Exhibit 10.18
LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
Insurer:
Policy Number:
Bank: Park West Bank and Trust Company
Insured:
Relationship of Insured to Bank: Executive
Trust: Rabbi Trust for the
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 any terms in this
Agreement that are not defined herein. If a definition of a term in the
policy is inconsistent with the definition of a term in this Agreement,
then the definition of the term as set forth in this Agreement shall
supersede and replace the definition of the terms as set forth in the
policy.
II. POLICY TITLE AND OWNERSHIP
Title and ownership shall reside in the Trustee for the Rabbi Trust for
the Agreement for its use and for the use of the Insured all in
accordance with this Agreement. The Trustee at the direction of the
Bank may, to the extent of its interest, exercise the right to borrow
or withdraw on the policy cash values. Where the Trustee at the
direction of 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 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, and to elect and change
a payment option for such beneficiary, subject to any right or interest
the Trustee at the direction of the Bank or the Trust may have in such
proceeds, as provided in this Agreement.
IV. PREMIUM PAYMENT METHOD
The Bank or the Trustee at the direction of 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 the Trustee at the direction of the Bank will report to the
Insured the amount of imputed income each year on Form W-2 or its
equivalent.
VI. DIVISION OF DEATH PROCEEDS
Subject to Paragraphs VII and IX herein, the division of the death
proceeds of the policy is as provided in Schedule A.
VII. DIVISION OF THE CASH SURRENDER VALUE OF THE POLICY
The Bank or the Trust 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 or the Trustee at the direction of 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 or the Trust' 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 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 mean the conviction of a
felony that results in an adverse effect on the Bank;
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B. Surrender, lapse, or other termination of the Policy by the
Bank.
C. The Insured, without the written consent of the Bank, prior to
attaining age sixty (60) and within three (3) years of the
Insured's termination of employment with the Bank shall become
an officer, employee, consultant, director or trustee of any
savings bank, savings and loan association, savings and loan
holding company, bank or bank holding company, any other
entity engaged in the business of accepting deposits or making
loans or any direct or indirect subsidiary or affiliate of any
such entity, that entails working within the Commonwealth of
Massachusetts, the State of Connecticut, or any other city or
county in which the Bank maintains an office.
Upon such termination, the Insured (or assignee) shall have a fifteen
(15) day option to receive from the Bank or the Trustee at the
direction of the Bank an absolute assignment of the policy in
consideration of a cash payment to the Bank or the Trustee at the
direction of the Bank, whereupon this Agreement shall terminate. Such
cash payment referred to hereinabove shall be the greater of:
1. The Bank's or the Trust's share of the cash value of the
policy on the date of such assignment, as defined in this
Agreement; or
2. The amount of the premiums which have been paid by the Bank or
the Trustee at the direction of the Bank prior to the date of
such assignment.
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.
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.
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 or the Trustee at
the direction of the Bank, their heirs, successors, personal
representatives and assigns.
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XII. ERISA PROVISIONS
The following provisions are part of this Agreement and are intended to
meet the requirements of the Employee Retirement Income Security Act of
1974 ("ERISA"):
A. Named Fiduciary and Plan Administrator.
The "Named Fiduciary and Plan Administrator" of this
Endorsement Method Split Dollar Agreement shall be Park West
Bank and Trust Company until its resignation or removal by the
Board of Directors. As Named Fiduciary and Plan Administrator,
the Bank or the Trustee at the direction of the Bank shall be
responsible for the management, control, and administration of
this Split Dollar Plan as established herein. The Named
Fiduciary may delegate 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.
B. 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.
C. Basis of Payment of Benefits.
Direct payment by the Insurer is the basis of payment of
benefits under this Agreement, with those benefits in turn
being based on the payment of premiums as provided in this
Agreement.
D. Claim Procedures.
Claim forms or claim information as to the subject policy can
be obtained by contacting Benmark, Inc. (800-544-6079). When
the Named Fiduciary has a claim which may be covered under the
provisions described in the insurance policy, they 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 in accordance with the terms of this
Agreement.
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, they should
contact the office named above and they will assist in making
an 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.
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XIII. 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.
XIV. 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.
XV. CHANGE OF CONTROL
Change in Control shall mean and include the following with respect to
Westbank Corporation or any successor thereto:
(1) The acquisition of "control" (within the meaning of Section
2(a)(2) of the Bank Holding Company Act of 1956, as amended,
or of Section 602 of the Change in Bank Control Act of 1978)
of Westbank Corporation by any person, company or other
entity, or of the Bank by any person, company or entity other
than Westbank Corporation;
(2) Any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 thereunder),
directly or indirectly, of securities of Westbank Corporation
representing 20% or more of the combined voting power of
Westbank Corporation's then-outstanding securities;
(3) Any such person becomes the beneficial owner, directly or
indirectly, of securities of Westbank Corporation representing
less than 20% of Westbank Corporation's then-outstanding
securities, but is determined by a court or regulatory agency
with jurisdiction over the matter to possess or to have
exercised control over Westbank Corporation; or
(4) During any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors
of Westbank Corporation cease for any reason to constitute at
least a majority thereof unless the election or the nomination
for election by Westbank Corporation's stockholders of each
new director was approved by a vote of at least three-fourths
of the directors of Westbank Corporation then still in office
who were directors at the beginning of the period.
(5) Any event which would be described in Subparagraph XV (1),
(2), (3), or (4) if the term "Bank" were substituted for the
term "Westbank Corporation" herein.
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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 one hundred percent (100%) of the death benefit provided herein
in Schedule A.
XVI. 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
of the Insured and the Bank.
XVII. EFFECTIVE DATE
The Effective Date of this Agreement shall be ____________,_____.
XVIII. SEVERABILITY AND INTERPRETATION
If a provision of 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 over broad 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.
XIX. APPLICABLE LAW
The validity and interpretation of this Agreement shall be governed by
the internal laws of the Commonwealth of Massachusetts applicable to
contracts to be performed wholly within the Commonwealth of
Massachusetts among parties all of whom are citizens and residents of
the Commonwealth of Massachusetts.
Executed at _________, __________, this ______ day of ____________, 2001.
PARK WEST BANK AND TRUST COMPANY
- -------------------------------- By: ---------------------------------------
Witness Title
- -------------------------------- --------------------------------------------
Witness Insured
- -------------------------------- --------------------------------------------
Witness Trustee
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SCHEDULE A
A. Should the Insured die subsequent to the _____ day of
___________, _______, the Insured's beneficiary(ies),
designated in accordance with Paragraph III, shall be entitled
to an amount equal to percent (___%) 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.
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