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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: ____________________
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
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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
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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;
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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 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 FIDUCIARY 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:
_____________________________ _______________________________________
_____________________________ _______________________________________
_____________________________ _______________________________________
_____________________________ _____________, 1998
___________________
