Exhibit 10.4
CULLMAN SAVINGS
BANK
DIRECTOR SPLIT DOLLAR
AGREEMENT
THIS DIRECTOR SPLIT DOLLAR
AGREEMENT (this
“Agreement”) is made as of this
day of
, 2008 by and
between Cullman Savings Bank, a federally chartered thrift,
supervised by the Office of Thrift Supervision (the
“Bank”), located in Cullman, Alabama, and
]
(the “Director”).
WHEREAS , to encourage the Director to remain a Director
of the Bank, the Bank is willing to allocate a portion of the death
proceeds of a life insurance policy on the Director’s life to
the Director’s beneficiary(ies) if the Director dies while
actively serving as a member of the Board of Director’s of
the Bank. The Bank will pay life insurance premiums from its
general assets.
NOW THEREFORE
, in consideration of the foregoing
premises and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Bank and the
Director hereby agree as follows.
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, the
following words and phrases shall have the meanings
specified:
1.1 “Director’s
Interest” means the benefit set forth in
Section 2
1.2 “Insured”
means the Director.
1.3 “Insurer”
means each life insurance carrier in which there is a Split Dollar
Policy Endorsement attached to this Split Dollar
Agreement.
1.4 “Net Amount At
Risk” as used in this agreement refers to the difference
in the Death Benefit payable by the insurance carrier and the Cash
Value of the policy(ies) owned by the Bank on the Director’s
life.
1.5 “Policy”
means the specific life insurance policy or policies issued by the
Insurer(s).
1.6 “Split Dollar Policy
Endorsement” means the form required by the Administrator
or the Insurer to indicate the Director’s interest, if any,
in a Policy on the Director’s life.
1.7 “Termination of
Service” with the Bank means that the Director shall have
ceased to be a member of the Board of Directors of the Bank for any
reason whatsoever, excepting a leave of absence approved by the
Bank. For purposes of this Agreement, if there is a dispute over
the status of the Director or the date of termination of the
Director’s service, the Bank shall have the sole and absolute
right to decide the dispute.
ARTICLE 2
POLICY
OWNERSHIP/INTERESTS
2.1 Bank Ownership . The Bank
is the sole owner of the Policy and shall have the right to
exercise all incidents of ownership. The Bank shall be the
beneficiary of any death proceeds remaining after the
Director’s Interest has been paid under Section 2.2 of
this Split Dollar Agreement.
2.2 Director’s Interest
. In the case of the Director’s death before Termination of
Service, the Director shall have the right to designate the
beneficiary(ies) of death proceeds in the amount of the lesser
of:
(a) one hundred percent
(100%) of the portion of the insurance proceeds on the life of
the Director and designated as the NAR (detailed on Schedule A) by
the insurance carrier or;
(b) the Participant’s benefit
calculated under section 7.1 of the Cullman Savings Bank
Directors’ Deferred Cash Compensation Plan. This amount is
detailed on Schedule A.
Subject to the terms of this Split
Dollar Agreement, including but not limited to the Bank’s
right to terminate this Split Dollar Agreement under
Section 8.8, the Bank hereby endorses the Director’s
Interest to the Director and agrees to execute any other or further
documents that may be required to effectuate this Split Dollar
Agreement. The Director shall have the right to elect and change
settlement options specified in the Policy that may be permitted.
However, the Director, the Director’s transferee, and the
Director’s beneficiary(ies) or estate shall have no rights or
interests in the Policy for that portion of the death proceeds
designated in this Section 2.2 if Termination of Service of
the Director occurs before Director’s death.
2.3 Premium Payment . The
Bank shall pay any premiums due on the Policy. It is anticipated
that the Policy will be a single premium modified endowment
contract
2
2.4 Imputed Income . The Bank
shall impute income to the Director in an amount equal to
(a) the current term rate for the Director’s age,
multiplied by (b) the net death benefit payable to the
Director’s beneficiary(ies). The current term rate is the
minimum amount required to be imputed under Revenue Rulings 64-328
and 66-110, or any subsequent applicable authority.
2.5 Internal Revenue Code
Section 1035 Exchanges . The Director recognizes and
agrees that the Bank may after this Director Split Dollar Agreement
is adopted wish to exchange the Policy of life insurance on the
Director’s life for another contract of life insurance
insuring the Director’s life. Provided that the Policy is
replaced (or intended to be replaced) with a comparable policy of
life insurance, the Director agrees to provide medical information
and cooperate with medical insurance-related testing required by a
prospective insurer for implementing the Policy or, if necessary,
for modifying or updating to a comparable insurer.
ARTICLE 3
BENEFICIARIES
3.1 Beneficiary Designations
. The Director shall designate a beneficiary by filing a written
designation with the Bank. 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.
If the Director dies without a valid beneficiary designation, all
payments shall be made to the Director’s estate.
ARTICLE 4
GENERAL
LIMITATIONS
4.1 Termination of Service .
Notwithstanding any provision of this Agreement to the contrary,
the Director’s Interest in the Policy shall terminate if the
Director’s service as a member of the Board of Directors is
terminated any reason by either party, including retirement, and
the Bank’s obligations under this Agreement shall terminate
as of the effective date of the termination of service.
4.2 Removal . Notwithstanding
any provision of this Agreement to the contrary, if the Director is
removed from the Board of Directors of the Bank or permanently
prohibited from participating in the conduct of the Bank’s
affairs by an order issued under section 8(e)(4) or (g)(1) of the
Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), all
obligations of the Bank under this Agreement shall terminate as of
the effective date of the order.
4.3 Insurer . The Insurer
shall be bound only by the terms of the Policy. Any payments the
Insurer makes or actions it takes in accordance with the Policy
shall fully discharge it from all claims, suits and demands of all
entities or persons. The Insurer shall not be bound by or be deemed
to have notice of the provisions of this Director Split Dollar
Agreement.
3
ARTICLE 5
CLAIMS AND REVIEW
PROCEDURES
5.1 Claims Procedure . If the
Administrator denies part of or the entire claim, the claimant
shall have the opportunity for a full and fair review by the
Administrator of the denial, as follows:
5.1.1 Initiation: Written
Claim . The claimant initiates a claim by submitting to the
Administrator a written claim for the benefits.
5.1.2 Timing of Administrator
Response . The Administrator shall respond to such claimant
within 90 days after receiving the claim. If the Administrator
determines that special circumstances require additional time for
processing the claim, the Administrator 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
Administrator expects to render its decision.
5.1.3 Notice of Decision . If
the Administrator denies part or all of the claim, then the
Administrator shall notify the claimant in writing of such denial.
The Admin
