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UNITED BANK SPLIT DOLLAR LIFE INSURANCE AGREEMENT

Life Insurance Split Dollar Agreement

UNITED BANK SPLIT DOLLAR LIFE INSURANCE AGREEMENT | Document Parties: UNITED FINANCIAL BANCORP INC You are currently viewing:
This Life Insurance Split Dollar Agreement involves

UNITED FINANCIAL BANCORP INC

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Title: UNITED BANK SPLIT DOLLAR LIFE INSURANCE AGREEMENT
Governing Law: Massachusetts     Date: 12/27/2007
Industry: Consumer Financial Services     Sector: Financial

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UNITED BANK

SPLIT DOLLAR LIFE INSURANCE AGREEMENT

 

 

This Split Dollar Agreement ("Agreement") is entered into by United Bank

("Bank") and Keith E. Harvey ("Insured") on December 20, 2007 ("Effective

Date") with respect to certain life insurance policies (the "Policy" or

"Policies") issued by a duly licensed life insurance company (the "Insurer") set

forth on Schedule A hereto. Insured is the Executive Vice President, Operations

and Retail of the Bank. The respective rights and duties of the Bank and Insured

in the Policy are set forth herein and on Schedule A attached hereto. This

Agreement is intended to be a non-equity, endorsement split dollar agreement,

such that it is not treated as a impermissible personal loan from the Bank to

the Insured under Section 402 of the Sarbanes-Oxley Act of 2002. This Agreement

shall continue in existence only for so long as the Insured remains employed by

the Bank and shall terminate on the termination of the Insured's employment

(other than due to the Insured's death).

1. Policy Title and Ownership; Endorsement.

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(a) Policy title and ownership shall reside in the Bank for its use and

for the use of the Insured, all in accordance with this Agreement. Such Policy

shall be treated as "bank owned life insurance" ("BOLI") and is held subject to

the provisions and limitations set forth in the Interagency Statement on the

Purchase and Risk Management of Life Insurance (OCC 2004-56). The Bank 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 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.

(b) An endorsement on the form provided by the Insurer must be completed

and filed with the Insurer for each Policy identified on Schedule A in order to

implement the rights and obligations set forth in this Agreement. The parties

agree that the Policy shall be subject to the terms and conditions of this

Agreement and of the endorsement filed with the Insurer.

(c) The Bank agrees that, except as otherwise provided herein, it shall

not sell, assign, transfer, surrender or cancel the policy, or change the

beneficiary designation without the express written consent of the Employee.

2. Beneficiary Designation Rights. The Insured (or assignee) shall have

the right and power to designate a beneficiary or beneficiaries to receive the

Insured's share of the Policy proceeds payable upon the death of the Insured,

subject to any right or interest the Bank may have in such proceeds, as provided

in this Agreement. The Bank shall not terminate, alter or amend the Insured's

beneficiary designations without the written consent of the Insured. The Bank

<PAGE>

shall be the beneficiary of any proceeds remaining under the Policy after the

payment required under this Agreement has been made to the Insured's designated

beneficiary.

3. Premium Payment. 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. Notwithstanding the foregoing, the Bank shall have the absolute

and sole right to terminate and surrender any or all of the Policies that are

subject to this Agreement and substitute another insurance policy with a

comparable death benefit.

4. Taxable Benefit. Annually, the Insured will recognize a taxable

benefit equal to the assumed cost of insurance required by the Internal Revenue

Service ("IRS"), as determined from time to time. The Bank (or its

administrator) will timely report to the Insured the amount of such imputed

income each year on IRS Form W-2 or its equivalent. The Bank and the Insured

intend that this Agreement will be subject to taxation under the "economic

benefit regime" set forth in Treasury Regulations section 1.61-22(d), such that

the Insured shall have taxable income equal to the annual cost of the current

life insurance coverage provided under the Policy.

5. Division of Death Proceeds. Upon the death of the Insured while

employed by the Bank, the Bank shall cooperate with the Insured's designated

beneficiary to take whatever action is necessary to collect the death benefit

provided under the Policy. Subject to Sections 6 and 8 below, the division of

the death proceeds of the Policy shall be as follows: the Insured's

beneficiary(ies) designated in accordance with Section 2 shall be entitled to

payment from the Policy proceeds directly from the Insurer of an amount equal to

the lesser of:

(i) Six Hundred Thousand Dollars ($600,000.00); or

(ii) The Net Death Benefit. The "Net Death Benefit" shall be the

death benefit payable under the terms of the Policy or Policies reduced by the

aggregate premiums paid by the Company.

6. Ownership of the Cash Surrender Value of the Policies.

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(a) The Bank shall at all times be entitled to one hundred percent

(100%) of the Policy's cash value, as that term is defined in the Policy

contract, less any policy loans and unpaid interest or cash withdrawals

previously incurred by the Bank. Such cash value shall be determined as of the

date of surrender or death, as the case may be.

(b) The Bank may pledge or assign the Policy, subject to the terms and

conditions of this Agreement, for the sole purposes of securing a loan from the

Insurer. The amount of such loan, including accumulated interest thereon, shall

not exceed the lesser or (i) the amount of the premiums on the Policy paid by

the Bank, or (ii) the cash surrender value of the Policy (as defined in the

Policy). Interest charges on such loan shall be paid by the Bank.

2

<PAGE>

7. Rights of Insured or Assignees. The Insured may not, without the

written consent of the Ban


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