Exhibit 10.14(b)
Execution Copy
AMENDED AND RESTATED IPSWICH IRREVOCABLE INSURANCE TRUST
This AGREEMENT made the 21st day of February, 1996 and amended and
restated as of May 18, 1999, by and between Ipswich Savings Bank, Ipswich,
Massachusetts ("the Company") and Eastern Bank, Lynn, Massachusetts (the
"Trustee").
WHEREAS, David L. Grey, an employee of the Company (the "Employee"), has
established a life insurance program under Policy No. N100136450 issued by
Nationwide Life Insurance Company (the "Policy");
WHEREAS, the Company has entered into a so-called Split Dollar Agreement
(as amended from time to time, the "Split Dollar Agreement") pursuant to which
it has agreed to contribute to an insurance trust amounts necessary to pay the
premiums due on said Policy until the retirement or earlier termination of its
obligations under said Split Dollar Agreement;
WHEREAS, pursuant to the Split Dollar Agreement the Employee has
assigned the Policy to said insurance trust for the the purpose of providing
security for the repayment, under certain circumstances, of the "Secured
Obligations" (as such term is defined in that certain Amended and Restated
Assignment of Life Insurance Policy as Collateral in favor of the Trustee dated
as of February 21, 1996 and subsequently amended and restated (the "Collateral
Assignment"); and
WHEREAS, the Company wishes to amend and restate the provisions of this
insurance trust (the "Trust") so as to reflect its revised obligations under the
Split Dollar Agreement; and
WHEREAS, pursuant to its obligations under the Split Dollar Agreement
the Company wishes to continue to contribute to the Trust assets that shall be
held therein, subject (but only to the extent of the Company's rights therein)
to the claims of the Company's creditors in the event of the Company's
Insolvency, as herein defined, until paid to the Employee and his beneficiaries
in such manner and at such times as specified in the Split Dollar Agreement;
NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
1 Section . ESTABLISHMENT OF TRUST
(a) The Company shall, at least on an annual basis, make or cause to be
made contributions to the Trust of cash or property, including insurance
contracts and/or marketable securities, which are acceptable to the Trustee and
which shall become the principal of the Trust to be held, administered and
disposed of by the Trustee as provided in this Trust and the Split Dollar
Agreement. The Company, in its sole discretion, may at any time, or from time to
time, make deposits of cash or other property into the Trust in addition to
those amounts required hereunder; neither the Trustee nor the Employee or any
beneficiary shall have any right to compel such additional deposits.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which the Company is
the grantor, within the meaning of subpart E, part 1, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
(d) The principal of the Trust, and any earnings thereon, shall be held
separate and apart from other funds of the Company and shall be used exclusively
for the uses and purposes of the Employee and (but only to the extent of the
Company's rights therein) the Company's general creditors as herein set forth.
The Employee and his beneficiaries shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust until such time as the
Secured Obligations have been satisfied. Any rights created under the Split
Dollar Agreement to cause the Company to make payments with respect to premiums
due or to become due under this Policy or this Trust Agreement shall be mere
unsecured contractual rights of the Employee and his beneficiaries against the
Company. To the extent of the Company's rights therein, any assets held by the
Trust will be subject to the claims of the Company's general creditors under
Federal and state law in the event of Insolvency, as defined in Section 3(a)
herein.
(e) The following provision shall govern the operation of this Trust,
and the provisions of this Section 1(e) shall supersede and control over any
conflicting provision of this Trust. The parties recognize and agree that this
Trust has been created solely to fund and secure payment of the Secured
Obligations and that in order to provide such security the Policy (which is and
shall remain property of the Employee) has been deposited in this Trust. The
general creditors of the Company shall have no rights in or with respect to
Trust assets other than the right, under the limited conditions described in
this Trust, to receive such Premium Reimbursements (as such term is defined in
the Split Dollar Agreement) as may constitute Secured Obligations. To the extent
the Trustee shall at any time have an obligation to make funds available to such
general creditors to satisfy such Secured Obligations, it shall first distribute
any assets held by the Trust other than the Policy. If after such distribution
the Secured Obligations shall remain unsatisfied, the Trustee shall notify the
Employee and cooperate reasonably with any proposal that the Employee may offer
to provide assets (other than the Policy) for distribution so as to minimize the
potential economic loss that a distribution from the Policy might cause to the
Employee . Once the Secured Obligations have been satisfied, any remaining
assets in the Trust shall be returned to the Employee or his heirs, and the
creditors of the Company shall have no further rights in and to any Trust
assets.
2 Section . PAYMENT OF PREMIUM REIMBURSEMENT
(a) The Trustee shall promptly pay over to the Company the Premium
Reimbursement (as defined in Section 5.1 of the Split Dollar Agreement) in the
event of termination of the Split Dollar Agreement pursuant to Sections 7.1(a)
or 7.1(b) thereof.
(b) The Trustee shall promptly pay over to the Company any Premium
Reimbursement received by it pursuant to Section 5.2 or 5.3 of the Split Dollar
Agreement in the event of termination thereof pursuant to Section 7.1(c)
thereof.
(c) The Trustee shall promptly pay over to the Company any Premium
Reimbursement received by it under Section 6.1, Part One, of the Split Dollar
Agreement by virtue of the death of the Employee.
(d) The Trustee shall make provision for the reporting and withholding
of any Federal, state or local taxes that may be required to be so withheld with
respect to any payment pursuant to the terms of the Split Dollar Agreement and
shall pay amounts withheld to the appropriate taxing authorities or determine
that such amounts have been reported, withheld and paid by the Company.
3 Section . TRUSTEE RESPONSIBILITY WHEN COMPANY IS INSOLVENT
(a) The Company shall be considered "Insolvent" for purposes of this
Trust Agreement if (i) the Company is unable to pay its debts as they become
due, or (ii) a receiver is appointed for the Company by the Commissioner of
Banks of Massachusetts or the Federal Deposit Insurance Corporation.
(b) At all times during the continuance of this Trust, as provided in
Section 1(e) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of the Company under Federal and state law as set
forth below.
(1) The Board of Directors and the Chief Executive Officer of
the Company shall have the duty to inform the Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of the
Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company has become
Insolvent and, pending such determination, the Trustee shall discontinue
payment of amounts to the Employee or his beneficiaries.
(2) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person claiming
to be a creditor alleging that the Company is Insolvent, the Trustee
shall have no duty to inquire whether the Company is Insolvent. The
Trustee may in all events rely on such evidence concerning the Company's
solvency as may be furnished to the Trustee and that provides the
Trustee with a reasonable basis for making a determination concerning
the Company's solvency.
(3) If at any time the Trustee has determined that the Company
is Insolvent, the Trustee shall hold its interest in the cash surrender
value of the Policy pursuant to Article V of the Split Dollar Agreement
for the benefit of the Company's general creditors. Nothing in this
Trust Agreement shall in any way diminish any rights of the Employee or
his beneficiaries to pursue their rights as general creditors of the
Company with respect to benefits due under the Split Dollar Agreement or
otherwise.
(4) The Trustee shall resume its obligations to the Employee and
his beneficiaries in accordance with Section 2 of this Trust Agreement
only after the Trustee has determined that the Company is not Insolvent
(or is no longer Insolvent).
4 Section . PAYMENT TO COMPANY
(a) Except as provided in Sections 2 and 3 hereof, the Company shall
have no right or power to direct the Trustee to return to the Company or to
divert to the Company or to divert to others any of the Trust assets before all
payments of amounts due have been made to the Employee and his beneficiaries
pursuant to the terms of the Split Dollar Agreement.
5 Section . INVESTMENT AUTHORITY
(a) In no event may the Trustee invest in securities (including stock or
rights to acquire stock) or obligations issued by the Company, other than a de
minimis amount held in common investment vehicles in which the Trustee invests.
All rights associated with assets of the Trust shall be exercised by the Trustee
or the person designated by the Trustee, and shall in no event be exercisable by
or rest with the Employee.
(b) The Trustee shall have the additional power in its discretion:
(1) To exercise all voting rights with respect to the shares of
stock held in the Trust and to grant proxies, discretionary or
otherwise;
(2) To cause any shares of stock to be registered and held in
the name of one or more of its nominees, or one or more nominees of any
system for the central handling of securities, without increase or
decrease of liability;
(3) To collect and receive any and all money and other property
due to the Trust and to give full discharge therefor;
(4) To settle, compromise or submit to arbitration any claims,
debts or damages due or owing to or from the Trustee; or commence or
defend suits or legal proceedings to protect any interest of the Trust;
and to represent the Trust in all suits or legal proceedings in any
court or before any other body or tribunal;
(5) To organize under the laws of any state a corporation for
the purpose of acquiring and holding title to any property which it is
authorized to acquire under this Agreement and to exercise with respect
hereto and, or all of the powers set forth in this Agreement;
(6) To determine how all receipts and disbursements shall be
credited, charged or apportioned as between income and principal; and
(7) Generally to do all acts, whether or not expressly
authorized, which the Trustees may deem necessary or desirable for the
protection of the Trust.
6 Section . DISPOSITION OF INCOME
(a) During the term of this Trust, all income received by the Trust, net
of expenses, shall be accumulated and reinvested.
7 Section . ACCOUNTING BY TRUSTEE
The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between the
Company and the Trustee. Within 90 days following the close of each calendar
year and within 60 days after the removal or resignation of the Trustee, the
Trustee shall deliver to the Company a written account of its administration of
the Trust during such year or during the period from the close of the last
preceding year to the date of such removal or resignation, setting forth all
investments, receipts, disbursements and other transactions affected by it,
including a description of all securities and investments purchased and sold
with the cost or net proceeds of such purchases or sales (accrued interest paid
or receivable being shown separately), and showing all cash, securities and
other property held in the Trust at the end of such year or as of the date of
such removal or resignation, as the case may be.
8 Section . RESPONSIBILITY OF TRUSTEE.
(a) The Trustee shall act with the care, skill, prudence, and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use, in the conduct of an
enterprise of a like character and with like aims, provided, however, that the
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by the Company which is contemplated by,
and in conformity with, the terms of the Plan or this Trust and is given in
writing by the Company. In the event of a dispute between the Company and a
party, the Trustee may apply to a court of competent jurisdiction to resolve the
dispute.
(b) If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the Trustee against
the Trustee's costs, expenses and liabilities (including, without limitation,
attorney's fees and expenses) relating thereto and to be primarily liable for
such payments. If the Company does not pay such costs, expenses and liabilities
in a reasonably timely manner, the Trustee may obtain payment from the Trust.
(c) The Trustee may consult with legal counsel (who may also be counsel
for the Company generally) with respect to any of its duties or obligations
hereunder.
(d) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
the Trustee shall have no power to name a beneficiary of the policy other than
the Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.
(f) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or to applicable law, the Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
9 Section . COMPENSATION AND EXPENSES OF TRUSTEE
The Company shall pay all administrative and Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid from the Trust.
10 Section . RESIGNATION AND REMOVAL OF TRUSTEE
(a) The Trustee may resign at any time by written notice to the Company,
which shall be effective 60 days after receipt of such notice unless the Company
and the Trustee agree otherwise.
(b) The Trustee may be removed by Company on 30 days' notice or upon
shorter notice accepted by the Trustee.
(c) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within 60 days after receipt of notice
of resignation or removal and the successor Trustee acceptance of appointment
unless Company extends the time limit.
(d) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraph (a) or (b) of this section. If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses of
the Trustee in connection with the proceeding shall be allowed as administrative
expenses of the Trust.
11 Section . APPOINTMENT OF SUCCESSOR
(a) If the Trustee resigns or is removed in accordance with section
10(a) or (b) hereof, the Company shall appoint any third party, such as a bank
trust department or other party that may be granted corporate trustee powers
under state law, as a successor to replace the Trustee upon resignation or
removal. The appointment shall be effective when accepted in writing by the new
trustee who shall have all the rights and powers of the former trustee,
including ownership rights in the Trust assets. The former trustee shall execute
any instrument necessary or reasonably requested by the Company or the successor
trustee to evidence the transfer.
(b) The successor trustee need not examine the records and acts of any
prior trustee, and may retain or dispose of existing Trust assets, subject to
Sections 7 and 8 hereof. The successor trustee shall not be responsible for and
Company shall indemnify and defend the successor trustee from any claim or
liability resulting from any action or inaction of any prior trustee or from any
other past event, or any condition existing at the time it becomes successor
trustee.
(c) AMENDMENT OR TERMINATION
(d) This Trust Agreement may be amended by a written instrument executed
by the Trustee and the Company. Notwithstanding the foregoing, no such amendment
shall conflict with the terms of the Split Dollar Agreement or shall make the
Trust revocable.
(e) The Trust shall terminate upon the termination of the Split Dollar
Agreement and the distribution of all proceeds from the Policy as directed
herein or in the Split Dollar Agreement. Any funds remaining after the
distribution of all proceeds of the policy to which the Employee is entitled
shall be distributed to the Company.
Section 12. MISCELLANEOUS
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to the Employee and his beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts, unless otherwise
preempted by any applicable federal law.
Section 13. NOTICES
Any notice or communication which the Company or Trustee may be required
or may desire to give to the other party under any provision of this Trust
Agreement shall be given in writing and personally delivered to, or mailed,
faxed or delivered by overnight courier service to the address given below:
If to the Company:Ipswich Savings Bank
Market Street
Ipswich, Massachusetts 01938
Attention: Chairman
If to the Trustee: Eastern Bank
270 Union Street
Lynn, Massachusetts 01901
Attention:
Any notice which is personally delivered shall be deemed to have been
given on the date it is personally delivered. Any notice which is mailed shall
be deemed to have been given on the third business day after deposit in the
mail, registered or certified mail, postage prepaid and return receipt
requested. Any notice which is delivered by overnight courier service shall be
deemed to have been given on the business day after deposit with such courier
service. Any notice which is transmitted by facsimile shall be deemed to have
been given on the day that such notice is transmitted.
The Company or Trustee may change the address to which notices, requests
and other communications are to be sent to it by giving written notice of such
address change to the other party in conformity with this Section 14, but such
change shall not be effective until notice of such change has been received by
the other party.
Section 14. EFFECTIVE DATE
The effective date of this Trust Agreement shall be February 21, 1996.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized offices and their respective seals to be
hereunto affixed as of the day and year first above written.
IPSWICH SAVINGS BANK
By:
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Its:
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EASTERN BANK, Trustee
By:
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Its:
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