Split Dollar Life Insurance Plan

FLEXIBLE PREMIUM LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN AGREEMENT


Insurer: Security Life of Denver
Policy Number: 001079232
Bank: Heritage Bank
Insured: Robert L. Beauprez
Relationship of Bank to Insured: Employer


The respective rights and duties of the Bank and the Insured in the subject policy shall be as defined in the following:


I. DEFINITIONS


Refer to the policy contract 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 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 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 assignee) shall have the right and power to designate a beneficiary(ies) 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 keep the policy in force.


2


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 Employee the amount of imputed income received each year on Form W2 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:


A. The Insured's beneficiary(ies), designated in accordance with
Paragraph III, shall be entitled to an amount equal to seventy
five percent (75%) 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.


B. Should the Insured not be employed by the Bank at the time of
his or her death, the Insured's beneficiary(ies), designated
in accordance with Paragraph III, shall be entitled to the
following percentage of the proceeds described in subparagraph
VI(A) hereinabove that corresponds to the year of service the
Insured served with the Bank:


Total Years
of Employment
with the Bank Vested
------------- ------
1 10%
2 20%
3 30%
4 40%
5 50%
6 60%
7 70%
8 80%
9 90%
10 100%


C. The Bank shall be entitled to the remainder of such proceeds.


D. The Bank and the Insured (or assignees) shall share in ...