EXHIBIT 10.7
SPLIT DOLLAR INSURANCE AGREEMENT BETWEEN
J. XXXXXX XXXXXXX, XX. AND CITIZENS BANK
INSURANCE AGREEMENT
This agreement made this 2nd day of November , 1992 by and between J.
Xxxxxx Xxxxxxx, Xx. (hereinafter referred to as "Xxxxxxx") and Citizens Bank, a
banking corporation located in Vienna, Georgia (hereinafter referred to as "the
Bank").
WHEREAS, Xxxxxxx is the chief executive officer of the Bank and contributed
substantially to the overall success of the Bank by his leadership and
expertise, and,
WHEREAS, Currently, Xxxxxxx and the Bank are partners to a "Split Dollar
Agreement," dated November 17, 1988, that the parties wish to cancel and,
WHEREAS, as a part of its efforts to retain, reward and motivate Xxxxxxx,
the Bank wishes to assist him in establishing an adequate life insurance
program.
NOW, THEREFORE, Xxxxxxx and the Bank and each of them, hereby agree:
1. That certain Split Dollar Agreement between Xxxxxxx and the Bank and
dated November 17, 1988, is hereby canceled. The insurance contract (Fidelity
and Guaranty Life Insurance Company policy number U776951) having been exchanged
for Southland Life Insurance Company policy number 1943173 (hereinafter referred
to as "the policy") pursuant to Section 1035 of the Internal Revenue Code. The
policy is an Option A with an initial face amount of $1,500,000 in Southland's
Value 100 policy form.
2. The Bank shall pay the premiums due on the policy which are:
Year 1: $46,900 (Paid by 1035 Exchange)
Year 2: $46,900
Year 3: $46,900
Year 4: $46,900
Year 5: $14,126
3. Subject to paragraph five (5.) hereinafter, the Bank shall have an
ownership interest in the policy and its cash values and death
benefit in an amount equal to the aggregate total premiums it has
paid. In addition, should Xxxxxxx die prior to his retirement, and at
the time of his death the Bank has an ownership interest in the
policy, the Bank shall receive an additional $500,000 of the death
benefit of the policy as key executive life insurance.
4. Subject to the Bank's ownership interest in the policy described in
paragraph 3 herein above, Xxxxxxx shall have all incidents of
ownership in the policy including the right to surrender or cancel
the policy and the right to borrow or withdraw against the policy.
5. Xxxxxxx shall have the right to purchase the Bank's interest in the
policy at any time by paying to the Bank the following amounts of
money at the appropriate times:
(a) While employed by the Bank prior to Xxxxxxx having attained
age 55, subject to subparagraph (b) below, by paying the Bank
an amount of money equal to the premium it has paid, or
(b) Should Xxxxxxx'x employment by the Bank be terminated for any
reason, either by the Bank or by Xxxxxxx prior to his age 55,
Xxxxxxx shall have the option to do the following
(i.) Within one year of the date hereof, withdrawing the sum
of $9,380 from the policy and transferring the policy
to the Bank or purchase the Bank's ownership rights by
paying to the bank an amount of money equal to the
premiums it has paid, less $9,380.
(ii.) Within the second year following the date hereof,
withdrawing the sum of $18,760 from the policy and
transferring the policy to the Bank or purchase the
Bank's ownership rights by paying to the bank an amount
of money equal to the premiums it has paid, less
$18,760.
(iii.) Within the third year following the date hereof,
withdrawing the sum of $28,140 from the policy and
transferring the policy to the Bank or purchase the
Bank's ownership rights by paying to the bank an amount
of money equal to the premiums it has paid, less
$28,140.
(iv.) Within the fourth year following the date hereof,
withdrawing the sum of $37,520 from the policy and
transferring it to the Bank or purchase the Bank's
ownership rights by paying to the bank an amount of
money equal to the premiums it has paid, less $37,520.
(v.) From the beginning of the fifth year following the date
hereof until the date of Xxxxxxx'x fifty-fifth (55)
birthday, withdrawing the sum of $46,900 from the
policy and transferring the policy to the Bank or
purchase the Bank's ownership rights by paying to the
bank an amount of money equal to the premiums it has
paid, less $46,900.
(c) After Xxxxxxx has attained the age of 55 years and before his age
65 while employed by the Bank, Xxxxxxx may purchase the Bank's
ownership interest by paying to the Bank an amount of money equal
to 50% of the premiums it has paid, less $46,900, or
(d) After Xxxxxxx has reached age 65 while employed by the Bank,
the Bank shall have no further ownership interest in the
policy and shall not be entitled to any part of the policy's
cash values or death benefit.
Following Xxxxxxx'x purchase of the Bank's ownership interest,
the Bank shall have no further interest in either the policies
cash values or death benefit.
6. XXXXXXX'X ASSIGNMENT RIGHTS.
Xxxxxxx may, at any time, assign to any individual, trust or
other organization all right, title and interest in the
subject policy and all rights, options privileges and duties
created under this agreement
7. NAMED FIDUCIARY AND PLAN ADMINISTRATOR.
Xx. Xxxxx Xxxxxx is hereby designated the "named fiduciary"
until resignation or removal by the Board of Directors.
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8. FUNDING.
The funding policy for the Split Dollar arrangement shall be
to maintain the subject policy in force by paying, when due,
all premiums required.
9. AMENDMENT.
The Split Dollar plan may be amended at any time and from time
to time, by a written instrument executed by the Bank and
Xxxxxxx, their successors and assigns.
10. BASIS OF PREMIUM PAYMENTS AND BENEFITS.
Payments to and from the Split Dollar Plan adopted herein
shall be in accordance with the provisions of Paragraphs 3
through 8, inclusive.
11. CLAIMS PROCEDURE FOR LIFE INSURANCE AND SPLIT DOLLAR PLAN.
(a) Claim forms or claim information as to the subject
policy can be obtained by contacting The Benefit
Marketing Group, Inc.
When the named fiduciary has a claim which may be
covered under the insurance policy provisions, he or
she should contact the office or the person named
above, who 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
the claim and make a decision as to payment within 90
days of the date the claim is received by the
Insurer. If the claim is payable, a benefit check
will be issued to the named fiduciary and forwarded
through the office or person named above. In the
event that a claim is not eligible under the policy,
the Insurer will notify the named fiduciary of the
denial. Such notification will be made in writing
within 90 days of the date the claim is received, and
will be transmitted through the office or person
named above. The notification will include the
specific reasons for the denial, as well as specific
reference to the policy provisions upon which the
denial is based.
The named fiduciary will also be informed as to the
steps which may be taken to have the claim denial
reviewed.
A decision as to the validity of a claim will
ordinarily be made within 10 working days of the date
the claim is received by the Insurer. Occasionally,
however, certain questions may prevent the Insurer
from rendering a decision on the validity of the
claim within the specific 90-day period. If this
occurs, the named fiduciary will be notified of the
reasons for the delay, as well as the anticipated
length of the delay, in writing and through the
office or person named above. If future information
or other material is required, the named fiduciary
will be so informed.
If the named fiduciary is dissatisfied with the
denial of the claim, or the amount paid, he or she
has 60 days from the date he or she receives notice
of a claim denial or receipt of the amount paid to
file his or her objections to the action taken by the
Insurer. If the named fiduciary wishes to contest a
claim denial, he or she should notify the person or
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office named above, who will assist in making inquiry
to the Insurer. All objections to the insurer's
actions should be in writing and submitted to the
person or office named above for transmittal to the
Insurer.
The Insurer will review the claim denial or amount
paid and render a decision on such objections. The
named fiduciary will be informed in writing of the
decision of the Insurer within 60 days of the date
the claim review request is received by the Insurer.
This decision will be final.
(b) Once a decision has been rendered as to the
distribution of proceeds under the claim procedure
described above as to the policy, claims for any
benefits due under the Plan or the surrender of the
policy may be made in writing by Xxxxxxx or the
Xxxxxxx'x designated beneficiary and Insured (or
his/her assignee) or their designated beneficiary as
the case may be, to the named fiduciary.
In the event a claim for benefits is wholly or partly
denied or disputed, the named fiduciary shall within
a reasonable period of time, after receipt of the
claim, notify Xxxxxxx or Xxxxxxx'x designated
beneficiary and Insured (or his/her assignee) or
their designated beneficiary as the case may be of
such total or partial denial or dispute listing:
(1) The specific reason or reasons for the denial
or dispute;
(2) Specific reference to pertinent plan
provisions upon which the denial or dispute
is based;
(3) A description of any additional information
necessary for the claimant to perfect the
claim and an explanation of why such
material or information is necessary; and
(4) An explanation of the plan's review
procedure.
Within 60 days of denial or notice of claim under the
plan, a claimant may request that the claim be
reviewed by the named fiduciary in a full and fair
hearing. A final decision shall be rendered by the
named fiduciary within 60 days after receipt of
request for review.
12. AGREEMENT BINDING UPON PARTIES.
This agreement shall bind Bank and Xxxxxxx, their heirs,
successors, personal representatives and assigns.
13. INSURANCE COMPANY NOT A PARTY TO AGREEMENT.
The Insurer provides this Split Dollar Agreement solely for
the convenience of its policyholders and their counsel, and is
not responsible for its legal or tax validity or effect.
Further, the Insurer shall not be deemed a party to this
agreement, but will respect the rights of the parties as
hereindeveloped, upon receiving an executed copy of this
agreement.
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Insurer shall not be responsible to account for the actual
premium contributions of the parties hereunder, but shall rely
solely upon the written declarations of the parties in any
distributions or settlement of the policy's lifetime or death
values. Payment or other performance of its contractual
obligations in accordance with the policy provisions shall
fully discharge the Insurer from any and all liability.
Executed at Unadilla, GA this 2nd day of November, 1992.
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/s/ Xxxxxx Xxxxxxxx /s/ J. Xxxxxx Xxxxxxx
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Witness J. Xxxxxx Xxxxxxx
/s/ Xxxxxx X. Xxxxx /s/
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Witness Citizen Bank
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DESIGNATION OF BENEFICIARY
Pursuant to the terms of the attached Insurance Agreement, dated the 2nd day of
November , 1992, I hereby designate the following beneficiary(ies) to receive
any payments which may be due under that Agreement after my death:
Primary Beneficiary Xxxxx X. Xxxxxxx
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Secondary Beneficiary(ies) Estate of J. Xxxxxx Xxxxxxx, Xx.
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This designation hereby revokes any prior designation which may have been in
effect.
Dated this 2nd day of November, 1992.
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/s/ Xxxxxxx Xxxxx /s/ Xxxxxx Xxxxxx Xxxxxxx, Xx.
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Witness Xxxxxx Xxxxxx Xxxxxxx, Xx.
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