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LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
Insurer/Policy Number: _______________________________
Bank: Saratoga National Bank
Insured: __________________
Relationship of Insured to Bank: Director
Date: June 18, 1999
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.
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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
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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 Director 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 removal 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 removed pursuant to subparagraph
(a), (b) or (f) below. The term "removal for cause" shall mean
termination of the service 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 (i) is of unsound mind, or (ii)
has committed a gross abuse of authority or discretion with
reference to the Bank, or (iii) otherwise is not suitable
to continue to serve as a member of the Board of Directors
of the Bank;
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(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 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
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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.
XVII. 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 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.
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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
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BENEFICIARY DESIGNATION FORM
Primary Designation:
Name Relationship
_____________________________ _______________________________________
_____________________________ _______________________________________
_____________________________ _______________________________________
Contingent Designation:
_____________________________ _______________________________________
_____________________________ _______________________________________
_____________________________ _______________________________________
_____________________________ _____________, 1999
__________________
10QEX10.12
