Exhibit 10.5
AMENDMENT
TO THE EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN AGREEMENT DATED JANUARY 1,
1999 AND THE LIFE INSURANCE ENDORSEMENT METHOD SPLIT DOLLAR
AGREEMENT DATED JANUARY 1, 1999
This Amendment, made and entered into this 30 day November, 2000, by
and between The Centreville National Bank of Maryland, a Bank organized and
existing under the laws of the State of Maryland, hereinafter each referred to
as a, "Bank", and Daniel T. Cannon, a Key Employee and Executive of the Bank,
hereinafter referred to as the, "Executive", shall effectively amend the
Executive Supplemental Retirement Plan Agreement and the Life Insurance
Endorsement Method Split Dollar Agreement both dated January 1, 1999 as
specifically set forth herein pursuant to the terms of said agreements.
The agreements shall be amended as follows:
1.) Subparagraph III (C) Termination of Service, contained in the Executive
Supplemental Retirement Agreement shall be deleted in its entirety and
replaced with the following:
C. Termination of Service:
Subject to Subparagraph III (E) hereinafter, should the Executive
suffer a termination of service [defined in Subparagraph I (E)],
he shall be entitled to receive the balance in the Pre-Retirement
Account paid over ten (10) years in equal installments commencing
at the Normal Retirement Age [Subparagraph I (K)]. In addition to
these payments, and commencing in the year in which the Executive
attains his Normal Retirement Age, the Index Retirement Benefit
for each year shall be paid to the Executive until his death.
2.) Subparagraphs VI (A), (B), (C) and (D), Division of Death Proceeds,
contained in the Life Insurance Endorsement Method Split Dollar Plan
Agreement shall be deleted in its entirety and replaced with the
following:
A. Upon the death of the Insured, the Insured's beneficiary(ies),
designated in accordance with Paragraph III, shall be entitled to
an amount equal to eighty percent (80%) of the net-at-risk
insurance portion of the proceeds. The net-at-risk insurance
portion is the total proceeds less the cash value of the policy.
B. The Bank shall be entitled to the remainder of such proceeds.
C. The Bank and the Insured (or assignees) shall share in any
interest due on the death proceeds on a pro rata basis as the
proceeds due each respectively bears to the total proceeds,
excluding any such interest.
This Amendment shall be effective the 30 day of November, 2000, and the
Subparagraph III (C) referred to hereinabove shall supercede Subparagraph III
(C) of the January 1, 1999 Executive Supplemental Retirement Agreement and
Subparagraphs VI (A), (B), and (C) referred to hereinabove shall supercede
Subparagraphs VI (A), (B). (C) and (D) of the January 1, 1999 Life Insurance
Endorsement Method Split Dollar Plan Agreement. To the extent that any term,
provision, or paragraph of said agreement is not specifically amended herein, or
in any other amendment thereto, said term, provision, or paragraph shall remain
in full force and effect as set forth in said January 1, 1999 agreement.
IN WITNESS WHEREOF, the parties hereto acknowledge that each has
carefully read this Amendment and executed the original thereof on the 30 day of
November, 2000, and that, upon execution, each has received a conforming copy.
THE CENTREVILLE NATIONAL BANK
OF MARYLAND
CENTREVILLE, MARYLAND
By:/s/ B. Vance Carmean, Jr.
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Witness B. Vance Carmean, Jr., Chairman
/s/ Daniel T. Cannon
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Witness Daniel T. Cannon, Participant
LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
Insurer: Connecticut Mutual Life Insurance Company
Policy Number:
Bank: The Centreville National Bank
Insured: Daniel Cannon
Relationship of Insured to Bank: Executive
The respective rights and duties of the Bank and the Insured in the subject
policy shall be as defined in the following:
I. DEFINITIONS
Refer to the policy contract for the definition of all terms in this
Agreement.
II. POLICY TITLE AND OWNERSHIP
Title and ownership 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 Split
Dollar 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 tins Agreement.
III. BENEFICIARY DESIGNATION RIGHTS
The Insured (or assignee) shall have the right and power to designate a
beneficiary or beneficiaries to receive his share of the proceeds
payable upon the death of the Insured. and to elect and change a
payment option for such beneficiary, 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.
V. TAXABLE BENEFIT
Annually the Insured will receive a taxable benefit equal to the
assumed cost of insurance as required by the Internal Revenue Service.
The Bank (or its administrator) will report to the Employee the amount
of imputed
income received each year on Form W-2 or its equivalent.
VI. DIVISION OF DEATH PROCEEDS
Subject to Paragraph VII herein, the division of the death proceeds of
the policy is as follows:
A. Should the Insured be employed by the Bank at the time of his or
her death, the Insured's beneficiary(ies), designated in
accordance with Paragraph III, shall be entitled to an amount
equal to eighty percent (80%) of the net at risk insurance portion
of the proceeds. The net at risk insurance portion is the total
proceeds less tile cash value of the policy.
B. Should the Insured not be employed by the Bank at the time of his
or her death, the Insured's beneficiary(ies), designated in
accordance with Paragraph III, shall be entitled to the following
percentage of the proceeds described in Subparagraph VI (A)
hereinabove that corresponds to the total number of years the
Insured has been employed by the Bank from the date of this
Agreement:
Total Years
of Employment
with the Bank Vested
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1-10 10% vested per year
(to a maximum of 100%)
C. The Bank shall be entitled to the remainder of such proceeds.
D. The Bank and the Insured (or assignees) shall share in any
interest due on the death proceeds on a pro rata basis as the
proceeds due each respectively bears to the total proceeds,
excluding any such interest.
VII. DIVISION OF THE CASH SURRENDER VALUE OF THE POLICY
The Bank shall at all times be entitled to an amount equal to 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 and any applicable surrender charges.
Such cash value shall be determined as of the date of surrender or
death as the case may be.
VIII. RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION EXISTS
In the event the policy involves an endowment or annuity element, the
Bank's right and interest in any endowment proceeds or annuity
benefits, on expiration of the deferment period, shall be determined
under the provisions of this Agreement by regarding such endowment
proceeds or the commuted value of such annuity benefits as the policy's
cash value. Such endowment proceeds or annuity benefits shall be
considered to be like death proceeds for the purposes of division under
this Agreement.
IX. TERMINATION OF AGREEMENT
This Agreement shall terminate if the Insured shall be discharged from
service with the Bank for cause. The term "for cause" shall mean gross
negligence or gross neglect or the commission of a felony or gross
misdemeanor involving moral turpitude, fraud, dishonesty or willful
violation of any law that results in any adverse effect on the Bank.
Upon such termination, the Insured (or assignee) shall have a
forty-five (45) day option to receive from the Bank an absolute
assignment of the policy in consideration of a cash payment to the
Bank, whereupon this Agreement shall terminate. Such cash payment
referred to hereinabove shall be the greater of:
1. The Bank's share of the cash value of the policy on the date of
such assignment, as defined in this Agreement.
2. The amount of the premiums which have been paid by the Bank prior
to the date of such assignment.
If, within said forty-five (45) 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 his rights, interest and claims in the
policy shall terminate as of the date of the termination of this
Agreement.
Except as provided above, this Agreement shall terminate upon
distribution of the death benefit proceeds in accordance with Paragraph
VI above.
X. INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS
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.
XI. AGREEMENT BINDING UPON THE PARTIES
This Agreement shall bind the Insured and the Bank, their heirs,
successors, personal representatives and assigns.
XII. NAMED FIDUCIARY AND PLAN ADMINISTRATOR
The Centreville National Bank is hereby designated the "Named
Fiduciary" until resignation or removal by the Board of Directors. As
Named Fiduciary, the Bank shall be responsible for the management,
control, and administration of this Split Dollar Plan as established
herein. The Named Fiduciary may allocate to others certain aspects of
the management and operation responsibilities of the plan, including
the employment of advisors and the delegation of any ministerial duties
to qualified individuals.
XIII. FUNDING POLICY
The funding policy for this Split Dollar Plan shall be to maintain the
subject policy in force by paying, when due, all premiums required.
XIV. CLAIM PROCEDURES FOR LIFE INSURANCE POLICY AND SPLIT DOLLAR PLAN
Claim forms or claim information as to the subject policy can be
obtained by contacting The Benefit Marketing Group, Inc.
(770-952-1529). When the Named Fiduciary has a claim which may be
covered under the provisions described in the insurance policy, he
should contact the office named above, and they will either complete a
claim form and forward it to an authorized representative of the
Insurer or advise the named
Fiduciary what further requirements are necessary. The Insurer will
evaluate and make a decision as to payment. If the claim is payable, a
benefit check will be issued to the Named Fiduciary. In the event that
a claim is not eligible under the policy, the Insurer will notify the
Named Fiduciary of the denial pursuant to the requirements under the
terms of the policy. If the Named Fiduciary is dissatisfied with the
denial of the claim and wishes to contest such claim denial, he should
contact the office named above and they will assist in making inquiry
to the Insurer. All objections to the Insurer's actions should be in
writing and submitted to the office named above for transmittal to the
Insurer.
XV. 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.
XVI. 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
for any and all liability.
XVII. CHANGE OF CONTROL
Change of Control shall be deemed to be the cumulative transfer of more
than fifty percent (50%) of the voting stock of the Bank from the date
of this Agreement. For the purposes of this Agreement, transfers on
account of deaths or gifts, transfers between family members, or
transfers to a qualified retirement plan maintained by the Bank shall
not be considered in determining whether there has been a Change of
Control. Upon a Change of Control, if the Insured's employment is
subsequently terminated, except for cause, then the Insured shall be
one hundred percent (100%) vested in the benefits promised in this
Agreement and, therefore, upon the death of the Insured, the Insured's
beneficiary(ies) (designated in accordance with Paragraph III) shall
receive the death benefit provided herein as if the Insured had died
while employed by the Bank [See Subparagraph VI (A)]. In addition, no
sale, merger or consolidation of the Bank shall take place unless the
new or surviving entity expressly acknowledges the obligations under
this Agreement and agrees to abide by its terms. In accordance with
Paragraph TV of this Agreement, upon a Change of Control, the Bank
shall either pay all the premiums due in one lump sum or pay the
premiums due annually.
Executed at Centreville, Maryland this 1st day of January, 1999.
THE CENTREVILLE NATIONAL BANK
OF MARYLAND
CENTREVILLE, MARYLAND
/s/ B. Vance Carmean, Jr., Chairman
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Witness Title
/s/ Daniel Cannon
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Witness Daniel Cannon