Exhibit 10.7

 

Madison Bank of Maryland

Supplemental Life Insurance Agreement

 

Madison Bank of Maryland

Supplemental Life Insurance Agreement

Effective February 10, 2017

 

This Supplemental Life Insurance Agreement (“Agreement”) is made and entered
into this 10th day of February, 2017, by and between Madison Bank of Maryland
(“Bank”), a bank with its principal place of business located in Forest Hill,
MD, and John M. Wright (“Executive”).

 

INTRODUCTION

 

The purpose of this Agreement is to attract, retain, and reward the Executive,
by providing death benefits to the designated beneficiary of the Executive. The
Bank will pay the death benefits from its general assets, but only so long as
one of its general assets is a life insurance policy on the Executive's life.

 

Article 1

Definitions

 

Whenever used in this Agreement, the following terms shall have the meanings
specified:

 

1.1“Beneficiary” means each designated person, or the estate of a deceased
Executive, entitled to benefits, if any, upon the death of an Executive.

 

1.2“Beneficiary Designation Form” means the form established from time to time
by the Plan Administrator that an Executive completes, signs and returns to the
Plan Administrator to designate one or more Beneficiaries.

 

1.3“Board” means the Board of Directors of the Bank as from time to time
constituted.

 

1.4“Disability” means the Executive (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months, or (ii) is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering employees of the Bank. Medical determination of Disability may be made
by either the Social Security Administration or by the provider of an accident
or health plan covering employees of the Bank. Upon the request of the Plan
Administrator, the Executive must submit proof to the Plan Administrator of the
Social Security Administration’s or provider’s determination.

 

1.5“Effective Date” shall mean February 10, 2017.

 

 

 

  

Madison Bank of Maryland

Supplemental Life Insurance Agreement

 

1.6“Plan Administrator” means the plan administrator described in Article 6.

 

1.7“Separation from Service” means that the Executive’s service, as an employee
and independent contractor, to the Bank and any member of a controlled group as
defined in Section 414 of the Code to which the Bank belongs, has terminated for
any reason, other than by reason of a leave of absence approved by the Bank or
the death of the Executive.

 

Article 2

Survivor Income Benefit

 

2.1Pre-Termination Survivor Income Benefit. If the Executive dies before
Separation from Service with the Bank, and if the Bank owns a life insurance
policy on the Executive's life at the time of such death, the Executive’s
designated Beneficiary shall be entitled to receive a death benefit equal to
twenty-five thousand dollars ($25,000.00).

 

2.2Disability Continuation. Upon Separation from Service due to Disability,
followed by death before recovering from such Disability, the Bank shall pay to
the Executive's designated beneficiary the survivor income benefit described in
Section 2.1. Notwithstanding the previous sentence, upon the disabled
Executive’s gainful employment with an entity other than the Bank, the Bank
shall have no further obligation to the disabled Executive, and the disabled
Executive’s rights pursuant to the Agreement shall cease.

 

2.3Payment of Benefit. The Bank shall pay the benefit to the Beneficiary in a
lump sum within ninety (90) days following the Executive’s death.

 

Article 3

Beneficiaries

 

3.1Beneficiary Designation. The Executive shall have the right, at any time, to
designate a Beneficiary(ies) to receive any benefits payable under this
Agreement upon the death of the Executive. The Beneficiary designated under this
Agreement may be the same as or different from the Beneficiary designation under
any other plan of the Bank in which the Executive participates.

 

3.2Beneficiary Designation: Change. The Executive shall designate a Beneficiary
by completing and signing the Beneficiary Designation Form, and delivering it to
the Plan Administrator or its designated agent. The Executive's Beneficiary
designation shall be deemed automatically revoked if the Beneficiary predeceases
the Executive or if the Executive names a spouse as Beneficiary and the marriage
is subsequently dissolved. The Executive shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the terms of the
Beneficiary Designation Form and the Plan Administrator’s rules and procedures,
as in effect from time to time. Upon the acceptance by the Plan Administrator of
a new Beneficiary Designation Form, all Beneficiary designations previously
filed shall be cancelled. The Plan Administrator shall be entitled to rely on
the last Beneficiary Designation Form filed by the Executive and accepted by the
Plan Administrator prior to the Executive’s death.

 

 

 

  

Madison Bank of Maryland

Supplemental Life Insurance Agreement

 

3.3Acknowledgment. No designation or change in designation of a Beneficiary
shall be effective until received, accepted and acknowledged in writing by the
Plan Administrator or its designated agent.

 

3.4No Beneficiary Designation. If the Executive dies without a valid beneficiary
designation, or if all designated Beneficiaries predecease the Executive, then
the Executive’s spouse shall be the designated Beneficiary. If the Executive has
no surviving spouse, the benefits shall be made to the personal representative
of the Executive's estate.

 

3.5Facility of Payment. If the Plan Administrator determines in its discretion
that a benefit is to be paid to a minor, to a person declared incompetent, or to
a person incapable of handling the disposition of that person’s property, the
Plan Administrator may direct payment of such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Plan Administrator may require proof of
incompetence, minority or guardianship as it may deem appropriate prior to
distribution of the benefit. Any payment of a benefit shall be a payment for the
account of the Executive and the Beneficiary, as the case may be, and shall be a
complete discharge of any liability under the Agreement for such payment amount.

 

Article 4

Claims and Review Procedure

 

4.1Claims Procedure. An Executive or Beneficiary (“claimant”) who has not
received benefits under the Agreement that he or she believes should be paid
shall make a claim for such benefits as follows:

 

4.1.1Initiation – Written Claim. The claimant initiates a claim by submitting to
the Plan Administrator a written claim for the benefits.

 

4.1.2Timing of Plan Administrator Response. The Plan Administrator shall respond
to such claimant within ninety (90) days after receiving the claim. If the Plan
Administrator determines that special circumstances require additional time for
processing the claim, the Plan Administrator can extend the response period by
an additional ninety (90) days by notifying the claimant in writing, prior to
the end of the initial 90-day period that an additional period is required. The
notice of extension must set forth the special circumstances and the date by
which the Plan Administrator expects to render its decision.

 

4.1.3Notice of Decision. If the Plan Administrator denies part or the entire
claim, the Plan Administrator shall notify the claimant in writing of such
denial. The Plan Administrator shall write the notification in a manner
calculated to be understood by the claimant. The notification shall set forth:

 

(a)The specific reasons for the denial;

(b)A reference to the specific provisions of the Agreement on which the denial
is based;

 

 

 

  

Madison Bank of Maryland

Supplemental Life Insurance Agreement

 

(c)A description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is needed;

(d)An explanation of the Agreement’s review procedures and the time limits
applicable to such procedures; and

(e)A statement of the claimant’s right to bring a civil action under ERISA
Section 502(a) following an adverse benefit determination on review.

 

4.2Review Procedure. If the Plan Administrator denies part or the entire claim,
the claimant shall have the opportunity for a full and fair review by the Plan
Administrator of the denial, as follows:

 

4.2.1Initiation – Written Request. To initiate the review, the claimant, within
60 days after receiving the Plan Administrator’s notice of denial, must file
with the Plan Administrator a written request for review.

 

4.2.2Additional Submissions – Information Access. The claimant shall then have
the opportunity to submit written comments, documents, records and other
information relating to the claim. The Plan Administrator shall also provide the
claimant, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

 

4.2.3Considerations on Review. In considering the review, the Plan Administrator
shall take into account all materials and information the claimant submits
relating to the claim, without regard to whether such information was submitted
or considered in the initial benefit determination.

 

4.2.4Timing of Plan Administrator’s Response. The Plan Administrator shall
respond in writing to such claimant within sixty (60) days after receiving the
request for review. If the Plan Administrator determines that special
circumstances require additional time for processing the claim, the Plan
Administrator can extend the response period by an additional sixty (60) days by
notifying the claimant in writing, prior to the end of the initial 60-day period
that an additional period is required. The notice of extension must set forth
the special circumstances and the date by which the Plan Administrator expects
to render its decision.

 

4.2.5Notice of Decision. The Plan Administrator shall notify the claimant in
writing of its decision on review. The Plan Administrator shall write the
notification in a manner calculated to be understood by the claimant. The
notification shall set forth:

 

(a)The specific reasons for the denial;

(b)A reference to the specific provisions of the Agreement on which the denial
is based;

(c)A statement that the claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to

 

 

 

Madison Bank of Maryland

Supplemental Life Insurance Agreement

 

the claimant’s claim for benefits; and

(d)A statement of the claimant’s right to bring a civil action under ERISA
Section 502(a).

 

Article 5

Amendments and Termination

 

The Bank may amend or terminate this Agreement at any time, for any reason, upon
30 days written notice to the Executive.

 

Article 6

Administration

6.1Plan Administrator Duties. This Agreement shall be administered by a Plan
Administrator which shall consist of the Board, or such committee or persons as
the Board may choose. The Plan Administrator shall also have the discretion and
authority to (i) make, amend, interpret and enforce all appropriate rules and
regulations for the administration of this Agreement and (ii) decide or resolve
any and all questions including interpretations of this Agreement, as may arise
in connection with this Agreement.

 

6.2Agents. In the administration of this Agreement, the Plan Administrator may
employ agents and delegate to them such administrative duties as it sees fit,
(including acting through a duly appointed representative), and may from time to
time consult with counsel who may be counsel to the Bank.

 

6.3Binding Effect of Decisions. The decision or action of the Plan Administrator
with respect to any question arising out of or in connection with the
administration, interpretation and application of this Agreement and the rules
and regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in this Agreement.

 

6.4Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless
any party contracted for the purposes of assisting the Plan Administrator in
performing its duties under this Agreement against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to act with
respect to this Agreement, except in the case of willful misconduct by such
contracted party.

 

6.5Information. To enable any party contracted for the purposes of assisting the
Plan Administrator in performing its duties under this Agreement to perform its
functions, the Bank shall supply full and timely information to such contracted
party on all matters relating to the Base Salary of the Executive, the date and
circumstances of the retirement, disability, death or Separation from Service of
the Executive, and such other pertinent information as such contracted party may
reasonably require.

 

 

 

  

Madison Bank of Maryland

Supplemental Life Insurance Agreement

 

Article 7

Miscellaneous

 

7.1Unsecured General Creditor. Executives and their Beneficiaries successors and
assigns shall have no legal or equitable rights, interests or claims in any
property or assets of the Bank. Any and all of the Bank's assets shall be, and
remain, the general, unpledged unrestricted assets of the Bank. The Bank's
obligation under the Agreement shall be merely that of an unfunded and unsecured
promise to pay money in the future.

 

7.2Not a Contract of Employment. The terms and conditions of this Agreement
shall not be deemed to constitute a contract of employment between the Bank and
the Executive. Nothing in this Agreement shall be deemed to give an Executive
the right to be retained in the service of the Bank or to interfere with the
right of the Bank to discipline or discharge the Executive at any time.

 

7.3Participation in Other Plans. Nothing herein contained shall be construed to
alter, abridge, or in any manner affect the rights and privileges of the
Executive to participate in and be covered by any pension, profit sharing, group
insurance, bonus or similar employee plans which the Bank may now or hereafter
maintain.

 

7.4Alienability. Neither the Executive nor any Beneficiary under this Agreement
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 Beneficiary or any of them, to 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 benefit hereunder, the Bank’s liabilities under
this Agreements hall forthwith cease and terminate.

 

7.5Successors. The provisions of this Agreement shall bind and inure to the
benefit of the Bank and its successors and assigns and the Executive and the
Beneficiary.

 

7.6Reorganization. The Bank shall not merge or consolidate into or with another
corporation, or reorganize, or sell substantially all of its assets to another
corporation, firm, or person unless and until such succeeding or continuing
corporation, firm, or person agrees to assume and discharge the obligations of
the Bank under this Agreement. Upon the occurrence of such event, the term
“Bank” as used in this Agreement shall be deemed to refer to such succeeding or
continuing bank, firm, or person.

 

7.7Interpretation. Wherever the fulfillment of the intent and purpose of this
Agreement requires, and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the plural.

 

7.8Alternative Action. In the event it shall become impossible for the Bank or
the Plan Administrator to perform any act required by this Agreement, the Bank
or Plan

 

 

 

  

Madison Bank of Maryland

Supplemental Life Insurance Agreement

 

Administrator may in its discretion perform such alternative act as most nearly
carries out the intent and purpose of this Agreement and is in the best
interests of the Bank.

 

7.9Applicable Law. Subject to ERISA, the provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of Maryland
without regard to its conflict of law principles.

 

7.10Headings. Article and section headings are for convenient reference only and
shall not control or affect the meaning or construction of any of its
provisions.

 

7.11Furnishing Information. An Executive or his or her Beneficiary will
cooperate with the Plan Administrator by furnishing any and all information
requested by the Plan Administrator and take such other actions as may be
requested in order to facilitate the administration of the Agreement and the
payments of benefits hereunder, including but not limited to taking such
physical examinations as the Plan Administrator may deem necessary.

 

7.12Validity. In case any provision of this Agreement shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Agreement shall be construed and enforced as if
such illegal and invalid provision had never been inserted herein.

 

7.13Notice. Any notice or filing required or permitted to be given to the Plan
Administrator under this Agreement shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:

 

John M. Wright 10019 Rolling River Run Laurel, MD 20723  

 

Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark or the receipt for
registration or certification.

 

Any notice or filing required or permitted to be given to an Executive under
this Agreement an shall be sufficient if in writing and hand-delivered, or sent
by mail, to the last known address of the Executive.

 

7.14Signed Copies. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, and such counterparts taken
together shall constitute one (1) and the same instrument.

 

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the
Bank have executed this Agreement as of the date indicated above.

 

 

 

  

Madison Bank of Maryland

Supplemental Life Insurance Agreement

 

EXECUTIVE:   BANK:           Madison Bank of Maryland         /s/   By /s/

John M. Wright

     

 

    Title Chairman