Placer Sierra Bancshares 10-Q 2006
Documents found in this filing:
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
The respective rights and duties of Southwest Community Bank (hereinafter the Bank) and Alan J. Lane (hereinafter the Insured) in the above policy(ies) (the Policy or Policies) shall be as follows:
Refer to the Policy provisions for the definition of all terms in this Agreement.
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 the Insureds 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.
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.
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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.
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. The bank agrees to reimburse (gross-up) the Insured for taxes paid related to the receipt of this benefit based on the Table below, or as adjusted based on then prevailing income tax rates:
Subject to Paragraph VII herein, the division of the death proceeds of the Policies is as follows:
1. If death occurs on or before the attainment of age seventy (70), the Insureds beneficiary(ies), (designated in accordance with Paragraph III), shall be entitled to an amount equal to the lesser of one million dollars ($1,000,000), or one hundred percent (100%) of the net at risk insurance portion of the proceeds. If death occurs after age seventy (70) but on or before age eighty (80), the Insureds beneficiary(ies) shall be entitled to the lesser of seven hundred thousand dollars ($700,000), or one hundred percent (100%) of the net at risk insurance proceeds. If death occurs after age eighty (80), the Insureds beneficiaries shall be entitled to the lesser of four hundred thousand dollars ($400,000), or one hundred percent (100%) of the net at risk insurance proceeds. The net at risk insurance portion is the total proceeds less the cash value of the Policy.
2. Payment of the death benefit determined by the preceding paragraph shall be made and distributed from the Policies in the following order, with resort to each succeeding policy only to the extent that the proceeds of each prior listed Policy are insufficient to satisfy the specified death benefit in full: (a) Massachusetts Mutual Life Insurance Co. Policy No. 0066426; (b) New York Life Insurance Company Policy No. 56610020.
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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:
(a) The Employees deliberate violation of (i) any state or federal banking or securities laws, or of the Bylaws, rules, policies or resolutions of the Employer, or (ii) of the rules or regulations of the California Department of Financial Institutions, the Federal Deposit Insurance Corporation, the Federal Reserve Board of Governors, the Office of the Comptroller of the Currency or any other regulatory agency or governmental authority having jurisdiction over the Employer, which has a material adverse effect upon the Employer; or
(b) The Employees conviction of (i) any felony or (ii) a crime involving moral turpitude or a fraudulent or dishonest act which, in each case, has a material adverse effect on the Employer.
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:
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.
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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.
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Southwest Community Bank
LIFE INSURANCE ENDORSEMENT METHOD SPLIT DOLLAR PLAN AGREEMENT
This Amendment dated April 19, 2006 amends the Life Insurance Endorsement Method Split Dollar Plan Agreement between Southwest Community Bank (the Bank) and Alan J. Lane (the Insured) dated June 15, 2005 (the Agreement).
1. Notwithstanding any other provision of the Policy or the Agreement, it is intended that any payment or benefit which is provided to the Insured pursuant to or in connection with the Policy or this Agreement which is considered to be nonqualified deferred compensation subject to Section 409A of the Code shall be provided and paid in a manner, and at such time and in such form, as complies with the applicable requirements of Section 409A of the Code to avoid the unfavorable tax consequences provided therein for noncompliance.
2. The Agreement shall otherwise remain in full force and effect as written.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
Southwest Community Bank
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