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Exhibit
10.12
AMERIANA BANK,
SB
SUPPLEMENTAL LIFE
INSURANCE AGREEMENT
THIS SUPPLEMENTAL LIFE
INSURANCE AGREEMENT (this “Agreement”) is adopted this
20 th day
of December, 2007 by and between AMERIANA BANK, SB, a
state-chartered savings bank located in New Castle, Indiana (the
“Bank”), and RICHARD HENNESSEY (the
“Director”).
The purpose of this Agreement
is to retain and reward the Director by dividing the death proceeds
of certain life insurance policies which are owned by the Bank on
the life of the Director with the designated beneficiary of the
Director. The Bank 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 |
“Bank’s Interest” means the benefit
set forth in Section 2.1. |
| 1.2 |
“Beneficiary” means each designated person,
or the estate of the deceased Director, entitled to benefits, if
any, upon the death of the Director. |
| 1.3 |
“Beneficiary Designation Form” means the
form established from time to time by the Plan Administrator that
the Director completes, signs and returns to the Plan Administrator
to designate one or more Beneficiaries. |
| 1.4 |
“Board” means the Board of Directors of the
Bank as from time to time constituted. |
| 1.5 |
“Code” means the Internal Revenue Code of
1986, as amended. |
| 1.6 |
“Effective Date” means December 20,
2007. |
| 1.7 |
“Director’s Interest” means the
benefit set forth in Section 2.2. |
| 1.8 |
“Insurer” means the insurance company
issuing the Policy on the life of the Director. |
| 1.9 |
“Net Death Proceeds ” means the total death
proceeds of the Policy minus the greater of |
(i) the cash surrender value
or (ii) the aggregate premiums paid by the Bank.
| 1.10 |
“Plan Administrator” means the plan
administrator described in Article 10. |
| 1.11 |
“Po1icy” or “Policies”
means the individual insurance policy or policies adopted by the
Bank for purposes of insuring the Director’s life under this
Agreement. |
Ameriana Bank, SB Supplemental Life
Insurance Agreement
| 1.12 |
“Separation from Service” means that the
Director’s service, as an employee and independent
contractor, to the Bank and any member of a controlled group as
defined in Section 414 of the Code to which the Bank belongs,
has terminated for any reason, other than by reason of a leave of
absence approved by the Bank or the death of the
Director. |
| 1.13 |
“Years of Service” means the twelve
(12) consecutive month period beginning five (5) years
after the Director’s first day of service to the Bank and any
twelve (12) month anniversary thereof during the entirety of
which time the Director is an employee of the Bank. Service with a
subsidiary or other entity controlled by the Bank before the time
such entity became a subsidiary or under such control shall not be
considered “credited service.” |
Article 2
Policy
Ownership/lnterests
| 2.1 |
Bank’s Interest . The Bank shall own the Policies
and shall have the right to exercise all incidents of ownership,
and the Bank may terminate a Policy without the consent of the
Director. The Bank shall be the beneficiary of the remaining death
proceeds of the Policies after the Director’s Interest is
determined according to Section 2.2. |
| 2.2 |
Director’s Interest . The Director, or the
Director’s assignee, shall have the right to designate the
Beneficiary of an amount of death proceeds equal to eighty percent
(80%) of the Net Death Proceeds. The Director shall also have
the right to elect and change settlement options with respect to
the Director’s Interest by providing written notice to the
Bank and the Insurer. |
Article 3
Premiums and Imputed
Income
| 3.1 |
Premium Payment . The Bank shall pay all premiums due on
all Policies. |
| 3.2 |
Economic Benefit . The Bank shall determine the economic
benefit attributable to the Director based on the life insurance
premium factor for the Director’s age multiplied by the
aggregate death benefit payable to the Beneficiary. The “life
insurance premium factor’ is the minimum factor applicable
under guidance published pursuant to Treasury Reg. 1.61
-22(d)(3)(ii) or any subsequent authority. |
| 3.3 |
Imputed Income . The Bank shall impute the economic
benefit to the Director on an annual basis, by adding the economic
benefit to the Director’s W-2, or if applicable, Form
1099. |
Article 4
General Limitations
-Removal
Notwithstanding any provision
of this Agreement to the contrary, the Director’s rights in
the Agreement shall terminate if the Director is subject to a final
removal or prohibition order issued by an appropriate federal
banking agency pursuant to Section 8(e) of the Federal Deposit
Insurance Act (“FDIA”).
Ameriana Bank, SB Supplemental Life
Insurance Agreement
Article 5
Beneficiaries
| 5.1 |
Beneficiary . The Director shall have the right, at any
time, to designate a Beneficiary to receive any benefits payable
under the Agreement upon the death of the Director. The Beneficiary
designated under this Agreement may be the same as or different
from the beneficiary designation under any other Agreement of the
Bank in which the Director participates. |
| 5.2 |
Beneficiary Designation; Change . The Director shall
designate a Beneficiary by completing and signing the Beneficiary
Designation Form, and delivering it to the Bank or its designated
agent. The Director’s beneficiary designation shall be deemed
automatically revoked if the Beneficiary predeceases the Director
or if the Director names a spouse as Beneficiary and the marriage
is subsequently dissolved. The Director shall have the right to
change a Beneficiary by completing, signing, and otherwise
complying with the terms of the Beneficiary Designation Form and
the Bank’s rules and procedures, as in effect from time to
time. Upon the acceptance by the Bank of a new Beneficiary
Designation Form, all Beneficiary designations previously filed
shall be cancelled. The Bank shall be entitled to rely on the last
Beneficiary Designation Form filed by the Director and accepted by
the Bank prior to the Director’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 Bank or its designated
agent. |
| 5.4 |
No Beneficiary Designation . If the Director dies
without a valid designation of beneficiary, or if all designated
Beneficiaries predecease the Director, then the Director’s
surviving spouse shall be the designated Beneficiary. If the
Director has no surviving spouse, the benefits shall be made
payable to the Director’s estate. |
| 5 . 5 |
Facility of Payment . If the Bank determines in its sole
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 Bank may direct
payment of such benefit to the guardian or other legal
representative of the person’s estate or to any trust created
for the sole benefit of said person. The Bank may require proof of
incompetence, minority or guardianship as it may deem appropriate
prior to d |
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