Exhibit 10.1
Cumberland Bank
Endorsement Split Dollar Agreement
     This Endorsement Split Dollar Agreement (this “Agreement”) is entered into
as of this ____ day of ______________, 200___ by and between Cumberland Bank
(the “Bank”), and ___, its ___ (the “Executive”). This Agreement shall append
the Split Dollar Policy Endorsement entered into on even date herewith or as
subsequently amended, by and between the aforementioned parties.
     Whereas, to encourage the Executive to remain a Bank employee, the Bank is
willing to divide the death proceeds of a life insurance policy or policies on
the Executive’s life, and
     Whereas, the Bank will pay premiums on the life insurance policy or
policies from the Bank’s general assets.
     Now Therefore, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Executive and the Bank hereby agree as follows.
Article 1
General Definitions
     The following terms shall have the meanings specified —
     1.1 Administrator means the administrator described in Article 7.
     1.2 Executive’s Interest means the benefit set forth in Section 2.2(a).
     1.3 Insured means the Executive.
     1.4 Insurer means each life insurance carrier in which there is a Split
Dollar Policy Endorsement attached to this Agreement.
     1.5 Net Death Proceeds means the total death proceeds of the Policy minus
the cash surrender value.
     1.6 Policy means the specific life insurance policy or policies issued by
the Insurers.
     1.7 Split Dollar Policy Endorsement means the form required by the
Administrator or the Insurer to indicate the Executive’s interest, if any, in a
Policy on such Executive’s life.

 

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Article 2
Policy Ownership/Interests
     2.1 Bank Ownership. The Bank is the sole owner of the Policy and shall have
the right to exercise all incidents of ownership. The Bank shall be the
beneficiary of the remaining death proceeds of the Policy after the Executive’s
Interest is paid according to Section 2.2 below.
     2.2 Death Benefit. (a) Executive’s Interest If the Policy Is Not Cancelled.
The Executive shall have the right to designate the beneficiary of the
Executive’s Interest. Provided the Policy is not cancelled, surrendered,
terminated, or allowed to lapse and the Executive’s employment with the Bank is
terminated by reason of death, then the Executive’s beneficiary designated in
accordance with the Split Dollar Policy Endorsement shall be entitled to ___% of
the Net Death Proceeds (the “Executive’s Interest”).
          (b) If the Policy Is Cancelled. If the Policy is cancelled,
surrendered, terminated, or allowed to lapse, in any such case without
replacement prior to the termination of Executive employment with the Bank by
reason of death, then no benefit is payable under this agreement.
     2.3 Option to Purchase. Upon termination of this Agreement, the Bank shall
not sell, surrender, or transfer ownership of the Policy without first giving
the Executive or the Executive’s transferee the option to purchase the Policy
for a period of 60 days from written notice of such intention. The purchase
price shall be an amount equal to the cash surrender value of the Policy.
     2.4 Comparable Coverage. The Bank may in its sole discretion replace the
Policy with a comparable insurance policy to cover the benefit provided under
this Agreement, in which case the Bank and the Executive shall execute a new
Split Dollar Policy Endorsement for the comparable insurance policy.
     2.5 Internal Revenue Code Section 1035 Exchanges. The Executive recognizes
and agrees that the Bank may after this Split Dollar Agreement is adopted wish
to exchange the Policy of life insurance on the Executive’s life for another
contract of life insurance insuring the Executive’s life. Provided that the
Policy is replaced (or intended to be replaced) with a comparable policy of life
insurance, the Executive agrees to provide medical information and cooperate
with medical insurance-related testing required by a prospective insurer for
implementing the Policy or, if necessary, for modifying or updating to a
comparable insurer.
Article 3
Premiums
     3.1 Premium Payment. The Bank shall pay any premiums due on the Policy.

 

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     3.2 Economic Benefit. The Administrator shall determine the economic
benefit attributable to the Executive based on the life insurance premium factor
for the Executive’s age multiplied by the aggregate death benefit payable to the
Executive’s Beneficiary. The life insurance premium factor is the minimum amount
required to be imputed under Internal Revenue Service Regulations, section
1.61-22(d)(3)(ii), or any subsequent applicable authority.
     3.3 Imputed Income. The Bank shall impute the economic benefit to the
Executive on an annual basis by adding the economic benefit to the Executive’s
Form W-2 or, if applicable, Form 1099.
Article 4
Assignment
     The Executive may irrevocably assign without consideration all of the
Executive’s rights and interest in this Agreement to any person, entity, or
trust established by the Executive or the Executive’s spouse, including but not
limited to a life insurance trust. If the Executive transfers all of the
Executive’s rights and interest in this Agreement, then all of the Executive’s
rights and interest in the Agreement shall be vested in the Executive’s
transferee, who shall be substituted as a party hereunder and the Executive
shall have no further interest in this Agreement.
Article 5
Insurer
     The Insurer shall be bound only by the terms of the Policy. Any payments
the Insurer makes or actions it takes in accordance with the Policy shall fully
discharge it from all claims, suits and demands of all entities or persons. The
Insurer shall not be bound by or be deemed to have notice of the provisions of
this Agreement.
Article 6
Claims and Review Procedures
     6.1 Claims Procedure. Any person or entity who has not received benefits
under this Agreement that he or she believes should be paid (the “claimant”)
shall make a claim for such benefits as follows —
     6.1.1 Initiation — Written Claim. The claimant initiates a claim by
submitting to the Administrator a written claim for the benefits.
     6.1.2 Timing of Administrator Response. The Administrator shall respond to
such claimant within 90 days after receiving the claim. If the Administrator
determines that special circumstances require additional time for processing the
claim, the Administrator can extend the response period by an additional 90 days
by notifying the claimant in writing, prior to the end of the initial 90-day
period that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Administrator expects
to render its decision.
     6.1.3 Notice of Decision. If the Administrator denies part or all of the
claim, the Administrator shall notify the claimant in writing of such denial.
The Administrator shall

 

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  write the notification in a manner calculated to be understood by the
claimant. The notification shall set forth —

  (a)   The specific reasons for the denial,     (b)   A reference to the
specific provisions of this Agreement on which the denial is based,     (c)   A
description of any additional information or material necessary for the claimant
to perfect the claim and an explanation of why it is needed,     (d)   An
explanation of the Agreement’s review procedures and the time limits applicable
to such procedures, and     (e)   A statement of the claimant’s right to bring a
civil action under ERISA section 502(a) following an adverse benefit
determination on review.

     6.2 Review Procedure. If the Administrator denies part or all of the claim,
the claimant shall have the opportunity for a full and fair review by the
Administrator of the denial, as follows —
     6.2.1 Initiation — Written Request. To initiate the review, the claimant,
within 60 days after receiving the Administrator’s notice of denial, must file
with the Administrator a written request for review.
     6.2.2 Additional Submissions — Information Access. The claimant shall then
have the opportunity to submit written comments, documents, records and other
information relating to the claim. The Administrator shall also provide the
claimant, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.
     6.2.3 Considerations on Review. In considering the review, the
Administrator shall take into account all materials and information the claimant
submits relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination.
     6.2.4 Timing of Administrator Response. The Administrator shall respond in
writing to such claimant within 60 days after receiving the request for review.
If the Administrator determines that special circumstances require additional
time for processing the claim, the Administrator can extend the response period
by an additional 60 days by notifying the claimant in writing, prior to the end
of the initial 60-day period, that an additional period is required. The notice
of extension must set forth the special circumstances and the date by which the
Administrator expects to render its decision.
     6.2.5 Notice of Decision. The Administrator shall notify the claimant in
writing of its decision on review. The Administrator shall write the
notification in a manner calculated to be understood by the claimant. The
notification shall set forth —

  (a)   The specific reasons for the denial,     (b)   A reference to the
specific provisions of the Agreement on which the denial is based,     (c)   A
statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records and

 

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    other information relevant (as defined in applicable ERISA regulations) to
the claimant’s claim for benefits, and

  (d)   A statement of the claimant’s right to bring a civil action under ERISA
section 502(a).

Article 7
Administration of Agreement
     7.1 Administrator Duties. This Agreement shall be administered by an
Administrator, which shall consist of the Bank’s board of directors or such
committee or person(s) as the board shall appoint. The Executive may be a member
of the Administrator. The Administrator shall also have the discretion and
authority to (a) make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of this Agreement and (b) decide or resolve
any and all questions, including interpretations of this Agreement, as may arise
in connection with the Agreement.
     7.2 Agents. In the administration of this Agreement, the Administrator may
employ agents and delegate to them such administrative duties as it sees fit
(including acting through a duly appointed representative) and may from time to
time consult with counsel, who may be counsel to the Bank.
     7.3 Binding Effect of Decisions. The decision or action of the
Administrator with respect to any question arising out of or in connection with
the administration, interpretation, and application of this Agreement and the
rules and regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Agreement.
     7.4 Indemnity of Administrator. The Bank shall indemnify and hold harmless
the members of the Administrator against any and all claims, losses, damages,
expenses, or liabilities arising from any action or failure to act with respect
to this Agreement, except in the case of willful misconduct by the Administrator
or any of its members.
     7.5 Information. To enable the Administrator to perform its functions, the
Bank shall supply full and timely information to the Administrator on all
matters relating to the date and circumstances of the retirement, death, or
Separation from Service of the Executive and such other pertinent information as
the Administrator may reasonably require.
Article 8
Miscellaneous
     8.1 Binding Effect. This Agreement shall bind the Executive and the Bank
and their beneficiaries, survivors, executors, administrators, and transferees,
and any Policy beneficiary.
     8.2 Amendment and Termination of Agreement. This Agreement may be amended
solely by a written agreement signed by the Bank and the Executive. This
Agreement shall terminate upon distribution of death benefits in accordance with
Section 2.2 above or upon the cancellation, surrender, termination or lapsing of
the Policy.
     8.3 Successors; Binding Agreement. By an assumption agreement in form and
substance satisfactory to the Executive, the Bank shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, or otherwise)
to all or substantially all of the

 

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business or assets of the Bank to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Bank would be
required to perform this Agreement.
     8.4 No Guarantee of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an employee of
the Bank, nor does it interfere with the Bank’s right to discharge the
Executive. It also does not require the Executive to remain an employee or
interfere with the Executive’s right to terminate employment at any time.
     8.5 Applicable Law. This Agreement and all rights hereunder shall be
governed by and construed according to the laws of the State of Tennessee except
to the extent preempted by the laws of the United States of America.
     8.6 Entire Agreement. This Agreement constitutes the entire agreement
between the Bank and the Executive concerning the subject matter hereof. No
rights are granted to the Executive by this Agreement other than those
specifically set forth herein.
     8.7 Severability. If for any reason any provision of this Agreement is held
invalid, such invalidity shall not affect any other provision of this Agreement
not held invalid, and each such other provision shall continue in full force and
effect to the full extent consistent with law. If any provision of this
Agreement is held invalid in part, such invalidity shall not affect the
remainder of the provision not held invalid, and the remainder of the provision
together with all other provisions of this Agreement shall continue in full
force and effect to the full extent consistent with law.
     8.8 Headings. Caption headings and subheadings herein are included solely
for convenience of reference and shall not affect the meaning or interpretation
of any provision of this Agreement.
     8.9 Notices. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand or mailed, certified or registered mail, return receipt
requested, with postage prepaid, to the following addresses or to such other
address as either party may designate by like notice. Unless otherwise changed
by notice, notice shall be properly addressed to the Executive if addressed to
the address of the Executive on the books and records of the Bank at the time of
the delivery of such notice, and properly addressed to the Bank if addressed to
the ___.
     In Witness Whereof, the Executive and a duly authorized representative of
the Bank have executed this Agreement as of the date first written above.

      Executive:   Bank:     By:  

 
   

 
Its:

 

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Split Dollar Policy Endorsement

     
Insured:
  Insurer:
Policy No.
   

     Pursuant to the terms of Cumberland Bank Endorsement Split Dollar Agreement
dated as of ____________, 200___, the undersigned Owner requests that the
above-referenced policy issued by the Insurer provides for the following
beneficiary designation and limited contract ownership rights to the Insured:
     1. Upon the death of the Insured, proceeds shall be paid in one sum to the
Owner, its successors or assigns, to the extent of its interest in the policy.
It is hereby provided that the Insurer may rely solely upon a statement from the
Owner as to the amount of proceeds it is entitled to receive under this
paragraph.
     2. Any proceeds at the death of the Insured in excess of the amount paid
under the provisions of the preceding paragraph shall be paid in one sum to:
Primary Beneficiary, Relationship/Social Security Number
Contingent Beneficiary, Relationship/Social Security Number
The exclusive right to change the beneficiary for the proceeds payable under
this paragraph, to elect any optional method of settlement for the proceeds paid
under this paragraph which are available under the terms of the policy and to
assign all rights and interests granted under this paragraph are hereby granted
to the Insured. The sole signature of the Insured shall be sufficient to
exercise said rights. The Owner retains all contract rights not granted to the
Insured under this paragraph.
     3. It is agreed by the undersigned that this designation and limited
assignment of rights shall be subject in all respects to the contractual terms
of the policy.
     4. Any payment directed by the Owner under this endorsement shall be a full
discharge of the Insurer, and such discharge shall be binding on all parties
claiming any interest under the policy.
     The undersigned for the Owner is signing in a representative capacity and
warrants that he or she has the authority to bind the entity on whose behalf
this document is being executed.
     Signed at ___, ___, this ___ day of ___, 200___.

      Insured:   Owner: Cumberland Bank     By:  

 
   

 
Its: