Exhibit 10.e
Pages 131-135
SAMPLE OF FIRST BANCORP SENIOR MANAGEMENT
SPLIT-DOLLAR LIFE INSURANCE AGREEMENT
STATE OF NORTH CAROLINA
COUNTY OF MONTGOMERY
SPLIT DOLLAR LIFE INSURANCE AGREEMENT
This Agreement is entered into this ____ day of _____________, 20___, by and
between FIRST BANCORP, (hereinafter called the "Employer"), and ____________,
(hereinafter called the "Employee").
WHEREAS, the Employee is a valued Employee of the Employer and the Employer
wishes to retain him/her in its employ; and
WHEREAS, the Employer, as an inducement to such continued employment, wishes
to assist the Employee with his personal life insurance program;
NOW, THEREFORE, the Employer and the Employee agree as follows:
1. Description of the Policy - Policy Ownership.
---------------------------------------------
The Employee has purchased, or will purchase, a certain policy of life
insurance on the Employee's life, being Policy No. ________________ issued by
________________ Life Insurance Company (hereinafter called the "Insurer") in
the face amount of $100,000 (said policy being hereinafter called the "Policy").
The Employee shall be the sole owner of all rights and incidents of ownership in
the Policy and may exercise all ownership rights granted to the owner by the
terms of the Policy, except as otherwise may be provided herein and in the
Collateral Assignment attached hereto and marked Exhibit A.
2. Premium Payments.
----------------
After the execution of this Agreement, and during the term of this
Agreement, the Employer shall pay each premium on the Policy as it becomes due.
3. Policy Loans.
------------
The Employee shall have the sole right to obtain loans secured by the
Policy. While this Agreement remains in effect, the Employee agrees that the
total of any such loans shall not exceed the amount, if any, by which the cash
value of the Policy exceeds the total unreimbursed payments made by the Employer
toward premiums under the Policy.
4. Collateral Assignment.
---------------------
To secure the repayment to the Employer of the premium payments made
pursuant to Section 2, the Employee shall execute a Collateral Assignment of the
Policy and transfer possession of the Policy to the Employer. A copy of said
Collateral Assignment is attached hereto, marked Exhibit A and incorporated
herein by reference.
5. Payment of Policy Proceeds Upon Death of Employee.
-------------------------------------------------
In the event of the Employee's death, the Employer shall have an
interest in the Policy proceeds equal to the total amount of premiums paid
pursuant to Section 2 of this Agreement. The balance, if any, of the proceeds of
the Policy, shall be paid to the beneficiary designated in the Policy by the
Employee.
6. Procedures at Employee's Death.
------------------------------
Upon the death of the Employee while the Policy and this Agreement are
in force, the Employer shall promptly take all necessary steps, including
rendering of such assistance as may reasonably be required by the Employee's
beneficiary, to obtain payment from the Insurer of the amounts payable under the
Policy to the respective parties, as provided under Section 5 above.
7. Termination of Employment.
-------------------------
If the Employee terminates employment with the Employer, the Employer
will cease paying the premiums on the Policy. However, the Employee will have
the option of making the premium payments that become due subsequent to the date
of his/her termination of employment. If the Employee pays the premiums as they
become due, then this Agreement will continue in full force and effect.
8. Termination of Agreement.
------------------------
This Agreement shall terminate upon the occurrence of any of the
following events:
(a) the total cessation of the business of the Employer.
(b) bankruptcy, receivership, or dissolution of the
Employer.
(c) payment in full by the Employee to the Employer of
the total cumulative premiums paid by the Employer to
the Insurer pursuant to Section 2, reduced by any
amounts previously paid to the Employer by the
Employee.
(d) the Employee's failure to pay the premiums that
become due after termination of employment in
accordance with Section 7.
(e) performance of the Agreement's terms following the
death of the Employee in accordance with Section 5.
2
9. Disposition of Policy upon Termination of Agreement.
---------------------------------------------------
Upon the termination of this Agreement for any reason other than Section
8(c) or Section 8(e) above, the Employee shall have the option for 90 days of
obtaining the release of the Collateral Assignment of the Policy to the
Employer. To obtain such release, the Employee shall repay to the Employer the
total amount of unreimbursed premium payments made by the Employer pursuant to
Section 2. Upon receipt of such amount, the Employer shall release the
Collateral Assignment of the Policy.
If the Employee does not repay such amount to the Employer within the
time period provided above, the Employer may enforce its rights under the
Collateral Assignment but the Employee shall not be liable for any deficiency
realized by the Employer upon the exercise of the Employer's rights under the
Collateral Assignment.
10. Discharge of Insurer.
--------------------
The Insurer shall be fully discharged from its obligations under the
Policy by payment of the Policy death benefits to the beneficiary or
beneficiaries named in the Policy subject to the terms and conditions of the
Policy and the Collateral Assignment. In no event shall the Insurer be
considered a party to this Agreement, or to any modification or amendment
hereof. No provision of this Agreement, nor any modification or amendment
hereof, shall in any way be construed as enlarging, changing, varying or in any
other way affecting the obligations of the Insurer as expressly provided in the
Policy, except insofar as the provisions hereof are made a part of the Policy by
the Collateral Assignment.
11. Miscellaneous Provisions.
------------------------
(a) This Agreement may not be amended, altered or
modified except by a written instrument signed by the
parties hereto or their respective successors or
assigns and may not be otherwise terminated except as
provided herein.
(b) The interpretation and effect of this Agreement shall
be governed by the laws of the State of North
Carolina.
(c) This Agreement shall be binding upon and shall inure
to the benefit of the Employer, Employee and their
respective successors and assigns.
IN WITNESS WHEREOF, the parties have executed multiple originals of this
Agreement as of the day and year first above written.
EMPLOYER:
[CORPORATE SEAL] FIRST BANCORP
Attest: By: _______________________
President
- ------------------------
Secretary
EMPLOYEE:
----------------------------
3
EXHIBIT A
SPLIT DOLLAR COLLATERAL ASSIGNMENT
A. For Value Received, __________________ (the "Assignor") hereby
assigns, transfers and sets over to First Bancorp, a North
Carolina corporation (the "Assignee"), as the interest of such
Assignee may appear, Policy No. _________________ issued by
________________ Life Insurance Company (the "Insurer") and
any supplementary contracts issued in connection therewith
(said policy and contracts being herein called the "Policy")
upon the life of ________________ (the "Insured"), subject to
all the terms and conditions of the Policy and to all superior
liens, if any, which the Insurer may have against the Policy.
The Assignor by execution of this Agreement agrees and the
Assignee by the execution and acceptance of this Assignment
agrees to the conditions and provisions herein set forth.
B. It is expressly agreed that the only specific right which
passes by virtue of this Assignment to Assignee is the right
of Assignee to collect from the Insurer Assignee's Interest
(as hereinafter defined) from the cash surrender value or
other proceeds or payments under the Policy upon the death of
the Insured or upon the earlier termination of that certain
Split Dollar Life Insurance Agreement dated _______________ by
and between Assignor and Assignee (the "Split Dollar
Agreement").
C. It is expressly agreed that all rights not specifically set
forth in paragraph B of this Assignment are reserved and
excluded from this Assignment and do not pass by virtue
hereof.
D. This Assignment is made and the Policy is to be held as
collateral security for the repayment of certain amounts
heretofore or hereafter advanced by the Assignee pursuant to
the Split Dollar Agreement.
E. The Assignee covenants and agrees with the Assignor as
follows:
1. That the Assignee will upon request forward without
unreasonable delay to the Insurer a signed statement
of the total of Assignee's Interest in the Policy
under the Split Dollar Agreement. The Assignee's
Interest in the Policy under the Split Dollar
Agreement as of any determination date shall be an
amount equal to the total cumulative premiums paid by
the Assignee to the Insurer through such
determination date pursuant to the provisions of
Section 2 of the Split Dollar Agreement reduced by
the premiums reimbursed to Assignee by the Assignor
prior to such determination date.
2. That the Assignee will upon request forward without
unreasonable delay to the Insurer the Policy for
necessary endorsements including, but not limited to,
endorsement or a designation or change of beneficiary
or election of an optional mode of settlement.
3. That the Assignee will forward without unreasonable
delay to the Insurer a formal Statement of Release of
this Assignment if the Split Dollar Agreement is
terminated for any reason and the obligation which
this Assignment secures is satisfied in accordance
with the terms of the Split Dollar Agreement.
F. The Insurer is hereby authorized to recognize the Assignee's
claims to rights hereunder without investigating the reason
for any action taken by the Assignee, or the validity or the
amount due to the Assignee under the Split Dollar Agreement,
4
or the application to be made by the Assignee of any amounts
to be paid to the Assignee. The sole signature of an officer
of Assignee shall be sufficient for the exercise of those
rights in the Policy which have been assigned hereby, and
checks for all amounts claimed by the Assignee by reason of
this Assignment shall be drawn to the exclusive order of the
Assignee. The Insurer may accept and rely upon the signed
statement of the Assignee as conclusive evidence of the extent
of the Assignee's collateral interest, and the receipt by the
Assignee of the sums claimed hereunder and paid by the Insurer
shall be a complete release and discharge to the Insurer to
the extent of such payment.
G. The Assignee may take or release other security, may grant
extensions, renewals or indulgences with respect to the
amounts due it under the Split Dollar Agreement, or may apply
to such amounts due it in such order as the Assignee shall
determine, the proceeds of the Policy hereby assigned or any
amount received on account of the Policy by the exercise of
any right permitted under this Assignment without resorting to
other security.
H. The Assignor declares that no proceedings in bankruptcy are
pending against him/her and that his/her property is not
subject to any assignment for the benefit of creditors.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment this
____ day of _____________, 20___.
ASSIGNEE:
FIRST BANCORP
Attest: By: _______________________
President
- ------------------------
Secretary
ASSIGNOR:
5