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United Bank Split Dollar Life Insurance Agreement

Life Insurance Split Dollar Agreement

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Governing Law: Massachusetts     Date: 12/27/2007
Industry: Consumer Financial Services     Sector: Financial

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This Split Dollar Agreement ("Agreement") is entered into by United Bank

("Bank") and John J. Patterson ("Insured") on December 20, 2007 ("Effective

Date") with respect to certain life insurance policies (the "Policy" or

"Policies") issued by a duly licensed life insurance company (the "Insurer") set

forth on Schedule A hereto. Insured is the Senior Vice President of Risk

Managment of the Bank. The respective rights and duties of the Bank and Insured

in the Policy are set forth herein and on Schedule A attached hereto. This

Agreement is intended to be a non-equity, endorsement split dollar agreement,

such that it is not treated as a impermissible personal loan from the Bank to

the Insured under Section 402 of the Sarbanes-Oxley Act of 2002. This Agreement

shall continue in existence only for so long as the Insured remains employed by

the Bank and shall terminate on the termination of the Insured's employment

(other than due to the Insured's death).

1. Policy Title and Ownership; Endorsement.


(a) Policy title and ownership shall reside in the Bank for its use and for

the use of the Insured, all in accordance with this Agreement. Such Policy shall

be treated as "bank owned life insurance" ("BOLI") and is held subject to the

provisions and limitations set forth in the Interagency Statement on the

Purchase and Risk Management of Life Insurance (OCC 2004-56). The Bank may, to

the extent of its interest, exercise the right to borrow or withdraw on the

Policy cash values. Where the Bank and the Insured (or assignee, with the

consent of the Insured) mutually agree to exercise the right to increase the

coverage under the 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.

(b) An endorsement on the form provided by the Insurer must be completed

and filed with the Insurer for each Policy identified on Schedule A in order to

implement the rights and obligations set forth in this Agreement. The parties

agree that the Policy shall be subject to the terms and conditions of this

Agreement and of the endorsement filed with the Insurer.

(c) The Bank agrees that, except as otherwise provided herein, it shall not

sell, assign, transfer, surrender or cancel the policy, or change the

beneficiary designation without the express written consent of the Employee.

2. Beneficiary Designation Rights. The Insured (or assignee) shall have the

right and power to designate a beneficiary or beneficiaries to receive the

Insured's share of the Policy proceeds payable upon the death of the Insured,

subject to any right or interest the Bank may have in such proceeds, as provided

in this Agreement. The Bank shall not terminate, alter or amend the Insured's

beneficiary designations without the written consent of the Insured. The Bank


shall be the beneficiary of any proceeds remaining under the Policy after the

payment required under this Agreement has been made to the Insured's designated


3. Premium Payment. The Bank shall pay an amount equal to the planned

premiums and any other premium payments that might become necessary to keep the

Policy in force. Notwithstanding the foregoing, the Bank shall have the absolute

and sole right to terminate and surrender any or all of the Policies that are

subject to this Agreement and substitute another insurance policy with a

comparable death benefit.

4. Taxable Benefit. Annually, the Insured will recognize a taxable benefit

equal to the assumed cost of insurance required by the Internal Revenue Service

("IRS"), as determined from time to time. The Bank (or its administrator) will

timely report to the Insured the amount of such imputed income each year on IRS

Form W-2 or its equivalent. The Bank and the Insured intend that this Agreement

will be subject to taxation under the "economic benefit regime" set forth in

Treasury Regulations section 1.61-22(d), such that the Insured shall have

taxable income equal to the annual cost of the current life insurance coverage

provided under the Policy.

5. Division of Death Proceeds. Upon the death of the Insured while employed

by the Bank, the Bank shall cooperate with the Insured's designated beneficiary

to take whatever action is necessary to collect the death benefit provided under

the Policy. Subject to Sections 6 and 8 below, the division of the death

proceeds of the Policy shall be as follows: the Insured's beneficiary(ies)

designated in accordance with Section 2 shall be entitled to payment from the

Policy proceeds directly from the Insurer of an amount equal to the lesser of:

(i) Two Hundred Fifty Thousand Dollars ($250,000.00); or

(ii) The Net Death Benefit. The "Net Death Benefit" shall be the death

benefit payable under the terms of the Policy or Policies reduced by the

aggregate premiums paid by the Company.

6. Ownership of the Cash Surrender Value of the Policies.


(a) The Bank shall at all times be entitled to one hundred percent (100%)

of the Policy's cash value, as that term is defined in the Policy contract, less

any policy loans and unpaid interest or cash withdrawals previously incurred by

the Bank. Such cash value shall be determined as of the date of surrender or

death, as the case may be.

(b) The Bank may pledge or assign the Policy, subject to the terms and

conditions of this Agreement, for the sole purposes of securing a loan from the

Insurer. The amount of such loan, including accumulated interest thereon, shall

not exceed the lesser or (i) the amount of the premiums on the Policy paid by

the Bank, or (ii) the cash surrender value of the Policy (as defined in the

Policy). Interest charges on such loan shall be paid by the Bank.



7. Rights of Insured or Assignees. The Insured may not, without the

written consent of the Bank, assign to any individual, trust or other

organization, any right, title or interest in the subject Policy nor any rights,

options, privileges or duties created under this Agreement.

8. Termination of Agreement.


(a) This Agreement shall terminate upon the occurrence of any one of the


(1) The Insured's termination of employment for any reason; or

(2) Surrender, lapse or other termination of the Policy by the Bank. The

Policy (and all rights of the Insured and his beneficiary(ies)) will also

terminate if any regulatory agency requires the Bank to sever its relationship

with the Insured, if the Bank is subjected to banking regulatory restrictions

limiting its ability to pay such compensation to the Insured

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