ENDORSEMENT SPLIT-DOLLAR AGREEMENT Effective June 1, 2006
Exhibit
10.18
ENDORSEMENT
SPLIT-DOLLAR
AGREEMENT
Effective
June 1, 2006
TABLE OF
CONTENTS
Page
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AGREEMENT
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1
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1.
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Effective
Date
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1
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2.
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Purchase
of Policy
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1
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3.
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Policy
Ownership
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1
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4.
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Beneficiary
Designation
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1
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5.
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Division
of Cash Surrender Value
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2
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6.
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Division
of Death Proceeds
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2
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7.
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Premium
Payments
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2
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8.
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Termination
of Agreement
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2
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9.
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Named
Fiduciary
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3
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10.
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Funding
Policy
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3
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11.
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Claims
Procedure
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3
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12.
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Amendment
and Revocation
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4
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13.
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Insurance
Company Not a Party to This Agreement
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4
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14.
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Validity
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4
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15.
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Notices
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4
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16.
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Successors
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4
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17.
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Governing
Law
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5
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SCHEDULE
A
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Beneficiary
Designation
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(i)
ENDORSEMENT
SPLIT-DOLLAR
AGREEMENT
This
Endorsement Split-Dollar Agreement (“Agreement”) made and entered into by and
between CharterBank, West Point, Georgia (“Employer”) and Xxxxx X. Xxxxxx
(“Director”);
WHEREAS,
Director is considered a key person by Employer; and
WHEREAS,
Director has agreed to permit Employer to purchase a life insurance policy on
Director’s life; and
WHEREAS,
the parties have further agreed to divide the death benefit between the Employer
and the Director’s Beneficiary;
NOW,
THEREFORE, in consideration of the premises and of the mutual promises contained
herein, the parties hereto agree as follows:
1.
Effective Date
The
Effective Date of this Agreement shall be June 1, 2006.
2. Purchase
of Policy
Employer
has purchased the following policies (“Policy”) on the life of Director which
shall be subject to the terms and conditions of this Agreement:
1
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2
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Insurer
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Policy
Number
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NYLIC
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56612267
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3. Policy
Ownership
Employer
shall be the sole and absolute owner of the Policy, and may exercise all
ownership rights granted to the owner thereof by the terms of the Policy, except
as may otherwise be limited by this Agreement.
4. Beneficiary
Designation
Director
shall have the right and power to designate a person, persons or entity
(“Beneficiary”) to receive Director’s share of the proceeds payable upon his
death, subject to any right or interest the Employer may have in such proceeds,
as provided in this Agreement. If no valid Beneficiary designation has been
filed with the Employer, upon Director’s death, the Beneficiary will be deemed
to be the Director’s estate.
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ENDORSEMENT SPLIT-DOLLAR
AGREEMENT
5. Division
of Cash Surrender Value
Employer
shall at all times be entitled to all cash values under
the terms of the Policy. Director shall have no right, at any time, to the cash
value of the Policy.
6. Division
of Death Proceeds
The
division of the death proceeds of the Policy is as follows:
(a) Director’s Share. Upon the death of Director,
the Beneficiary shall be entitled to one hundred thousand dollars
($100,000).
(b) Employer’s Share. The Employer shall be
entitled to the remainder of such death proceeds.
(c) Division of Interest. Employer and Beneficiary
shall share in any interest due with respect to the death proceeds on a pro-rata
basis as the proceeds due each respectively bears to the total proceeds,
excluding any such interest.
7. Premium
Payments
(a) Subject
to Employer’s absolute right to surrender or terminate the Policy at any time
and for any reason, Employer shall pay an amount equal to the planned premiums
and any other premium payments that might become necessary to keep the policy in
force.
(b) Employer
shall annually furnish to Director a statement of the amount reportable by
Director for federal and state income tax purposes, if any, as a result of the
insurance protection provided.
(c) Director
shall have no right to make any premium payment to the Policy at any
time.
8. Termination
of Agreement
Upon the
occurrence of any one (1) of the following, the Director’s participation in this
Plan shall terminate and all death proceeds shall thereafter be paid solely to
the Employer:
(a) Director
terminates service on Employer’s Board for any reason;
(b) Total
cessation of Employer’s business;
(c) Bankruptcy,
receivership or dissolution of Employer;
(d) Receipt
by Employer of written notification of a request to terminate this Agreement
from
Director;
(e) Surrender,
lapse, or other termination of the Policy by Employer; or
(f) Distribution
of the death proceeds in accordance with Section 6 of this
Agreement.
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ENDORSEMENT SPLIT-DOLLAR AGREEMENT
9.
Named Fiduciary
Employer
is hereby designated as the named fiduciary under this Agreement. As named
fiduciary, Employer shall be responsible for and have the authority to manage
the operation and administration of this Agreement, and it shall be responsible
for establishing and carrying out a funding policy and method consistent with
the objectives of this Agreement. The named fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the
Agreement, including the employment of advisors and the delegation of any
ministerial duties to qualified individuals.
10. Funding
Policy
Subject
to Employer’s absolute right to surrender or terminate the Policy at any time
and for any reason, the funding policy for this Agreement shall be to maintain
the Policy in force by paying, when due, all premiums required.
11. Claims
Procedure
(a) Any
person claiming a benefit, requesting an interpretation or ruling under this
Agreement, or requesting information under this Agreement shall present the
request in writing to Employer, which shall respond in writing within a
reasonable period of time, but not later than ninety (90) days after receipt of
the request.
(b) Denial of Claim. If the claim or request
is denied, the written notice of denial shall state:
(i) The
reason for denial, with specific reference to the provisions in the Agreement on
which the denial is based;
(ii) A
description of any additional material or information required and an
explanation of why it is necessary; and
(iii) An
explanation of the Agreement’s claims review procedure.
(c) Review of Claim. Any person whose claim or request is denied
may request a review by notice given to Employer within sixty (60) days
following receipt of notification of the adverse determination. The claim or
request shall be reviewed by Employer which may, but shall not be required to,
grant the claimant a hearing. On review, the claimant may have representation,
examine pertinent documents, and submit issues and comments in
writing.
(d) Final Decision. The decision on review shall normally be made
within sixty (60) days. If an extension of time is required for a hearing or
other special circumstances, the claimant shall be notified within such sixty
(60) day period of an extension which shall not be for more than an additional
sixty (60) days. The Employer’s decision shall be delivered in writing to
Director and shall state the reason and the relevant provisions in the Agreement
for the decision. All decisions on review shall be final and bind all parties
concerned.
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ENDORSEMENT SPLIT-DOLLAR AGREEMENT
12. Amendment
and Revocation
Subject
to Employer’s absolute right to surrender or terminate the Policy at any time
and for any reason, it is agreed by and between the parties hereto that, during
Director’s lifetime, this Agreement may be amended or revoked at any time, in
whole or in part, by the mutual written consent of the Director and
Employer.
13. Insurance
Company Not a Party to This Agreement
Insurer
shall be fully discharged from its obligations under the Policy by payment of
the Policy death benefit to the Beneficiary named in the Policy, subject to the
terms and conditions of the Policy. In no event shall Insurer be considered a
party to this Agreement, or any modification or amendment hereof.
14. Validity
If any
provision of this Agreement is held illegal, 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.
15. Notices
All
notices shall be in writing, and shall be sufficiently given if delivered to the
Employer at its principal place of business, or to the Director at his last
known address as shown in Employer’s records, in person, by Federal Express or
similar receipted delivery, or, if mailed, postage prepaid, by certified mail,
return receipt requested. The date of such mailing shall be deemed the date of
notice, demand or consent.
16. Successors
The
provisions of this Agreement shall bind and inure to the benefit of Employer and
its successors and assigns, and Director and his heirs, successors, personal
representatives and assigns.
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ENDORSEMENT SPLIT-DOLLAR AGREEMENT
17.
Governing Law
The
provisions of this Agreement shall be construed and interpreted according to the
laws of the State of Georgia, except as preempted by federal law.
IN
WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read
this Agreement and executed the original thereof on the date set forth below,
and that upon execution, each has received a conforming copy.
CHARTERBANK
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BY:
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/s/
Xxxxxx Xxxxxx
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CFO
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Title
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Date:
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6-13-06
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XXXXX
X. XXXXXX
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/s/ Xxxxx X. Xxxxxx | ||
Date:
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6/26/06
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ENDORSEMENT SPLIT-DOLLAR AGREEMENT