Unassociated Document


    Exhibit
10.21

     

    LIFE
INSURANCE

    ENDORSEMENT
METHOD SPLIT DOLLAR PLAN

    AGREEMENT

     

    Insurer/Policy Number:            New York Life
Insurance Company

     

    Bank:                       Heritage Bank Of Commerce

     

    Insured:

     

    Relationship of Insured to
Bank:                   
Director

     

    Date:

     

     

    


    The
respective rights and duties of the Bank and the Insured in the above
policy(ies) (hereinafter 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

            


    

     

    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 each
year on Form W-2 or its equivalent.  In addition, Insured shall be
responsible for all additional appropriate or required taxes, if
any.

     

    
      	
              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

            


    

     

    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 Director
      Compensation Benefits Agreement, effective as of _________________, 2005,
      shall terminate for any reason other than the Insured’s death,
      or

            


    

     

    
      	
              2.  

            	
              The
      Insured shall be removed from his position as a Director “for
      cause”.  The term “for cause” shall
  mean:

            


    

     

    
      	
              a.  

            	
              The
      willful, intentional and material breach or the habitual and continued
      neglect by the Director of his responsibilities and
  duties;

            


    

     

    
      	
              b.  

            	
              The
      Director’s willful and intentional violation of (i) any state,
      federal, banking or securities laws, or of the Bylaws, rules, policies or
      resolutions of Employer, or the rules or regulations of the California
      Commissioner of Financial Institutions, Board of Governors or the Federal
      Reserve System, Federal Deposit Insurance Corporation, or other regulatory
      agency or governmental authority having jurisdiction over the Employer,
      which has a material adverse effect upon the
  Employer;

            


    

     

    
      	
              c.  

            	
              The
      Director’s final conviction after exhaustion of all appeals of
      (i) any felony or (ii) a crime involving moral turpitude, or the
      Director’s willful and intentional commission of a fraudulent or dishonest
      act, which in any of the foregoing circumstances has a material adverse
      effect upon 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:

     

    
      	
              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 that 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
      FIDUCIARY 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, 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 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, feminine 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.

    
       

      HERITAGE
BANK OF
COMMERCE                                                                                                             
  INSURED

      


      


      ____________________________                                                                                                         
____________________________

      

 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      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:__________________________________________________________________                                                                                                                     

      (State)                                                      (City)                                (State)(Zip)

       

       

       

      
        Name_______________________________                                           Relationship__________________/__________%

        


        Address:__________________________________________________________________                                                                                                                     

        (State)                                                      (City)                                (State)(Zip)

         

         

         

        
          Name_______________________________                                           Relationship__________________/__________%

          


          Address:__________________________________________________________________                                                                                                                     

          (State)                                                      (City)                                (State)(Zip)

           

           

           

          
            Name_______________________________                                           Relationship__________________/__________%

            


            Address:__________________________________________________________________                                                                                                                     

            (State)                                                      (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 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
DESIGNATION

      


      A.           Person(s)
as a Secondary (Contingent) Designation:

      (Please indicate the percentage for
each beneficiary)

      


      
        Name_______________________________                                           Relationship__________________/__________%

        


        Address:__________________________________________________________________                                                                                                                     

        (State)                                                      (City)                                (State)(Zip)

         

         

        
          Name_______________________________                                           Relationship__________________/__________%

          


          Address:__________________________________________________________________                                                                                                                     

          (State)                                                      (City)                                (State)(Zip)

           

           

          
            Name_______________________________                                           Relationship__________________/__________%

            


            Address:__________________________________________________________________                                                                                                                     

            (State)                                                      (City)                                (State)(Zip)

             

             

            
              Name_______________________________                                           Relationship__________________/__________%

              


              Address:__________________________________________________________________                                                                                                                     

              (State)                                                      (City)                                (State)(Zip)

               

               

            

          

        

      

      
             
B.           Estate as a Secondary
(Contingent) 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
(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 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:____________________________