Exhibit 10.9
HARVARD SAVINGS BANK
SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is adopted this
17 th
day of July, 2008 by and between
HARVARD SAVINGS BANK a state-chartered stock savings bank located
in Harvard Illinois (the “Company”), and DONN L
CLAUSSEN (the “Executive”). This Agreement shall append
the Split Dollar Endorsement entered into on even date herewith or
as subsequently amended, by and between the aforementioned
parties.
INTRODUCTION
To encourage the Executive to remain
an employee of the Company, the Company is willing to divide the
death proceeds of a life insurance policy on the Executive’s
life. The Company will pay life insurance premiums from its general
assets.
AGREEMENT
The Company and the Executive agree
as follows:
Article 1
General Definitions
The following terms shall have the
meanings specified:
|
|
1.1
|
“Insured” means the Executive
|
|
|
1.2
|
“Insurer” means each life insurance carrier in which there
is a Split Dollar Policy Endorsement attached to this
Agreement
|
|
|
1.3
|
“Net
Death Proceeds” means the total death proceeds of the Policy
minus any cash surrender value.
|
|
|
1.4
|
“Normal Retirement
Age” means the
Executive’s 65 th birthday.
|
|
|
1.5
|
“Policy” means the specific life insurance policy issued
by the Insurer.
|
|
|
1.6
|
“Termination of
Employment” means
the Executive ceasing to be employed by the Company for any reason
whatsoever, other than by reason of an approved leave of
absence.
|
Article 2
Policy Ownership/Interests
|
|
2.1
|
Company
Ownership . The Company
is the sole owner of the Policy and shall have the right to
exercise all incidents of ownership. The Company shall be the
beneficiary of the Policy to the extent of each Policy’s cash
surrender value plus any death benefits remaining after applying
those amounts explicitly assigned to the Executive’s
beneficiary pursuant to section 2.2 below.
|
|
|
2.2
|
Executive’s Interest
. The Executive shall have the right
to designate the beneficiary of $350,000 of the Net Death Proceeds.
The Executive shall also have the right to elect and change
settlement options that may be permitted. However, the Executive,
the Executive’s transferee or the Executive’s
beneficiary shall have no rights or interests in the Policy with
respect to that portion of the death proceeds designated in this
section 2.2 upon the Executive’s Termination of Employment
for reasons other than the Executive’s death.
|
|
|
2.3
|
Comparable
Coverage . Upon execution
of this Agreement, 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
prior to Executive’s Termination of Employment, unless the
Company replaces the Policy with a comparable insurance policy to
cover the benefit provided under this Agreement and the Company and
the Executive execute a new Split Dollar Policy Endorsement for
said comparable insurance policy. The Policy or any comparable
policy shall be subject to the claims of the Company’s
creditors.
|
Article 3
Premiums
|
|
3.1
|
Premium
Payment . The company
shall pay any premiums due on the Policy
|
|
|
3.2
|
Economic
Benefit . The Company
shall determine the economic benefit attributable to the Executive
based on the amount of the current term rate for the
Executive’s age multiplied by the aggregate death benefit
payable to the Executive’s beneficiary. 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.
|
|
|
3.3
|
Imputed
Income . The Company
shall impute the economic benefit to the Executive on an annual
basis.
|
Article 4
Assignment
The Executive may assign without
consideration all of the Executive’s interests in the Policy
and in this Agreement to any person, entity or trust. In the event
the Executive transfers all of the Executive’s interest in
the Policy, then all of the Executive’s interest in the
Policy and in the 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 the
Policy or in this Agreement.
Article 5
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 Agreement.
Article 6
Claims and Review Procedures
|
|
6.1
|
Claims
Procedures. Any person or
entity who has not received benefits under the Plan that he or she
believes should be paid (the “claimant”) shall make a
claim for such benefits as follows:
|
|
|
6.1.1
|
Initiation
– Written Claim .
The claimant initiates a claim by submitting to the Company a
written claim for the benefits.
|
|
|
6.1.2
|
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
clai
|
