Exhibit 10.18
THIRD AMENDED AND RESTATED NEVADA
SECURITY BANK
SPLIT DOLLAR AGREEMENT
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Insurer:
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Beneficial Life Insurance Company
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Policy Number BL2174372
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Sun Life Assurance Company
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Policy Number S02700005
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Lincoln Benefit Life Company
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Policy Number 01N1209515
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Massachusetts Mutual Life Insurance
Company
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Policy Number 0073633
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Bank:
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Nevada Security Bank
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Insured:
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John N. Donovan
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Relationship of Insured to Bank:
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Executive
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Effective Date:
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December 31 st , 2008
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The Bank and Insured as of the
Effective Date aforementioned hereby enters into this Third Amended
and Restated Nevada Security Bank Split Dollar Agreement
(hereinafter “Agreement”) which amends, supersedes and
replaces in the entirety the prior “Second Amended and
Restated Nevada Security Bank Split Dollar Agreement,”
entered into by and between these same parties dated
September 20, 2007. The respective rights and duties of
Nevada Security Bank (hereinafter the “Bank” or
“Employer”) and the Insured (also referred to as
“Executive”) in the above-referenced policies (referred
to as “Policy”) shall be pursuant to the terms set
forth below:
1.
DEFINITIONS.
Unless otherwise defined herein, the
meaning of any defined term in this Agreement shall have meaning as
set forth in the Policy. If the definition of a term in the
Policy is inconsistent with the definition of a term in this
Agreement, then the definition of the term as set forth in this
Agreement shall supersede and replace the definition of the terms
as set forth in the Policy. For the purposes of this
Agreement, the terms “Insured” and
“Executive,” and the terms “Bank” and
“Employer” shall have the same meaning.
1.1
Termination for
Cause .
The term
“Termination for Cause” shall mean termination of
Employment of the Executive by reason of any of the
following:
(A)
Dishonest or fraudulent conduct by
Executive with respect to the performance of Executive’s
duties with Bank or its parent corporation (The Bank
Holdings);
(B)
Conduct by Executive that materially
discredits Bank or its parent corporation or any of its
subsidiaries or is materially detrimental to the reputation of the
Bank or its parent corporation or any of its subsidiaries,
including but not limited to conviction or a plea of nolo
contendere of Executive of a felony or crime involving moral
turpitude;
(C)
Executive’s willful misconduct
or gross negligence in performance of Executive’s duties
under this Agreement, including but not limited to
Executive’s refusal to comply in any material respect with
the legal directives of the Executive’s
immediate supervisor or the Board of Directors (hereinafter
the “Board”), if such misconduct or negligence has not
been remedied or is not being remedied to the Board’s
reasonable satisfaction within thirty (30) days after written
notice, including a detailed description of the misconduct or
negligence, has been delivered by the Board to
Executive;
(D)
An order or directive from a state
or federal banking regulatory agency requesting or requiring
removal of Executive or a finding by any such agency that
Executive’s performance threatens the safety or soundness of
Bank, its parent corporation or any of its subsidiaries;
(E)
Material breach of Executive’s
fiduciary duties to Bank if such breach has not been remedied or is
not being remedied to the Board’s reasonable satisfaction
within thirty (30) days after written notice, including a detailed
description of the breach that has been delivered by the Board to
Executive;
(F)
The Executive is convicted of a
felony or misdemeanor involving moral turpitude;
(G)
State and/or Federal banking
regulators request or order termination of this Agreement;
or
(H)
The Executive commits any act which
could cause termination of Coverage under the Bank’s Blanket
Bond as to the Executive, as distinguished from termination of such
coverage as to the Bank as a whole.
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1.2
Voluntary
Termination . The term “Voluntary
Termination” shall mean termination elected by the
Executive.
1.3
Disability/Disabled
. For the purpose of this Agreement, an Executive
will be considered disabled if:
(A)
He is unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period
of not less than twelve (12) months, or
(B)
He is, by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement
benefits for a period of not less than three (3) months under
an accident and health plan covering employees of
Participant’s employer.
1.4
Change in
Control . A “Change in Control” shall
mean the earliest occurrence of one of the following
events:
A.
A Change In Ownership of The Bank
Holdings or the Employer .
A change in ownership of The Bank
Holdings (TBH) or the Employer occurs on the date that any
person (or group of persons) acquires ownership of stock of TBH or
the Employer 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 TBH or the
Employer, respectively.
B.
A Change in Effective Control of
TBH or the Employer .
A change in effective control of TBH
or the Employer occurs on the date that:
1.
Any person (or group of persons)
acquires (or has acquired during the twelve (12) month period
ending on the date of the most recent acquisition by such person or
persons) ownership of stock of TBH or the Employer possessing
thirty-five percent (35%) or more of the total voting power of the
stock of TBH or the Employer, respectively; or
2.
A majority of members of TBH’s
or the Employer’s Board is replaced during any twelve
(12) month period by directors whose appointment or election
is not endorsed by a majority of the members of TBH’s or the
Employer’s Board, respectively prior to the date of the
appointment or election.
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C.
A Change in Ownership of a
Substantial Portion of TBH’s or the Employer’s
Assets .
A change in the ownership of a
substantial portion of TBH’s or the Employer’s assets
occurs on the date that any person (or group of persons) 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 TBH or the Employer, respectively 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 TBH or
the Employer, respectively immediately prior to such acquisition or
acquisitions.
For the purpose of this Agreement,
transfers of the outstanding voting securities of TBH or the
Employer made on account of deaths or gifts, transfers between
family members, former spouses or transfers to a qualified
retirement plan maintained by TBH or the Employer shall not be
considered in determining whether there has been a Change in
Control.
2.
POLICY TITLE AND
OWNERSHIP.
The parties agree that title and
ownership in the Policy shall reside in the Bank for its use and
for the use of the Insured all in accordance with this
Agreement. The Bank alone 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.
3.
BENEFICIARY DESIGNATION
RIGHTS.
The Bank and Insured agree that the
Insured (or assignee) shall have the right and power to designate a
beneficiary or beneficiaries to receive the Insured’s share
of the proceeds payable upon the death of the Insured, and to elect
and change a payment option for such beneficiary, subject to any
right or interest the Bank may have in such proceeds, as provided
in this Agreement.
4.
PREMIUM PAYMENT
METHOD.
Subject to the Bank’s absolute
right to surrender or terminate the Policy at any time and for any
reason, the Bank agrees to pay an amount equal to the planned
premiums and any other premium payments that might become necessary
to keep the Policy in force.
5.
TAXABLE BENEFIT.
Annually the Insured will receive a
taxable benefit equal to the assumed cost of insurance as required
by the Internal Revenue Service. The Bank (or its
administrator) will report to the Insured the amount of imputed
income each year on Form W-2 or its equivalent. The
Executive shall be responsible for the payment of the income taxes
on such imputed income.
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6.
DIVISION OF DEATH
PROCEEDS.
Subject to Paragraphs 7 and 9
herein, the parties agree to the division of the death proceeds of
the Policy as follows:
A.
Provided that, either (i) the
Insured was either emp
