EXHIBIT 10.5
HEARTLAND NATIONAL BANK
Split Dollar Plan
HEARTLAND NATIONAL BANK
SPLIT DOLLAR PLAN
EFFECTIVE January 4, 2005
HEARTLAND NATIONAL BANK
Split Dollar Plan
HEARTLAND NATIONAL BANK
SPLIT DOLLAR PLAN
THIS SPLIT DOLLAR PLAN is adopted this 4 day of January, 2005, by and
between HEARTLAND NATIONAL BANK, a nationally-chartered corporation located in
Sebring, Florida (the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Executive").
The purpose of this Agreement is to retain and reward the Executive, by
dividing the death proceeds of certain life insurance policies which are owned
by the Company on the life of the Executive with the designated beneficiary of
the Executive. The Company will pay the life insurance premiums from its general
assets.
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the following terms shall have the
meanings specified:
1.1 "Beneficiary" means each designated person, or the estate of the deceased
Executive, entitled to benefits, if any, upon the death of the Executive.
1.2 "Beneficiary Designation Form" means the form established from time to
time by the Plan Administrator that the Executive completes, signs and
returns to the Company to designate one or more Beneficiaries.
1.3 "Board" means the boards of directors of the Corporation and the Company.
1.4 "Company's Interest" means the benefit set forth in Section 3.2.
1.5 "Change of Control" means (i) a merger which the Corporation is not the
surviving entity, the acquisition of the Company by means of a merger,
consolidation or purchase of 80% or more of its outstanding shares, or the
acquisition by any individual or group of beneficial ownership of more
than 50% of the outstanding shares of the Corporation's common stock. The
term "group" and the concept of beneficial ownership shall have such
meaning ascribed thereto as set forth in the Securities Exchange act of
1934, as amended, and the regulations and rules thereunder; or (ii) if
more restrictive, the definition in Section 409A of the Code and
regulations thereunder.
1.6 "Corporation" means Heartland Bancshares, Inc.
1.7 "Disability" means the Executive's suffering a sickness, accident or
injury which has been determined by the insurance carrier of any
individual or group disability insurance policy covering the Executive, or
by the Social Security Administration, to be a disability rendering the
Executive totally and permanently disabled. Upon the request of the
Company, the Executive must submit proof to the Company of the insurance
carrier's or Social Security Administration's determination.
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HEARTLAND NATIONAL BANK
Split Dollar Plan
1.8 "Employment Agreement" means the Employment Agreement between the Company,
the Corporation and the Executive dated November 9, 2004.
1.9 "Executive's Interest" means the benefit set forth in Section 3.1.
1.10 "Insured" means the Executive.
1.11 "Insurer" means the insurance company issuing the life insurance policy on
the life of the Insured.
1.12 "Net Death Proceeds" means the total death proceeds of the Policy minus
the cash surrender value.
1.13 "Normal Retirement Age" means the Executive attaining age 62.
1.14 "Normal Retirement Date" means the later of the Normal Retirement Age or
the date of Termination of Employment for any reason other than
Termination for Cause.
1.15 "Policy" means the individual insurance policy or policies adopted by the
Company for purposes of insuring the Executive's life under this
Agreement.
1.16 "Termination of Employment" means the termination of Executive's service
for any reason, voluntarily or involuntarily, other than a leave of
absence approved by the Company.
1.17 "Termination for Cause" means that the Executive's employment with the
Company has been or is terminated by the Board for any of the following
reasons:
(a) If the Executive shall fail or refuse to comply with the obligations
required of him as set forth in the Employment Agreement or comply
with the policies of the Company established by the Board from time
to time; provided, however, that for the first such failure or
refusal, the Executive shall be given written warning (providing at
least a 10 day period for an opportunity to cure), and the second
failure or refusal shall be grounds for Termination for Cause;
(b) If the Executive shall have engaged in conduct involving fraud,
deceit, personal dishonesty, or breach of fiduciary duty;
(c) If the Executive shall have violated any bank law or regulation,
memorandum of understanding, cease and desist order, or other
agreement with any banking agency having jurisdiction over the
Company and the Corporation which, in the judgment of the Board, has
adversely affected or may adversely affect, the business or
reputation of the Company and the Corporation as determined by the
Board;
(d) If the Executive shall have become subject to continuing
intemperance in the use of
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Split Dollar Plan
alcohol or drugs which has adversely affected, or may adversely
affect, the business or reputation of the Company and the
Corporation as determined by the Board;
(e) If the Executive shall have filed, or has filed against him, any
petition under the federal bankruptcy law or any state insolvency
laws; or
(f) If any banking authority having supervisory jurisdiction over the
Company and the Corporation initiates any proceedings for removal of
the Executive.
1.18 "Termination for Good Reason" shall mean (i) any material breach by the
Company and the Corporation of any provision of the Employment Agreement,
or (ii) any significant reduction (not pertaining to job performance
issues), in the duties, responsibilities, authority or title of the
Executive as an officer of the Company and the Corporation.
ARTICLE 2
PARTICIPATION
2.1 Termination of Participation. The Executive's rights under this Agreement
shall automatically cease and his or her participation in this Agreement
shall automatically terminate, if either of the following events occur:
(i) if there is a Termination for Cause; or (ii) if the Executive's
employment with the Company is terminated prior to Normal Retirement Age
for reasons other than Disability (except as set forth in Section 2.2
(b)), following a Change of Control, Termination for Good Reason, or a
leave of absence approved by the Company. In the event that the Company
decides to maintain the Policy after the Executive's termination of
participation in the Agreement, the Company shall be the direct
beneficiary of the entire death proceeds of the Policy.
2.2 Post-Termination Benefit.
(a) Except as otherwise provided in paragraph (b) of this Section 2.2,
if the Executive's employment with the Company is terminated because
of Disability, following a Change of Control, Termination for Good
Reason, Termination for Cause, or attaining the Normal Retirement
Date, the Company shall maintain the Policy in full force and effect
and, in no event, shall the Company amend, terminate or otherwise
abrogate the Executive's Interest in the Policy. However, the
Company may replace the Policy with a policy that provides
comparable death benefits provided under this Agreement.
(b) Notwithstanding the provisions of paragraph (a) of this Section 2.2,
upon the disabled Executive's gainful employment with an entity
other than the Company, the Company shall have no further obligation
to the disabled Executive, and the disabled Executive's rights
pursuant to the Agreement shall cease. In the event the disabled
Executive's rights are terminated hereunder and the Company decides
to
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Split Dollar Plan
maintain the Policy, the Company shall be the direct beneficiary of
the entire death proceeds of the Policy.
ARTICLE 3
POLICY OWNERSHIP/INTERESTS
3.1 Executive's Interest. The Executive, or the Executive's assignee, shall
have the right to designate the Beneficiary of an amount equal to fifty
percent (50%) of the Net Death Proceeds, subject to:
(a) Forfeiture of Executive's rights upon Termination of Participation
as set forth in Section 2.1;
(b) Forfeiture of Executive's rights upon Termination for Cause;
(c) Forfeiture of Executive's rights upon gainful employment following
Disability;
(d) Termination of the Agreement and the corresponding forfeiture of
rights for all Executives or any one Executive in accordance with
Section 9.1 hereof; or to conform with written directives to the
Company from its banking regulators, and
(e) Forfeiture of the Executive's rights and interest hereunder that the
Company may reasonably consider necessary to conform with applicable
law (including the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002).
3.2 Company's Interest. The Company shall own the Policy and shall have the
right to exercise all incidents of ownership except that the Company shall
not sell, surrender or transfer ownership of a Policy so long as the
Executive has an interest in the Policy as described in Section 3.1.
However, the Company may replace the Policy with a policy that provides
comparable death benefits to cover the benefit provided under this
Agreement. This provision shall not impair the right of the Company,
subject to Article 9, to terminate this Agreement. The Company shall be
the beneficiary of an amount of death proceeds equal to the greater of a)
the cash surrender value of the Policy, b) the aggregate premiums paid on
the Policy by the Company less any outstanding indebtedness to the Insurer
or c) the total death proceeds less the Executive's Interest described in
Section 3.1.
ARTICLE 4
PREMIUMS
4.1 Premium Payment. The Company shall pay all premiums due on all Policies.
4.2 Economic Benefit. The Company shall determine the economic benefit
attributable to the Executive based on the life insurance premium factor
for the Executive's age multiplied by the aggregate death benefit payable
to the Executive's beneficiary. The "life insurance premium factor" is the
minimum factor applicable under guidance published pursuant to IRS Reg.
Section 1.6l-22(d)(3)(ii) or any subsequent authority.
4.3 Imputed Income. The Company shall impute the economic benefit to the
Executive on an
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Split Dollar Plan
annual basis, by adding the economic benefit to the Executive's W-2, or if
applicable, Form 1099.
ARTICLE 5
BENEFICIARIES
5.1 Beneficiary. The Executive shall have the right, at any time, to designate
a Beneficiary(ies) to receive any benefits payable under the Agreement to
a beneficiary upon the death of the Executive. The Beneficiary designated
under this Agreement may be the same as or different from the Beneficiary
designation under any other Agreement of the Company in which the
Executive participates.
5.2 Beneficiary Designation; Change. The Executive shall designate a
Beneficiary by completing and signing the Beneficiary Designation Form,
and delivering it to the Company or its designated agent. The Executive's
beneficiary designation shall be deemed automatically revoked if the
Beneficiary predeceases the Executive or if the Executive names a spouse
as Beneficiary and the marriage is subsequently dissolved. The Executive
shall have the right to change a Beneficiary by completing, signing and
otherwise complying with the terms of the Beneficiary Designation Form and
the Company's rules and procedures, as in effect from time to time. Upon
the acceptance by the Company of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be cancelled. The Company
shall be entitled to rely on the last Beneficiary Designation Form filed
by the Executive and accepted by the Company prior to the Executive's
death.
5.3 Acknowledgment. No designation or change in designation of a Beneficiary
shall be effective until received, accepted and acknowledged in writing by
the Company or its designated agent.
5.4 No Beneficiary Designation. If the Executive dies without a valid
designation of beneficiary, or if all designated Beneficiaries predecease
the Executive, then the Executive's surviving spouse shall be the
designated Beneficiary. If the Executive has no surviving spouse, the
benefits shall be made payable to the personal representative of the
Executive's estate.
5.5 Facility of Payment. If the Company determines in its discretion that a
benefit is to be paid to a minor, to a person declared incompetent, or to
a person incapable of handling the disposition of that person's property,
the Company may direct payment of such benefit to the guardian, legal
representative or person having the care or custody of such minor,
incompetent person or incapable person. The Company may require proof of
incompetence, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Any payment of a benefit shall be a payment
for the account of the Executive and the Executive's Beneficiary, as the
case may be, and shall be a complete discharge of any liability under the
Agreement for such payment amount.
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HEARTLAND NATIONAL BANK
Split Dollar Plan
ARTICLE 6
ASSIGNMENT
The Executive may irrevocably assign without consideration all or part of
the Executive's Interest in this Agreement to any person, entity or trust. In
the event the Executive shall transfer all or part of the Executive's Interest,
then all or part of the Executive's Interest in this Agreement shall be vested
in the Executive's transferee, who shall be substituted as a party hereunder,
and the Executive shall have no further interest in this Agreement.
ARTICLE 7
INSURER
The Insurer shall be bound only by the terms of its given Policy. The
Insurer shall not be bound by or deemed to have notice of the provisions of this
Agreement. The Insurer shall have the right to rely on the Company's
representations with regard to any definitions, interpretations or Policy
interests as specified under this Agreement.
ARTICLE 8
CLAIMS AND REVIEW PROCEDURE
8.1 Claims Procedure. The Executive or Beneficiary ("claimant") who has not
received benefits under the Agreement that he or she believes should be
paid shall make a claim for such benefits as follows:
8.1.1 Initiation - Written Claim. The claimant initiates a claim by
submitting to the Company a written claim for the benefits.
8.1.2 Timing of Company Response. The Company shall respond to such
claimant within 90 days after receiving the claim. If the Company
determines that special circumstances require additional time for
processing the claim, the Company can extend the response period by
an additional 90 days by notifying the claimant in writing, prior to
the end of the initial 90-day period, that an additional period is
required. The notice of extension must set forth the special
circumstances and the date by which the Company expects to render
its decision.
8.1.3 Notice of Decision. If the Company denies part or all of the claim,
the Company shall notify the claimant in writing of such denial. The
Company shall write the notification in a manner calculated to be
understood by the claimant. The notification shall set forth:
(a) The specific reasons for the denial;
(b) A reference to the specific provisions of the Agreement on
which the denial is based;
(c) A description of any additional information or material
necessary for the claimant to perfect the claim and an
explanation of why it is needed;
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HEARTLAND NATIONAL BANK
Split Dollar Plan
(d) An explanation of the Agreement's review procedures and the
time limits applicable to such procedures; and
(e) A statement of the claimant's right to bring a civil action
under ERISA Section 502(a) following an adverse benefit
determination on review.
8.2 Review Procedure. If the Company denies part or all of the claim, the
claimant shall have the opportunity for a full and fair review by the
Company of the denial, as follows:
8.2.1 Initiation - Written Request. To initiate the review, the claimant,
within 60 days after receiving the Company's notice of denial, must
file with the Company a written request for review.
8.2.2 Additional Submissions - Information Access. The claimant shall then
have the opportunity to submit written comments, documents, records
and other information relating to the claim. The Company shall also
provide the claimant, upon request and free of charge, reasonable
access to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to
the claimant's claim for benefits.
8.2.3 Considerations on Review. In considering the review, the Company
shall take into account all materials and information the claimant
submits relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit
determination.
8.2.4 Timing of Company's Response. The Company shall respond in writing
to such claimant within 60 days after receiving the request for
review. If the Company determines that special circumstances require
additional time for processing the claim, the Company can extend the
response period by an additional 60 days by notifying the claimant
in writing, prior to the end of the initial 60-day period, that an
additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Company
expects to render its decision.
8.2.5 Notice of Decision. The Company shall notify the claimant in writing
of its decision on review. The Company shall write the notification
in a manner calculated to be understood by the claimant. The
notification shall set forth:
(a) The specific reasons for the denial;
(b) A reference to the specific provisions of the Agreement on
which the denial is based;
(c) A statement that the claimant is entitled to receive, upon
request and free of charge, reasonable access to, and copies
of, all documents, records and other information relevant (as
defined in applicable ERISA regulations) to the claimant's
claim for benefits; and
(d) A statement of the claimant's right to bring a civil action
under ERISA Section 502(a).
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HEARTLAND NATIONAL BANK
Split Dollar Plan
ARTICLE 9
AMENDMENTS AND TERMINATION
9.1 Amendment or Termination of Agreement. Except as otherwise provided in
Section 2.2, the Company may amend or terminate this Agreement at any time
prior to the Executive's death. Such amendment or termination shall be by
written notice to the Executive. In the event that the Company decides to
maintain the Policy after the termination of the Agreement, the Company
shall be the direct beneficiary of the entire death proceeds of the
Policy.
9.2 Option to Purchase Upon Termination. If the Company exercises the right to
terminate the Agreement, the Company shall not sell, surrender or transfer
ownership of a Policy without first giving the Executive or the
Executive's transferee the option to purchase the Policy for a period of
sixty (60) days from written notice of such intention. The purchase price
shall be an amount equal to the cash surrender value of the Policy.
ARTICLE 10
ADMINISTRATION
10.1 Company Duties. This Agreement shall be administered by the Company which
shall consist of the Board, or such committee or persons as the Board may
choose. The Company shall also have the discretion and authority to (i)
make, amend, interpret and enforce all appropriate rules and regulations
for the administration of this Agreement and (ii) decide or resolve any
and all questions including interpretations of this Agreement, as may
arise in connection with this Agreement.
10.2 Agents. In the administration of this Agreement, the Company may employ
agents and delegate to them such administrative duties as it sees fit,
(including acting through a duly appointed representative), and may from
time to time consult with counsel who may be counsel to the Company.
10.3 Binding Effect of Decisions. The decision or action of the Company with
respect to any question arising out of or in connection with the
administration, interpretation and application of this Agreement and the
rules and regulations promulgated hereunder shall be final and conclusive
and binding upon all persons having any interest in this Agreement.
10.4 Indemnity of Company. The Company shall indemnify and hold harmless the
members of the Company against any and all claims, losses, damages,
expenses or liabilities arising from any action or failure to act with
respect to this Agreement, except in the case of willful misconduct by the
Company or any of its members.
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HEARTLAND NATIONAL BANK
Split Dollar Plan
ARTICLE 11
MISCELLANEOUS
11.1 Binding Effect. This Agreement shall bind the Executive and the Company,
their beneficiaries, survivors, executors, administrators and transferees
and any Beneficiary.
11.2 No Guarantee of Employment. This Agreement is not an employment policy or
contract. It does not give the Executive the right to remain an
Executive of the Company, nor does it interfere with the Company's right
to discharge the Executive. It also does not require the Executive to
remain an Executive nor interfere with the Executive's right to terminate
employment at any time.
11.3 Applicable Law. The Agreement and all rights hereunder shall be governed
by and construed according to the laws of the State of Florida, except to
the extent preempted by the laws of the United States of America.
11.4 Reorganization. The Company shall not merge or consolidate into or with
another company, or reorganize, or sell substantially all of its assets to
another company, firm or person unless such succeeding or continuing
company, firm or person agrees to assume and discharge the obligations of
the Company under this Agreement. Upon the occurrence of such event, the
term "Company" as used in this Agreement shall be deemed to refer to the
successor or survivor company.
11.5 Notice. Any notice or filing required or permitted to be given to the
Company under this Agreement shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address
below:
▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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 or the
receipt for registration or certification.
Any notice or filing required or permitted to be given to the Executive
under this Agreement shall be sufficient if in writing and hand-delivered,
or sent by mail, to the last known address of the Executive.
11.6 Entire Agreement. This Agreement, along with the Executive's Beneficiary
Designation Form constitute the entire agreement between the Company and
the Executive as to the subject matter hereof. No rights are granted to
the Executive under this Agreement other than those specifically set forth
herein.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date indicated above.
EXECUTIVE: COMPANY:
HEARTLAND NATIONAL BANK
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------ ----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ Title Chairman of the Board
By execution hereof, Heartland Bancshares, Inc. consents to and agrees to be
bound by the terms and condition of this Agreement.
ATTEST: HEARTLAND BANCSHARES, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------ ----------------------------
Title Chairman of the Board
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HEARTLAND NATIONAL BANK
Beneficiary Designation Form
Split Dollar Plan
I, ▇▇▇▇▇ ▇▇▇▇▇▇▇, designate the following as beneficiary of benefits under the
Agreement payable following my death:
Primary: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ 100%
Contingent: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇ 50 %
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 50 %
NOTES:
- PLEASE PRINT CLEARLY OR TYPE THE NAMES OF THE BENEFICIARIES.
- TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE
TRUSTEE(S) AND THE EXACT NAME AND DATE OF THE TRUST AGREEMENT
- ▇▇.▇▇▇▇ YOUR ESTATE AS BENEFICIARY, PLEASE WRITE "ESTATE OF
[YOUR NAME]".
- BE AWARE THAT NONE OF THE CONTINGENT BENEFICIARIES WILL RECEIVE
ANYTHING UNLESS ALL OF THE PRIMARY BENEFICIARIES PREDECEASE YOU.
I understand that I may change these beneficiary designations by delivering a
new written designation to the Company, which shall be effective only upon
receipt and acknowledgment by the Company prior to my death. I further
understand that the designations will be automatically revoked if the
beneficiary predeceases me, or, if I have named my spouse as beneficiary and our
marriage is subsequently dissolved.
Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Signature: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Date: 1-04-05
Received by the Company this __________ day of _________________, 20____
By: _____________________________________________
Title: __________________________________________
HEARTLAND NATIONAL BANK
Policy Endorsement
Split Dollar Plan
POLICY ENDORSEMENT
Contract Owner: HEARTLAND NATIONAL BANK
The undersigned Owner requests that the policy(ies) shown in the attached
Schedule Page issued by NEW YORK LIFE INSURANCE COMPANY (the "Insurer") provide
for the following beneficiary designation:
1. Upon the death of the Insured, proceeds shall be paid in one sum to the
Owner, its successors or assigns, as Beneficiary, to the extent claimed by said
Owner.
2. Any proceeds at the death of the Insured in excess of the amount paid
under the provisions of paragraph 1 of this Policy Endorsement shall be paid in
one sum in accordance with the written direction of the Owner. Such direction
will be provided to the Insurer at the time of claim. The Insurer will be
protected in relying solely on the Owner to provide the name(s) of the
party(ies) to pay any excess not paid under paragraph 1. If the Owner fails to
provide the name(s) of the party(ies) at the time of claim, then any proceeds
payable under this paragraph shall be paid in one sum to the Beneficiary.
3. It is hereby provided that (i) any payment made to the Beneficiary or
other party under paragraph 2 of this Policy Endorsement shall be a full
discharge of the Insurer to the extent thereof; (ii) such discharge shall be
binding on all parties claiming any interest under the Policy; and (iii) the
Insurer shall have no responsibility with respect to the amounts so claimed.
4. It is agreed by the undersigned that this designation shall be subject
in all respects to the contractual terms of the Policy.
The undersigned is signing in a representative capacity for the Owner and
warrants that he or she has the authority to bind the entity on whose behalf
this document is being executed.
Signed at Sebring, Florida, this 4 day of January, 2005.
OWNER:
HEARTLAND NATIONAL BANK
BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------- -----------------------------
(Signature: Bank Officer #1) (Signature: Bank Officer #2)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------- -----------------------------
(Printed) (Printed)
TITLE: Chairman of the Board TITLE: EVP
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HEARTLAND NATIONAL BANK
Beneficiary Designation Form
Split Dollar Plan
SCHEDULE PAGE
POLICY(IES) SUBJECT TO POLICY ENDORSEMENT
Policy Number Insured
▇▇▇▇▇ ▇▇▇▇▇▇▇
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