JOINT BENEFICIARY DESIGNATION AGREEMENT
Exhibit
99.3
Insurer(s)/Policy Number(s): |
Security
Life of Denver Policy # XXXXXX
|
West
Coast Life Policy # XXXXXX
|
Bank: |
Cornerstone
Bank
|
Insured: |
Xxxxxx
Xxxxxx
|
Relationship
of Insured to Bank:
|
Executive
|
The
respective rights and duties of the Bank and the Insured in the above-referenced
policy(ies) shall be pursuant to the terms set forth below:
I. |
DEFINITIONS
|
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.
II.
|
POLICY
TITLE AND OWNERSHIP
|
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.
III.
|
BENEFICIARY
DESIGNATION RIGHTS
|
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.
1
IV.
|
PREMIUM
PAYMENT METHOD
|
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.
V.
|
TAXABLE
BENEFIT
|
Annually
the Insured will receive a taxable benefit equal to the imputed value 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.
VI.
|
DIVISION
OF DEATH PROCEEDS
|
Subject
to Paragraphs VII and IX herein, the division of the death proceeds of the
policy is as follows:
A.
|
Should
the Insured be employed by the Bank, the Insured’s beneficiary(ies),
designated in accordance with Paragraph III, shall be entitled to
an
amount equal to the lesser of Three Hundred Ninety Seven Thousand
00/100th
Dollars ($397,000) or one hundred percent (100%) 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
Bank shall be entitled to the remainder of such
proceeds.
|
C.
|
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.
|
VII.
|
DIVISION
OF THE CASH SURRENDER VALUE OF THE
POLICY
|
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.
VIII.
|
RIGHTS
OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION
EXISTS
|
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.
2
IX. |
TERMINATION
OF AGREEMENT
|
A.
|
This
Agreement shall terminate upon the occurrence of any one of the
following:
|
1.
|
The
Insured shall leave the employment of the Bank for any reason;
or
|
2.
|
Surrender,
lapse, or other termination of the Policy by the Bank, and subject
to the
Insured’s option as set forth
hereinbelow.
|
B.
|
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:
|
1.
|
The
Bank’s share of the cash value of the policy on the date of such
assignment, as defined in this Agreement;
or
|
2.
|
The
amount of the premiums that have been paid by the Bank prior to the
date
of such assignment.
|
C.
|
If,
within said fifteen (15) day period, the Insured fails to exercise
said
option, fails to procure the entire aforestated cash payment, or
dies,
then the option shall terminate and the Insured (or assignee) agrees
that
all of the Insured’s rights, interest and claims in the policy shall
terminate as of the date of the termination of this
Agreement.
|
D.
|
The
Insured expressly agrees that this Agreement shall constitute sufficient
written notice to the Insured of the Insured’s option to receive an
absolute assignment of the policy as set forth
herein.
|
E.
|
Except
as provided above, this Agreement shall terminate upon distribution
of the
death benefit proceeds in accordance with Paragraph VI
above.
|
X. |
INSURED’S
OR ASSIGNEE’S ASSIGNMENT
RIGHTS
|
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.
3
XI.
|
AGREEMENT
BINDING UPON THE PARTIES
|
This
Agreement shall bind the Insured and the Bank, their heirs, successors, personal
representatives and assigns.
XII.
|
ADMINISTRATIVE
AND CLAIMS PROVISIONS
|
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”):
|
A. |
Plan
Administrator.
|
The
“Plan
Administrator” of this Joint Beneficiary Designation Agreement shall be
Cornerstone Bank. 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 the Agreement, including the employment of
advisors and the delegation of any ministerial duties to qualified
individuals.
B.
|
Basis
of Payment of Benefits.
|
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.
C. |
Claim
Procedures.
|
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.
4
XIII. |
GENDER
|
Whenever
in this Agreement words are used in the masculine or neutral gender, they shall
be read and construed as in the masculine, feminine or neutral gender, whenever
they should so apply.
XIV.
|
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 from any and all
liability.
XV. |
CHANGE
OF CONTROL
|
Change
of
Control shall be defined as the occurrence of any one of the
following:
a.
|
the
acquisition of more than fifty percent (50%) of the value or voting
power
of the Bank’s stock by a person or
group;
|
b.
|
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;
|
c.
|
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
|
d.
|
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.
|
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
Subparagraph VI [A]).
5
XVI. |
AMENDMENT
OR REVOCATION, AND EXCHANGE OF
POLICY
|
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.
XVII. |
EFFECTIVE
DATE
|
The
Effective Date of this Agreement shall be September 1, 2007.
XVIII. |
SEVERABILITY
AND INTERPRETATION
|
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.
XIX.
|
TERMINATION
OR MODIFICATION OF AGREEMENT BY REASON OF CHANGES IN THE LAW, RULES
OR
REGULATIONS
|
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 (Paragraph XV), this paragraph shall become null and void
effective immediately upon said Change of Control.
XX. |
APPLICABLE
LAW
|
The
laws
of the State of North Carolina shall govern the validity and interpretation
of
this Agreement.
6
Executed
at ____________, _____________ this ______ day of ___________,
2007.
CORNERSTONE
BANK
(City,
State)
|
||
By: | ||
|
|
|
Witness | (Bank Officer other than Insured) Title | |
|
|
|
Witness | Xxxxxx Xxxxxx | |
7