Common use of Crediting of Benefits Clause in Contracts

Crediting of Benefits. As of the first day of each Plan Year, for so long as the Employee is entitled to future Installment Payments, and to the extent the Benefit Credit Balance is less than the future benefits payable under this Agreement, the Bank shall credit to a book reserve account maintained for the Employee an amount equal to the Annual Benefit Credit. The Annual Benefit Credit shall be an amount equal to the quotient of (1) the difference between (a) the Annual Earnings on Bank-Owned Life Insurance, minus (b) the Annual After-Tax Cost-of-Funds; divided by (2) the After-Tax Factor. An example of the crediting of benefits is attached to this Agreement on Exhibit A. The amount of the book reserve account shall accumulate without interest. The Parties acknowledge that the book reserve account is used solely to measure the amount that accrues for the Employee's benefit under this Agreement and that the Bank shall have no duty to set aside assets in such account to cover its obligations hereunder. The right of the Employee or any designated beneficiary to receive a distribution under this Agreement is an unsecured claim against the general assets of the Bank. Any insurance policy or other asset acquired by the Bank shall be deemed to not be held in trust for the benefit of the Employee nor to be collateral security for the performance of the obligations of the Bank, but shall remain a general, unpledged and unrestricted asset of the Bank. The Employee and designated beneficiaries have the status of general unsecured creditors of the Bank. This Agreement constitutes a mere promise by the Bank to make benefit payments in the future.