Exhibit 10.27
LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AGREEMENT
INSURER / POLICY NUMBER: New York Life Insurance Company
Policy No. 56611128
BANK: The Vintage Bank (hereinafter the "bank"), a state-chartered commercial
bank and wholly-owned subsidiary of North Bay Bancorp (the "Holding
Company")
INSURED: John A. Nerland
RELATIONSHIP OF INSURED TO BANK: Executive
DATE: February 2, 2005
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
1. Refer to the Policy provisions for the definition of all terms in this
Agreement other than those contained herein or set forth below:
2. The term "Affiliate" shall mean a corporation or entity of any type
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, the Bank, within the meaning of Rule 144 under the
Securities Act of 1933, as amended.
II. POLICY TITLE, OWNERSHIP AND EXCHANGE
1. 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.
2. Exchange of Policies. Whereas the Agreement references specific life
insurance policies ("Existing Policy[ies]") and such Existing Policy(ies) are
subject to exchange for new policies insuring Executive ("Replacement
Policy[ies]"), the parties agree hereby that Replacement Policies will be
accorded the same treatment under the Agreement as Existing Policies and shall,
in all respects relating to the Agreement replace the Existing Policies for
which they were exchanged.
The Executive agrees to cooperate with Bank in all exchanges requested by the
Bank, by providing and promptly returning signatures as requested by the Bank,
Named Fiduciary or Plan Administrator.
III. BENEFICIARY DESIGNATION RIGHTS
The insured (or beneficiay[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. If the Insured is Seventy One (71) years old or younger at the time of
death, then the Insured's Beneficiary(ies), designated in accordance with
Paragraph III, shall be entitled to an amount equal to the lesser of Seven
Hundred and Fifty Thousand ($750,000) Dollars or One Hundred Percent (100%) of
the Net-at-Risk portion of the proceeds under the Policy(ies). If the Insured
dies after attaining the age of Seventy One (71) years old, but before attaining
Eighty One (81) years of age, then the Insured's Beneficiary(ies), designated in
accordance with Paragraph III, shall be entitled to an amount equal to the
lesser of Five Hundred and Twenty-Five Thousand ($525,000) Dollars or One
Hundred Percent (100%) of the Net-at-Risk portion of the proceeds from the
policy. If the Insured attains the age of Eighty One (81) years old or older,
then the Insured's beneficiary(ies), designated in accordance with Paragraph 3,
shall be entitled to an amount equal to the lesser of Three Hundred Thousand
($300,000) Dollars or One Hundred Percent (100%) of the Net-at-Risk portion of
the proceeds from the policy. The Net-at-Risk insurance portion is the total
proceeds of the policy less the cash value of the policy. The Insured may elect
to reduce their death benefit in the future at any time provided that they have
written authorization from their spouse or primary Beneficiary.
2. 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.
3. 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
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: (i) the insured commits fraud, theft or embezzlement against the
Bank, or any subsidiary or Affiliate thereof; (ii) the Insured commits a felony
or a crime involving moral turpitude; (iii) the insured compromises trade
secrets or other proprietary information of the Bank, or any subsidiary or
Affiliate thereof; (iv) the insured breaches any non-solicitation agreement with
the Bank, or any subsidiary or Affiliate thereof; (v) the insured breaches any
of the material terms of any employment agreement entered into with the Bank or
Holding Company and, if given the right in any such employment agreement, fails
to cure said breach in accordance therewith; (vi) the Insured breaches any of
the material terms of this Agreement; (vii) the Insured engages in any grossly
negligent act or willful misconduct that causes, or could be reasonably expected
to cause, harm to the business, operations or reputation of the Bank, or any
subsidiary or Affiliate thereof; or (viii) the Bank, or any subsidiary or
Affiliate thereof; is ordered to terminate any employment agreement by any
governmental regulatory agency with supervisory authority over the Bank, or any
subsidiary or Affiliate thereof; or (ix) the Insured's right to receive benefits
under that certain Participation Agreement effective October 1, 2005 is
terminated on account of the Insured's voluntary resignation prior to achieving
an Applicable Percentage (as defined in the Supplemental Executive Retirement
Plan) equal to one hundred percent (100%) and such resignation is not on account
of or after a Change in Control (as defined in the Supplemental Executive
Retirement Plan).
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 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 FIDUCIARY AND PLAN ADMINISTRATOR
The Holding Company is hereby designated the "Named Fiduciary" until
resignation or removal by its Board of Directors. As Named Fiduciary, the
Holding Company 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 paving, when due, all premiums required.
XV. CLAIM PROCEDURES
Claim forms or claim information as to the subject Policy can be obtained
by contacting The Benmark, Inc. (800-544-6079). 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.
IN WITNESS WHEREOF, the Insured and a duly authorized Bank officer have signed
this Agreement as of the above written date.
THE VINTAGE BANK INSURED
By: ______________________________ _____________________________
President and Chief Executive Officer
Acceptance of Named Fiduciary Designation:
NORTH BAY BANCORP
By: ______________________________________
President and Chief Executive Officer
BENEFICIARY DESIGNATION FORM
FOR THE LIFE INSURANCE ENDORSEMENT METHOD
SPLIT DOLLAR PLAN AGREEMENT
I. PRIMARY DESIGNATION
(You may refer to the beneficiary designation information prior to
completion of this form.)
A. Person(s) as a Primary Designation:
(Please indicate the percentage for each beneficiary.)
Name_____________________________ Relationship___________________ / _______%
Address:_______________________________________________________________________
(Street) (City) (State) (Zip)
Name_____________________________ Relationship___________________ / _______%
Address:_______________________________________________________________________
(Street) (City) (State) (Zip)
Name_____________________________ Relationship___________________ / _______%
Address:_______________________________________________________________________
(Street) (City) (State) (Zip)
Name_____________________________ Relationship___________________ / _______%
Address:_______________________________________________________________________
(Street) (City) (State) (Zip)
B. Estate as a Primary Designation:
My Primary Beneficiary is The Estate of ______________________________________
as set forth in the last
will and testament dated the _____ day of _____________, _____ and any codicils
thereto.
C. Trust as a Primary Designation:
Name of the Trust: ____________________________________________________________
Execution Date of the Trust: _____ / _____ / _________
Name of the Trustee: __________________________________________________________
Beneficiary(ies) of the Trust (please indicate the percentage for each
beneficiary):
__________________________________________________________________________
___________________________________________________________________________
Is this an Irrevocable Life Insurance Trust? ________ Yes ________ No
(If yes and this designation is for a Split Dollar agreement, an Assignment of
Rights form should be completed.)
II. SECONDARY (CONTINGENT) DESIGNATION
A. Person(s) as a Secondary (Contingent) Designation: (Please indicate the
percentage for each beneficiary.)
Name______________________________ Relationship___________________ / _______%
Address:_______________________________________________________________________
(Street) (City) (State) (Zip)
Name_____________________________ Relationship___________________ / _______%
Address:_______________________________________________________________________
(Street) (City) (State) (Zip)
Name_____________________________ Relationship___________________ / _______%
Address:_______________________________________________________________________
(Street) (City) (State) (Zip)
Name_____________________________ Relationship___________________ / _______%
Address:_______________________________________________________________________
(Street) (City) (State) (Zip)
B. Estate as a Secondary (Contingent) Designation:
My Secondary Beneficiary is The Estate of _____________________________________
as set forth in my last will and testament dated the _____ day of ___________,
_____ and any codicils thereto.
C. Trust as a Secondary (Contingent) Designation:
Name of the Trust: ___________________________________________________________
Execution Date of the Trust: _____ / _____ / _________
Name of the Trustee: __________________________________________________________
Beneficiary(ies) of the Trust (please indicate the percentage for each
beneficiary):
________________________________________________________________________________
________________________________________________________________________________
All sums payable under the Joint Beneficiary Designation Agreement by reason of
my death shall be paid to the Primary Beneficiary(ies), if he or she survives
me, and if no Primary Beneficiary(ies) shall survive me, then to the Secondary
(Contingent) Beneficiary(ies). This beneficiary designation is valid until the
participant notifies the bank in writing.
_________________________________ ________________________________
Insured Date
NOTE*** IF YOU RESIDE IN A COMMUNITY PROPERTY STATE (ARIZONA, CALIFORNIA, IDAHO,
LOUISIANA, NEVADA, NEW MEXICO, TEXAS, WASHINGTON OR WISCONSIN), AND YOU ARE
DESIGNATING A BENEFICIARY OTHER THAN YOUR SPOUSE, THEN YOUR SPOUSE MUST ALSO
SIGN THE BENEFICIARY DESIGNATION FORM.
I am aware that my spouse, the above named Insured has designated someone other
than me to be the beneficiary and waive any rights I may have to the proceeds of
such insurance under applicable community property laws. I understand that this
consent and waiver supersedes any prior spousal consent or waiver under this
plan.
Spouse Signature:______________________________
Date:_________________
Witness (other than insured) : ___________________________