|
Exhibit 10.25 Addendum A
The Cortland Savings and Banking Company
Third Amended Split Dollar Agreement and Endorsement This
Third Amended Split Dollar Agreement and Endorsement (this
"Agreement") is entered into as of this third day of December, 2008
by and between The Cortland Savings and Banking Company, an
Ohio-chartered commercial bank (the "Bank"), and Lawrence A.
Fantauzzi, President and Chief Executive Officer of the Bank (the
"Executive"). This Agreement shall append the Split Dollar Policy
Endorsement entered into on even date herewith or as subsequently
amended, by and between the aforementioned parties. Whereas
, to encourage the Executive to remain a Bank employee, the Bank
and the Executive entered into a Second Amended Split Dollar
Agreement and Endorsement effective as of December 16, 2003,
providing for division of the death proceeds of a life insurance
policy or policies on the Executive’s life, Whereas ,
the Bank and the Executive are entering into a Third Amended Salary
Continuation Agreement effective as of the date hereof, providing
for specified retirement benefits and amending and restating in its
entirety the Second Amended Salary Continuation Agreement, which
also was entered into effective as of December 16, 2003, and
Whereas , the Bank and the Executive intend that this Third
Amended Split Dollar Agreement and Endorsement shall be attached as
Addendum A to the Third Amended Salary Continuation Agreement,
amending and restating in its entirety the Second Amended Split
Dollar Agreement and Endorsement. Now Therefore , in
consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Article 1
Definitions Capitalized terms not otherwise defined in this
Agreement are used herein as defined in the Third Amended Salary
Continuation Agreement dated as of the date of this Agreement
between the Bank and the Executive. The following terms shall have
the meanings specified. 1.1 Administrator means the
administrator described in Article 7. 1.2 Executive’s
Interest means the benefit set forth in section 2.2. 1.3
Insured means the Executive. 1.4 Insurer means each life
insurance carrier for which there is a Split Dollar Policy
Endorsement attached to this Agreement.
1.5 Net Death Proceeds means the total death proceeds of
the Policy minus the cash surrender value. 1.6 Policy means
the specific life insurance policy or policies issued by the
Insurer(s). 1.7 Salary Continuation Agreement means the
Third Amended Salary Continuation Agreement dated as of the date of
this Agreement between the Bank and the Executive, as the same may
hereafter be amended. 1.8 Split Dollar Policy Endorsement
means the form required by the Administrator or the Insurer to
indicate the Executive’s interest, if any, in a Policy on
such Executive’s life. 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 the remaining death proceeds of the Policy after the
Executive’s interest is paid according to section 2.2 below.
2.2 Death Benefit . Provided the Executive’s death
occurs both before the Executive’s Separation from Service
and before the Executive attains age 65, at the Executive’s
death the Executive’s beneficiary designated in accordance
with the Split Dollar Policy Endorsement shall be entitled to
Policy proceeds in an amount equal to the lesser of ( x )
100% of the Net Death Proceeds or ( y ) $807,051 (the lesser
of the amounts specified in clauses ( x ) and ( y )
being referred to in this Agreement as the "Executive’s
Interest"). The Executive’s Interest shall be extinguished at
the earliest of the date of the Executive’s Separation from
Service, the date the Executive attains age 65, or the date on
which the Executive receives payment of the benefit provided under
the Salary Continuation Agreement for a Change in Control, and the
Executive’s beneficiary shall be entitled to no benefits
under this Agreement for the Executive’s death occurring
thereafter. The Executive shall have the right to designate the
beneficiary of the Executive’s Interest. 2.3 Option to
Purchase . Upon termination of this Agreement, the Bank shall
not sell, surrender, or transfer ownership of the Policy without
first giving the Executive or the Executive’s transferee the
option to purchase the Policy for a period of 60 days from
written notice of such intention. The purchase price shall be an
amount equal to the cash surrender value of the Policy. 2.4
Comparable Coverage . The Bank may replace the Policy with a
comparable insurance policy to cover the benefit provided under
this Agreement, in which case the Bank and the Executive shall
execute a new Split-Dollar Policy Endorsement for the comparable
insurance policy. 2.5 Internal Revenue Code Section 1035
Exchanges . The Executive recognizes and agrees that the Bank
may after this Agreement is adopted wish to exchange the Policy of
life insurance on the Executive’s life for another contract
of life insurance insuring the Executive’s life. Provided
that the Policy is replaced (or intended to be replaced) with a
comparable policy of life insurance, the Executive 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.
2
Article 3
Premiums 3.1 Premium Payment . The Bank shall pay any
premiums due on the Policy. 3.2 Economic Benefit . The
Administrator shall annually determine the economic benefit
attributable to the Executive based on the life insurance premium
factor for the Executive’s age multiplied by the aggregate
death benefit payable to the Executive’s beneficiary. The
"life insurance premium factor" is the minimum factor applicable
under guidance published pursuant to Treasury Reg. section
1.61-22(d)(3)(ii) or any subsequent authority. 3.3 Imputed
Income . The Bank shall impute the economic benefit to the
Executive on an annual basis by adding the economic benefit to the
Executive’s W-2, or if applicable, Form 1099.
Article 4
Assignment The Executive may irrevocably assign without
consideration all of the Executive’s interest in the Policy
and in this Agreement to any person, entity, or trust established
by the Executive or the Executive’s spouse. If the Executive
transfers all of the Executive’s interest in the Policy, 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 this Agreement.
Article 5
Insurer The Insurer shall be bound by the terms of the
Policy only. 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.
3
Article 6
Claims and Review Procedures 6.1 Claims Procedure .
Any person or entity who has not received benefits under this
Agreement that he or she believes should be paid (the "claimant")
shall make a claim for benefits as follows —
|
|
6.1.1
|
|
Initiation — written claim . The claimant initiates
a claim by submitting to the Administrator a written claim for
benefits. If the claim relates to the contents of a notice received
by the claimant, the claim must be made within 60 days after
the notice was received by the claimant. All other claims must be
made within 180 days after the date of the event that caused
the claim to arise. The claim must state with particularity the
determination desired by the claimant.
|
|
|
|
|
|
|
|
6.1.2
|
|
Timing of Administrator response . The Administrator
shall respond to the 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, before 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.
|
|
|
|
|
|
|
|
6.1.3
|
|
Notice of decision . If the Administrator denies part or
all of the claim, the Administrator shall notify the claimant in
writing of the denial. The Administrator shall write the
notification in a manner calculated to be understood by the
claimant. The notification shall set forth —
|
|
|
(a)
|
|
The specific reasons for the denial,
|
|
|
|
|
|
|
|
(b)
|
|
A reference to the specific provisions of this Agreement on
which the denial is based,
|
|
|
|
|
|
|
|
(c)
|
|
A description of any additional information or material
necessary for the claimant to perfect the claim and an explanation
of why i
|
|
