Exhibit 10.21
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LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
Insurer: Xxxxxxxxx Xxxxxxxx
Southland Life
Policy Number: AH5098129
0660001610
Bank: Community Trust Bank
Insured: Xxxxx X. Xxxx
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, 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.
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 be employed by the Bank and die on or before the
3rd day of January, 2002, 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 be employed by the Bank and die subsequent to the
3rd day of January, 2002, 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 3rd day of January, 2002, 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 age of the Insured at the time that he terminated service with
the Bank. Should the
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Insured not be employed by the Bank at the time of his or her death
and die subsequent to the 3rd day of January, 2002, the Insured's
beneficiary(ies) shall be entitled to the following percentage of the
proceeds described in Subparagraph VI (B) hereinabove:
Vested Percentage
Age of Executive (to a maximum of 100%)
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Age 55 or younger 0%
56 10%
57 20%
58 30%
59 40%
60 50%
61 60%
62 70%
63 80%
64 90%
65 or older 100%
D. The Bank shall be entitled to the remainder of such proceeds.
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 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.
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IX. TERMINATION OF AGREEMENT
This Agreement shall terminate upon the occurrence of any one of the
following:
1. The Insured shall terminate service with the Bank prior to attaining
age fifty-six (56); or
2. The Insured shall breach any provision of the Employment Agreement
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between Xxxxx X. Xxxx and Community Trust Financial Services
Corporation dated January 3, 2000 (hereinafter referred to as the,
"Executive's Employment Agreement"); or
3. The Insured shall be discharged from employment with the Bank for
cause. The term for "cause" shall be as defined in subparagraph 10.01
(c), "Grounds for Termination", of the Executive's Employment
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Agreement; or
4. Surrender, lapse, or other termination of the Policy by the Bank.
Upon such termination, 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 which have been paid by the Bank prior to
the date of such assignment.
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.
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.
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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.
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The "Named Fiduciary and Plan Administrator" of this Endorsement Method
Split Dollar Agreement shall be Community Trust 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.
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The funding policy for this Split Dollar Plan shall be to maintain the
subject policy in force by paying, when due, all premiums required.
C. Basis of Payment of Benefits.
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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.
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D. Claim Procedures.
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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 the terms of this Agreement.
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 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 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
for any and all liability.
XV. CHANGE OF CONTROL
Change of Control shall be as defined in paragraph 10.03, ""Change in
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Control" Defined", of the Executive's Employment Agreement. Upon a Change
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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 Subparagraphs VI (A) &
(B)].
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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 January 3, 2000.
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 Xxxxx, Georgia this 13th day of January, 2000.
COMMUNITY TRUST BANK
Hiram, Georgia
/s/ Xxxxxxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxx
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Witness - Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxx - CEO
/s/ X. X. Xxxxxx, Xx. /s/ Xxxxx Xxxx
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Witness - X. X. Xxxxxx, Xx. Xxxxx Xxxx
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