EXHIBIT 10.5
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
EXECUTIVE AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of ____________
by and between Heritage Bank, a Bank organized and existing under the laws of
the State of Georgia, (hereinafter referred to as the, "Bank"), and
_______________ an Executive of the Bank (hereinafter referred to as the,
"Executive").
WHEREAS, the Executive is now in the employ of the Bank, and has for
many years faithfully served the Bank. It is the consensus of the Board of
Directors (hereinafter referred to as the, "Board") that the Executive's
services have been of exceptional merit, in excess of the compensation paid and
an invaluable contribution to the profits and position of the Bank in its field
of activity. The Board further believes that the Executive's experience,
knowledge of corporate affairs, reputation and industry contacts are of such
value, and the Executive's continued services so essential to the Bank's future
growth and profits, that it would suffer severe financial loss should the
Executive terminate their service on the Board;
ACCORDINGLY, the Board has adopted the Heritage Bank Executive
Supplemental Retirement Plan (hereinafter referred to as the, "Executive Plan")
and it is the desire of the Bank and the Executive to enter into this agreement
which the Bank will agree to make certain payments to the Executive upon the
Executive's retirement and to the Executive's beneficiary(ies) in the event of
the Executives's death pursuant to the Executive Plan;
FURTHERMORE, it is the intent of the parties hereto that this Executive
Plan be considered an unfunded arrangement maintained primarily to provide
supplemental retirement benefits for the Executive, and to be considered a
non-qualified benefit plan for purposes of the Employee Retirement Security Act
of 1974, as amended ("ERISA"). The Executive is fully advised of the bank's
financial status and has had substantial input in the design and operation of
this benefit plan; and
NOW THEREFORE, in consideration of services the Executive has performed
in the past and those to be performed in the future, and based upon the mutual
promises and covenants herein contained, the Bank and the Executive agree as
follows:
I. DEFINITIONS
A. Effective Date:
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The Effective Date of the Plan shall be _____________________.
B. Plan Year:
---------
Any reference to the "Plan Year" shall mean a calendar year
from January 1st to December 31st. In the year of
implementation, the term the "Plan Year" shall mean the period
from the Effective Date to December 31st of the year of the
Effective Date.
C. Retirement Date:
---------------
Retirement Date shall mean retirement from service with the
Bank which becomes effective on the first day of the calendar
month following the month in which the Executive reaches age
sixty-five (65) or such later date as the Executive may
actually retire.
D. Termination of Service:
----------------------
Termination of Service shall mean the Executive's voluntary
resignation of service by the Executive or the Bank's
discharge of the Executive without cause, prior to the Normal
Retirement Age [Subparagraph (J)].
E. Pre-Retirement Account:
----------------------
A Pre-Retirement Account shall be established as a liability
reserve account on the books of the Bank for the benefit of
the Executive. Prior to the Executive's Termination of Service
or the Executive's retirement, whichever event shall first
occur, such liability reserve account shall be increased or
decreased each Plan Year, until the aforestated event occurs,
by the Index Retirement Benefit [Subparagraph I (F)].
F. Index Retirement Benefit:
------------------------
The Index Retirement Benefit for each Executive in the
Executive Plan for each Plan Year shall be equal to the excess
(if any) of the Index [Subparagraph I (G)] for that Plan Year
over the Opportunity Cost [Subparagraph I (H)] for that Plan
Year, divided by a factor equal to 1.13 minus the marginal tax
rate.
G. Index:
-----
The Index for any Plan Year shall be the aggregate annual
after-tax income from the life insurance contract(s) described
hereinafter as defined by FASB Technical Bulletin 85-4. This
Index shall be applied as if such insurance contract(s) were
purchased on the Effective Date of the Executive Plan.
Insurance Company: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Life Insurance Co.
Policy Form: Flexible Premium Adjustable Life
Policy Name: Executive Security Plan IV
Insured's Age and Sex: ________________
Riders: None
Option: None
Face Amount: ________
Premiums Paid: ________
Number of Premium Payments: One
Assumed Purchase Date: ________________
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Insurance Company: Union Central Life Insurance Co.
Policy Form: Flexible Premium Adjustable Life
Policy Name: COLI UL
Insured's Age and Sex: ________________
Riders: None
Ratings: None
Option: Level
Face Amount: ________________
Premiums Paid: ________________
Number of Premiums Paid: One
Assumed Purchase Date: ________________
If such contracts of life insurance are actually purchased by
the Bank, then the actual policies as of the dates they were
actually purchased shall be used in calculations under this
Executive Plan. If such contracts of life insurance are not
purchased or are subsequently surrendered or lapsed, then the
Bank shall receive annual policy illustrations that assume the
above-described policies were purchased or had not
subsequently surrendered or lapsed, which illustration will be
received from the respective insurance companies and will
indicate the increase in policy values for purposes of
calculating the amount of the Index.
In either case, references to the life insurance contracts are
merely for purposes of calculating a benefit. The Bank has no
obligation to purchase such life insurance and, if purchased,
the Executives and their beneficiary(ies) shall have no
ownership interest in such policy and shall always have no
greater interest in the benefits under this Executive Plan
than that of an unsecured creditor of the Bank.
H. Opportunity Cost:
----------------
The Opportunity Cost Expense for any Plan Year shall be
calculated by taking the sum of the amount of premiums for the
life insurance policies described in the definition of "Index"
plus the amount of any after-tax benefits paid to any
Executive pursuant to the Executive Plan (Paragraph II
hereinafter) plus the amount of all previous years after-tax
Opportunity Cost, and multiplying that sum by the average
annualized after-tax yield of a one-year Treasury ▇▇▇▇ for the
Plan Year.
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I. Change of Control:
-----------------
Change of Control means the cumulative transfer of more than
fifty percent (50%) of the voting stock of the Bank from the
Effective Date of this Executive Plan. For the purposes of
this Executive Plan, transfers 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 of Control.
J. Normal Retirement Age:
---------------------
Normal Retirement Age shall mean the date on which the
Executive attains age sixty-five (65).
II. INDEX BENEFITS
A. Retirement Benefits:
-------------------
Subject to Subparagraph II (D) hereinafter, an Executive who
remains on the Board until the Normal Retirement Age
[Subparagraph I (J)] shall be entitled to receive the balance
in the Pre-Retirement Account in ten (10) equal annual
installments commencing thirty (30) days following the
Executive's retirement. In addition to these payments and
commencing in conjunction therewith, the Index Retirement
Benefit [Subparagraph I (F)] for each Plan year subsequent to
the Executive's retirement, and including the remaining
portion of the Plan Year following said retirement, shall be
paid to the Executive until the Executive's death.
B. Termination of Service:
----------------------
Subject to Subparagraph II (D) hereinbelow, should an
Executive suffer a Termination of Service the Executive shall
be entitled to receive the balance in the Pre-Retirement
Account payable to the Executive in ten (10) equal annual
installments commencing thirty (30) days following the
Executive's Normal Retirement Age [Subparagraph I (J)]. In
addition to these payments and commencing in conjunction
therewith, the Index retirement Benefit for each Plan Year
subsequent to the year in which the Executive attains Normal
Retirement Age, and including the remaining portion of the
Plan Year in which the Executive attains Normal Retirement
Age, shall be paid to the Executive until the Executive's
death.
C. Death:
-----
Should the Executive die prior to having received the balance
of the Pre-Retirement Account the Executive may be entitled to
under the terms of this Executive Plan, the entire unpaid
balance of the Executive's Pre-Retirement account shall be
paid in a lump sum to the individual or individuals the
Executive may have designated in writing and filed with the
Bank. In the absence of any effective designation of
beneficiary(ies), the unpaid balance shall be paid as set
forth herein to the duly qualified executor or administrator
of the Executive's estate. Said payment due hereunder shall be
made the first day of the
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second month following the decease of the Executive.
Provided, however, that anything hereinabove to the contrary
notwithstanding, no death benefit shall be payable hereunder
if the Executive dies on or before the 14th day of July,
2001.
D. Termination of Service and Discharge for Cause:
----------------------------------------------
Should the executive suffer a Termination of Service prior to
having been employed by the Bank for five (5) full years from
the date of first employment, or be Discharged for Cause at
any time, all benefits, under this Executive Plan, except the
Deferral Benefits (Paragraph III), shall be forfeited. the
term for "cause" shall mean any of the following that result
in an adverse effect on the Bank: (i) gross negligence or
gross neglect; (ii) the commission of a felony or gross
misdemeanor involving moral turpitude, fraud, or dishonesty;
(iii) the willful violation of any law, rule, or regulation
(other than a traffic violation or similar offense); (iv) an
intentional failure to perform stated duties; or (v) a breach
of fiduciary duty involving personal profit. If a dispute
arises as to discharge for "cause", such dispute shall be
resolved by arbitration as set forth in this Executive Plan.
(i) Deferral Benefits: As stated herein, if the Executive
should suffer a Termination of Service pursuant to this
Subparagraph II (D), the Executive shall be entitled to
Deferral Benefits as set forth in Paragraph III, and said
benefits shall be payable within thirty (30) days from the
date of said Termination of Service.
E. Disability Benefit:
------------------
In the event the Executive becomes disabled prior to
Termination of Service, and the Executive's employment is
terminated because of such disability, the Executive shall
immediately begin receiving the benefits in Subparagraph III
(A) above. Such benefit shall begin without regard to the
Executive's Normal Retirement Age and the Executive shall be
one hundred percent (100%) vested in the entire benefit
amount. If there is a dispute regarding whether the Executive
is disabled, such dispute shall be resolved by a physician
selected by the Bank and such resolution shall be binding upon
all parties to this Agreement.
F. Death Benefit:
-------------
Except as set forth above, there is no death benefit provided
under this Agreement.
III. DEFERRAL BENEFITS
A. Deferral Election:
-----------------
Any executive wishing to defer any portion or all of the
Executive's salary may elect to defer up to one hundred
percent (100%) each year for a maximum of five (5) years. At
the end of the five year period, the Board shall have the
option of extending the deferral period for any amount of time
it shall deem to be appropriate. The executive will make the
election to defer by filing with the Bank a written statement
setting forth the amount and timing of the deferrals. This
statement must be filed prior to having earned the deferred
income.
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B. Deferred Compensation Account:
-----------------------------
The Bank shall establish a Deferred Compensation Account in
the name of the Executive and credit that account with the
deferrals. The Bank shall also credit interest to the Deferred
Compensation Account balance on December 31st of each year.
The interest rate credited shall be 150% of the one-year
Treasury ▇▇▇▇ each year, with a minimum interest credited each
year of six percent (6%).
C. Retirement, Disability, Termination of Service or Death:
-------------------------------------------------------
Upon the Executive's Retirement Date or Disability, the
balance of the Executive's Deferred Compensation Account shall
be payable to the Executive as set forth in this Agreement
[Subparagraphs II (A) & (E)]. Should the Executive dies while
there is a balance in the Executive's Deferred Compensation
Account, such balance shall be paid pursuant to Subparagraph
II (C). If the Executive should suffer a Termination of
Service under the terms of this Agreement [Subparagraphs I(D)
and II (D)], then the Executive shall begin receiving the
balance in the Executive's Deferred Compensation Account
within thirty (30) days following said termination.
IV. RESTRICTIONS UPON FUNDING
The Bank shall have no obligation to set aside, earmark or entrust any
fund or money with which to pay its obligation under this Executive
Plan. The Executive, their beneficiary(ies), or any successor in
interest shall be and remain simply a general creditor of the Bank in
the same manner as any other creditor having a general claim for
matured and unpaid compensation.
The Bank reserves the absolute right, at its sole discretion, to either
fund the obligations undertaken by this Executive Plan or to refrain
from funding the same and to determine the extent, nature and method of
such funding. Should the Bank elect to fund this Executive Plan, in
whole or in part, through the purchase of life insurance, mutual funds,
disability policies or annuities, the Bank reserves the absolute right,
in its sole discretion, to terminate such funding at any time, in whole
or in part. At no time shall any Executive be deemed to have any lien
nor right, title or interest in or to any specific funding investment
or to any assets of the Bank.
If the Bank elects to invest in a life insurance, disability or annuity
policy upon the life of the Executive, then the Executive shall assist
the Bank by freely submitting to a physical exam and supplying such
additional information necessary to obtain such insurance or annuities.
V. CHANGE IN CONTROL
Upon a Change of Control [Subparagraph I (I)], if the Executive
subsequently suffers a Termination of Service [Subparagraph I (D)],
then the Executive shall receive the benefits promised in this
Executive Plan upon attaining Normal Retirement Age, as if the
Executive had been continuously employed by the Bank until the
Executive's Normal Retirement Age. The Executive will also remain
eligible for all promised death benefits in this Executive Plan. In
addition, no sale, merger or consolidation of the Bank shall take place
unless the new or surviving entity expressly acknowledges the
obligations under this Executive Plan and agrees to abide by its terms.
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VI. MISCELLANEOUS
A. Alienability and Assignment Prohibition:
---------------------------------------
Neither the Executive, nor the Executive's surviving spouse,
nor any other beneficiary(ies) under this Executive Plan shall
have any power or right to transfer, assign, anticipate,
hypothecate, mortgage, commute, modify or otherwise encumber
in advance any of the benefits payable hereunder nor shall any
of said benefits be subject to seizure for the payment of any
debts, judgments, alimony or separate maintenance owed by the
Executive or the Executive's beneficiary(ies), nor be
transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. In the event the Executive or any
beneficiary attempts assignment, commutation, hypothecation,
transfer or disposal of the benefits hereunder, the Bank's
liabilities shall forthwith cease and terminate.
B. Binding Obligation of the Bank and any Successor in Interest:
------------------------------------------------------------
The Bank shall not merge or consolidate into or with another
bank or sell substantially all of its assets to another bank,
firm or person until such bank, firm or person expressly
agrees, in writing, to assume and discharge the duties and
obligations of the Bank under this Executive Plan. This
Executive Plan shall be binding upon the parties hereto, their
successors, beneficiaries, heir and personal representatives.
C. Amendment or Revocation:
-----------------------
It is agreed by and between the parties hereto that, during
the lifetime of the Executive, this Executive Plan may be
amended or revoked at any time or times, in whole or in part,
by the mutual written consent of the Executive and the Bank.
D. Gender:
------
Whenever in this Executive Plan 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.
E. Effect on Other Bank Benefit Plans:
----------------------------------
Nothing contained in this Executive Plan shall affect the
right of the Executive to participate in or be covered by any
qualified or non-qualified pension, profit-sharing, group,
bonus or other supplemental compensation or fringe benefit
plan constituting a part of the Bank's existing or future
compensation structure.
F. Headings:
--------
Headings and subheadings in this Executive Plan are inserted
for reference and convenience only and shall not be deemed a
part of this Executive Plan.
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G. Applicable Law:
--------------
The validity and interpretation of this Agreement shall be
governed by the laws of the State of Georgia.
H. 12 U.S.C.ss.1828(k):
-------------------
Any payments made to the Executive pursuant to this Executive
Plan, or otherwise, are subject to and conditioned upon their
compliance with 12 U.S.C. ss.1828(k) or any regulations
promulgated thereunder.
I. Partial Invalidity:
------------------
If any term, provision, covenant, or condition of this
Executive Plan is determined by an arbitrator or a court, as
the case may be, to be invalid, void, or unenforceable, such
determination shall not render any other term, provision,
covenant, or condition invalid, void, or unenforceable, and
the Executive Plan shall remain in full force and effect
notwithstanding such partial invalidity.
J. Employment:
----------
No provision of this Executive Plan shall be deemed to
restrict or limit any existing employment agreement by and
between the Bank and the Executive, nor shall any conditions
herein create specific employment rights to the Executive nor
limit the right of the Employer to discharge the Executive
with or without cause. In an similar fashion, no provision
shall limit the Executive's rights to voluntarily sever the
Executive's employment at any time.
VII. ERISA PROVISION
A. Named Fiduciary and Plan Administrator:
--------------------------------------
The "Named Fiduciary and Plan Administrator" of this Executive
Plan shall be Heritage Bank until its resignation or removal
by the Board. As Named Fiduciary and Plan Administrator, the
Bank shall be responsible for the management, control and
administration of the Executive Plan. The Named Fiduciary may
delegate to others certain aspects of the management and
operation responsibilities of the Executive Plan including the
employment of advisors and the delegation of ministerial
duties to qualified individuals.
B. Claims Procedure and Arbitration:
--------------------------------
In the event a dispute arises over benefits under this
Executive Plan and benefits are not paid to the Executive (or
to the Executive's beneficiary(ies) in the case of the
Executive's death) and such claimants feel they are entitled
to receive such benefits, then a written claim must be made to
the Named Fiduciary and Plan Administrator named above within
sixty (60) days from the date payments are refused. The Named
Fiduciary and Plan Administrator shall review the written
claim and if the claim is denied, in whole or in part, they
shall provide in writing within sixty (60) days of receipt of
such claim its specific
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reasons for such denial, reference to the provisions of this
Executive Plan upon which the denial is based and any
additional material or information necessary to perfect the
claim. Such written notice shall further indicate the
additional steps to be taken by claimants if a further
review of the claim denial is desired. A claim shall be
deemed denied if the Named Fiduciary and Plan Administrator
fail to take any action within the aforesaid sixty-day
period.
If claimants desire a second review they shall notify the
Named Fiduciary and Plan Administrator in writing within
sixty (60) days of the first claim denial. Claimants may
review this Executive Plan or any documents relating thereto
and submit any written issues and comments it may feel
appropriate. In their sole discretion, the Named Fiduciary
and Plan Administrator shall then review the second claim
and provide a written decision within sixty (60) days of
receipt of such claim. This decision shall likewise state
the specific reasons for the decision and shall include
reference to specific provisions of the Plan Agreement upon
which the decision is based.
If claimants continue to dispute the benefit denial based
upon completed performance of this Executive Plan or the
meaning and effect of the terms and conditions thereof, then
claimants may submit the dispute to an Arbitrator for final
arbitration. The Arbitrator shall be selected by mutual
agreement of the Bank and the claimants. The Arbitrator
shall operate under any generally recognized set of
arbitration rules. The parties hereto agree that they and
their heirs, personal representatives, successors and
assigns shall be bound by the decision of such Arbitrator
with respect to any controversy properly submitted to it for
determination.
Where a dispute arises as to the Bank's discharge of the
Executive for "cause", such dispute shall likewise be
submitted to arbitration as above-described and the parties
hereto agree to be bound by the decision thereunder.
VIII. 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 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 Executive Plan, then the
Bank reserves the right to terminate or modify this Agreement
accordingly. Provided, however, that the Executive shall be entitled to
receive at least his/her Executive's Deferred Compensation Account
including interest earned. Upon a Change of Control [Subparagraph I
(I)], this paragraph shall become null and void effective immediately
upon said Change of Control.
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IN WITNESS WHEREOF, the parties hereto acknowledge that each has
carefully read this Agreement and executed the original thereof on the __ day of
__________________ and that, upon execution, each has received a conforming
copy.
HERITAGE BANK
Jonesboro, Georgia
--------------------------------- -------------------------------
Witness Title
--------------------------------- -------------------------------
Witness Title
LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
Insurer: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Life Insurance Co.
Union Central Life Insurance Co.
Policy Number: ________________
Bank: Heritage Bank
Insured: ________________
Relationship of Insured to Bank: Executive
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:
I. DEFINITIONS
Refer to the policy contract for the definition of all terms in this
Agreement.
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 Split
Dollar policy, the, 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.
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IV. PREMIUM PAYMENT METHOD
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
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.
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 by employed by the Bank and die on or before
the 14th day of July, 2001, the Insured's beneficiary(ies),
designated in accordance with Paragraph III, shall be entitled to
an amount equal to 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. Should the Insured by employed by the Bank and die subsequent to
the 14th day of July, 20001, 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.
C. Should the Insured not be employed by the Bank at the time of his
or her death and die on or before the 14th day of July, 2001, 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 number of full years the Insured
has been employed by the Bank since the date of first employment.
Should the Insured not be employed by the Bank at the time of his
or her death and die subsequent to the 14th day of July, 2001,
the Insured's beneficiary(ies) shall be entitled to the following
percentage of the proceeds described in Subparagraph VI (B)
hereinabove:
Total Years of
Employment Vested
with the Bank (to a Maximum of 100%)
------------- ----------------------
0-4 0%
5 or more 100%
D. The Bank shall be entitled to the remainder of such proceeds.
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E. 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 by 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.
IX. TERMINATION OF AGREEMENT
This Agreement shall terminate upon the occurrence of any one of the
following:
1. The Insured shall leave the employment of the Bank (voluntarily
or involuntarily) prior to five (5) full years of employment
with the Bank, or
2. The Insured shall be discharged from employment with the Bank
for cause. The term for "cause" shall mean any of the
following that result in an adverse effect on the Bank: (i)
gross negligence or gross neglect; (ii) the commission of a
felony or gross misdemeanor involving moral turpitude, fraud,
or dishonesty; (iii) the willful violation of any law, rule,
or regulation (other than a traffic violation or similar
offense); (iv) an intentional failure to perform stated
duties; or (v) a breach of fiduciary duty involving personal
profit.
3. Surrender, lapse, or other termination of the Policy by the
Bank,
Upon such termination, the Insured (or assignee) shall have a
forty-five (45) 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
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2. The amount of the premiums which have been paid by the Bank
prior to the date of such assignment.
If, within said forty-five (45) 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.
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.
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.
XI. AGREEMENT BINDING UPON THE PARTIES
This Agreement shall bind the Insured and the Bank, their heirs,
successors, personal representatives and assigns.
XII. ERISA 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. Named Fiduciary and Plan Administrator.
---------------------------------------
The "Named Fiduciary and Plan Administrator" of this
Endorsement Method Split Dollar Agreement shall be Heritage
Bank until resignation or removal by the Board of Directors.
As Named Fiduciary and Plan Administrator, the Bank shall be
responsible for the management, control and administration of
this Split Dollar Plan as established herein. the Named
Fiduciary may delegate 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.
B. Funding Policy.
--------------
The funding policy for this Split Dollar Plan Shall be
maintain the subject policy in force by paying, when due, all
premiums required.
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C. 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.
D. Claim Procedures.
----------------
Claim forms or claim information as to the subject policy can
be obtained by contacting The Benefit Marketing Group, Inc.
(770-952-1529). When the Named Fiduciary 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 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 in accordance with
this Agreement.
In the event that a claim is not eligible under the policy, the Insurer
will notify the Named Fiduciary or 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 wishes to contest such
claim denial, they should contact the office named above and they will
assist in making 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.
XIII. GENDER
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 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
for any and all liability.
XV. CHANGE OF CONTROL
Change of Control shall be deemed to be the cumulative transfer of more
than fifty percent (50%) of the voting stock of the Bank from the date
of this Agreement. For the purposes of this Agreement, transfers 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 of
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
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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) & (B)].
XVI. AMENDMENT OR REVOCATION
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.
XVII. EFFECTIVE DATE
The Effective Date of this Agreement shall be ________________________.
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 over broad 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. APPLICABLE LAW
The validity and interpretation of this Agreement shall be governed by
the laws of the State of Georgia.
Executed at Jonesboro, Georgia this ____ day of _________________.
HERITAGE BANK
Jonesboro, Georgia
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Witness Title
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Witness Title
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