annuity Insurance Company
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Policy
Number:
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BOL000887Z
BOL000888Z BOL000889Z BOL000890Z BOL000891Z BOL000892Z BOL000893Z ▇▇▇▇▇▇▇ |
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Bank:
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Mt.
Washington Co-Operative Bank
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Insured:
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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Relationship
of Insured to Bank:
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Executive
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The
respective rights and duties of the Bank and the Insured in the above-referenced
policy shall be pursuant to the terms set forth below:
The Bank
and the Executive are parties to a Split Dollar Agreement dated the 28th day
of June, ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇ Co-Operative Bank and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
that provides for the payment of certain benefits. This Joint
Beneficiary Designation Agreement and the benefits provided hereunder shall
supercede and replace the existing Split Dollar Agreement and the-benefits
provided thereby.
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I.
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DEFINITIONS
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Refer to
the policy contract for the definition of any terms in this Agreement that are
not defined herein. If the definition of a term in the policy is inconsistent
with the definition of a term in this Agreement, then the definition of the term
as set forth in this Agreement shall supersede and replace the definition of the
terms as set forth in the policy.
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II.
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POLICY
TITLE AND OWNERSHIP
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Title and
ownership shall reside in the Bank for its use and for the use of the Insured
all in accordance with this Agreement. The Bank alone may, to the extent of its
interest, exercise the right to borrow or withdraw on the policy cash
values. Where the Bank and the Insured (or assignee, with the consent
of the Insured) mutually agree to exercise the right to increase the coverage
under the subject Joint Beneficiary Designation policy, then, in such event, the
rights, duties and benefits of the parties to such increased coverage shall
continue to be subject to the terms of this Agreement.
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III.
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BENEFICIARY
DESIGNATION RIGHTS
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The
Insured (or assignee) shall have the right and power to designate a beneficiary
or beneficiaries to receive the Insured's share of the proceeds payable upon the
death of the Insured, and to elect and change a payment option for such
beneficiary, subject to any right or interest the Bank may have in such
proceeds, as provided in this Agreement.
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IV.
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PREMIUM PAYMENT METHOD AND
BANK’S DUE DILIGENCE
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Subject
to the following, the Bank shall pay an amount equal to the planned premiums and
any other premium payments that might become necessary to keep the policy in
force. The Bank shall exercise due diligence in reviewing the financial
stability of the insurance company(ies) and the policy(ies) that are the subject
of this Agreement. If the Bank believes that the Insurer under the policy is
financially weak or that the policy is not performing well, the Bank may, at any
time, surrender the policy or substitute a different policy provided that the
Bank is under no obligation to invest in such replacement policy any more than
the proceeds available from the case surrender value of the original policy. The
Executive will cooperate by undertaking any necessary medical examination. If
the Bank chooses to surrender the above-referenced policy without replacing it
or the policy otherwise ceases to exist prior to the death to the Insured, the
Bank agrees to pay the Insured's name beneficiary(ies) the dollar amount as
projected, at the time of death, as of the Effective Date of this
Agreement.
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V.
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TAXABLE
BENEFIT
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Annually
the Insured will receive a taxable benefit equal to the assumed cost of
insurance as required by the Internal Revenue Service. The Bank (or
its administrator) will report to the Insured the amount of imputed income each
year on Form W-2 or its equivalent.
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VI.
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DIVISION
OF DEATH PROCEEDS.
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Subject
to Paragraphs VII and IX herein, the division of the death proceeds of the
policy is as follows:
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A.
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Should
the Insured be employed by the Bank at the time of death or
terminated due to disability or retired at the time of death, the
Insured's beneficiary(ies), designated in accordance with Paragraph III,
shall be entitled to an amount equal to sixty-five percent (65%) of the
net-at-risk insurance portion of the proceeds plus an amount equal to the
Accrued Liability Retirement Account balance, as defined in Parargraph VI
of the Executive Salary Continuation Agreement that Supercedes and
Replaces the Amended and Restated Supplemental Executive Retirement
Agreement Dated June 28, 2002, as of the date of death. This amount shall
not exceed one hundred percent (100%) of the net-at-risk insurance portion
of the proceeds. The net-at-risk insurance portion is the total proceeds
less the cash value of the policy.
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B.
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Should
the Insured not be employed by the Bank at the time of death, the
Insured's beneficiary(ies), designated in accordance with Paragraph III,
shall be entitled to the percentage as set forth herein below of fifty
percent (50%) of the net-at-risk insurance portion of the proceeds that
corresponds to the number of full years the Insured has been employed by
the Bank from the first (1st)
anniversary date (August 23,1999) of first
employment.
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From
the first (1st)
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Anniversary
date of
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Employment with the Bank
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Vested (to a maximum of
100%)
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Fewer
than 5
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0%
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5
years
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20%
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6
years
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40%
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7
years
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60%
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8
years
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80%
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9
or more years
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100%
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C.
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The
Bank shall be entitled to the remainder of such
proceeds.
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D.
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The
Bank and the Insured (or assignees) shall share in any interest due on the
death proceeds on a pro rata basis as the proceeds due each respectively
bears to the total proceeds, excluding any such
interest.
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V.
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DIVISION
OF THE CASH SURRENDER VALUE OF THE
POLICY
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The Bank
shall at all times be entitled to an amount equal to the policy's cash value, as
that term is defined in the policy contract, less any policy loans
and
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unpaid
interest or cash withdrawals previously incurred by the Bank and any applicable
surrender charges. Such cash value shall be determined as of the date of
surrender or death as the case may be.
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VIII.
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RIGHTS
OF PARTIES WHERE POLICY ENDOWMENT OR
ANNUITY
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ELECTION
EXISTS
In the
event the policy involves an endowment or annuity element, the Bank's right and
interest in any endowment proceeds or annuity benefits, on expiration of the
deferment period, shall be determined under the provisions of this Agreement by
regarding such endowment proceeds or the commuted value of such annuity benefits
as the policy's cash value. Such endowment proceeds or annuity benefits shall be
considered to be like death proceeds for the purposes of division under this
Agreement.
IX. TERMINATION OF
AGREEMENT
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A.
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This
Agreement shall terminate upon the occurrence of any one of the
following:
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1.
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The
Insured shall leave the employment of the Bank (voluntarily or
involuntarily) prior to the fifth (5th)
year anniversary of employment with
the Bank;
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2.
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The
insured shall be discharged from employment with the Bank for cause. The
term "for cause" shall mean any of the following that result in an adverse
effect on the Bank: (i) gross negligence or gross neglect; (ii) the
commission of a felony or gross misdemeanor involving fraud or dishonesty;
(iii) the willful violation of any law, rule, or regulation (other than a
traffic violation or similar offense); (iv) an intentional failure to
perform stated duties; or (v) a breach of fiduciary duty involving
personal profit; or
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3.
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Surrender,
lapse, or other termination of the Policy by the Bank, and subject to the
Insured’s option as set forth
hereinbelow.
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B.
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Upon
such termination of this Agreement but prior to the termination of the
policy by the Bank, the Insured (or assignee) shall have a fifteen (15)
day option to receive from the Bank an absolute assignment of the policy
in consideration of a cash payment to the Bank, whereupon this Agreement
shall terminate. Such cash payment referred to hereinabove
shall be the greater of:
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1.
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The
Bank's share of the cash value of the policy on the date of such
assignment, as defined in this Agreement;
or
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2.
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The
amount of the premiums that have been paid by the Bank prior to the date
of such assignment.
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C.
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If;
within said fifteen (15) day period, the Insured fails to exercise said
option, fails to procure the entire aforestated cash payment, or dies,
then the option shall terminate and the Insured (or assignee) agrees that
all of the Insured's rights, interest and claims in the policy shall
terminate as of the date of the termination of this
Agreement.
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D.
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The
Insured expressly agrees that this Agreement shall constitute sufficient
written notice to the Insured of the Insured's option to receive an
absolute assignment of the policy as set forth
herein.
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E.
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Except
as provided above, this Agreement shall terminate upon distribution of the
death benefit proceeds in accordance with Paragraph VI
above.
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X.
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INSURED'S
OR ASSIGNEES ASSIGNMENT RIGHTS
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The
Insured may not, without the written consent of the Bank, assign to any
individual, trust or other organization, any right, title or interest m file
subject policy nor any rights, options, privileges or duties created under this
Agreement
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XI.
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AGREEMENT
BINDING UPON THE PARTIES
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This
Agreement shall bind the Insured and the Bank, their heirs, successors, personal
representatives and assigns,
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XII.
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ADMINISTRATIVE AND CLAIMS
PROVISIONS
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The
following provisions are part of this Agreement and are intended to meet the
requirements of the Employee Retirement Income Security Act of 1974
("EMSA");
A. Named Fiduciary and Plan
Administrator:
The
'"Named Fiduciary and Plan Administrator of tins Joint Beneficiary Designation
Agreement shall be Mt. Washington Co-Operative Bank until its resignation or
removal "by the Board of Directors, As Named Fiduciary and Plan Administrator,
the Bank shall be responsible for the management, control, and administration of
this Agreement as established herein. The Named Fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the
Agreement, including
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the employment of advisors and the delegation of any ministerial duties to
qualified individuals.
B.
Basis of Payment of
Benefits:
Direct
payment by the Insurer is the basis of payment of benefits under this Agreement,
with those benefits m turn being based on the payment of premiums as provided in
this Agreement.
C.
Claim
Procedures:
Claim
forms or claim information as to the subject policy can be obtained by
contacting Benmark, Inc. (800-544-6079). When the Named Fiduciary has a claim
which may be covered under the provisions described in the insurance policy,
they should contact the office named above, and they will either complete a
claim form and forward it to an authorized
representative of the Insurer or advise the named Fiduciary what further
requirements are necessary. The Insurer will evaluate and make a decision as to
payment. If the claim is payable, a benefit check will be issued in accordance
with the terms of this Agreement.
In the
event that a claim is not eligible under the policy, the Insurer will notify the
Named Fiduciary of the denial pursuant to the requirements under the terms of
the policy. If the Named Fiduciary is dissatisfied with the denial of the claim
and wishes to contest such claim denial, they should contact the office named
above and they will assist in making an inquiry to the Insurer. All objections
to the Insurer’s actions should be in writing and submitted to the office named
above for transmittal to the insurer.
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XIII.
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GENDER
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Whenever
in this Agreement words are used in the masculine or neuter gender, they shall
be read and construed as in the masculine, feminine or neuter gender, whenever
they should so apply.
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XIV.
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INSURANCE COMPANY NOT A PARTY
TO THIS AGREEMENT
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The
Insurer shall not be deemed a party to this Agreement, but will respect the
rights of the parties as herein developed upon receiving an executed copy of
this Agreement. Payment or other performance in accordance with the policy
provisions shall fully discharge the Insurer from any and all
liability.
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XV.
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CHANGE
IN CONTROL
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A Change
in Control will be deemed to have occurred if:
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1.) During
any period of two (2) consecutive years (not including any period prior to the
execution of this Agreement), individuals who are Continuing Directors (as
hereinafter defined) cease for any reason to constitute at least a majority of
the Board of Directors of the Bank. For this purpose a "Continuing Director"
shall mean (x) an individual who was a director of the Bank at the beginning of
such period or (y) any new director (other than a director
designated by a person who has entered into, or made a bona-fide offer to enter
into, any Agreement with the Bank to effect an acquisition, merger or
consolidation) whose election by the Board or nomination for election by the
Bank's shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved;
2.) The
directors of the Bank approve a merger or consolidation of the Bank with any
other bank or corporation, other than (x) a merger or
consolidation in which individuals who are directors of the Bank immediately
prior to the transaction will continue to represent at least two-thirds (2/3) of
the directors of the institution resulting from the merger or consolidation (or,
if applicable, of any parent holding company), or (y) a reorganization the
primary purpose of which is to permit the Bank to reorganize into a mutual
holding company structure (without an issuance of minority shares to the public)
pursuant to Chapter 167H of the Massachusetts General Laws or any similar
provisions of law;
3.) The
Bank converts from mutual stock form (it being understood that a reorganization
into a mutual holding company structure shall not constitute conversion from
mutual to stock form unless there shall also be an issuance of minority shares
to the public);
4.) The
Bank effectuates a complete liquidation of the Bank or sale or disposition of
all or substantially all of its assets.
Upon such
Change in Control, if the Insured's employment is terminated, except for cause,
within six (6) months prior or anytime subsequent to such mutual to stock
conversion and change of control, then the Insured shall be one hundred percent
(100%) vested in the benefits promised in this Agreement and, therefore, upon
the death of the Insured, the Insured's beneficiary(ies) (designated in
accordance with Paragraph III) shall receive the death benefit provided herein
as if the Insured had died while employed by the Bank [See Subparagraph VI
(A)].
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XVI.
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EFFECTIVE
DATE
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The
Effective Date of this Agreement shall be September 1, 2004.
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XVII.
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SEVERABILITY
AND INTERPRETATION
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If a
provision of this Agreement is held to be invalid or unenforceable, the
remaining provisions shall nonetheless be enforceable according to their terms.
Further, in the event that any provision is held to be overbroad as written such
provision shall be deemed amended to narrow its application to the extent
necessary to make the provision enforceable according to law and enforced as
amended.
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XVIII.
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SUPERSEDE AND CONSTITUTE
ENTIRE
AGREEMENT
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This
Agreement shall supersede the Split Dollar Agreement dated the 28th day
of June, 2002, and shall constitute the entire agreement of the parties
pertaining to this particular Life Insurance Endorsement Method Split Dollar
Plan Agreement.
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XIX.
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APPLICABLE
LAW
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The laws
of the Commonwealth of Massachusetts shall govern the validity and
interpretation of this Agreement.
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Executed
at, Boston, Massachusetts, this 20th day of
September,
2004.
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MT,
WASHINGTON CO-OPERATIVE BANK
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Boston,
MA
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/s/
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By:
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/s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
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SVP-CFO
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Witness
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Title
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/s/
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By:
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/s/ ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
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Witness
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