Exhibit 10(ab)
LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
Insurer/Policy Number:
Bank: San Xxxx National Bank
Insured:
Relationship of Insured to Bank: Director
Date: , 2000
The respective rights and duties of the Bank and the Insured in the above
policy(ies) (the "Policy" or Policies) 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
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The Insured (or beneficiary[ies] or assignee[s]) shall have the right
and power to designate a beneficiary or beneficiaries to receive his
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.
4. In the event that the Policy is terminated other than as a
result of (a) a termination of this Agreement pursuant to
paragraph X or (b) any intentional act of the Insured which
results in the termination of the Policy, then the Bank shall
pay to the Insured's beneficiary(ies) an amount which will
provide a total after-tax death benefit equal to the benefit
that the Insured would have received if the Policy had not
been terminated.
VII. DIVISION OF CASH SURRENDER VALUE
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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 under that certain
Executive Supplemental Compensation Benefits Agreement
effective as of May 1, 2000 shall terminate for any reason
other than the Insured's death, or
2. The Insured shall be discharged from service with the Bank for
cause. The term "for cause" shall mean:
a. A termination "for cause" as this term may be defined
in any written employment agreement entered into by and
between the Bank and the Insured;
b. The willful breach of duty by the Insured in the course
of his employment;
c. The Insured's deliberate violation of (i) any federal
banking or securities laws, or of the Bylaws, rules,
policies or resolutions of the Bank or Holding Company,
or (ii) of the rules or regulations of the Board of
Governors of the Federal Reserve System, Federal
Deposit Insurance Corporation, Office of the Controller
of the
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Currency or any other regulatory agency or
governmental authority having jurisdiction over the
Bank or Holding Company, which has a material adverse
effect upon the Bank or Holding Company; or
d. The Insured's conviction of any felony or a crime
involving moral turpitude or a fraudulent or dishonest
act.
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,
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,
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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 have signed
this Agreement as of the above written date.
SAN XXXX NATIONAL BANK INSURED
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Xxxxx X. Xxxxx Director
President and CEO
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BENEFICIARY DESIGNATION FORM
PRIMARY DESIGNATION:
NAME RELATIONSHIP
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CONTINGENT DESIGNATION:
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_____________, 2000
Signed:_______________________
Director
