EXHIBIT 10.26
AMENDMENT 2 TO SUPPLEMENTAL RETIREMENT AGREEMENT
This Amendment 2 to Supplemental Retirement Agreement (this "Amendment")
dated as of this 31st day of July, 2002 (but effective March 20, 2001), by and
between Charter One Financial, Inc., its successors and assigns (the "Company")
and Xxxxxxx X. Xxxx (the "Executive") for the purpose of modifying and amending
that certain Supplemental Retirement Agreement between the parties dated as of
October 31, 1995, as amended pursuant to Amendment 1 thereto dated as of May 3,
1996 (the "SRA").
W I T N E S S E T H :
The board of directors of the Company has decided to increase the
maximum monthly benefit under the SRA in light of changes in condition since the
date of the SRA including, but not limited to, the substantial growth of the
Company, the Executive's contribution to such growth, and the inadequacy, as of
the effective date of this Amendment, of the maximum monthly benefit currently
provided in the SRA. In addition, the Company and the Executive have, on even
date herewith, entered into a Fully Restated Split Dollar Agreement (the "Death
Benefit Agreement") which necessitates a change to the SRA.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Notwithstanding anything contained in Section 1(d)(v) of the SRA or
otherwise in the SRA, in the event of the death of the Executive under
circumstances in which a beneficiary of the Executive or his estate is entitled
to death proceeds (a) under any life insurance policy or policies maintained
pursuant to the Death Benefit Agreement (including any amendments or
modifications) or (b) under any other written agreement between the Company and
the Executive that replaces the Death Benefit Agreement, then in that event,
neither the Executive nor his/her spouse will be entitled to any benefits under
the SRA.
2. Section 1(g) of the SRA is hereby amended and fully restated as
follows:
"(g) MONTHLY BENEFIT shall mean the Average Compensation
multiplied by the Accrued Benefit Percentage; provided, however,
in no event will the Monthly Benefit exceed $45,000.00."
3. Except as modified and amended herein, the SRA shall remain in
full force and effect.
The parties have caused this Amendment to be executed and delivered as
of the date first above herein written.
CHARTER ONE FINANCIAL, INC.
By: /s/ Xxxxxxx X. Xxx
---------------------
Authorized Officer
EXECUTIVE
/s/ Xxxxxxx X. Xxxx
-------------------
XXXXXXX X. XXXX
XXXXXXX X. XXXX FULLY RESTATED SPLIT DOLLAR AGREEMENT
This Agreement, made and entered into this 31st day of July, 2002 (but effective
March 20, 2001), by and among Charter One Financial, Inc., (hereinafter referred
to as the "Company"), a corporation organized and existing under the laws of
Delaware, and Xxxxxxx X. Xxxx (hereinafter referred to as the "Employee").
WHEREAS, the Company and the Employee entered into the Xxxxxxx X. Xxxx Split
Dollar Agreement on May 3, 1996 (the "Existing Agreement");
WHEREAS, the parties desire by this Agreement to amend and fully restate the
benefits to be received by the Employee under the Policies (as hereunder
defined);
WHEREAS, the Company is the owner of five insurance policies as more
particularly described on Exhibit A hereto (individually "each Policy" or
collectively the "Policies") issued by New England Mutual Life Insurance Company
and Northwestern Mutual Life Insurance Company (the "Insurers") in the aggregate
face amount of $4,739,878.00 on the Employee's life; and
WHEREAS, the Company and the Employee agree to make the Policies subject to this
Agreement; and
WHEREAS, this Agreement shall replace and supercede the Existing Agreement.
NOW, THEREFORE, for value received and in consideration of the mutual covenants
contained herein, the parties agree as follows:
ARTICLE I - DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth
below:
1. "Cash Surrender Value of the Policies" will mean the cash value of the
Policies; plus the cash value of any paid-up additions thereon; plus any
dividend accumulations and unpaid dividends thereunder; and less the
aggregate Policy Loan Balance under the Policies.
2. "Cash Value of each Policy" will mean the cash value as illustrated in
the table of values shown in each Policy.
3. "Change in Control" will have the meaning set forth in Section 1(a) of
the Employment Agreement between the Company and the Employee dated
October 31, 1995.
4. "Company's Interest in the Policies" will be as defined in Article III.
5. "Current Loan Value of each Policy" will mean the Loan Value of each
Policy reduced
by its outstanding Policy Loan Balance.
6. "Loan Value of each Policy" will mean the amount which with loan
interest will equal the Cash Value of the Policy and of any paid-up
additions on the next loan interest due date or on the next premium due
date, whichever is the smaller amount.
7. "Policy Loan Balance" at any time will mean policy loans outstanding
plus interest accrued to date under each Policy.
ARTICLE II - ALLOCATION OF PREMIUMS
The Company will pay all premiums on the Policies when due, according to the
Schedule of the planned annual premiums in each Policy.
ARTICLE III - RIGHTS IN THE POLICY
Until the earliest of (a) the termination of the Employee's employment with the
Company and its affiliates (if applicable) prior to a Change in Control for any
reason other than death or an involuntary termination by the Company or one of
its affiliates without cause, (b) 210 days after the involuntary termination of
the Employee's employment without cause (including for disability) by the
Company and its affiliates (if applicable) prior to a Change in Control (which
shall include a termination for disability), (c) the date of the Employee's
termination of employment with the Company and its affiliates (if applicable)
for any reason other than death in connection with or after a Change in Control
if on the date of employment termination the Employee is at least 58 years of
age, (d) 30 days after the Employee attains the age of 58 years if his
employment with the Company and its affiliates (if applicable) is terminated for
any reason other than death in connection with or after a Change in Control and
on the date of employment termination the Employee is less than 58 years of age;
(e) the date the Employee purchases all of the Policies pursuant to Article V of
this Agreement, (f) the day next following the death of the Employee or (g) the
bankruptcy, receivership or dissolution of the Company (the "Coverage Period"),
the Employee will have the sole right to designate the beneficiary of the death
proceeds of the Policies in excess of the Company's Interest in the Policies.
the Company will have and may exercise, all ownership rights in each Policy,
except as may otherwise be provided herein. During the Coverage Period, the
Company will not, without prior written consent of the Employee: (i) terminate
any of the Policies or permit any of the Policies to lapse for non-payment of
premium; (ii) terminate, alter or amend the beneficiary designation of the
Employee to the extent the Employee has the power to designate a beneficiary
hereunder; (iii) terminate, alter or amend the settlement option with respect to
the interest of the beneficiary designated by Employee to the extent the
Employee has the power to designate a beneficiary hereunder; (iv) surrender any
Policy for cancellation; (v) assign its rights in any Policy (other than for the
purposes of obtaining a loan against the Policy) to anyone other than the
Employee; or (vi) take any action in dealing with the Insurers that would impair
any right or interest of the Employee in the Policies. The Company will have the
right to borrow from the Insurers (and to secure that loan by one or more
Policies) an amount which, together with the unpaid interest accrued thereon,
will at no time exceed the lesser of (a) the Company's Interest in the Policies,
or (b) the Loan Value of the Policies. "Company's Interest in the Policies" will
mean, at any time during
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the Coverage Period at which the value of such interest is to be determined
under this Agreement, the sum of (1) plus (2):
where (1) is: the greater of (a) the Cash Surrender Value
of the Policies at such time, or (b) the total
premiums theretofore paid on the Policies by the
Company (including any premiums paid by loans charged
automatically against the Policies and including any
premiums paid, by loan or otherwise, for any
supplemental agreement or rider) reduced by the
Policy Loan Balance on all the Policies, with respect
to any loans made or charged automatically against
the Policies by the Company; and
where (2) is: the excess, if any, of the total value of the
Policies at such time over the sum of (a) plus (b)
where (a) is the amount determined in (1) above and
(b) is an amount equal to $3,300,000 while the
Employee is employed by the Company or any of its
affiliates and $1,650,000 if the Employee is no
longer employed by the Company or any of its
affiliates.
If the result of (2) is a negative figure, it shall
be treated as zero for purposes of this computation.
In the event that the Company has paid any unscheduled payments as permitted by
any Policy, all such payments will be included in the total premiums paid on
such Policy by the Company.
It is understood and agreed that the Employee does not have any interest in the
Cash Value of each Policy or in any dividends or earnings of each Policy.
Unless the Employee has died during the Coverage Period, then after the Coverage
Period the Company's Interest in the Policies then owned by the Company shall be
the total value of such Policies.
ARTICLE IV - RIGHTS TO THE PROCEEDS AT DEATH
In the event of the Employee's death during the Coverage Period, the Company
will be entitled to receive from the Proceeds of the Policies an amount equal to
the Company's Interest in the Policies and the remainder of the Proceeds of the
Policies will be paid to such beneficiary as the Employee may have designated
under the terms of the Policies, or failing such designation, to the Employee's
estate. In no event will the Proceeds of the Policies to be paid to the
beneficiary or estate of the Employee exceed or be less than $3,300,000 if the
Employee's death occurs while he is employed by the Company or one of its
affiliates, or exceed or be less than $1,650,000 if his death occurs during the
Coverage Period but after a termination of service. Within 60 days after the
death of the Employee, the Company will provide to the Insurers a written
statement indicating the amount of the Proceeds of the Policies which it is
entitled to receive.
ARTICLE V - RIGHT OF EMPLOYEE TO PURCHASE POLICIES
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1. Termination Without Cause. In the event that the Employee's employment
with the Company and its affiliates is involuntarily terminated without
cause (including for disability) by the Company or one of its
affiliates, whichever is applicable, prior to a Change in Control then
the Employee shall have the right, commencing with the date of his
termination of employment until 180 days thereafter (the "Exercise
Period"), to purchase any or all of the Policies from the Company for a
cash purchase price equal to the Cash Surrender Value of the Policy or
Policies designated for purchase by the Employee, with the Employee
assuming the Policy Loan Balance of such Policy or Policies. The
Employee shall deliver written notice to the Company of his election to
purchase within the Exercise Period, which written notice shall (a)
designate the specific Policy or Policies to be purchased and (b) the
date and time of closing of the purchase, which date shall not be less
than 10 days or more than 20 days after the date of the written notice.
After receipt of such written notice within the Exercise Period, the
Company shall promptly provide the Employee with all pertinent
information relating to the Cash Surrender Value and Policy Loan Balance
of the designated Policy or Policies. Closing will take place at the
executive offices of the Company at the time and date specified in the
Employee's election notice, at which time (i) the Company shall transfer
all legal and beneficial interest in the designated Policy or Policies
to the Employee by appropriate instruments of transfer and (ii) the
Employee shall make cash payment to the Company of the Cash Surrender
Value of the designated Policy or Policies. Notwithstanding the
foregoing, if the Employee dies prior to completing the purchase of the
Policy or Policies, whether during or after the Exercise Period, then
his right of purchase herein shall cease and terminate.
2. Change in Control. In the event that the Employee's employment with the
Company and its affiliates is terminated for any reason (other than
death) in connection with or following a Change in Control and he is
less than 58 years of age on the date his employment termination, then
the Employee shall have the right, commencing with the date of his
employment termination until the Employee reaches 58 years of age (the
"Change in Control Exercise Period"), to purchase any or all of the
Policies from the Company for a cash purchase price equal to the Cash
Surrender Value of the Policy or Policies designated for purchase by the
Employee, with the Employee assuming the Policy Loan Balance of such
Policy or Policies. The Employee shall deliver written notice to the
Company of his election to purchase within the Change in Control
Exercise Period, which written notice shall (a) designate the specific
Policy or Policies to be purchased and (b) the date and time of closing
of the purchase, which date shall not be less than 10 days or more than
20 days after the date of the written notice. After receipt of such
written notice within the Change in Control Exercise Period, the Company
shall promptly provide the Employee with all pertinent information
relating to the Cash Surrender Value and Policy Loan Balance of the
designated Policy or Policies. Closing will take place at the executive
offices of the Company at the time and date specified in the Employee's
election notice, at which time (i) the Company shall transfer all legal
and beneficial interest in the designated Policy or Policies to the
Employee by appropriate instruments of transfer and (ii) the Employee
shall make cash payment to the Company of the Cash Surrender Value of
the designated Policy or Policies. Notwithstanding the foregoing, if the
Employee dies prior to completing the purchase of the Policy or
Policies,
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whether during or after the Change in Control Exercise Period, then his
right of purchase herein shall cease and terminate
ARTICLE VI - TERMINATION OF AGREEMENT
This Agreement shall terminate at the expiration of the Coverage Period unless
the Employee has died prior to the expiration of the Coverage Period. In the
event of the death of the Employee prior to the expiration of the Coverage
Period, then this Agreement shall terminate when Proceeds of the Policies are
paid under Article IV of this Agreement. Upon termination of this Agreement
while the Employee is living, the Employee will, without further consideration,
transfer to the Company all of his right, title and interest in each Policy then
owned by the Company, by executing such documents as are necessary to transfer
such right, title and interest as of the date of termination. The Company will
thereafter be able to deal with each such Policy in any way it may see fit. In
the event that Employee does not timely execute such assignment documents, all
of Employee's right, title and interest in each such Policy shall be deemed to
have lapsed and Company will thereafter be able to deal with the Policy in
anyway it sees fit.
ARTICLE VII - PLAN MANAGEMENT
For the purposes of the Employee Retirement Income Security Act of 1974 (ERISA),
the Company will be the "Named Fiduciary" and "Plan Administrator" on the
split-dollar life insurance plan (the "Plan") for which this Agreement is hereby
designated the written plan instrument. The Company's Board of Directors may
authorize a person or group of persons to fulfill the responsibilities of the
Company as Plan Administrator. The Named Fiduciary or the Plan Administrator may
employ others to render advise with regard to its responsibilities under this
Plan. The Named Fiduciary may also allocate fiduciary responsibilities to others
and may exercise any other powers necessary for the discharge of its duties to
the extent not in conflict with ERISA.
ARTICLES VIII - CLAIMS PROCEDURE
1. Any insured, beneficiary or other individual (hereinafter "Claimant")
entitled to benefits under the Plan or under the Policies will file a
claim request with the Plan Administrator with respect to benefits
under the Plan with the Insurers, with respect to benefits under the
Policies. The Plan Administrator will, upon written request of the
Claimant, make available copies of any claim forms or instructions
provided by the Insurers or advise the Claimant where such forms or
instructions may be obtained.
2. Notification of Claimant
If a claim request is wholly or partially denied, the Plan
Administrator will furnish to the Claimant a notice of the decision
within ninety (90) days in writing and in a manner calculated to be
understood by the Claimant, which notice will contain the following
information:
a. The specific reason or reasons for the denial;
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b. Specific reference to pertinent Plan provisions upon which the
denial is based;
c. A description of any additional material or information
necessary for the Claimant to perfect the claim and an
explanation of why such material or information is necessary;
and
d. An explanation of the Plan's claims review procedure describing
the steps to be taken by a Claimant who wishes to submit his/her
claim for review.
In the case of benefits which are provided under the Policy, the initial
decision on the claims will be made by the applicable Insurer.
2. Review Procedure
A Claimant or his/her authorized representative may with respect to any
denied claim:
a. Request a review upon written application filed within sixty
(60) days after receipt by the Claimant of written notice of the
denial of his/her claim;
b Review pertinent documents; and
c. Submit issues and comments in writing.
Any request or submission will be in writing and will be directed to the
Named Fiduciary (or its designee). The Named Fiduciary (or its designee)
will have the sole responsibility for the review of any denied claim and
will take all steps appropriate in the light of its findings.
2. Decision on Review
The Named Fiduciary (or its designee) will render a decision upon
review. If special circumstances (such as the need to hold a hearing or
any matter pertaining to the denied claims warrant additional time, the
decision will be rendered as soon as possible, but not later than one
hundred twenty (120) days after receipt of the request for review.
Written notice of any such extension will be furnished to the Claimant
prior to the commence- ment of the extension. The decision on review
will be in writing and will include specific reasons for the decision,
written in a manner calculated to be understood by the Claimant, as well
as specific references to the pertinent provisions of the Plan on which
the decision is based. If the decision on review is not furnished to the
Claimant with the time limits prescribed above, the claim will be deemed
denied on review.
ARTICLE IX - SATISFACTION OF CLAIM
The Employee agrees that his rights and interests, and the rights and interests
of any person taking under or through him, will be completely satisfied upon
compliance by the Company with
6
the provisions of this Agreement.
ARTICLE X - AMENDMENT AND ASSIGNMENT
This Agreement may be altered, amended or modified, including the addition of
any extra policy provisions, by a written instrument signed by the Company and
the Employee. Employee may not assign his/her interests or obligations under
this Agreement. Subject to the limitations of Article IV, the Company may assign
its interests and obligations under this Agreement, provided, however, that any
assignment will be subject to the terms of this Agreement.
ARTICLE XI - POSSESSION OF THE POLICIES
The Company will keep possession of the Policies. The Company agrees, from time
to time, to make the Policies available to the Employee or to the Insurers for
the purpose of endorsing or filing any change of beneficiary on the Policies for
that portion of the death proceeds under the Policies that the Employee's
beneficiary is entitled to receive as provided in Article IV, but the Policies
will promptly be returned the Company.
ARTICLE XII - GOVERNING LAW
This Agreement will be governed by the laws of the State of Ohio.
ARTICLE XIII - INTERPRETATION
Where appropriate in this Agreement, words used in the singular will include the
plural and words in the masculine will include the feminine.
ARTICLE XIV - SUCCESSORS IN INTEREST
This Agreement shall be binding upon, and the Company's obligations herein shall
become obligations of, any and all successors of the Company. In the event a
successor entity is a direct or indirect subsidiary of any ultimate parent
corporation, the ultimate parent corporation shall execute a counterpart of this
Agreement guaranteeing the Company's obligations herein.
ARTICLE XV - ENTIRE AGREEMENT; TERMINATION OF EXISTING AGREEMENT
This Agreement sets forth the entire agreement of the parties relating solely to
the subject matter hereto. This Agreement replaces and supercedes the Existing
Agreement. Therefore, upon execution of this Agreement, the Existing Agreement
shall terminate and have no further force or effect.
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The parties have executed this Agreement as of the day and year first written
above.
CHARTER ONE FINANCIAL, INC.
By /s/ Xxxxxxx X. Xxx
------------------
XXXXXXX X. XXX
CHIEF FINANCIAL OFFICER
/s/ Xxxxxxx X. Xxxx
-------------------
XXXXXXX X. XXXX
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AMENDMENT 2 TO SUPPLEMENTAL RETIREMENT AGREEMENT
This Amendment 2 to Supplemental Retirement Agreement (this "Amendment")
dated as of this 31st day of July, 2002 (but effective March 20, 2001), by and
between Charter One Financial, Inc., its successors and assigns (the "Company")
and Xxxxxxx X. Xxx (the "Executive") for the purpose of modifying and amending
that certain Supplemental Retirement Agreement between the parties dated as of
October 31, 1995, as amended pursuant to Amendment 1 thereto dated as of May 3,
1996 (the "SRA").
W I T N E S S E T H :
The board of directors of the Company has decided to increase the
maximum monthly benefit under the SRA in light of changes in condition since the
date of the SRA including, but not limited to, the substantial growth of the
Company, the Executive's contribution to such growth, and the inadequacy, as of
the effective date of this Amendment, of the maximum monthly benefit currently
provided in the SRA. In addition, the Company and the Executive have, on even
date herewith, entered into a Fully Restated Split Dollar Agreement (the "Death
Benefit Agreement") which necessitates a change to the SRA.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Notwithstanding anything contained in Section 1(d)(v) of the SRA
or otherwise in the SRA, in the event of the death of the Executive under
circumstances in which a beneficiary of the Executive or his estate is entitled
to death proceeds (a) under any life insurance policy or policies maintained
pursuant to the Death Benefit Agreement (including any amendments or
modifications) or (b) under any other written agreement between the Company and
the Executive that replaces the Death Benefit Agreement, then in that event,
neither the Executive nor his/her spouse will be entitled to any benefits under
the SRA.
2. Section 1(g) of the SRA is hereby amended and fully restated as
follows:
"(g) MONTHLY BENEFIT shall mean the Average Compensation
multiplied by the Accrued Benefit Percentage; provided,
however, in no event will the Monthly Benefit exceed
$40,000.00."
3. Except as modified and amended herein, the SRA shall remain in
full force and effect.
The parties have caused this Amendment to be executed and delivered as
of the date first above herein written.
CHARTER ONE FINANCIAL, INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------
Authorized Officer
EXECUTIVE
/s/ Xxxxxxx X. Xxx
------------------
XXXXXXX X. XXX
XXXXXXX X. XXX FULLY RESTATED SPLIT DOLLAR AGREEMENT
This Agreement, made and entered into this 31st day of July, 2002 (but effective
March 20, 2001), by and among Charter One Financial, Inc., (hereinafter referred
to as the "Company"), a corporation organized and existing under the laws of
Delaware, and Xxxxxxx X. Xxx (hereinafter referred to as the "Employee").
WHEREAS, the Company and the Employee entered into the Xxxxxxx X. Xxx Split
Dollar Agreement on May 3, 1996 (the "Existing Agreement");
WHEREAS, the parties desire by this Agreement to amend and fully restate the
benefits to be received by the Employee under the Policies (as hereunder
defined);
WHEREAS, the Company is the owner of three insurance policies as more
particularly described on Exhibit A hereto (individually "each Policy" or
collectively the "Policies") issued by New England Mutual Life Insurance Company
and Northwestern Mutual Life Insurance Company (the "Insurers") in the aggregate
face amount of $4,286,422.00 on the Employee's life; and
WHEREAS, the Company and the Employee agree to make the Policies subject to this
Agreement; and
WHEREAS, this Agreement shall replace and supercede the Existing Agreement.
NOW, THEREFORE, for value received and in consideration of the mutual covenants
contained herein, the parties agree as follows:
ARTICLE I - DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth
below:
1. "Cash Surrender Value of the Policies" will mean the cash value of the
Policies; plus the cash value of any paid-up additions thereon; plus any
dividend accumulations and unpaid dividends thereunder; and less the
aggregate Policy Loan Balance under the Policies.
2. "Cash Value of each Policy" will mean the cash value as illustrated in
the table of values shown in each Policy.
3. "Change in Control" will have the meaning set forth in Section 1(a) of
the Employment Agreement between the Company and the Employee dated
October 31, 1995.
4. "Company's Interest in the Policies" will be as defined in Article III.
5. "Current Loan Value of each Policy" will mean the Loan Value of each
Policy reduced by its outstanding Policy Loan Balance.
1
6. "Loan Value of each Policy" will mean the amount which with loan
interest will equal the Cash Value of the Policy and of any paid-up
additions on the next loan interest due date or on the next premium due
date, whichever is the smaller amount.
7. "Policy Loan Balance" at any time will mean policy loans outstanding
plus interest accrued to date under each Policy.
ARTICLE II - ALLOCATION OF PREMIUMS
The Company will pay all premiums on the Policies when due, according to the
Schedule of the planned annual premiums in each Policy.
ARTICLE III - RIGHTS IN THE POLICY
Until the earliest of (a) the termination of the Employee's employment with the
Company and its affiliates (if applicable) prior to a Change in Control for any
reason other than death or an involuntary termination by the Company or one of
its affiliates without cause, (b) 210 days after the involuntary termination of
the Employee's employment without cause (including for disability) by the
Company and its affiliates (if applicable) prior to a Change in Control (which
shall include a termination for disability), (c) the date of the Employee's
termination of employment with the Company and its affiliates (if applicable)
for any reason other than death in connection with or after a Change in Control
if on the date of employment termination the Employee is at least 58 years of
age, (d) 30 days after the Employee attains the age of 58 years if his
employment with the Company and its affiliates (if applicable) is terminated for
any reason other than death in connection with or after a Change in Control and
on the date of employment termination the Employee is less than 58 years of age;
(e) the date the Employee purchases all of the Policies pursuant to Article V of
this Agreement, (f) the day next following the death of the Employee or (g) the
bankruptcy, receivership or dissolution of the Company (the "Coverage Period"),
the Employee will have the sole right to designate the beneficiary of the death
proceeds of the Policies in excess of the Company's Interest in the Policies.
the Company will have and may exercise, all ownership rights in each Policy,
except as may otherwise be provided herein. During the Coverage Period, the
Company will not, without prior written consent of the Employee: (i) terminate
any of the Policies or permit any of the Policies to lapse for non-payment of
premium; (ii) terminate, alter or amend the beneficiary designation of the
Employee to the extent the Employee has the power to designate a beneficiary
hereunder; (iii) terminate, alter or amend the settlement option with respect to
the interest of the beneficiary designated by Employee to the extent the
Employee has the power to designate a beneficiary hereunder; (iv) surrender any
Policy for cancellation; (v) assign its rights in any Policy (other than for the
purposes of obtaining a loan against the Policy) to anyone other than the
Employee; or (vi) take any action in dealing with the Insurers that would impair
any right or interest of the Employee in the Policies. The Company will have the
right to borrow from the Insurers (and to secure that loan by one or more
Policies) an amount which, together with the unpaid interest accrued thereon,
will at no time exceed the lesser of (a) the Company's Interest in the Policies,
or (b) the Loan Value of the Policies. "Company's Interest in the Policies" will
mean, at any time during the Coverage Period at which the value of such interest
is to be determined under this Agreement, the sum of (1) plus (2):
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where (1) is: the greater of (a) the Cash Surrender Value
of the Policies at such time, or (b) the total
premiums theretofore paid on the Policies by the
Company (including any premiums paid by loans charged
automatically against the Policies and including any
premiums paid, by loan or otherwise, for any
supplemental agreement or rider) reduced by the
Policy Loan Balance on all the Policies, with respect
to any loans made or charged automatically against
the Policies by the Company; and
where (2) is: the excess, if any, of the total value of the
Policies at such time over the sum of (a) plus (b)
where (a) is the amount determined in (1) above and
(b) is an amount equal to $2,900,000 while the
Employee is employed by the Company or any of its
affiliates and $1,450,000 if the Employee is no
longer employed by the Company or any of its
affiliates.
If the result of (2) is a negative figure, it shall
be treated as zero for purposes of this computation.
In the event that the Company has paid any unscheduled payments as permitted by
any Policy, all such payments will be included in the total premiums paid on
such Policy by the Company.
It is understood and agreed that the Employee does not have any interest in the
Cash Value of each Policy or in any dividends or earnings of each Policy.
Unless the Employee has died during the Coverage Period, then after the Coverage
Period the Company's Interest in the Policies then owned by the Company shall be
the total value of such Policies.
ARTICLE IV - RIGHTS TO THE PROCEEDS AT DEATH
In the event of the Employee's death during the Coverage Period, the Company
will be entitled to receive from the Proceeds of the Policies an amount equal to
the Company's Interest in the Policies and the remainder of the Proceeds of the
Policies will be paid to such beneficiary as the Employee may have designated
under the terms of the Policies, or failing such designation, to the Employee's
estate. In no event will the Proceeds of the Policies to be paid to the
beneficiary or estate of the Employee exceed or be less than $2,900,000 if the
Employee's death occurs while he is employed by the Company or one of its
affiliates, or exceed or be less than $1,450,000 if his death occurs during the
Coverage Period but after a termination of service. Within 60 days after the
death of the Employee, the Company will provide to the Insurers a written
statement indicating the amount of the Proceeds of the Policies which it is
entitled to receive.
ARTICLE V - RIGHT OF EMPLOYEE TO PURCHASE POLICIES
1. Termination Without Cause. In the event that the Employee's employment
with the Company and its affiliates is involuntarily terminated without
cause (including for
3
disability) by the Company or one of its affiliates, whichever is
applicable, prior to a Change in Control then the Employee shall have
the right, commencing with the date of his termination of employment
until 180 days thereafter (the "Exercise Period"), to purchase any or
all of the Policies from the Company for a cash purchase price equal to
the Cash Surrender Value of the Policy or Policies designated for
purchase by the Employee, with the Employee assuming the Policy Loan
Balance of such Policy or Policies. The Employee shall deliver written
notice to the Company of his election to purchase within the Exercise
Period, which written notice shall (a) designate the specific Policy or
Policies to be purchased and (b) the date and time of closing of the
purchase, which date shall not be less than 10 days or more than 20 days
after the date of the written notice. After receipt of such written
notice within the Exercise Period, the Company shall promptly provide
the Employee with all pertinent information relating to the Cash
Surrender Value and Policy Loan Balance of the designated Policy or
Policies. Closing will take place at the executive offices of the
Company at the time and date specified in the Employee's election
notice, at which time (i) the Company shall transfer all legal and
beneficial interest in the designated Policy or Policies to the Employee
by appropriate instruments of transfer and (ii) the Employee shall make
cash payment to the Company of the Cash Surrender Value of the
designated Policy or Policies. Notwithstanding the foregoing, if the
Employee dies prior to completing the purchase of the Policy or
Policies, whether during or after the Exercise Period, then his right of
purchase herein shall cease and terminate.
2. Change in Control. In the event that the Employee's employment with the
Company and its affiliates is terminated for any reason (other than
death) in connection with or following a Change in Control and he is
less than 58 years of age on the date his employment termination, then
the Employee shall have the right, commencing with the date of his
employment termination until the Employee reaches 58 years of age (the
"Change in Control Exercise Period"), to purchase any or all of the
Policies from the Company for a cash purchase price equal to the Cash
Surrender Value of the Policy or Policies designated for purchase by the
Employee, with the Employee assuming the Policy Loan Balance of such
Policy or Policies. The Employee shall deliver written notice to the
Company of his election to purchase within the Change in Control
Exercise Period, which written notice shall (a) designate the specific
Policy or Policies to be purchased and (b) the date and time of closing
of the purchase, which date shall not be less than 10 days or more than
20 days after the date of the written notice. After receipt of such
written notice within the Change in Control Exercise Period, the Company
shall promptly provide the Employee with all pertinent information
relating to the Cash Surrender Value and Policy Loan Balance of the
designated Policy or Policies. Closing will take place at the executive
offices of the Company at the time and date specified in the Employee's
election notice, at which time (i) the Company shall transfer all legal
and beneficial interest in the designated Policy or Policies to the
Employee by appropriate instruments of transfer and (ii) the Employee
shall make cash payment to the Company of the Cash Surrender Value of
the designated Policy or Policies. Notwithstanding the foregoing, if the
Employee dies prior to completing the purchase of the Policy or
Policies, whether during or after the Change in Control Exercise Period,
then his right of purchase herein shall cease and terminate
4
ARTICLE VI - TERMINATION OF AGREEMENT
This Agreement shall terminate at the expiration of the Coverage Period unless
the Employee has died prior to the expiration of the Coverage Period. In the
event of the death of the Employee prior to the expiration of the Coverage
Period, then this Agreement shall terminate when Proceeds of the Policies are
paid under Article IV of this Agreement. Upon termination of this Agreement
while the Employee is living, the Employee will, without further consideration,
transfer to the Company all of his right, title and interest in each Policy then
owned by the Company, by executing such documents as are necessary to transfer
such right, title and interest as of the date of termination. The Company will
thereafter be able to deal with each such Policy in any way it may see fit. In
the event that Employee does not timely execute such assignment documents, all
of Employee's right, title and interest in each such Policy shall be deemed to
have lapsed and Company will thereafter be able to deal with the Policy in
anyway it sees fit.
ARTICLE VII - PLAN MANAGEMENT
For the purposes of the Employee Retirement Income Security Act of 1974 (ERISA),
the Company will be the "Named Fiduciary" and "Plan Administrator" on the
split-dollar life insurance plan (the "Plan") for which this Agreement is hereby
designated the written plan instrument. The Company's Board of Directors may
authorize a person or group of persons to fulfill the responsibilities of the
Company as Plan Administrator. The Named Fiduciary or the Plan Administrator may
employ others to render advise with regard to its responsibilities under this
Plan. The Named Fiduciary may also allocate fiduciary responsibilities to others
and may exercise any other powers necessary for the discharge of its duties to
the extent not in conflict with ERISA.
ARTICLES VIII - CLAIMS PROCEDURE
1. Any insured, beneficiary or other individual (hereinafter "Claimant")
entitled to benefits under the Plan or under the Policies will file a
claim request with the Plan Administrator with respect to benefits
under the Plan with the Insurers, with respect to benefits under the
Policies. The Plan Administrator will, upon written request of the
Claimant, make available copies of any claim forms or instructions
provided by the Insurers or advise the Claimant where such forms or
instructions may be obtained.
2. Notification of Claimant
If a claim request is wholly or partially denied, the Plan
Administrator will furnish to the Claimant a notice of the decision
within ninety (90) days in writing and in a manner calculated to be
understood by the Claimant, which notice will contain the following
information:
a. The specific reason or reasons for the denial;
b. Specific reference to pertinent Plan provisions upon which the
denial is based;
5
c. A description of any additional material or information
necessary for the Claimant to perfect the claim and an
explanation of why such material or information is necessary;
and
d. An explanation of the Plan's claims review procedure describing
the steps to be taken by a Claimant who wishes to submit his/her
claim for review.
In the case of benefits which are provided under the Policy, the initial
decision on the claims will be made by the applicable Insurer.
2. Review Procedure
A Claimant or his/her authorized representative may with respect to any
denied claim:
a. Request a review upon written application filed within sixty
(60) days after receipt by the Claimant of written notice of the
denial of his/her claim;
b Review pertinent documents; and
c. Submit issues and comments in writing.
Any request or submission will be in writing and will be directed to the
Named Fiduciary (or its designee). The Named Fiduciary (or its designee)
will have the sole responsibility for the review of any denied claim and
will take all steps appropriate in the light of its findings.
2. Decision on Review
The Named Fiduciary (or its designee) will render a decision upon
review. If special circumstances (such as the need to hold a hearing or
any matter pertaining to the denied claims warrant additional time, the
decision will be rendered as soon as possible, but not later than one
hundred twenty (120) days after receipt of the request for review.
Written notice of any such extension will be furnished to the Claimant
prior to the commence- ment of the extension. The decision on review
will be in writing and will include specific reasons for the decision,
written in a manner calculated to be understood by the Claimant, as well
as specific references to the pertinent provisions of the Plan on which
the decision is based. If the decision on review is not furnished to the
Claimant with the time limits prescribed above, the claim will be deemed
denied on review.
ARTICLE IX - SATISFACTION OF CLAIM
The Employee agrees that his rights and interests, and the rights and interests
of any person taking under or through him, will be completely satisfied upon
compliance by the Company with the provisions of this Agreement.
6
ARTICLE X - AMENDMENT AND ASSIGNMENT
This Agreement may be altered, amended or modified, including the addition of
any extra policy provisions, by a written instrument signed by the Company and
the Employee. Employee may not assign his/her interests or obligations under
this Agreement. Subject to the limitations of Article IV, the Company may assign
its interests and obligations under this Agreement, provided, however, that any
assignment will be subject to the terms of this Agreement.
ARTICLE XI - POSSESSION OF THE POLICIES
The Company will keep possession of the Policies. The Company agrees, from time
to time, to make the Policies available to the Employee or to the Insurers for
the purpose of endorsing or filing any change of beneficiary on the Policies for
that portion of the death proceeds under the Policies that the Employee's
beneficiary is entitled to receive as provided in Article IV, but the Policies
will promptly be returned the Company.
ARTICLE XII - GOVERNING LAW
This Agreement will be governed by the laws of the State of Ohio.
ARTICLE XIII - INTERPRETATION
Where appropriate in this Agreement, words used in the singular will include the
plural and words in the masculine will include the feminine.
ARTICLE XIV - SUCCESSORS IN INTEREST
This Agreement shall be binding upon, and the Company's obligations herein shall
become obligations of, any and all successors of the Company. In the event a
successor entity is a direct or indirect subsidiary of any ultimate parent
corporation, the ultimate parent corporation shall execute a counterpart of this
Agreement guaranteeing the Company's obligations herein.
ARTICLE XV - ENTIRE AGREEMENT; TERMINATION OF EXISTING AGREEMENT
This Agreement sets forth the entire agreement of the parties relating solely to
the subject matter hereto. This Agreement replaces and supercedes the Existing
Agreement. Therefore, upon execution of this Agreement, the Existing Agreement
shall terminate and have no further force or effect.
7
The parties have executed this Agreement as of the day and year first written
above.
CHARTER ONE FINANCIAL, INC.
By /s/ Xxxxxxx X. Xxxx
-------------------
XXXXXXX X. XXXX
CHIEF EXECUTIVE OFFICER
/s/ Xxxxxxx X. Xxx
------------------
XXXXXXX X. XXX
8
AMENDMENT 2 TO SUPPLEMENTAL RETIREMENT AGREEMENT
This Amendment 2 to Supplemental Retirement Agreement (this "Amendment")
dated as of this 31st day of July, 2002 (but effective March 20, 2001), by and
between Charter One Financial, Inc., its successors and assigns (the "Company")
and Xxxx X. Xxxx (the "Executive") for the purpose of modifying and amending
that certain Supplemental Retirement Agreement between the parties dated as of
October 31, 1995, as amended pursuant to Amendment 1 thereto dated as of May 3,
1996 (the "SRA").
W I T N E S S E T H :
The board of directors of the Company has decided to increase the
maximum monthly benefit under the SRA in light of changes in condition since the
date of the SRA including, but not limited to, the substantial growth of the
Company, the Executive's contribution to such growth, and the inadequacy, as of
the effective date of this Amendment, of the maximum monthly benefit currently
provided in the SRA. In addition, the Company and the Executive have, on even
date herewith, entered into a Fully Restated Split Dollar Agreement (the "Death
Benefit Agreement") which necessitates a change to the SRA.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Notwithstanding anything contained in Section 1(d)(v) of the SRA
or otherwise in the SRA, in the event of the death of the Executive under
circumstances in which a beneficiary of the Executive or his estate is entitled
to death proceeds (a) under any life insurance policy or policies maintained
pursuant to the Death Benefit Agreement (including any amendments or
modifications) or (b) under any other written agreement between the Company and
the Executive that replaces the Death Benefit Agreement, then in that event,
neither the Executive nor his/her spouse will be entitled to any benefits under
the SRA.
2. Section 1(g) of the SRA is hereby amended and fully restated as
follows:
"(g) MONTHLY BENEFIT shall mean the Average Compensation
multiplied by the Accrued Benefit Percentage; provided,
however, in no event will the Monthly Benefit exceed
$40,000.00."
3. Except as modified and amended herein, the SRA shall remain in
full force and effect.
The parties have caused this Amendment to be executed and delivered as
of the date first above herein written.
CHARTER ONE FINANCIAL, INC.
By: /s/ Xxxxxxx X. Xxx
----------------------
Authorized Officer
EXECUTIVE
/s/ Xxxx X. Xxxx
----------------
XXXX X. XXXX
XXXX X. XXXX FULLY RESTATED SPLIT DOLLAR AGREEMENT
This Agreement, made and entered into this 31st day of July, 2002 (but effective
March 20, 2001), by and among Charter One Financial, Inc., (hereinafter referred
to as the "Company"), a corporation organized and existing under the laws of
Delaware, and Xxxx X. Xxxx (hereinafter referred to as the "Employee").
WHEREAS, the Company and the Employee entered into the Xxxx X. Xxxx Split Dollar
Agreement on May 3, 1996 (the "Existing Agreement");
WHEREAS, the parties desire by this Agreement to amend and fully restate the
benefits to be received by the Employee under the Policies (as hereunder
defined);
WHEREAS, the Company is the owner of four insurance policies as more
particularly described on Exhibit A hereto (individually "each Policy" or
collectively the "Policies") issued by New England Mutual Life Insurance Company
and Northwestern Mutual Life Insurance Company (the "Insurers") in the aggregate
face amount of $4,639,822.00 on the Employee's life; and
WHEREAS, the Company and the Employee agree to make the Policies subject to this
Agreement; and
WHEREAS, this Agreement shall replace and supercede the Existing Agreement.
NOW, THEREFORE, for value received and in consideration of the mutual covenants
contained herein, the parties agree as follows:
ARTICLE I - DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth
below:
1. "Cash Surrender Value of the Policies" will mean the cash value of the
Policies; plus the cash value of any paid-up additions thereon; plus any
dividend accumulations and unpaid dividends thereunder; and less the
aggregate Policy Loan Balance under the Policies.
2. "Cash Value of each Policy" will mean the cash value as illustrated in
the table of values shown in each Policy.
3. "Change in Control" will have the meaning set forth in Section 1(a) of
the Employment Agreement between the Company and the Employee dated
October 31, 1995.
4. "Company's Interest in the Policies" will be as defined in Article III.
5. "Current Loan Value of each Policy" will mean the Loan Value of each
Policy reduced by its outstanding Policy Loan Balance.
1
6. "Loan Value of each Policy" will mean the amount which with loan
interest will equal the Cash Value of the Policy and of any paid-up
additions on the next loan interest due date or on the next premium due
date, whichever is the smaller amount.
7. "Policy Loan Balance" at any time will mean policy loans outstanding
plus interest accrued to date under each Policy.
ARTICLE II - ALLOCATION OF PREMIUMS
The Company will pay all premiums on the Policies when due, according to the
Schedule of the planned annual premiums in each Policy.
ARTICLE III - RIGHTS IN THE POLICY
Until the earliest of (a) the termination of the Employee's employment with the
Company and its affiliates (if applicable) prior to a Change in Control for any
reason other than death or an involuntary termination by the Company or one of
its affiliates without cause, (b) 210 days after the involuntary termination of
the Employee's employment without cause (including for disability) by the
Company and its affiliates (if applicable) prior to a Change in Control (which
shall include a termination for disability), (c) the date of the Employee's
termination of employment with the Company and its affiliates (if applicable)
for any reason other than death in connection with or after a Change in Control
if on the date of employment termination the Employee is at least 58 years of
age, (d) 30 days after the Employee attains the age of 58 years if his
employment with the Company and its affiliates (if applicable) is terminated for
any reason other than death in connection with or after a Change in Control and
on the date of employment termination the Employee is less than 58 years of age;
(e) the date the Employee purchases all of the Policies pursuant to Article V of
this Agreement, (f) the day next following the death of the Employee or (g) the
bankruptcy, receivership or dissolution of the Company (the "Coverage Period"),
the Employee will have the sole right to designate the beneficiary of the death
proceeds of the Policies in excess of the Company's Interest in the Policies.
the Company will have and may exercise, all ownership rights in each Policy,
except as may otherwise be provided herein. During the Coverage Period, the
Company will not, without prior written consent of the Employee: (i) terminate
any of the Policies or permit any of the Policies to lapse for non-payment of
premium; (ii) terminate, alter or amend the beneficiary designation of the
Employee to the extent the Employee has the power to designate a beneficiary
hereunder; (iii) terminate, alter or amend the settlement option with respect to
the interest of the beneficiary designated by Employee to the extent the
Employee has the power to designate a beneficiary hereunder; (iv) surrender any
Policy for cancellation; (v) assign its rights in any Policy (other than for the
purposes of obtaining a loan against the Policy) to anyone other than the
Employee; or (vi) take any action in dealing with the Insurers that would impair
any right or interest of the Employee in the Policies. The Company will have the
right to borrow from the Insurers (and to secure that loan by one or more
Policies) an amount which, together with the unpaid interest accrued thereon,
will at no time exceed the lesser of (a) the Company's Interest in the Policies,
or (b) the Loan Value of the Policies. "Company's Interest in the Policies" will
mean, at any time during the Coverage Period at which the value of such interest
is to be determined under this Agreement, the sum of (1) plus (2):
2
where (1) is: the greater of (a) the Cash Surrender Value
of the Policies at such time, or (b) the total
premiums theretofore paid on the Policies by the
Company (including any premiums paid by loans charged
automatically against the Policies and including any
premiums paid, by loan or otherwise, for any
supplemental agreement or rider) reduced by the
Policy Loan Balance on all the Policies, with respect
to any loans made or charged automatically against
the Policies by the Company; and
where (2) is: the excess, if any, of the total value of the
Policies at such time over the sum of (a) plus (b)
where (a) is the amount determined in (1) above and
(b) is an amount equal to $2,900,000 while the
Employee is employed by the Company or any of its
affiliates and $1,450,000 if the Employee is no
longer employed by the Company or any of its
affiliates.
If the result of (2) is a negative figure, it shall
be treated as zero for purposes of this computation.
In the event that the Company has paid any unscheduled payments as permitted by
any Policy, all such payments will be included in the total premiums paid on
such Policy by the Company.
It is understood and agreed that the Employee does not have any interest in the
Cash Value of each Policy or in any dividends or earnings of each Policy.
Unless the Employee has died during the Coverage Period, then after the Coverage
Period the Company's Interest in the Policies then owned by the Company shall be
the total value of such Policies.
ARTICLE IV - RIGHTS TO THE PROCEEDS AT DEATH
In the event of the Employee's death during the Coverage Period, the Company
will be entitled to receive from the Proceeds of the Policies an amount equal to
the Company's Interest in the Policies and the remainder of the Proceeds of the
Policies will be paid to such beneficiary as the Employee may have designated
under the terms of the Policies, or failing such designation, to the Employee's
estate. In no event will the Proceeds of the Policies to be paid to the
beneficiary or estate of the Employee exceed or be less than $2,900,000 if the
Employee's death occurs while he is employed by the Company or one of its
affiliates, or exceed or be less than $1,450,000 if his death occurs during the
Coverage Period but after a termination of service. Within 60 days after the
death of the Employee, the Company will provide to the Insurers a written
statement indicating the amount of the Proceeds of the Policies which it is
entitled to receive.
ARTICLE V - RIGHT OF EMPLOYEE TO PURCHASE POLICIES
1. Termination Without Cause. In the event that the Employee's employment
with the Company and its affiliates is involuntarily terminated without
cause (including for
3
disability) by the Company or one of its affiliates, whichever is
applicable, prior to a Change in Control then the Employee shall have
the right, commencing with the date of his termination of employment
until 180 days thereafter (the "Exercise Period"), to purchase any or
all of the Policies from the Company for a cash purchase price equal to
the Cash Surrender Value of the Policy or Policies designated for
purchase by the Employee, with the Employee assuming the Policy Loan
Balance of such Policy or Policies. The Employee shall deliver written
notice to the Company of his election to purchase within the Exercise
Period, which written notice shall (a) designate the specific Policy or
Policies to be purchased and (b) the date and time of closing of the
purchase, which date shall not be less than 10 days or more than 20 days
after the date of the written notice. After receipt of such written
notice within the Exercise Period, the Company shall promptly provide
the Employee with all pertinent information relating to the Cash
Surrender Value and Policy Loan Balance of the designated Policy or
Policies. Closing will take place at the executive offices of the
Company at the time and date specified in the Employee's election
notice, at which time (i) the Company shall transfer all legal and
beneficial interest in the designated Policy or Policies to the Employee
by appropriate instruments of transfer and (ii) the Employee shall make
cash payment to the Company of the Cash Surrender Value of the
designated Policy or Policies. Notwithstanding the foregoing, if the
Employee dies prior to completing the purchase of the Policy or
Policies, whether during or after the Exercise Period, then his right of
purchase herein shall cease and terminate.
2. Change in Control. In the event that the Employee's employment with the
Company and its affiliates is terminated for any reason (other than
death) in connection with or following a Change in Control and he is
less than 58 years of age on the date his employment termination, then
the Employee shall have the right, commencing with the date of his
employment termination until the Employee reaches 58 years of age (the
"Change in Control Exercise Period"), to purchase any or all of the
Policies from the Company for a cash purchase price equal to the Cash
Surrender Value of the Policy or Policies designated for purchase by the
Employee, with the Employee assuming the Policy Loan Balance of such
Policy or Policies. The Employee shall deliver written notice to the
Company of his election to purchase within the Change in Control
Exercise Period, which written notice shall (a) designate the specific
Policy or Policies to be purchased and (b) the date and time of closing
of the purchase, which date shall not be less than 10 days or more than
20 days after the date of the written notice. After receipt of such
written notice within the Change in Control Exercise Period, the Company
shall promptly provide the Employee with all pertinent information
relating to the Cash Surrender Value and Policy Loan Balance of the
designated Policy or Policies. Closing will take place at the executive
offices of the Company at the time and date specified in the Employee's
election notice, at which time (i) the Company shall transfer all legal
and beneficial interest in the designated Policy or Policies to the
Employee by appropriate instruments of transfer and (ii) the Employee
shall make cash payment to the Company of the Cash Surrender Value of
the designated Policy or Policies. Notwithstanding the foregoing, if the
Employee dies prior to completing the purchase of the Policy or
Policies, whether during or after the Change in Control Exercise Period,
then his right of purchase herein shall cease and terminate
4
ARTICLE VI - TERMINATION OF AGREEMENT
This Agreement shall terminate at the expiration of the Coverage Period unless
the Employee has died prior to the expiration of the Coverage Period. In the
event of the death of the Employee prior to the expiration of the Coverage
Period, then this Agreement shall terminate when Proceeds of the Policies are
paid under Article IV of this Agreement. Upon termination of this Agreement
while the Employee is living, the Employee will, without further consideration,
transfer to the Company all of his right, title and interest in each Policy then
owned by the Company, by executing such documents as are necessary to transfer
such right, title and interest as of the date of termination. The Company will
thereafter be able to deal with each such Policy in any way it may see fit. In
the event that Employee does not timely execute such assignment documents, all
of Employee's right, title and interest in each such Policy shall be deemed to
have lapsed and Company will thereafter be able to deal with the Policy in
anyway it sees fit.
ARTICLE VII - PLAN MANAGEMENT
For the purposes of the Employee Retirement Income Security Act of 1974 (ERISA),
the Company will be the "Named Fiduciary" and "Plan Administrator" on the
split-dollar life insurance plan (the "Plan") for which this Agreement is hereby
designated the written plan instrument. The Company's Board of Directors may
authorize a person or group of persons to fulfill the responsibilities of the
Company as Plan Administrator. The Named Fiduciary or the Plan Administrator may
employ others to render advise with regard to its responsibilities under this
Plan. The Named Fiduciary may also allocate fiduciary responsibilities to others
and may exercise any other powers necessary for the discharge of its duties to
the extent not in conflict with ERISA.
ARTICLES VIII - CLAIMS PROCEDURE
1. Any insured, beneficiary or other individual (hereinafter "Claimant")
entitled to benefits under the Plan or under the Policies will file a
claim request with the Plan Administrator with respect to benefits
under the Plan with the Insurers, with respect to benefits under the
Policies. The Plan Administrator will, upon written request of the
Claimant, make available copies of any claim forms or instructions
provided by the Insurers or advise the Claimant where such forms or
instructions may be obtained.
2. Notification of Claimant
If a claim request is wholly or partially denied, the Plan
Administrator will furnish to the Claimant a notice of the decision
within ninety (90) days in writing and in a manner calculated to be
understood by the Claimant, which notice will contain the following
information:
a. The specific reason or reasons for the denial;
b. Specific reference to pertinent Plan provisions upon which the
denial is based;
5
c. A description of any additional material or information
necessary for the Claimant to perfect the claim and an
explanation of why such material or information is necessary;
and
d. An explanation of the Plan's claims review procedure describing
the steps to be taken by a Claimant who wishes to submit his/her
claim for review.
In the case of benefits which are provided under the Policy, the initial
decision on the claims will be made by the applicable Insurer.
2. Review Procedure
A Claimant or his/her authorized representative may with respect to any
denied claim:
a. Request a review upon written application filed within sixty
(60) days after receipt by the Claimant of written notice of the
denial of his/her claim;
b Review pertinent documents; and
c. Submit issues and comments in writing.
Any request or submission will be in writing and will be directed to the
Named Fiduciary (or its designee). The Named Fiduciary (or its designee)
will have the sole responsibility for the review of any denied claim and
will take all steps appropriate in the light of its findings.
2. Decision on Review
The Named Fiduciary (or its designee) will render a decision upon
review. If special circumstances (such as the need to hold a hearing or
any matter pertaining to the denied claims warrant additional time, the
decision will be rendered as soon as possible, but not later than one
hundred twenty (120) days after receipt of the request for review.
Written notice of any such extension will be furnished to the Claimant
prior to the commence- ment of the extension. The decision on review
will be in writing and will include specific reasons for the decision,
written in a manner calculated to be understood by the Claimant, as well
as specific references to the pertinent provisions of the Plan on which
the decision is based. If the decision on review is not furnished to the
Claimant with the time limits prescribed above, the claim will be deemed
denied on review.
ARTICLE IX - SATISFACTION OF CLAIM
The Employee agrees that his rights and interests, and the rights and interests
of any person taking under or through him, will be completely satisfied upon
compliance by the Company with the provisions of this Agreement.
6
ARTICLE X - AMENDMENT AND ASSIGNMENT
This Agreement may be altered, amended or modified, including the addition of
any extra policy provisions, by a written instrument signed by the Company and
the Employee. Employee may not assign his/her interests or obligations under
this Agreement. Subject to the limitations of Article IV, the Company may assign
its interests and obligations under this Agreement, provided, however, that any
assignment will be subject to the terms of this Agreement.
ARTICLE XI - POSSESSION OF THE POLICIES
The Company will keep possession of the Policies. The Company agrees, from time
to time, to make the Policies available to the Employee or to the Insurers for
the purpose of endorsing or filing any change of beneficiary on the Policies for
that portion of the death proceeds under the Policies that the Employee's
beneficiary is entitled to receive as provided in Article IV, but the Policies
will promptly be returned the Company.
ARTICLE XII - GOVERNING LAW
This Agreement will be governed by the laws of the State of Ohio.
ARTICLE XIII - INTERPRETATION
Where appropriate in this Agreement, words used in the singular will include the
plural and words in the masculine will include the feminine.
ARTICLE XIV - SUCCESSORS IN INTEREST
This Agreement shall be binding upon, and the Company's obligations herein shall
become obligations of, any and all successors of the Company. In the event a
successor entity is a direct or indirect subsidiary of any ultimate parent
corporation, the ultimate parent corporation shall execute a counterpart of this
Agreement guaranteeing the Company's obligations herein.
ARTICLE XV - ENTIRE AGREEMENT; TERMINATION OF EXISTING AGREEMENT
This Agreement sets forth the entire agreement of the parties relating solely to
the subject matter hereto. This Agreement replaces and supercedes the Existing
Agreement. Therefore, upon execution of this Agreement, the Existing Agreement
shall terminate and have no further force or effect.
7
The parties have executed this Agreement as of the day and year first written
above.
CHARTER ONE FINANCIAL, INC.
By /s/ Xxxxxxx X. Xxx
------------------
XXXXXXX X. XXX
CHIEF FINANCIAL OFFICER
/s/ Xxxx X. Xxxx
----------------
XXXX X. XXXX
8
AMENDMENT 2 TO SUPPLEMENTAL RETIREMENT AGREEMENT
This Amendment 2 to Supplemental Retirement Agreement (this "Amendment")
dated as of this 31st day of July, 2002 (but effective March 20, 2001), by and
between Charter One Financial, Inc., its successors and assigns (the "Company")
and Xxxx X. Xxxxxx (the "Executive") for the purpose of modifying and amending
that certain Supplemental Retirement Agreement between the parties dated as of
October 31, 1995, as amended pursuant to Amendment 1 thereto dated as of May 3,
1996 (the "SRA").
W I T N E S S E T H :
The board of directors of the Company has decided to increase the
maximum monthly benefit under the SRA in light of changes in condition since the
date of the SRA including, but not limited to, the substantial growth of the
Company, the Executive's contribution to such growth, and the inadequacy, as of
the effective date of this Amendment, of the maximum monthly benefit currently
provided in the SRA. In addition, the Company and the Executive have, on even
date herewith, entered into a Fully Restated Split Dollar Agreement (the "Death
Benefit Agreement") which necessitates a change to the SRA.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Notwithstanding anything contained in Section 1(d)(v) of the SRA
or otherwise in the SRA, in the event of the death of the Executive under
circumstances in which a beneficiary of the Executive or his estate is entitled
to death proceeds (a) under any life insurance policy or policies maintained
pursuant to the Death Benefit Agreement (including any amendments or
modifications) or (b) under any other written agreement between the Company and
the Executive that replaces the Death Benefit Agreement, then in that event,
neither the Executive nor his/her spouse will be entitled to any benefits under
the SRA.
2. Section 1(g) of the SRA is hereby amended and fully restated as
follows:
"(g) MONTHLY BENEFIT shall mean the Average Compensation
multiplied by the Accrued Benefit Percentage; provided,
however, in no event will the Monthly Benefit exceed
$40,000.00."
3. Except as modified and amended herein, the SRA shall remain in
full force and effect.
The parties have caused this Amendment to be executed and delivered as
of the date first above herein written.
CHARTER ONE FINANCIAL, INC.
By: /s/ Xxxxxxx X. Xxx
----------------------
Authorized Officer
EXECUTIVE
/s/ Xxxx X. Xxxxxx
------------------
XXXX X. XXXXXX
XXXX X. XXXXXX FULLY RESTATED SPLIT DOLLAR AGREEMENT
This Agreement, made and entered into this 31st day of July, 2002 (but effective
March 20, 2001), by and among Charter One Financial, Inc., (hereinafter referred
to as the "Company"), a corporation organized and existing under the laws of
Delaware, and Xxxx X. Xxxxxx (hereinafter referred to as the "Employee").
WHEREAS, the Company and the Employee entered into the Xxxx X. Xxxxxx Split
Dollar Agreement on May 3, 1996 (the "Existing Agreement");
WHEREAS, the parties desire by this Agreement to amend and fully restate the
benefits to be received by the Employee under the Policies (as hereunder
defined);
WHEREAS, the Company is the owner of three insurance policies as more
particularly described on Exhibit A hereto (individually "each Policy" or
collectively the "Policies") issued by New England Mutual Life Insurance Company
and Northwestern Mutual Life Insurance Company (the "Insurers") in the aggregate
face amount of $4,289,769.00 on the Employee's life; and
WHEREAS, the Company and the Employee agree to make the Policies subject to this
Agreement; and
WHEREAS, this Agreement shall replace and supercede the Existing Agreement.
NOW, THEREFORE, for value received and in consideration of the mutual covenants
contained herein, the parties agree as follows:
ARTICLE I - DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth
below:
1. "Cash Surrender Value of the Policies" will mean the cash value of the
Policies; plus the cash value of any paid-up additions thereon; plus
any dividend accumulations and unpaid dividends thereunder; and less
the aggregate Policy Loan Balance under the Policies.
2. "Cash Value of each Policy" will mean the cash value as illustrated in
the table of values shown in each Policy.
3. "Change in Control" will have the meaning set forth in Section 1(a) of
the Employment Agreement between the Company and the Employee dated
October 31, 1995.
4. "Company's Interest in the Policies" will be as defined in Article III.
5. "Current Loan Value of each Policy" will mean the Loan Value of each
Policy reduced by its outstanding Policy Loan Balance.
1
6. "Loan Value of each Policy" will mean the amount which with loan
interest will equal the Cash Value of the Policy and of any paid-up
additions on the next loan interest due date or on the next premium due
date, whichever is the smaller amount.
7. "Policy Loan Balance" at any time will mean policy loans outstanding
plus interest accrued to date under each Policy.
ARTICLE II - ALLOCATION OF PREMIUMS
The Company will pay all premiums on the Policies when due, according to the
Schedule of the planned annual premiums in each Policy.
ARTICLE III - RIGHTS IN THE POLICY
Until the earliest of (a) the termination of the Employee's employment with the
Company and its affiliates (if applicable) prior to a Change in Control for any
reason other than death or an involuntary termination by the Company or one of
its affiliates without cause, (b) 210 days after the involuntary termination of
the Employee's employment without cause (including for disability) by the
Company and its affiliates (if applicable) prior to a Change in Control (which
shall include a termination for disability), (c) the date of the Employee's
termination of employment with the Company and its affiliates (if applicable)
for any reason other than death in connection with or after a Change in Control
if on the date of employment termination the Employee is at least 58 years of
age, (d) 30 days after the Employee attains the age of 58 years if his
employment with the Company and its affiliates (if applicable) is terminated for
any reason other than death in connection with or after a Change in Control and
on the date of employment termination the Employee is less than 58 years of age;
(e) the date the Employee purchases all of the Policies pursuant to Article V of
this Agreement, (f) the day next following the death of the Employee or (g) the
bankruptcy, receivership or dissolution of the Company (the "Coverage Period"),
the Employee will have the sole right to designate the beneficiary of the death
proceeds of the Policies in excess of the Company's Interest in the Policies.
the Company will have and may exercise, all ownership rights in each Policy,
except as may otherwise be provided herein. During the Coverage Period, the
Company will not, without prior written consent of the Employee: (i) terminate
any of the Policies or permit any of the Policies to lapse for non-payment of
premium; (ii) terminate, alter or amend the beneficiary designation of the
Employee to the extent the Employee has the power to designate a beneficiary
hereunder; (iii) terminate, alter or amend the settlement option with respect to
the interest of the beneficiary designated by Employee to the extent the
Employee has the power to designate a beneficiary hereunder; (iv) surrender any
Policy for cancellation; (v) assign its rights in any Policy (other than for the
purposes of obtaining a loan against the Policy) to anyone other than the
Employee; or (vi) take any action in dealing with the Insurers that would impair
any right or interest of the Employee in the Policies. The Company will have the
right to borrow from the Insurers (and to secure that loan by one or more
Policies) an amount which, together with the unpaid interest accrued thereon,
will at no time exceed the lesser of (a) the Company's Interest in the Policies,
or (b) the Loan Value of the Policies. "Company's Interest in the Policies" will
mean, at any time during the Coverage Period at which the value of such interest
is to be determined under this Agreement, the sum of (1) plus (2):
2
where (1) is: the greater of (a) the Cash Surrender Value
of the Policies at such time, or (b) the total
premiums theretofore paid on the Policies by the
Company (including any premiums paid by loans charged
automatically against the Policies and including any
premiums paid, by loan or otherwise, for any
supplemental agreement or rider) reduced by the
Policy Loan Balance on all the Policies, with respect
to any loans made or charged automatically against
the Policies by the Company; and
where (2) is: the excess, if any, of the total value of the
Policies at such time over the sum of (a) plus (b)
where (a) is the amount determined in (1) above and
(b) is an amount equal to $2,900,000 while the
Employee is employed by the Company or any of its
affiliates and $1,450,000 if the Employee is no
longer employed by the Company or any of its
affiliates.
If the result of (2) is a negative figure, it shall
be treated as zero for purposes of this computation.
In the event that the Company has paid any unscheduled payments as permitted by
any Policy, all such payments will be included in the total premiums paid on
such Policy by the Company.
It is understood and agreed that the Employee does not have any interest in the
Cash Value of each Policy or in any dividends or earnings of each Policy.
Unless the Employee has died during the Coverage Period, then after the Coverage
Period the Company's Interest in the Policies then owned by the Company shall be
the total value of such Policies.
ARTICLE IV - RIGHTS TO THE PROCEEDS AT DEATH
In the event of the Employee's death during the Coverage Period, the Company
will be entitled to receive from the Proceeds of the Policies an amount equal to
the Company's Interest in the Policies and the remainder of the Proceeds of the
Policies will be paid to such beneficiary as the Employee may have designated
under the terms of the Policies, or failing such designation, to the Employee's
estate. In no event will the Proceeds of the Policies to be paid to the
beneficiary or estate of the Employee exceed or be less than $2,900,000 if the
Employee's death occurs while he is employed by the Company or one of its
affiliates, or exceed or be less than $1,450,000 if his death occurs during the
Coverage Period but after a termination of service. Within 60 days after the
death of the Employee, the Company will provide to the Insurers a written
statement indicating the amount of the Proceeds of the Policies which it is
entitled to receive.
ARTICLE V - RIGHT OF EMPLOYEE TO PURCHASE POLICIES
1. Termination Without Cause. In the event that the Employee's employment
with the Company and its affiliates is involuntarily terminated without
cause (including for
3
disability) by the Company or one of its affiliates, whichever is
applicable, prior to a Change in Control then the Employee shall have
the right, commencing with the date of his termination of employment
until 180 days thereafter (the "Exercise Period"), to purchase any or
all of the Policies from the Company for a cash purchase price equal to
the Cash Surrender Value of the Policy or Policies designated for
purchase by the Employee, with the Employee assuming the Policy Loan
Balance of such Policy or Policies. The Employee shall deliver written
notice to the Company of his election to purchase within the Exercise
Period, which written notice shall (a) designate the specific Policy or
Policies to be purchased and (b) the date and time of closing of the
purchase, which date shall not be less than 10 days or more than 20 days
after the date of the written notice. After receipt of such written
notice within the Exercise Period, the Company shall promptly provide
the Employee with all pertinent information relating to the Cash
Surrender Value and Policy Loan Balance of the designated Policy or
Policies. Closing will take place at the executive offices of the
Company at the time and date specified in the Employee's election
notice, at which time (i) the Company shall transfer all legal and
beneficial interest in the designated Policy or Policies to the Employee
by appropriate instruments of transfer and (ii) the Employee shall make
cash payment to the Company of the Cash Surrender Value of the
designated Policy or Policies. Notwithstanding the foregoing, if the
Employee dies prior to completing the purchase of the Policy or
Policies, whether during or after the Exercise Period, then his right of
purchase herein shall cease and terminate.
2. Change in Control. In the event that the Employee's employment with the
Company and its affiliates is terminated for any reason (other than
death) in connection with or following a Change in Control and he is
less than 58 years of age on the date his employment termination, then
the Employee shall have the right, commencing with the date of his
employment termination until the Employee reaches 58 years of age (the
"Change in Control Exercise Period"), to purchase any or all of the
Policies from the Company for a cash purchase price equal to the Cash
Surrender Value of the Policy or Policies designated for purchase by the
Employee, with the Employee assuming the Policy Loan Balance of such
Policy or Policies. The Employee shall deliver written notice to the
Company of his election to purchase within the Change in Control
Exercise Period, which written notice shall (a) designate the specific
Policy or Policies to be purchased and (b) the date and time of closing
of the purchase, which date shall not be less than 10 days or more than
20 days after the date of the written notice. After receipt of such
written notice within the Change in Control Exercise Period, the Company
shall promptly provide the Employee with all pertinent information
relating to the Cash Surrender Value and Policy Loan Balance of the
designated Policy or Policies. Closing will take place at the executive
offices of the Company at the time and date specified in the Employee's
election notice, at which time (i) the Company shall transfer all legal
and beneficial interest in the designated Policy or Policies to the
Employee by appropriate instruments of transfer and (ii) the Employee
shall make cash payment to the Company of the Cash Surrender Value of
the designated Policy or Policies. Notwithstanding the foregoing, if the
Employee dies prior to completing the purchase of the Policy or
Policies, whether during or after the Change in Control Exercise Period,
then his right of purchase herein shall cease and terminate
4
ARTICLE VI - TERMINATION OF AGREEMENT
This Agreement shall terminate at the expiration of the Coverage Period unless
the Employee has died prior to the expiration of the Coverage Period. In the
event of the death of the Employee prior to the expiration of the Coverage
Period, then this Agreement shall terminate when Proceeds of the Policies are
paid under Article IV of this Agreement. Upon termination of this Agreement
while the Employee is living, the Employee will, without further consideration,
transfer to the Company all of his right, title and interest in each Policy then
owned by the Company, by executing such documents as are necessary to transfer
such right, title and interest as of the date of termination. The Company will
thereafter be able to deal with each such Policy in any way it may see fit. In
the event that Employee does not timely execute such assignment documents, all
of Employee's right, title and interest in each such Policy shall be deemed to
have lapsed and Company will thereafter be able to deal with the Policy in
anyway it sees fit.
ARTICLE VII - PLAN MANAGEMENT
For the purposes of the Employee Retirement Income Security Act of 1974 (ERISA),
the Company will be the "Named Fiduciary" and "Plan Administrator" on the
split-dollar life insurance plan (the "Plan") for which this Agreement is hereby
designated the written plan instrument. The Company's Board of Directors may
authorize a person or group of persons to fulfill the responsibilities of the
Company as Plan Administrator. The Named Fiduciary or the Plan Administrator may
employ others to render advise with regard to its responsibilities under this
Plan. The Named Fiduciary may also allocate fiduciary responsibilities to others
and may exercise any other powers necessary for the discharge of its duties to
the extent not in conflict with ERISA.
ARTICLES VIII - CLAIMS PROCEDURE
1. Any insured, beneficiary or other individual (hereinafter "Claimant")
entitled to benefits under the Plan or under the Policies will file a
claim request with the Plan Administrator with respect to benefits
under the Plan with the Insurers, with respect to benefits under the
Policies. The Plan Administrator will, upon written request of the
Claimant, make available copies of any claim forms or instructions
provided by the Insurers or advise the Claimant where such forms or
instructions may be obtained.
2. Notification of Claimant
If a claim request is wholly or partially denied, the Plan
Administrator will furnish to the Claimant a notice of the decision
within ninety (90) days in writing and in a manner calculated to be
understood by the Claimant, which notice will contain the following
information:
a. The specific reason or reasons for the denial;
b. Specific reference to pertinent Plan provisions upon which the
denial is based;
5
c. A description of any additional material or information
necessary for the Claimant to perfect the claim and an
explanation of why such material or information is necessary;
and
d. An explanation of the Plan's claims review procedure describing
the steps to be taken by a Claimant who wishes to submit his/her
claim for review.
In the case of benefits which are provided under the Policy, the initial
decision on the claims will be made by the applicable Insurer.
2. Review Procedure
A Claimant or his/her authorized representative may with respect to any
denied claim:
a. Request a review upon written application filed within sixty
(60) days after receipt by the Claimant of written notice of the
denial of his/her claim;
b Review pertinent documents; and
c. Submit issues and comments in writing.
Any request or submission will be in writing and will be directed to the
Named Fiduciary (or its designee). The Named Fiduciary (or its designee)
will have the sole responsibility for the review of any denied claim and
will take all steps appropriate in the light of its findings.
2. Decision on Review
The Named Fiduciary (or its designee) will render a decision upon
review. If special circumstances (such as the need to hold a hearing or
any matter pertaining to the denied claims warrant additional time, the
decision will be rendered as soon as possible, but not later than one
hundred twenty (120) days after receipt of the request for review.
Written notice of any such extension will be furnished to the Claimant
prior to the commence- ment of the extension. The decision on review
will be in writing and will include specific reasons for the decision,
written in a manner calculated to be understood by the Claimant, as well
as specific references to the pertinent provisions of the Plan on which
the decision is based. If the decision on review is not furnished to the
Claimant with the time limits prescribed above, the claim will be deemed
denied on review.
ARTICLE IX - SATISFACTION OF CLAIM
The Employee agrees that his rights and interests, and the rights and interests
of any person taking under or through him, will be completely satisfied upon
compliance by the Company with the provisions of this Agreement.
6
ARTICLE X - AMENDMENT AND ASSIGNMENT
This Agreement may be altered, amended or modified, including the addition of
any extra policy provisions, by a written instrument signed by the Company and
the Employee. Employee may not assign his/her interests or obligations under
this Agreement. Subject to the limitations of Article IV, the Company may assign
its interests and obligations under this Agreement, provided, however, that any
assignment will be subject to the terms of this Agreement.
ARTICLE XI - POSSESSION OF THE POLICIES
The Company will keep possession of the Policies. The Company agrees, from time
to time, to make the Policies available to the Employee or to the Insurers for
the purpose of endorsing or filing any change of beneficiary on the Policies for
that portion of the death proceeds under the Policies that the Employee's
beneficiary is entitled to receive as provided in Article IV, but the Policies
will promptly be returned the Company.
ARTICLE XII - GOVERNING LAW
This Agreement will be governed by the laws of the State of Ohio.
ARTICLE XIII - INTERPRETATION
Where appropriate in this Agreement, words used in the singular will include the
plural and words in the masculine will include the feminine.
ARTICLE XIV - SUCCESSORS IN INTEREST
This Agreement shall be binding upon, and the Company's obligations herein shall
become obligations of, any and all successors of the Company. In the event a
successor entity is a direct or indirect subsidiary of any ultimate parent
corporation, the ultimate parent corporation shall execute a counterpart of this
Agreement guaranteeing the Company's obligations herein.
ARTICLE XV - ENTIRE AGREEMENT; TERMINATION OF EXISTING AGREEMENT
This Agreement sets forth the entire agreement of the parties relating solely to
the subject matter hereto. This Agreement replaces and supercedes the Existing
Agreement. Therefore, upon execution of this Agreement, the Existing Agreement
shall terminate and have no further force or effect.
7
The parties have executed this Agreement as of the day and year first written
above.
CHARTER ONE FINANCIAL, INC.
By /s/ Xxxxxxx X. Xxx
------------------
XXXXXXX X. XXX
CHIEF FINANCIAL OFFICER
/s/ Xxxx X. Xxxxxx
------------------
XXXX X. XXXXXX
8
AMENDMENT 2 TO SUPPLEMENTAL RETIREMENT AGREEMENT
This Amendment 2 to Supplemental Retirement Agreement (this "Amendment")
dated as of this 31st day of July, 2002 (but effective March 20, 2001), by and
between Charter One Financial, Inc., its successors and assigns (the "Company")
and Xxxxxx X. Xxxx (the "Executive") for the purpose of modifying and amending
that certain Supplemental Retirement Agreement between the parties dated as of
October 31, 1995, as amended pursuant to Amendment 1 thereto dated as of May 3,
1996 (the "SRA").
W I T N E S S E T H :
The board of directors of the Company has decided to increase the
maximum monthly benefit under the SRA in light of changes in condition since the
date of the SRA including, but not limited to, the substantial growth of the
Company, the Executive's contribution to such growth, and the inadequacy, as of
the effective date of this Amendment, of the maximum monthly benefit currently
provided in the SRA. In addition, the Company and the Executive have, on even
date herewith, entered into a Fully Restated Split Dollar Agreement (the "Death
Benefit Agreement") which necessitates a change to the SRA.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Notwithstanding anything contained in Section 1(d)(v) of the SRA
or otherwise in the SRA, in the event of the death of the Executive under
circumstances in which a beneficiary of the Executive or his estate is entitled
to death proceeds (a) under any life insurance policy or policies maintained
pursuant to the Death Benefit Agreement (including any amendments or
modifications) or (b) under any other written agreement between the Company and
the Executive that replaces the Death Benefit Agreement, then in that event,
neither the Executive nor his/her spouse will be entitled to any benefits under
the SRA.
2. Section 1(g) of the SRA is hereby amended and fully restated as
follows:
"(g) MONTHLY BENEFIT shall mean the Average Compensation
multiplied by the Accrued Benefit Percentage; provided,
however, in no event will the Monthly Benefit exceed
$25,000.00."
3. Except as modified and amended herein, the SRA shall remain in
full force and effect.
The parties have caused this Amendment to be executed and delivered as
of the date first above herein written.
CHARTER ONE FINANCIAL, INC.
By: /s/ Xxxxxxx X. Xxx
----------------------
Authorized Officer
EXECUTIVE
/s/ Xxxxxx X. Xxxx
------------------
XXXXXX X. XXXX
XXXXXX X. XXXX FULLY RESTATED SPLIT DOLLAR AGREEMENT
This Agreement, made and entered into this 31st day of July, 2002 (but effective
March 20, 2001), by and among Charter One Financial, Inc., (hereinafter referred
to as the "Company"), a corporation organized and existing under the laws of
Delaware, and Xxxxxx X. Xxxx (hereinafter referred to as the "Employee").
WHEREAS, the Company and the Employee entered into the Xxxxxx X. Xxxx Split
Dollar Agreement on May 3, 1996 (the "Existing Agreement");
WHEREAS, the parties desire by this Agreement to amend and fully restate the
benefits to be received by the Employee under the Policies (as hereunder
defined);
WHEREAS, the Company is the owner of four insurance policies as more
particularly described on Exhibit A hereto (individually "each Policy" or
collectively the "Policies") issued by New England Mutual Life Insurance Company
and Northwestern Mutual Life Insurance Company (the "Insurers") in the aggregate
face amount of $3,063,402.00 on the Employee's life; and
WHEREAS, the Company and the Employee agree to make the Policies subject to this
Agreement; and
WHEREAS, this Agreement shall replace and supercede the Existing Agreement.
NOW, THEREFORE, for value received and in consideration of the mutual covenants
contained herein, the parties agree as follows:
ARTICLE I - DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth
below:
1. "Cash Surrender Value of the Policies" will mean the cash value of the
Policies; plus the cash value of any paid-up additions thereon; plus any
dividend accumulations and unpaid dividends thereunder; and less the
aggregate Policy Loan Balance under the Policies.
2. "Cash Value of each Policy" will mean the cash value as illustrated in
the table of values shown in each Policy.
3. "Change in Control" will have the meaning set forth in Section 1(a) of
the Employment Agreement between the Company and the Employee dated
October 31, 1995.
4. "Company's Interest in the Policies" will be as defined in Article III.
5. "Current Loan Value of each Policy" will mean the Loan Value of each
Policy reduced by its outstanding Policy Loan Balance.
1
6. "Loan Value of each Policy" will mean the amount which with loan
interest will equal the Cash Value of the Policy and of any paid-up
additions on the next loan interest due date or on the next premium due
date, whichever is the smaller amount.
7. "Policy Loan Balance" at any time will mean policy loans outstanding
plus interest accrued to date under each Policy.
ARTICLE II - ALLOCATION OF PREMIUMS
The Company will pay all premiums on the Policies when due, according to the
Schedule of the planned annual premiums in each Policy.
ARTICLE III - RIGHTS IN THE POLICY
Until the earliest of (a) the termination of the Employee's employment with the
Company and its affiliates (if applicable) prior to a Change in Control for any
reason other than death or an involuntary termination by the Company or one of
its affiliates without cause, (b) 210 days after the involuntary termination of
the Employee's employment without cause (including for disability) by the
Company and its affiliates (if applicable) prior to a Change in Control (which
shall include a termination for disability), (c) the date of the Employee's
termination of employment with the Company and its affiliates (if applicable)
for any reason other than death in connection with or after a Change in Control
if on the date of employment termination the Employee is at least 58 years of
age, (d) 30 days after the Employee attains the age of 58 years if his
employment with the Company and its affiliates (if applicable) is terminated for
any reason other than death in connection with or after a Change in Control and
on the date of employment termination the Employee is less than 58 years of age;
(e) the date the Employee purchases all of the Policies pursuant to Article V of
this Agreement, (f) the day next following the death of the Employee or (g) the
bankruptcy, receivership or dissolution of the Company (the "Coverage Period"),
the Employee will have the sole right to designate the beneficiary of the death
proceeds of the Policies in excess of the Company's Interest in the Policies.
the Company will have and may exercise, all ownership rights in each Policy,
except as may otherwise be provided herein. During the Coverage Period, the
Company will not, without prior written consent of the Employee: (i) terminate
any of the Policies or permit any of the Policies to lapse for non-payment of
premium; (ii) terminate, alter or amend the beneficiary designation of the
Employee to the extent the Employee has the power to designate a beneficiary
hereunder; (iii) terminate, alter or amend the settlement option with respect to
the interest of the beneficiary designated by Employee to the extent the
Employee has the power to designate a beneficiary hereunder; (iv) surrender any
Policy for cancellation; (v) assign its rights in any Policy (other than for the
purposes of obtaining a loan against the Policy) to anyone other than the
Employee; or (vi) take any action in dealing with the Insurers that would impair
any right or interest of the Employee in the Policies. The Company will have the
right to borrow from the Insurers (and to secure that loan by one or more
Policies) an amount which, together with the unpaid interest accrued thereon,
will at no time exceed the lesser of (a) the Company's Interest in the Policies,
or (b) the Loan Value of the Policies. "Company's Interest in the Policies" will
mean, at any time during the Coverage Period at which the value of such interest
is to be determined under this Agreement, the sum of (1) plus (2):
2
where (1) is: the greater of (a) the Cash Surrender Value of the Policies
at such time, or (b) the total premiums theretofore paid
on the Policies by the Company (including any premiums paid
by loans charged automatically against the Policies and
including any premiums paid, by loan or otherwise, for any
supplemental agreement or rider) reduced by the Policy Loan
Balance on all the Policies, with respect to any loans made
or charged automatically against the Policies by the
Company; and
where (2) is: the excess, if any, of the total value of the Policies at
such time over the sum of (a) plus (b) where (a) is the
amount determined in (1) above and (b) is an amount equal
to $1,800,000 while the Employee is employed by the Company
or any of its affiliates and $900,000 if the Employee is no
longer employed by the Company or any of its affiliates.
If the result of (2) is a negative figure, it shall be
treated as zero for purposes of this computation.
In the event that the Company has paid any unscheduled payments as permitted by
any Policy, all such payments will be included in the total premiums paid on
such Policy by the Company.
It is understood and agreed that the Employee does not have any interest in the
Cash Value of each Policy or in any dividends or earnings of each Policy.
Unless the Employee has died during the Coverage Period, then after the Coverage
Period the Company's Interest in the Policies then owned by the Company shall be
the total value of such Policies.
ARTICLE IV - RIGHTS TO THE PROCEEDS AT DEATH
In the event of the Employee's death during the Coverage Period, the Company
will be entitled to receive from the Proceeds of the Policies an amount equal to
the Company's Interest in the Policies and the remainder of the Proceeds of the
Policies will be paid to such beneficiary as the Employee may have designated
under the terms of the Policies, or failing such designation, to the Employee's
estate. In no event will the Proceeds of the Policies to be paid to the
beneficiary or estate of the Employee exceed or be less than $1,800,000 if the
Employee's death occurs while he is employed by the Company or one of its
affiliates, or exceed or be less than $900,000 if his death occurs during the
Coverage Period but after a termination of service. Within 60 days after the
death of the Employee, the Company will provide to the Insurers a written
statement indicating the amount of the Proceeds of the Policies which it is
entitled to receive.
ARTICLE V - RIGHT OF EMPLOYEE TO PURCHASE POLICIES
1. Termination Without Cause. In the event that the Employee's employment
with the Company and its affiliates is involuntarily terminated without
cause (including for disability) by the Company or one of its
affiliates, whichever is applicable, prior to a
3
Change in Control then the Employee shall have the right, commencing
with the date of his termination of employment until 180 days thereafter
(the "Exercise Period"), to purchase any or all of the Policies from the
Company for a cash purchase price equal to the Cash Surrender Value of
the Policy or Policies designated for purchase by the Employee, with the
Employee assuming the Policy Loan Balance of such Policy or Policies.
The Employee shall deliver written notice to the Company of his election
to purchase within the Exercise Period, which written notice shall (a)
designate the specific Policy or Policies to be purchased and (b) the
date and time of closing of the purchase, which date shall not be less
than 10 days or more than 20 days after the date of the written notice.
After receipt of such written notice within the Exercise Period, the
Company shall promptly provide the Employee with all pertinent
information relating to the Cash Surrender Value and Policy Loan Balance
of the designated Policy or Policies. Closing will take place at the
executive offices of the Company at the time and date specified in the
Employee's election notice, at which time (i) the Company shall transfer
all legal and beneficial interest in the designated Policy or Policies
to the Employee by appropriate instruments of transfer and (ii) the
Employee shall make cash payment to the Company of the Cash Surrender
Value of the designated Policy or Policies. Notwithstanding the
foregoing, if the Employee dies prior to completing the purchase of the
Policy or Policies, whether during or after the Exercise Period, then
his right of purchase herein shall cease and terminate.
2. Change in Control. In the event that the Employee's employment with the
Company and its affiliates is terminated for any reason (other than
death) in connection with or following a Change in Control and he is
less than 58 years of age on the date his employment termination, then
the Employee shall have the right, commencing with the date of his
employment termination until the Employee reaches 58 years of age (the
"Change in Control Exercise Period"), to purchase any or all of the
Policies from the Company for a cash purchase price equal to the Cash
Surrender Value of the Policy or Policies designated for purchase by the
Employee, with the Employee assuming the Policy Loan Balance of such
Policy or Policies. The Employee shall deliver written notice to the
Company of his election to purchase within the Change in Control
Exercise Period, which written notice shall (a) designate the specific
Policy or Policies to be purchased and (b) the date and time of closing
of the purchase, which date shall not be less than 10 days or more than
20 days after the date of the written notice. After receipt of such
written notice within the Change in Control Exercise Period, the Company
shall promptly provide the Employee with all pertinent information
relating to the Cash Surrender Value and Policy Loan Balance of the
designated Policy or Policies. Closing will take place at the executive
offices of the Company at the time and date specified in the Employee's
election notice, at which time (i) the Company shall transfer all legal
and beneficial interest in the designated Policy or Policies to the
Employee by appropriate instruments of transfer and (ii) the Employee
shall make cash payment to the Company of the Cash Surrender Value of
the designated Policy or Policies. Notwithstanding the foregoing, if the
Employee dies prior to completing the purchase of the Policy or
Policies, whether during or after the Change in Control Exercise Period,
then his right of purchase herein shall cease and terminate
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ARTICLE VI - TERMINATION OF AGREEMENT
This Agreement shall terminate at the expiration of the Coverage Period unless
the Employee has died prior to the expiration of the Coverage Period. In the
event of the death of the Employee prior to the expiration of the Coverage
Period, then this Agreement shall terminate when Proceeds of the Policies are
paid under Article IV of this Agreement. Upon termination of this Agreement
while the Employee is living, the Employee will, without further consideration,
transfer to the Company all of his right, title and interest in each Policy then
owned by the Company, by executing such documents as are necessary to transfer
such right, title and interest as of the date of termination. The Company will
thereafter be able to deal with each such Policy in any way it may see fit. In
the event that Employee does not timely execute such assignment documents, all
of Employee's right, title and interest in each such Policy shall be deemed to
have lapsed and Company will thereafter be able to deal with the Policy in
anyway it sees fit.
ARTICLE VII - PLAN MANAGEMENT
For the purposes of the Employee Retirement Income Security Act of 1974 (ERISA),
the Company will be the "Named Fiduciary" and "Plan Administrator" on the
split-dollar life insurance plan (the "Plan") for which this Agreement is hereby
designated the written plan instrument. The Company's Board of Directors may
authorize a person or group of persons to fulfill the responsibilities of the
Company as Plan Administrator. The Named Fiduciary or the Plan Administrator may
employ others to render advise with regard to its responsibilities under this
Plan. The Named Fiduciary may also allocate fiduciary responsibilities to others
and may exercise any other powers necessary for the discharge of its duties to
the extent not in conflict with ERISA.
ARTICLES VIII - CLAIMS PROCEDURE
1. Any insured, beneficiary or other individual (hereinafter "Claimant")
entitled to benefits under the Plan or under the Policies will file a
claim request with the Plan Administrator with respect to benefits under
the Plan with the Insurers, with respect to benefits under the Policies.
The Plan Administrator will, upon written request of the Claimant, make
available copies of any claim forms or instructions provided by the
Insurers or advise the Claimant where such forms or instructions may be
obtained.
2. Notification of Claimant
If a claim request is wholly or partially denied, the Plan Administrator
will furnish to the Claimant a notice of the decision within ninety (90)
days in writing and in a manner calculated to be understood by the
Claimant, which notice will contain the following information:
a. The specific reason or reasons for the denial;
b. Specific reference to pertinent Plan provisions upon which the
denial is based;
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c. A description of any additional material or information necessary
for the Claimant to perfect the claim and an explanation of why
such material or information is necessary; and
d. An explanation of the Plan's claims review procedure describing
the steps to be taken by a Claimant who wishes to submit his/her
claim for review.
In the case of benefits which are provided under the Policy, the initial
decision on the claims will be made by the applicable Insurer.
2. Review Procedure
A Claimant or his/her authorized representative may with respect to any
denied claim:
a. Request a review upon written application filed within sixty (60)
days after receipt by the Claimant of written notice of the
denial of his/her claim;
b Review pertinent documents; and
c. Submit issues and comments in writing.
Any request or submission will be in writing and will be directed to the
Named Fiduciary (or its designee). The Named Fiduciary (or its designee)
will have the sole responsibility for the review of any denied claim and
will take all steps appropriate in the light of its findings.
2. Decision on Review
The Named Fiduciary (or its designee) will render a decision upon
review. If special circumstances (such as the need to hold a hearing or
any matter pertaining to the denied claims warrant additional time, the
decision will be rendered as soon as possible, but not later than one
hundred twenty (120) days after receipt of the request for review.
Written notice of any such extension will be furnished to the Claimant
prior to the commence- ment of the extension. The decision on review
will be in writing and will include specific reasons for the decision,
written in a manner calculated to be understood by the Claimant, as well
as specific references to the pertinent provisions of the Plan on which
the decision is based. If the decision on review is not furnished to the
Claimant with the time limits prescribed above, the claim will be deemed
denied on review.
ARTICLE IX - SATISFACTION OF CLAIM
The Employee agrees that his rights and interests, and the rights and interests
of any person taking under or through him, will be completely satisfied upon
compliance by the Company with the provisions of this Agreement.
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ARTICLE X - AMENDMENT AND ASSIGNMENT
This Agreement may be altered, amended or modified, including the addition of
any extra policy provisions, by a written instrument signed by the Company and
the Employee. Employee may not assign his/her interests or obligations under
this Agreement. Subject to the limitations of Article IV, the Company may assign
its interests and obligations under this Agreement, provided, however, that any
assignment will be subject to the terms of this Agreement.
ARTICLE XI - POSSESSION OF THE POLICIES
The Company will keep possession of the Policies. The Company agrees, from time
to time, to make the Policies available to the Employee or to the Insurers for
the purpose of endorsing or filing any change of beneficiary on the Policies for
that portion of the death proceeds under the Policies that the Employee's
beneficiary is entitled to receive as provided in Article IV, but the Policies
will promptly be returned the Company.
ARTICLE XII - GOVERNING LAW
This Agreement will be governed by the laws of the State of Ohio.
ARTICLE XIII - INTERPRETATION
Where appropriate in this Agreement, words used in the singular will include the
plural and words in the masculine will include the feminine.
ARTICLE XIV - SUCCESSORS IN INTEREST
This Agreement shall be binding upon, and the Company's obligations herein shall
become obligations of, any and all successors of the Company. In the event a
successor entity is a direct or indirect subsidiary of any ultimate parent
corporation, the ultimate parent corporation shall execute a counterpart of this
Agreement guaranteeing the Company's obligations herein.
ARTICLE XV - ENTIRE AGREEMENT; TERMINATION OF EXISTING
AGREEMENT
This Agreement sets forth the entire agreement of the parties relating solely to
the subject matter hereto. This Agreement replaces and supercedes the Existing
Agreement. Therefore, upon execution of this Agreement, the Existing Agreement
shall terminate and have no further force or effect.
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The parties have executed this Agreement as of the day and year first written
above.
CHARTER ONE FINANCIAL, INC.
By /s/ Xxxxxxx X. Xxx
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XXXXXXX X. XXX
CHIEF FINANCIAL OFFICER
/s/ Xxxxxx X. Xxxx
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XXXXXX X. XXXX
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