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EXHIBIT 10.1
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
Policy
Owner:
Venture Bank
Insured:
Relationship of Insured to
Bank:
Executive Officer
Effective
Date:
, 2007
THIS AGREEMENT
is adopted this ________ day of _______, 200__, by and between
Venture Financial Group, Inc. and Venture Bank (hereinafter the
“Employer”), and ___________________ (the
"Executive").
INTRODUCTION
To
encourage the Executive to remain an employee of the Employer, the
Employer is willing to divide the death proceeds of a life
insurance policy (hereinafter “Policy(ies)”) on the
Executive's life. The Employer will pay life insurance premiums
from its general assets.
The
Employer and the Executive hereby agree that the respective rights
and duties of the Executive and the Employer in the above
referenced Policy(ies) and any Replacement Policy(ies) (defined
below) shall be pursuant to the terms set forth below.
Article 1
General Definitions |
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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 determined pursuant to Article 4.
1.2 “
Beneficiary Designation Form ” means the form
established from time to time by the Employer that
the Executive completes, signs, and returns to the
Employer to designate one or more Beneficiaries.
1.3
“Cash Value” has the meaning given in the
Policy agreement.
1.4
“Change in Control”. For the purpose of this
Agreement, a Change in Control shall include any of the following
(and for the purposes of this provision, the term "corporation"
shall mean both Venture Bank and/or Venture Financial Group)
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A. |
Change in the Ownership of a Corporation .
A change in the ownership of the corporation occurs on the date
that any one person or persons acting as a group (as defined in IRC
409A), acquires ownership of stock of the corporation that,
together with stock held by such person or group, constitutes more
than fifty percent (50%) of the total fair market value or total
voting power of the stock of such corporation. The acquisition of
additional stock by the same person or group is not considered to
cause a change in the ownership of the corporation. |
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B. |
Change in the Effective Control of the
Corporation. A change in the effective control of the
corporation shall be deemed to occur on either of the following
dates: |
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(i) The date any one person,
or persons acting as a group acquires (or has acquired during the
twelve (12) month period ending on the date of the most recent
acquisition by such person or group) ownership of stock of the
corporation possessing thirty percent (30%) or more of the total
voting power of the stock of such corporation; or |
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(ii) The date a majority of
members of the corporation’s board of directors is replaced
during any twelve (12) month period by directors whose appointment
or election is not endorsed by a majority of the members of the
corporation’s board of directors before the date of the
appointment or election. |
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C. |
Change in the Ownership of a Substantial
Portion of the Corporation’s Assets . A change in the
ownership of a substantial portion of a corporation’s assets
shall be deemed to occur on the date that any one person or group
acquires (or has acquired during the twelve (12) month period
ending on the date of the most recent acquisition by such person or
persons) assets from the corporation that have a total gross fair
market value equal to or more than forty percent (40%) of the total
gross fair market value of all of the assets of the corporation
immediately before such acquisition or acquisitions. No Change in
Control shall result if the assets are transferred to certain
entities controlled directly or indirectly by the
shareholders of the transferring corporation. |
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For the purpose of this Agreement, transfers made on account of
deaths or gifts, transfers between family members or transfers to a
qualified retirement plan maintained by the Employer shall not be
considered in determining whether there has been a Change in
Control.
1.5
“Early Retirement” means the
Executive’s Termination of Employment, for any reason other
than for Cause, on or after attaining the age of fifty-five (55)
and after completing at least ten (10) Years of Service.
1.6
“
Existing Policies” means those life
insurance policies specifically referenced in this
Agreement.
1.7
“
Insurer ” means each life insurance
carrier referenced above or a Replacement Policy
carrier.
1.8
“Net-at-Risk Proceeds”
(hereinafter “NAR”) means the amount which equals
the total proceeds of the Policy paid on the insured’s death
minus the Cash Value of the Policy.
1.9
“Normal Retirement” means the
Executive’s Termination of Employment, for any reason other
than for Cause, on or after attaining the age of sixty-five
(65).
1.10
“Plan
Administrator” is defined in Paragraph
13.1.
1.11
“ Policy
” means the Existing Policies and Replacement
Policies.
1.12
“Replacement
Policy(ies)” means life insurance policies
issued in exchange for Existing Policies.
1.13
“ Termination of
Employment ”. The term Termination of
Employment shall be interpreted in accordance with the provisions
of IRC 409A as it applies to the term “Separation From
Service”. Whether a termination of employment has occurred is
determined based on whether the facts and circumstances indicate
that the Bank and the Executive reasonably anticipate that no
further services will be performed after a certain date or that the
level of bona fide services the employee will perform after such
date (whether as an employee or as an independent contractor) will
permanently decrease to no more than twenty (20%) percent of the
average level of bona fide services performed (as an employee or an
independent contractor) over the immediately preceding 36-month
period (or the full period of services to the employer if the
employee has been providing services to the employer less than 36
months). There shall be no Termination of Employment while the
Executive is on military leave, sick leave or other bona fide leave
of absence, as long as such leave does not exceed six months, or if
longer, so long as the individual retains a right to re-employment
with the service recipient under an applicable statute or by
contract.
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1.14
Years of Service
. The term “Years of Service” means the total
number of years in which the Executive has been employed by or in
the service of Employer. For the purposes of this Plan, a year of
employment or service shall be a three-hundred and sixty-five (365)
day period (or 366 day period in the case of a leap year) that for
the first year of employment, commences on the Participant’s
date of hire (or engagement) and that, for any subsequent year,
commences on an anniversary of that hiring date.
Article 2
Policy Title, Ownership and Exchange or Replacement of
Policies
2.1 Title and
Ownership . Title and ownership of the Policy
shall reside in the Employer for its benefit and for the benefit of
the Executive all in accordance with this Agreement. The Employer
alone may, to the extent of its interest, exercise the right to
borrow or withdraw on the Policy’s Cash Value. If the
Employer and the Executive (or assignee, with the consent of the
Executive) mutually agree to exercise the right to increase the
coverage under the 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.
2.2 Exchange or Replacement
of Policies. Replacement Policies will be accorded
the same treatment under the Agreement as Existing Policies and
shall, in all respects relating to this Agreement replace the
Existing Policies for which they were exchanged. The Executive
shall cooperate with Employer in all exchanges requested by the
Employer by providing and promptly returning signatures as
requested by the Employer or Plan Administrator.
Article 3
Division of Death Proceeds
Subject to Paragraphs 11.1 and 18.1, the division of the death
proceeds of the policy shall be as follows:
3.1
Death of Participant Prior to
Termination of Employment. In the event the
Executive dies prior to Terminating Employment with Employer, then
the Executive’s Beneficiary(ies), designated in accordance
with the terms of this Agreement, hall be entitled to receive death
proceeds equal to the lesser of $ ______ Dollars ($) or One Hundred
Percent (100%) of the NAR.
The Employer shall be entitled to the remainder of such proceeds,
and the Employer and the Executive (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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3.2 Death Following Early
or Normal Retirement. In the event the Executive
dies after Early or Normal Retirement, then the Executive’s
Beneficiary(ies), designated in accordance with the terms of this
Agreement, shall be entitled to receive death
proceeds equal to the lesser of $ ________ Dollars ($) or One
Hundred Percent (100%) of the NAR.
The Employer shall be entitled to the remainder of such proceeds,
and the Employer and the Executive (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.
3.3 Death following
Termination of Employment. In the event the
Executive dies after Terminating his Employment with the Employer
for any reason, then Executive’s Beneficiary(ies) shall not
be entitled to receive any death benefit pursuant to the terms of
this Agreement.
Article 4
Premium Payment Method
Subject to the Employer’s absolute right to surrender or
terminate the Policy at any time and for any reason subject to
Article 11, prior to a Change in Control, the Employer shall pay an
amount equal to the planned premiums and any other premium payments
that might become necessary to keep the Policy in force.
Article 5
Taxable Benefit |
Annually the Executive will receive a taxable benefit equal to the
assumed cost of insurance as required by the Internal Revenue
Service. The Employer (or its administrator) will report to the
Executive the amount of imputed income each year on Form W-2 or its
equivalent.
The Executive may not, without the written consent of the Employer,
assign to any individual, trust or other organization, any right,
title or interest in the subject policy nor any rights, options,
privileges or duties created under this Agreement.
7.1 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
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the Employer in which the Executive participates.
7.2
Beneficiary Designation and Changes Thereto
. The Executive shall designate a Beneficiary by completing
and signing the Beneficiary Designation Form, and delivering it to
the Employer or its designated agent. 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 Employer’s rules and procedures, as in effect from time
to time. Upon the acceptance by the Employer of a new Beneficiary
Designation Form, all Beneficiary designations previously filed
shall be cancelled. The Employer shall be entitled to rely on the
last Beneficiary Designation Form filed by the Executive and
accepted by the Employer prior to the Executive’s
death.
7.3
Acknowledgment . No designation or change
in designation of a Beneficiary shall be effective until received,
accepted and acknowledged in writing by the Employer or its
designated agent.
7.4
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 s
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