Exhibit 10.24
Split Dollar Insurance Agreement between the Company
and Brenton Life Insurance Trust for the benefit of
C. Robert Brenton, dated August 12, 1994.
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Split Dollar Insurance Agreement
Collateral Assignment
AGREEMENT, made and entered into this 12th day of August, 1994, by and
between Brenton Banks, Inc., Des Moines, Iowa ("Company"), and Brenton Life
Insurance Trust, an irrevocable trust, ("Owner") for the benefit of C. Robert
Brenton, Des Moines, Iowa.
WHEREAS, C. Robert Brenton is a valued Employee of the Company, and
Company wishes to provide additional inducement for C. Robert Brenton's
continued involvement with the Company, and as additional compensation,
Company wishes to assist C. Robert Brenton with respect to a personal life
insurance program by entering into this Split Dollar Insurance Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties hereto agree as follows:
1. Policy. The life insurance policy (the "Policy") with which this
Agreement deals is identified in Exhibit "A" attached hereto and by this
reference incorporated herein. In the event that this Agreement deals with
multiple life insurance policies, each policy shall be identified in a
separate Exhibit "A" attached hereto, and all references herein to the Policy
shall include all policies with respect to which a separate Exhibit "A" is
attached hereto.
2. Ownership. The Owner shall at all times be the owner of the
Policy, and shall have the sole right to exercise all ownership rights
granted to the owner by the terms of the Policy. It is the express intention
of the parties hereto to reserve to the Owner all rights in the Policy
granted by the terms of the Policy, including, but not limited to, the right
to borrow against the Policy, the right to assign the Owner's interest in the
Policy, the right to change the beneficiary of the Policy, the right to
exercise settlement options, and the right to surrender or cancel the Policy
(in whole or in part). The Company shall not have nor exercise any right in
and to the Policy which could in any way endanger, defeat or impair any of
the rights of the Owner in the Policy. The only rights in and to the Policy
granted to the Company shall be its security interest in the cash value of
the Policy and its right to receive a portion of the death benefit of the
Policy, all as provided herein.
3. Premiums. Premiums on the Policy shall be paid by the parties
hereto as set forth in Exhibit "B" attached hereto and by this reference
incorporate herein.
4. Interest of Company in the Policy. The Company's interest in the
Policy shall be limited to the following rights in the cash value and to a
portion of the death benefit of the Policy as set forth below:
a. In the event the Policy is totally surrendered or
canceled by the Owner, the Company shall receive from the
surrender proceeds of the Policy: (i) the aggregate amount
of cumulative premiums paid by the Company, plus (ii) an
amount, not less than zero, which is calculated by taking
5.2 percent per annum of the total amount of cumulative
premiums paid by the Company to date less $300,000.00
("Amount Due Company").
b. Upon the death of C. Robert Brenton, or, if the
Policy is a survivorship life insurance product, upon the
death of the survivor of C. Robert Brenton and C. Robert
Brenton's spouse, while the Policy remains in force, the
Company shall receive from the death benefit proceeds of
the Policy the Amount Due Company.
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c. In the event of the termination of this Agreement,
the Company shall be repaid by the Owner the Amount Due
Company.
d. In the event the Owner obtains a policy loan with
respect to the Policy or in the event the Policy is partially
surrendered and such loan or partial surrender causes the net
cash surrender value of the Policy to be a sum less than the
Amount Due Company, the Owner will repay to the Company a
portion of any Policy loan proceeds or partial surrender
proceeds to the Company so as to cause the net cash surrender
value of the Policy following the policy loan or partial
surrender to be equal to or exceed the Amount Due Company.
As used in this Agreement, the term "net cash surrender value" shall mean the
cash surrender value of the Policy, less the amount of any then existing
loans or withdrawals against the Policy obtained by the Owner. As used in
this Agreement, the term "the aggregate amount of cumulative premiums paid by
the Company" shall mean the aggregate amount of premiums paid by the Company
net of any repayment to the Company of such amount.
5. Collateral Assignment. Contemporaneously herewith the Owner has
assigned the Policy as collateral security to secure payment of the amounts
payable to Company identified herein under a form of Collateral Assignment
which has been filed with the insurance company issuing the Policy. In the
event of a total or partial surrender of the Policy, termination of this
Agreement or upon the death of C. Robert Brenton, or, if the Policy is a
survivorship life insurance product, upon the death of the survivor of C.
Robert Brenton and C. Robert Brenton's spouse, the amounts payable to the
Company identified herein shall be paid to the Company in accordance with the
terms of such Collateral Assignment.
6. Death of C. Robert Brenton. Upon the death of C. Robert Brenton,
or, if the Policy is a survivorship life insurance product, upon the death of
the survivor of C. Robert Brenton and C. Robert Brenton's spouse, the balance
of the death benefit under the Policy in excess of the amount payable to the
Company under the provisions hereof, if any, shall be paid directly to the
beneficiary or beneficiaries designated by the Owner in the manner and in the
amounts provided by the beneficiary designation of the Policy filed with the
insurance company issuing the Policy.
7. Termination. This Agreement may be terminated at any time upon the
mutual agreement of the parties hereto.
8. Assignment by Owner. In the event the Owner shall transfer all
interest in the Policy to a transferee, then all of the Owner's interest in
the Policy and in this Agreement shall be vested in the transferee, who shall
become a substituted party hereto and who shall become bound by the
provisions hereof, and the Owner shall have no further interest in the Policy
or in this Agreement.
9. Assignment by Company. The Company shall not assign any of its
rights in the Policy or in this Agreement to anyone other than the Owner (or
the Owner's transferee, if the Owner has transferred its rights in the
Policy) without the prior written consent of the Owner (or the Owner's
transferee, if the Owner has transferred its rights in the Policy). Any
attempted assignment or transfer by the Company in violation of this
paragraph shall be null and void and of no force and effect.
10. Insurer Liability. The insurance company which issues the Policy
shall not be deemed to be bound by the provisions of this Agreement nor to
have notice of the terms of this Agreement. Any and all liability of the
insurance company issuing the Policy shall be determined solely by reference
to the terms of the Policy, any applicable riders to the Policy, the
beneficiary designation with respect to the Policy, the Collateral Assignment
with respect to the Policy and any other documents filed with the insurance
company and accepted and acknowledged by the insurance company.
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11. Split Dollar Plan. This Agreement is intended to qualify the
ownership of the Policy as a collateral assignment method split dollar life
insurance employee benefit plan as described in Revenue Ruling 64-328, and
shall be administered so as to qualify as such a plan.
12. Entire Agreement. This Agreement constitutes the entire agreement
of the parties with respect to the subject matter hereof and cannot be
amended, altered, modified, except by a written instrument signed by each of
the parties hereto.
13. Notices. Any notice, consent or demand required or permitted to be
given under the provisions of this Agreement by one party to another shall be
in writing, shall be signed by the party giving the notice, and shall be
given either by delivery to the other party personally, or by mailing, by
United States certified mail, postage prepaid, to the other party, addressed
to the other party's last known mailing address as shown on the records of
the Company. In the event such notice is given by mailing, the date of
mailing shall be deemed the date of the giving of such notice, consent or
demand.
14. Binding on Successors and Assigns. This Agreement shall bind and
inure to the benefit of the parties and their respective heirs, successors
and assigns.
15. Governing Law. This Agreement shall be deemed made in the state of
Iowa Business Corporation Act, the this Agreement and the rights of the
parties hereunder shall be governed by and construed in accordance with the
laws of the state of Iowa Business Corporation Act.
16. Severability. In the event a particular provision of this
Agreement is held to be invalid under applicable law, effect shall
nevertheless be given to all valid provisions hereof to further the
objectives of this Agreement.
17. Interpretation. Where appropriate in this Agreement, words used in
the singular shall include the plural, and words used in the masculine or
neuter shall include the feminine.
18. Named Fiduciary and Plan Administrator. For the purposes of the
Employee Retirement Security Act of 1974 (ERISA), the Company shall be the
"Named Fiduciary" and Plan Administrator of the split dollar insurance plan
for which this Agreement is hereby designated the written plan instrument.
The Company, as Named Fiduciary, shall have authority to control and manage
the operation and administration of this Agreement, and it shall be
responsible for establishing and carrying out a funding policy and method
consistent with the objectives of this Agreement. Any decision by the
Company denying a claim for benefits under this Agreement shall be stated in
writing, set forth specific reasons for the denial, and be delivered or
mailed to the claimant. All claim procedures under this split dollar
insurance plan shall be performed in compliance with the requirements of
ERISA.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the year and date first above written.
Brenton Banks, Inc.
Company
By /s/ Steven T. Schuler
Its CFO/Treasurer/Sec.
177
Brenton Bank, N. A., Trustee of the
Brenton Life Insurance Trust
Owner
By /s/ Gary Ernst
Its Vice Pres. Sr. Trust Officer
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EXHIBIT "A"
Policy Number: 44209399
Issued by: Equitable Variable Life Insurance Company
Providing for initial death benefit proceeds of $3,500,000.
This policy is a survivorship life insurance policy on the lives of C.
Robert Brenton and Babette C. Brenton, C. Robert Brenton's wife, which pays
a death benefit only upon the death of the survivor of C. Robert Brenton and
Babette C. Brenton.
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EXHIBIT "B"
Premiums
The Company shall pay all of the premiums due on the Policy.
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Collateral Assignment
THIS ASSIGNMENT is made and entered into this ________ day of
________________________, ________, by the undersigned as owner (the "Owner")
of a certain life insurance policy number 44209399 (the "Policy") issued by
Equitable Variable Life Insurance Company (the "Insurer") upon the lives of
C. Robert Brenton and Babette C. Brenton, and Brenton Bank, Inc. (the
"Assignee").
WHEREAS, C. Robert Brenton ("Employee") is a valued Employee of the
Assignee, and
WHEREAS, Owner has entered into a Split Dollar Agreement with the
Assignee (the "Agreement"), and
WHEREAS, in consideration of the Assignee agreeing to make certain
premium payments, the Owner agrees to grant the Assignee a security interest
in the Policy as collateral security for the repayment of the cumulative
premiums paid by the Assignee.
NOW, THEREFORE, the undersigned Owner hereby assigns, transfers and sets
over to the Assignee the following specific rights in the Policy subject to
the following terms and conditions:
1. This Assignment is made, and the Policy is to be held, as
collateral security for all liabilities of the Owner to the Assignee, either
now existing or that may hereafter arise, pursuant to the terms of the
Agreement.
2. The Assignee's interest in the Policy shall be strictly limited to:
a. The right to be repaid from the surrender proceeds of
the Policy: (i) the aggregate amount of cumulative premiums paid
by the Company, plus (ii) an amount, not less than zero, which
is calculated by taking 5.2 percent per annum of the total amount
of cumulative premiums paid by the Company to date less $300,000.00
("Amount Due Company") in the event the Policy is totally surrendered
or canceled by the Owner.
b. The right to be repaid from the death benefit proceeds of
the Policy the Amount Due Company upon the death of the Employee,
or, if the Policy is a survivorship life insurance product, upon
the death of the survivor of the Employee and the Employee's
spouse, while the Policy remains in force.
c. The right to be repaid the Amount Due Company in the
event of the termination of the Agreement.
d. The right to be repaid a portion of any Policy loan
proceeds or partial surrender proceeds paid to the Assignee so
as to cause the net cash surrender value of the Policy to be
equal to or exceed the Amount Due Company in the event the Owner
obtains a Policy loan or in the event the Policy is partially
surrendered and such loan or partial surrender causes the net
cash surrender value of the Policy to be a sum less than the
Amount Due Company.
As used in this Assignment, the term "net cash surrender value" shall mean
the cash surrender value of the Policy, less the amount of any then existing
loans or withdrawals against the Policy obtained by the Owner. As used in
this Assignment, the term "the aggregate amount of cumulative premiums paid
by the Assignee" shall mean the aggregate amount of premiums paid by the
Assignee net of any repayment to the Assignee of such amount.
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3. The Owner shall retain all incidents of ownership in the Policy,
including, but not limited to, the sole and exclusive rights to: borrow
against the Policy; make withdrawals from the Policy; assign Owner interest
in the Policy; change the beneficiary of the Policy; exercise settlement
options; and, surrender or cancel the Policy (in whole or in part). All of
these incidents of ownership shall be exercisable by the Owner unilaterally
and without the consent of any other person.
4. The Assignee shall, upon request, if the Policy is in the
possession of the Assignee, forward the Policy to the Insurer, without
unreasonable delay, for change of beneficiary, any election of optional mode
of settlement, or the exercise of any other right reserved by the Owner.
5. The Insurer is hereby authorized to recognize the Assignee's
claims, including the validity or the amount of any liabilities of the Owner
to the Assignee under the Agreement, the existence of any default therein,
the giving of any notice required therein or herein, or the application to be
made by the Assignee of any amounts to be paid to the Assignee. Upon the
Insurer giving prior written notice to Owner of the proposed payment of
amounts to the Assignee, the receipt of the Assignee for any sums received by
it shall be a full discharge and release therefore to the Insurer.
6. The Insurer shall be fully protected in recognizing a request made
by the Owner for surrender or cancellation of the Policy, in whole or in
part, or in recognizing a request made by the Owner for any loans against the
Policy permitted by the terms of the Policy. In the event this request is
made, upon prior written notice thereof to the Assignee the Insurer may pay
the proceeds of any surrender, cancellation, or loan to the sole order of the
Owner, or as the Owner shall direct.
7. Upon the full payment of the liabilities of the Owner to the
Assignee pursuant to the Agreement, the Assignee shall execute an appropriate
release of this Collateral Assignment.
8. It is the express intention of the Owner to assign a limited
interest in the Policy to the Assignee as security for certain premium
payments made by the Assignee, without giving the Assignee any incidents of
ownership in the Policy within the meaning of section 2042 of the Internal
Revenue Code (and regulations thereunder), or any similar provision of
subsequent law. All provisions of this Collateral Assignment (and of the
Agreement) shall be construed and exercised so as to effect this intention.
IN WITNESS WHEREOF, the Owner and Assignee have executed this Assignment
and the Insurer has acknowledged its acceptance of this Assignment effective
the day and year first above written.
Brenton Bank, N.A. Trustee of the
Brenton Life Insurance Trust
Owner
By ________________________________________
Its _______________________________________
Brenton Banks, Inc.
Assignee
By ________________________________________
Its _______________________________________
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ACCEPTED:
Equitable Variable Life Insurance Company
Insurer
By ________________________________________
Its _______________________________________
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