EXECUTIVE LIFE INSURANCE AGREEMENT
Policy No. ("Policy") Insurer ("Insurer)
- --------------------- ------------------
__________ Mass Mutual Life Insurance Co.
__________ Northwestern Mutual Life Insurance Co.
Bank: Millington Savings Bank, Millington, New Jersey ("Bank")
Insured: __________________
Relationship of Insured to Bank: Executive
The respective rights and duties of the Bank and the Insured in the
above-referenced policy shall be pursuant to the terms set forth below:
I. DEFINITIONS
Refer to the policy contract for the definition of all terms in this
Agreement, which contract is incorporated by reference.
II. POLICY TITLE AND OWNERSHIP
Title and ownership of the Policies referenced above 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 subject 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.
III. BENEFICIARY DESIGNATION RIGHTS
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, subject to any right or
interest the Bank may have in such proceeds, as provided in this
Agreement.
IV. PREMIUM PAYMENT METHOD
The Bank shall pay an amount equal to the planned premiums and any
other premium payments that might become necessary to keep the policy
in force. Notwithstanding the foregoing, the Bank shall have the
absolute and sole right to terminate and surrender the policy that is
the subject matter of this Agreement.
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V. TAXABLE BENEFIT
Annually, the Insured will recognize a taxable benefit equal to the
assumed cost of insurance as required by the Internal Revenue Service
("IRS"), as determined from time to time. The Bank (or its
administrator) will report to the Insured the amount of such imputed
income each year on IRS Form W-2 or its equivalent.
VI. DIVISION OF DEATH PROCEEDS
Subject to Paragraphs VII and X herein, the division of the death
proceeds of the Policy is as follows:
A. If the Insured is:
i) employed by the Bank at the time of his or her death,
ii) has retired from employment with the Bank after completion
of not less than twenty (20 years of service with the Bank,
or
iii) has retired from employment with the Bank and at such date
of retirement the sum of the Insured's age and years of
service equals not less than 70 (subparagraph (ii) or (iii)
constituting "Retirement"),
then the Insured's Beneficiary(ies), designated in accordance
with Paragraph III, shall be entitled to payment from the Policy
proceeds directly from the Insurer of an amount equal to two (2)
hundred percent (200%) of:
1) the Insured's highest annual base salary (not including
bonus, equity compensation, deferred compensation or
any other forms of compensation) in effect at the Bank
at any time during the three calendar years prior to
the date of death of the Insured (if the Insured is
employed by the Bank at the time of death), or
2) the Insured's highest annual base salary (not including
bonus, equity compensation, deferred compensation or
any other forms of compensation) paid by the Bank to
the Insured during the three calendar years prior to
the date of Retirement of the Insured (if the Insured's
death shall follow the Retirement of the Insured).
Notwithstanding the foregoing, the maximum payment due the
Insured's beneficiary(ies) from the Insurer due under this
Agreement and the sum of all of the Policies noted above shall
not exceed $_______ in the aggregate. To the extent possible, an
equal amount of each Policy's proceeds shall be payable to the
Insured's Beneficiary(ies), not to exceed such Policy proceeds.
Any amount payable in accordance with Section V1.A in excess of a
Policy's proceeds shall thereafter be paid by any remaining
Policies proceeds pro rata.
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B. Subject to the obligations set forth therein, the Bank shall
be entitled to the remainder of such Policy proceeds.
VII. OWNERSHIP OF THE CASH SURRENDER VALUE OF THE POLICY
The Bank shall at all times be entitled to one hundred percent (100%)
of the Policy's cash value, as that term is defined in the Policy
contract, less any policy loans and unpaid interest or cash withdrawals
previously incurred by the Bank. Such cash value shall be determined as
of the date of surrender or death as the case may be.
VIII. CHANGE OF CONTROL OF BANK
If a Change of Control of the Bank shall occur prior to the Insured's
termination of employment or Retirement, then the death benefit
coverage set forth in Section VI shall remain in effect until the
Insured's death, unless this Agreement is otherwise terminated pursuant
to its terms prior to such date of a Change in Control. Coverage under
this Agreement for the Insured who terminates employment with the Bank
(for reasons other than death or a Change in Control of the Bank) prior
to completion of at least [ten] years of service with the Bank (and
prior to the occurrence of a Change of Control) will cease on his or
her last day of employment with the Bank.
For purposes of the above, A "Change of Control" shall mean: (i) the
sale of all, or substantially all, of the assets of the Bank or any
Parent corporation ("Parent"); (ii) the merger or recapitalization of
the Bank or the parent whereby the Bank or the Parent is not the
surviving entity; (iii) a change in control of the Bank or the Parent,
as otherwise defined or determined by the Office of Thrift Supervision
or regulations promulgated by it; or (iv) the acquisition, directly or
indirectly, of the beneficial ownership (within the meaning of that
term as it is used in Section 13(d) of the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder) of
twenty-five percent (25%) or more of the outstanding voting securities
of the Bank or Parent by any person, trust, entity or group. This
limitation shall not apply to the purchase of shares by underwriters in
connection with a public offering of the Parent stock, or the purchase
of shares of up to twenty-five percent (25%) of any class of securities
of the Parent by a tax-qualified employee stock benefit plan. The term
"person" refers to an individual or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization or any other form of entity not
specifically listed herein. The decision of the Board as to whether a
change in control has occurred shall be conclusive and binding.
However, a Change in Control shall not be deemed to have occurred as a
result of (i) a holding company reorganization of the Bank and
simultaneous acquisition of more than 50% of the Bank's stock
(following the Bank's conversion to stock form) by a Parent, (ii) the
reorganization of the Bank into a new holding company form whereby the
Parent shall own 100% of the stock of the Bank and public stockholders
shall own 100% of the Parent common stock, or (iii) the issuance of
shares of Bank or Parent common stock to the public shareholders,
provided that a
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majority of the voting stock of the Bank or Parent are owned by a
mutual holding company in accordance with regulations of the State of
New Jersey Department of Banking and Insurance or other applicable
banking regulatory agency.
IX. RIGHTS OF INSURED OR ASSIGNEES
The Insured may not, without the written consent of the Bank, assign
to any individual, trust or other organization, any right, title or
interest in the subject Policy nor any rights, options, privileges or
duties created under this Agreement, other than the right to name a
Beneficiary(ies) from time to time.
X. TERMINATION OF AGREEMENT
This Agreement shall terminate upon the occurrence of any one of the
following:
A. The Insured shall be discharged from employment with the Bank
"for cause." The term "for cause" shall include termination
because of the Participant's personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses)
or final cease-and-desist order, or material breach of any
provision of the Plan; or
B. Surrender, lapse, or other termination of the Policy by the
Bank. The Policy (and all rights of the Insured and his/her
beneficiaries) will also terminate if any regulatory agency
requires the Bank to sever its relationship with the
Executive, if the Bank is subjected to banking regulatory
restrictions limiting its ability to pay such compensation to
the Insured, upon the occurrence of the bankruptcy,
insolvency, receivership or dissolution of the Bank, or as may
otherwise be determined by the Bank in good faith.
Upon such termination, the Insured (or assignee) shall have a
fifteen (15) day right to elect to receive from the Bank an
absolute assignment of the policy in consideration of a cash
payment from the Insured to the Bank, whereupon this Agreement
shall terminate. Such cash payment referred to hereinabove
shall be equal to the cash value of the policy on the date of
such assignment, as defined in this Agreement.
If, within said fifteen (15) day period, the Insured fails to
exercise said option, fails to procure the entire aforestated
cash payment, or dies, then the option shall terminate and the
Insured (or assignee) agrees that all of the Insured's rights,
interest and claims in the policy shall terminate as of the
date of the termination of this Agreement.
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The Insured expressly agrees that this Agreement shall
constitute sufficient written notice to the Insured of the
Insured's option to receive an absolute assignment of the
policy as set forth herein.
Except as provided above, this Agreement shall terminate upon
distribution of the death benefit proceeds in accordance with
paragraph VI above.
XI. AGREEMENT BINDING UPON THE PARTIES
This Agreement shall bind the Insured and the Bank, their heirs,
successors, personal representatives and assigns.
XII. GENDER
Whenever in this Agreement words are used in the masculine or neuter
gender, they shall be read and construed as in the masculine, feminine or
neuter gender, whenever they should so apply.
XIII. INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT
The Insurer shall not be deemed a party to this Agreement, but will respect
the rights of the parties as herein developed upon receiving an executed
copy of this Agreement. Payment or other performance in accordance with the
policy provisions shall fully discharge the Insurer from any and all
liability.
XIV. AMENDMENT OR REVOCATION
It is agreed by and between the parties hereto that, during the lifetime of
the Insured, this Agreement may be amended or revoked at any time or times,
in whole or in part, by the mutual written consent fo the Insured and the
Bank.
XV. EFFECTIVE DATE
The Effective Date of this Agreement shall be January 1, 2004.
XVI. SEVERABILITY AND INTERPRETATION
If a provision o f this Agreement is held to be invalid or unenforceable,
the remaining provisions shall nonetheless be enforceable according to
their terms. Further, in the event that any provision is held to be
overbroad as written, such provision shall be deemed amended to narrow its
application to the extent necessary to make the provision enforceable
according to law and enforced as amended.
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XVII. APPLICABLE LAW
The validity and interpretation of this Agreement shall be governed by
the laws of the State of New Jersey.
XVIII. ERISA PROVISIONS
The following provisions regarding the name fiduciary, the funding policy, the
payment of benefits, and the claims procedure are part of this Agreement and are
intended to meet the requirements of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"):
a) The Bank shall be the name fiduciary for purposes of ERISA and
this Agreement.
b) All premiums paid with respect to the Policy shall be remitted to
the Insurer when due in accordance with the Agreement.
c) Benefits under this Agreement shall be paid directly by the
Insurer, with those benefits in turn being based on the payment
of premiums as provided in the Agreement.
d) For the purposes of handling claims with respect to this
Agreement, the "Claims Reviewer" shall be the Bank, unless
another person or organizational unit is designated by the Bank
as Claims Reviewer.
e) An initial claim for benefits under the Agreement must be made by
the Insured or his or her beneficiary in accordance with the
terms of the Agreement or policy through which the benefits are
provided. Not later than 90 days after receipt of such a claim,
the Claims Reviewer will render a written decision on the claim
to the claimant, unless special circumstances require the
extension of such 90-day period. If such extension is necessary,
the Claims Reviewer shall provide the Insured or the Insured's
beneficiary with written notification of such extension before
the expiration of the initial 90-day period. Such notice shall
specify the reason or reasons for such extension and the date by
which a final decision can be expected. In no event shall such
extension exceed a period of 90 days from the end of the initial
90-day period. In the event the Claims Reviewer denies the claim
of a Insured or the Insured's beneficiary in whole or in part,
the Claims Reviewer's written notification shall specify, in a
manner calculated to be understood by the claimant, the reason
for the denial; a reference to the Agreement or insurance policy
that is the basis for the denial; a description of any additional
material or information necessary for the claimant to perfect the
claim; an explanation as to why such information or material is
necessary; and an explanation of the applicable claims procedure.
Should the claim be denied in whole or in part and should the
claimant be dissatisfied with the Claims Reviewer's disposition
of the claimant's claim, the claimant may have a full and fair
review of the claim by the Bank upon written request therefor
submitted by the claimant or the claimant's duly authorized
representative and received by the
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Bank within 60 days after the claimant receives written
notification that the claimant's claim has been denied. In
connection with such review, the claimant or the claimant's duly
authorized representative shall be entitled to review pertinent
documents and submit the claimant's views as to the issues, in
writing. The Bank shall act to deny or accept the claim within 60
days after receipt of the claimant's written request for review
unless special circumstances require the extension of such 60-day
period. If such extension is necessary, the Bank shall provide
the claimant with written notification of such extension before
the expiration of such initial 60-day period. In all events, the
Bank shall act to deny or accept the claim within 120 days of the
receipt of the claimant's written request for review. The action
of the Bank shall be in the form of a written notice to the
claimant and its contents shall include all of the requirements
for action on the original claim. In no event may a claimant
commence legal action for benefits the claimant believes are due
the claimant until the claimant has exhausted all of the remedies
and procedures afforded the claimant by this Section XVIII.
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Executed at the offices of the Bank, in Millington, New Jersey, this ____ day of
____________, 200__.
Millington Savings Bank
______________________________ By: ____________________________
Witness Title: ____________________________
______________________________ By: ____________________________
Witness Title: ____________________________
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MILLINGTON SAVINGS BANK
EXECUTIVE LIFE INSURANCE AGREEMENT
BENEFICIARY DESIGNATION
Beneficiary Form / / New / / Change
- ----------------
________________________________________________________________________________
Name (last, first, middle initial) Social Security
Number
________________________________________________________________________________
Address
________________________________________________________________________________
Date of Hire Date of Birth
A. BENEFICIARY DESIGNATIONS
At my death, I direct that the beneficiary under the Executive Life Insurance
Agreement with Millington Savings Bank be paid to my primary beneficiary or
beneficiaries. If none of my primary beneficiaries are living, please pay my
accounts to my secondary beneficiary.
________________________________________________________________________________
Primary Beneficiary Relationship
________________________________________________________________________________
Address
________________________________________________________________________________
Secondary Beneficiary Relationship
________________________________________________________________________________
Address
MARITAL STATUS: / / Married / / Single
B. EXECUTIVE AUTHORIZATION
I understand that the beneficiary elections made above will remain in effect
until I file a Change Form with the Bank.
__________________________________________________________________
Date