LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
Insurer/Policy Number:
Bank: Saratoga National Bank
Insured: __________________
Relationship of Insured to Bank: ____________________
Date: _____________, 1998
The respective rights and duties of the Bank and the Insured in the above
policy(ies) (individually and collectively referred to as the "Policy") shall be
as follows:
I. DEFINITIONS
Refer to the Policy provisions 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 the
Policy cash values. Where the Bank and the Insured (or beneficiary[ies] or
assignee[s], 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 beneficiary[ies] or assignee[s]) shall have the right and
power to designate a beneficiary or beneficiaries to receive his or her
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 maintain 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
received each year on Form W-2 or its equivalent.
VI. DIVISION OF DEATH PROCEEDS
Subject to Paragraph VII herein, the division of the death proceeds of the
Policy is as follows:
1. 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.
2. The Bank shall be entitled to the remainder of such proceeds.
3. The Bank and the Insured (or beneficiary[ies] or assignee[s]) shall
share in any interest due on the death proceeds on a pro rata basis in
the ratio that the proceeds due the Bank and the Insured,
respectively, bears to the total proceeds, excluding any such
interest.
VII. DIVISION OF CASH SURRENDER VALUE
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, less any Policy loans
and unpaid interest or cash withdrawals previously incurred by the Bank and
any applicable Policy surrender charges. Such cash value shall be
determined as of the date of surrender of the Policy or death of the
Insured as the case may be.
VIII.PREMIUM WAIVER
If the Policy contains a premium waiver provision, any such waived amounts
shall be considered for all purposes of this Agreement as having been paid
by the Bank.
IX. 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
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 treated like death proceeds for the purposes of division under this
Agreement.
X. TERMINATION OF AGREEMENT
This Agreement shall terminate at the option of the Bank following thirty
(30) days written notice to the Insured upon the happening of any one of
the following:
1. The Insured's right to receive benefits pursuant to the terms and
conditions of that certain Executive Supplemental Compensation
Agreement effective as of ___________, 1998, shall terminate for any
reason other than the Insured's death; or
2. The Insured shall be discharged from service with the Bank as a result
of a termination for cause under subparagraph (c), (d) or (e) below.
Notwithstanding the foregoing, this Agreement shall remain in effect
in the event that the Insured is terminated pursuant to subparagraph
(a), (b) or (f) below. The term "termination for cause" shall mean
termination of the employment of the Insured by reason of any of the
following determined in good faith by the Bank's Board of Directors:
(a) The willful, intentional and material breach or the habitual and
continued neglect by the Insured of his or her employment
responsibilities and duties;
(b) The continuous mental or physical incapacity of the Insured,
subject to disability rights under this Agreement;
(c) The Insured's willful and intentional violation of any federal
banking or securities laws, or of the Bylaws, rules, policies or
resolutions of Bank, or the rules or regulations of the Board of
Governors of the Federal Reserve System, Federal Deposit
Insurance Corporation, Office of the Comptroller of the Currency,
or other regulatory agency or governmental authority having
jurisdiction over the Bank, which has a material adverse effect
upon the Bank;
(d) The written determination by a state or federal banking agency or
governmental authority having jurisdiction over the Bank that the
Insured is not suitable to act in the capacity for which he or
she is employed by the Bank;
(e) The Insured's conviction of (i) any felony or (ii) a crime
involving moral turpitude, or the Insured's willful and
intentional commission of a fraudulent or dishonest act; or
(f) The Insured's willful and intentional disclosure, without
authority, of any secret or confidential information concerning
the Bank or taking any action which the Bank's Board of Directors
determines, in its sole discretion and subject to good faith,
fair dealing and reasonableness, constitutes unfair competition
with or induces any customer to breach any contract with the
Bank.
Upon such termination, the Insured (or beneficiary[ies] or assignee[s])
shall have a ninety (90) 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 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.
2. The amount of the premiums which have been paid by the Bank prior to
the date of such assignment.
Should the Insured (or beneficiary[ies] or assignee[s]) fail to exercise
this option within the prescribed ninety (90) day period, the Insured (or
beneficiary[ies] or assignee[s]) agrees that all of his or her rights,
interest and claims in the Policy shall terminate as of the date of the
termination of this Agreement.
Except as provided above, this Agreement shall terminate upon distribution
of the death benefit proceeds in accordance with Paragraph VI above.
XI. INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS
The Insured may not, without the prior written consent of the Bank, which
shall not be unreasonably withheld, assign to any individual, trust or
other organization, any right, title or interest in the Policy nor any
rights, options, privileges or duties created under this Agreement.
XII. AGREEMENT BINDING UPON THE PARTIES
This Agreement shall be binding upon the Insured and the Bank, and their
respective heirs, successors, personal representatives and assigns, as
applicable.
XIII.NAMED XXXXXXXXX AND PLAN ADMINISTRATOR
The Bank is hereby designated the "Named Fiduciary" until resignation or
removal by its Board of Directors. As Named Fiduciary, the Bank shall be
responsible for the management, control, and administration of this
Agreement as established herein. The Named Fiduciary may allocate to others
certain aspects of the management and operations responsibilities of this
Agreement, including the employment of advisors and the delegation of any
ministerial duties to qualified individuals.
XIV. FUNDING POLICY
The funding policy for this Agreement shall be to maintain the Policy in
force by paying, when due, all premiums required.
XV. 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 Policy, it 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 to
the Named Fiduciary.
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, it 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.
XVI. 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.
XXXX.XXXXXXXXX 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 set forth herein 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.
IN WITNESS WHEREOF, the Insured and a duly authorized Bank officer or
director have signed this Agreement at Saratoga, California as of the date first
above written.
SARATOGA NATIONAL BANK INSURED
__________________________ _____________________________
Xxxxxxx X. Xxxxx _____________________
President and Chief Executive Officer
BENEFICIARY DESIGNATION FORM
Primary Designation:
Name Relationship
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Contingent Designation:
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----------------------------- , 1998
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