EXHIBIT 10.5
FLEXIBLE PREMIUM LIFE INSURANCE
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ENDORSEMENT METHOD SPLIT DOLLAR PLAN AGREEMENT
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Insurer:
Policy Number:
Corporation: Tri-County Bank of Royston
Insured: Xxxxxx Xxxxxxxxx
Relationship of Corporation to Insured: Employer
The respective rights and duties of the Corporation and the Insured in
the subject policy shall be as defined in the following:
I. DEFINITIONS.
Refer to the policy contract for the definition of all terms in this
Agreement.
II. POLICY TITLE AND OWNERSHIP
t Title and ownership shall reside in the Corporation for its use and
for the use of the Insured all in accordance with this Agreement.
The Corporation alone may, to the extent of its interest, exercise
the right to borrow or withdraw on the policy cash values. Where
the Corporation and the Insured (or assignee, with the consent of
the Insured) mutually agree to exercise the right to increase the
coverage under the subject split dollar 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.
III. BENEFICIARY DESIGNATION RIGHTS
The Insured (or assignee) shall have the right and power to
designate a beneficiary or beneficiaries to receive his 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 Corporation may have in such proceeds, as provided
in this Agreement.
IV. PREMIUM PAYMENT METHOD
The Corporation shall pay an amount equal to the planned premiums
and any other premium payments that might become necessary to keep
the policy in force.
V. TAXABLE BENEFIT
Annually the Insured will receive a taxable benefit equal to the
assumed cost of insurance as required by the Internal Revenue
Service. The Corporation (or its administrator) will report to the
Employee the amount of imputed income received each year on Form W-2
or its equivalent.
VI. DIVISION OF DEATH PROCEEDS
Subject to paragraph VII herein, the division of the death proceeds
of the policy is as follows:
A. The Insured's beneficiary(ies), designated in accordance with
Paragraph III, shall be entitled to an amount equal to 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.
B. The Corporation shall be entitled to the remainder of such
proceeds.
C. The Corporation 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.
VII. DIVISION OF THE CASU SURRENDER VALUE OF THE POLICY
The Corporation 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 Corporation and any
applicable surrender charges. Such cash value shall be determined
as of the date of surrender or death as the case may be.
VIII. PREMIUM WAIVER
If the policy contains a premium waiver provision, such waived
amounts shall be considered for all purposes of this Agreement as
having been paid by the Corporation.
IX. RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION EXISTS
In the event the policy involves an endowment or annuity element,
the Corporation'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 each 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.
X. TERMINATION OF AGREEMENT
This agreement shall terminate at the option of the Corporation
following thirty (30) days written notice to the Insured upon the
happening of any one of the following:
1. The Insured shall be discharged from employment with the
Corporation for cause. The term "for cause" shall mean gross
negligence or grow neglect or the commission of a felony or
gross-misdemeanor involving moral turpitude, fraud, dishonesty
or willful violation of any law that results in any adverse
effect on the bank.
2. The Internal Revenue Code is amended so as to substantially,
adversely affect the tax treatment to the corporation of the
corporation's ownership in this policy.
Upon such termination, the Insured (or assignee) shall have a ninety
(90) day option to receive from the Corporation an absolute
assignment of the policy in consideration of a cash payment to the
Corporation, whereupon this Agreement shall terminate. Such cash
payment shall be the greater of:
1. The Corporation's share of the cash value of the policy on the
date of such assignment, as defined in this Agreement.
2. The amount of the premiums which have been paid by the
Corporation prior to the date of such assignment.
Should the Insured (or assignee) fail to exercise this option within
the prescribed ninety (90) 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 Agreement.
XI. INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS
The Insured may not, without the written consent of the Corporation,
assign to any individual, trust or other organization, any right,
title or interest in the subject policy or any rights, options,
privileges or duties created under this Agreement.
XII. AGREEMENT BINDING UPON THE PARTIES
This Agreement shall bind the Insured and the Corporation, their
heirs, successors, personal representatives and assigns.
XIII. NAMED FIDUCIARY AND PLAN ADMINISTRATOR
X. Xxxxxxx XxXxxxxxx is hereby designated the "Named Fiduciary"
until resignation or removal by the board of directors. As Named
Fiduciary, Xx. XxXxxxxxx shall be responsible for the management,
control, and administration of this Split Dollar Plan as established
herein. The Named Fiduciary may allocate to others certain aspects
of the management and operation responsibilities of the plan,
including the employment of advisors and the delegation of any
ministerial duties to qualified individuals.
XIV. FUNDING POLICY
The funding policy for this Split Dollar Plan shall be to maintain
the subject policy in force by paying, when due, all premiums
required.
XV, CLAIMS PROCEDURE FOR LIFE INSURANCE POLICY AND SPLIT DOLLAR PLAN
Claim forms or claim information as to the subject policy can be
obtained by contacting The Benefit Marketing Group, Inc. (404-952-
1529). When the Named Fiduciary has a claim which may be covered
under the provisions described in the insurance policy, he 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 named Fiduciary 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 to
the Named Fiduciary.
In the event that a claim is not eligible under the policy, the
Insurer will notify the Named Fiduciary of the denial pursuant to
the requirements under the terms of the policy. If the Named
Fiduciary is dissatisfied with the denial of the claim and wished to
contest such claim denial, he should contact the office named above
and they will assist in making inquiry to the Insurer. All
objections to the Insured's actions should be in writing and
submitted to the office named above for transmittal to the Insurer.
XVI. GENDER
Whenever in this agreement words are used in the masculine or neuter
gender, the shall be read and construed as in the masculine,
feminine or neuter gender, wherever they should so apply.
XVII. INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT
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 for any and all liability.
Executed at Royston, Ga. this 10 day of November, 1994.
TRI-COUNTY BANK OF ROYSTON
By: /s/ X. Xxxxxxx XxXxxxxxx
Title: V. Chmn.
By: /s/ Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx
BENEFICIARY DESIGNATION FORM
PRIMARY DESIGNATION:
Name Relationship
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/s/ Xxxxx X. Xxxxxxxxx Wife
CONTINGENT DESIGNATION:
Applicant's Estate
/s/ Xxxxxx Xxxxxxxxx 11/10/94
Xxxxxx Xxxxxxxxx Date
