JOINT BENEFICIARY DESIGNATION AGREEMENT
Exhibit
10.16
JOINT
BENEFICIARY DESIGNATION
AGREEMENT
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Insurer:
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Policy
Number:
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Bank:
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Bank
of Xxxxx
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Insured:
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Xxxx
X. Xxxxxxx
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Relationship
of Insured to Bank:
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Officer
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The
respective rights and duties of the Bank and the Insured in the above-referenced
policy shall be pursuant to the terms set forth below:
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I.
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DEFINITIONS
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Refer to
the policy contract for the definition of any terms in this Agreement that are
not defined herein. If the definition of a term in the policy is
inconsistent with the definition of a term in this Agreement, then the
definition of the term as set forth in this Agreement shall supersede and
replace the definition of the terms as set forth in the policy.
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II.
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POLICY
TITLE AND OWNERSHIP
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Title and
ownership shall reside in the Bank for its use and for the use of the Insured
all in accordance with this Agreement. The Bank alone may, to the
extent of its interest, exercise the right to borrow or withdraw on the policy
cash values. Where the Bank and the Insured (or assignee, with the
consent of the Insured) mutually agree to exercise the right to increase the
coverage under the subject Joint Beneficiary Designation policy, then, in such
event, the rights, duties and benefits of the parties to such increased coverage
shall continue to be subject to the terms of this Agreement.
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III.
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BENEFICIARY
DESIGNATION RIGHTS
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The
Insured (or assignee) shall have the right and power to designate a beneficiary
or beneficiaries to receive the Insured’s share of the proceeds payable upon the
death of the Insured, and to elect and change a payment option for such
beneficiary, subject to any right or interest the Bank may have in such
proceeds, as provided in this Agreement.
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IV.
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PREMIUM
PAYMENT METHOD
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Subject
to the Bank’s absolute right to surrender or terminate the policy at any time
and for any reason, the Bank shall pay an amount equal to the planned premiums
and any other premium payments that might become necessary to keep the policy in
force.
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V.
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TAXABLE
BENEFIT
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Annually
the Insured will receive a taxable benefit equal to the assumed cost of
insurance as required by the Internal Revenue Service. The Bank (or
its administrator) will report to the Insured the amount of imputed income each
year on Form W-2 or its equivalent.
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VI.
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DIVISION
OF DEATH PROCEEDS
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Subject
to Paragraphs VII and X herein, the division of the death proceeds of the policy
is as follows:
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A.
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Should
the Insured be employed by the Bank or retired from the bank at the time
of death, the Insured’s beneficiary(ies), designated in accordance with
Paragraph III, shall be entitled to an amount equal to the lesser of Two
Hundred Fifty Thousand and 00/100th
Dollars ($250,000.00) or eighty percent (80%) of the net-at-risk insurance
portion of the proceeds. The net-at-risk insurance portion is
the total proceeds less the cash value of the
policy.
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B.
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Should
the Insured not be employed by the Bank at the time of death, the Insured’s
beneficiary(ies), designated in accordance with Paragraph III, shall be
entitled to the percentage as set forth hereinbelow of the proceeds
described in Subparagraph VI (A) above that corresponds to the Insured’s
age:
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Age of the
Insured
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Vested (to a maximum
of 100%)
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59
and under
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0%
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Age
60
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50%
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61-65
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An
additional 10% vested per year
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(to
a total maximum of 100%)
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C.
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The
Bank shall be entitled to the remainder of such
proceeds.
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D.
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The
Bank and the Insured (or assignees) shall share in any interest due on the
death proceeds on a pro rata basis as the proceeds due each respectively
bears to the total proceeds, excluding any such
interest.
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2
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VII.
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DIVISION
OF THE CASH SURRENDER VALUE OF THE
POLICY
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The Bank
shall at all times be entitled to an amount equal to the policy’s cash value, as
that term is defined in the policy contract, less any policy loans and unpaid
interest or cash withdrawals previously incurred by the Bank and any applicable
surrender charges. Such cash value shall be determined as of the date
of surrender or death as the case may be.
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VIII.
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PREMIUM
WAIVER
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If
the policy contains a premium waiver provision, such waived amounts shall
be be considered for all purposes of this Agreement as having been paid by
the Bank.
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IX.
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RIGHTS
OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION
EXISTS
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In the
event the policy involves an endowment or annuity element, the Bank’s right and
interest in any endowment proceeds or annuity benefits, on expiration of the
deferment period, shall be determined under the provisions of this Agreement by
regarding such endowment proceeds or the commuted value of such annuity benefits
as the policy’s cash value. Such endowment proceeds or annuity
benefits shall be considered to be like death proceeds for the purposes of
division under this Agreement.
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X.
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TERMINATION
OF AGREEMENT
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A.
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This
Agreement shall terminate at the option of the Bank following thirty (30)
days written notice to the Insured upon the happening of any one of the
following:
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1.
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The
Insured shall leave the employment of the Bank (voluntarily or
involuntarily) prior to the Insured attaining the age of sixty (60);
or
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2.
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The
Insured shall be discharged from employment with the Bank for
cause. The term “for cause” shall mean: (i) gross negligence or
neglect in the performance of his job; (ii) the commission of a felony or
gross misdemeanor involving fraud, dishonesty or willful violation of any
law that results in any adverse effect on the
Bank.
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B.
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Upon
such termination of this Agreement but prior to the termination of the
policy by the Bank, the Insured (or assignee) shall have a fifteen (15)
day option to receive from the Bank an absolute assignment of the policy
in consideration of a cash payment to the Bank, whereupon this Agreement
shall terminate. Such cash payment referred to hereinabove
shall be the greater of:
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3
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1.
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The
Bank’s share of the cash value of the policy on the date of such
assignment, as defined in this Agreement;
or
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2.
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The
amount of the premiums that have been paid by the Bank prior to the date
of such assignment.
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C.
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Should
the Insured (or assignee) fail to exercise this option within the
prescribed fifteen (15) day period, the Insured (or assignee) agrees that
all of his rights, interest and claims in the policy shall terminate as of
the date of the termination of this
Agreeement.
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D.
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In
the event, however, that the Insured is terminated “for cause” under the
terms as set forth in Subparagraph X (A) (2) above, the Bank shall have
the right, in its sole discretion, to allow the Insured to exercise the
option as set forth above.
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E.
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Except
as provided above, this Agreement shall terminate upon distribution of the
death benefit proceeds in accordance with Paragraph VI
above.
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XI.
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INSURED’S
OR ASSIGNEE’S ASSIGNMENT RIGHTS
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The
Insured may not, without the written consent of the Bank, assign to any
individual, trust or other organization, any right, title or interest in the
subject policy nor any rights, options, privileges or duties created under this
Agreement.
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XII.
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AGREEMENT
BINDING UPON THE PARTIES
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This
Agreement shall bind the Insured and the Bank, their heirs, successors, personal
representatives and assigns.
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XIII.
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ADMINISTRATIVE
AND CLAIMS PROVISIONS
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The
following provisions are part of this Agreement and are intended to meet the
requirements of the Employee Retirement Income Security Act of 1974
(“ERISA”):
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A.
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Plan
Administrator:
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The “Plan
Administrator” of this Joint Beneficiary Designation Agreement shall be Bank of
Xxxxx. As Plan Administrator, the Bank shall be responsible for the
management, control, and administration of this Agreement as established
herein. The Plan Administrator may delegate to others certain aspects
of the management and operation responsibilities of
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the
Agreement, including the employment of advisors and the delegation of any
ministerial duties to qualified individuals.
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B.
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Basis of Payment of
Benefits:
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Direct
payment by the Insurer is the basis of payment of benefits under this Agreement,
with those benefits in turn being based on the payment of premiums as provided
in this Agreement.
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C.
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Claim
Procedures:
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Claim
forms or claim information as to the subject policy can be obtained by
contacting Benmark, Inc. (800-544-6079). When the Plan Administrator
has a claim which may be covered under the provisions described in the insurance
policy, they should contact the office named above, and they will either
complete a claim form and forward it to an authorized representative of the
Insurer or advise the Plan Administrator what further requirements are
necessary. The Insurer will evaluate and make a decision as to
payment. If the claim is payable, a benefit check will be issued in
accordance with the terms of this Agreement.
In the
event that a claim is not eligible under the policy, the Insurer will notify the
Plan Administrator of the denial pursuant to the requirements under the terms of
the policy. If the Plan Administrator is dissatisfied with the denial
of the claim and wishes to contest such claim denial, they should contact the
office named above and they will assist in making an inquiry to the
Insurer. All objections to the Insurer’s actions should be in writing
and submitted to the office named above for transmittal to the
Insurer.
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XIV.
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GENDER
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Whenever
in this Agreement words are used in the masculine or neuter gender, they shall
be read and construed as in the masculine, feminine or neuter gender, whenever
they should so apply.
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XV.
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INSURANCE
COMPANY NOT A PARTY TO THIS
AGREEMENT
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The
Insurer shall not be deemed a party to this Agreement, but will respect the
rights of the parties as herein developed upon receiving an executed copy of
this Agreement. Payment or other performance in accordance with the
policy provisions shall fully discharge the Insurer from any and all
liability.
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XVI.
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CHANGE
OF CONTROL
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Change of
Control shall be defined as the occurrence of any one of the
following:
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a.
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the
acquisition of more than fifty percent (50%) of the value or voting power
of the Bank’s stock by a person or
group;
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b.
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the
acquisition in a period of twelve (12) months or less of at least
thirty-five percent (35%) of the Bank’s stock by a person or
group;
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c.
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the
replacement of a majority of the Bank’s board in a period of twelve (12)
months or less by Directors who were not endorsed by a majority of the
current board members; or
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d.
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the
acquisition in a period of twelve (12) months or less of forty percent
(40%) or more of the Bank’s assets by an unrelated
entity.
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For the
purposes of this Agreement, transfers made on account of deaths or gifts,
transfers between family members or transfers to a qualified retirement plan
maintained by the Bank shall not be considered in determining whether there has
been a Change in Control. Upon a Change of Control, if the Insured’s
employment is subsequently terminated, except for cause, then the Insured shall
be one hundred percent (100%) vested in the benefits promised in this Agreement
and, therefore, upon the death of the Insured, the Insured’s beneficiary(ies)
(designated in accordance with Paragraph III) shall receive the death benefit
provided herein as if the Insured had died while employed by the Bank (see
Subparagraphs VI [A]).
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XVII.
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AMENDMENT
OR REVOCATION, AND EXCHANGE OF
POLICY
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Subject
to the Bank’s sole and absolute right to surrender or terminate any and all life
insurance policies that are the subject matter of this Agreement, it is agreed
by and between the parties hereto that, during the lifetime of the Insured, this
Agreement may be amended or revoked at any time or times, in whole or in part,
by the mutual written consent of the Insured and the Bank. The Bank
may, however, unilaterally and without the consent of the Insured, exchange any
life insurance policy(ies) that are the subject matter of this Agreement, with
or without replacing said policy(ies) and, in the event of a same or similar
exchange, the Insured expressly agrees to the same.
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XVIII.
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EFFECTIVE
DATE
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The
Effective Date of this Agreement shall be March 28, 2006.
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XIX.
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SEVERABILITY
AND INTERPRETATION
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If a
provision of this Agreement is held to be invalid or unenforceable, the
remaining provisions shall nonetheless be enforceable according to their
terms. Further, in the event that any provision is held to be
overbroad as written such provision shall be deemed amended to narrow its
application to the extent necessary to make the provision enforceable according
to law and enforced as amended.
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XX.
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TERMINATION
OR MODIFICATION OF AGREEMENT BY REASON OF CHANGES IN THE LAW, RULES OR
REGULATIONS
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The Bank
is entering into this Agreement upon the assumption that certain existing tax
and accounting laws, rules and regulations will continue in effect in their
current form. If any said assumptions should change and said change
has a detrimental effect on this Joint Beneficiary Designation Agreement, then
the Bank reserves the right to terminate or modify this Agreement
accordingly. Upon a Change of Control, this paragraph shall become
null and void effective immediately upon said Change of Control.
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XXI.
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APPLICABLE
LAW
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The laws
of the State of Georgia shall govern the validity and interpretation of this
Agreement.
Executed
at Xxxxx, Georgia this ____ day of
_____________,
2007.
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BANK
OF XXXXX
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Thomaston,
Georgia
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By:
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Witness
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(Bank Officer other than Insured) |
Title
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Witness
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Xxxx
X. Xxxxxxx
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7
BENEFICIARY
DESIGNATION FORM
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I.
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PRIMARY
DESIGNATIONS
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A.
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Person(s)
as a Primary Designation:
(Please
indicate the percentage for each beneficiary.)
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1.
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Name:
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Relationship:
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SS#:
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%
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(Street)
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(City)
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(State)
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(Zip)
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2.
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Name:
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Relationship:
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SS#:
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%
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(Street)
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(City)
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(State)
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(Zip)
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3.
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Name:
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Relationship:
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SS#:
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%
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||||||||
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(Street)
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(City)
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(State)
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(Zip)
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4.
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Name:
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Relationship:
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SS#:
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%
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(Street)
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(City)
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(State)
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(Zip)
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II.
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ESTATE AND/OR TRUST AS
PRIMARY DESIGNATIONS
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A.
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Estate as a Primary
Designation:
An
Estate can still be listed even if there is no will.
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My
Primary Beneficiary is The Estate of
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as
set forth in the Last Will and
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(Insert
full name)
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Testament
dated the
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day of
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,
200
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and
any codicils thereto.
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B.
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Trust as a Primary
Designation:
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Name
of the Trust:
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Execution
Date of the Trust:
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Name
of the Trustee:
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Beneficiary
of the Trust:
(please
indicate the percentage for each beneficiary):
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Name(s):
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Name(s):
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Is this an Irrevocable Life
Insurance Trust? □
Yes
□ No
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(If
yes and this designation is for a Joint Beneficiary Designation Agreement,
an Assignment of Rights form must
be completed.)
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8
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III.
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SECONDARY (CONTINGENT)
DESIGNATIONS
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A.
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Person(s)
as a Secondary (Contingent) Designation:
(Please
indicate the percentage for each beneficiary in the event of the Primary’s
Death.)
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1.
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Name:
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Relationship:
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SS#:
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%
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(Street)
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(City)
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(State)
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(Zip)
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2.
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Name:
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Relationship:
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SS#:
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%
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(Street)
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(City)
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(State)
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(Zip)
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3.
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Name:
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Relationship:
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SS#:
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%
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(Street)
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(City)
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(State)
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(Zip)
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4.
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Name:
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Relationship:
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SS#:
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%
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(Street)
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(City)
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(State)
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(Zip)
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IV.
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ESTATE AND/OR TRUST AS
SECONDARY (CONTINGENT) DESIGNATIONS
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A.
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Estate as a Secondary
(Contingent) Designation:
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My
Primary Beneficiary is The Estate of
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as
set forth in the last will and
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Testament
dated the
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day of
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,
200
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and
any codicils thereto.
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B.
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Trust as a Secondary
(Contingent) Designation:
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Name
of the Trust:
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Execution
Date of the Trust:
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Name
of the Trustee:
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Beneficiary
of the Trust:
(please
indicate the percentage for each beneficiary):
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Name(s):
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Name(s):
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Is this an Irrevocable Life
Insurance Trust? □
Yes
□ No
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(If
yes and this designation is for a Joint Beneficiary Designation Agreement,
an Assignment of Rights form must
be completed.)
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V.
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SIGN AND
DATE
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This
Beneficiary Designation Form is valid until the participant notifies the
bank in writing.
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Xxxx
X. Xxxxxxx
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Date
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