EXHIBIT 10.4
Monroe Bank & Trust Director Death Benefit Only Plan
The following agreement was entered into by the Bank and each of its ten directors:
1. Peter H. Carlton
2. H. Douglas Chaffin
3. Joseph S. Daly
4. Thomas M. Huner
5. Rocque E. Lipford
6. William D. McIntyre, Jr.
7. Michael J. Miller
8. Debra J. Shah
9. Philip P. Swy
10. Karen M. Wilson
Management of Monroe Bank has been working to restructure the current Split Dollar Life Insurance Agreement
("SDLI"). The reason for this restructuring is twofold. First, under the current SDLI Agreement, an endorsement
split dollar arrangement is utilized, which subjects the participant to taxes on imputed income each year. In the
later years, this cost can be significant. Second, Monroe Bank has been purchasing Bank Owned Life Insurance
policies that are not properly aligned with the participant's benefit, making it difficult to continue to purchase such
coverage due to restrictions on how much life insurance the bank may own.
The new Death Benefit Only Plan addresses both of these issues. Under the new Plan, participants will no longer
be subject to being taxed on imputed income. In addition, the bank will purchase new life insurance policies that
more closely align with participant benefits, and thus will be better able to properly finance the benefits.
Your benefits will not change. Monroe Bank values your contribution and thus is pleased to provide its key
executives with this continued benefit. This communication packet will provide you with additional information on
this new plan. Included in the packet is an overview of the new plan, as well as a Question & Answer section.
Please read this material, then complete the documents/forms listed below.
Steps to Implement the New DBO Plan
- Review the enclosed Plan Overview and Questions & Answers
- Complete the Consent to Insure form, providing information where indicated, and sign.
- Sign the Participation Agreement, indicating your acknowledgement that the current