Norman C. and Rosemary J. Eckersley - Page 3




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          Insurance Company for a period of five years from October 27,               
          1987.  Pacific will pay all premiums up to five year maturity and           
          will be assigned to and for the benefit of his spouse” (Crown               
          life policy).1  The Crown life policy was issued on October 30,             
          1987, and had a face value of $1 million with the life insurance            
          proceeds payable, if not already paid, on the maturity date of              
          October 25, 2019.  The Crown life policy provided for an initial            
          premium payment of $21,639.70, with subsequent premiums of                  
          $25,170 due every 6 months, beginning on October 25, 1988.   The            
          policy provided that “guaranteed policy values” or “accumulation            
          value” was calculated, in part, based upon a guaranteed interest            
          rate of 4-1/2 percent, compounded annually.  Upon issuance of the           
          Crown life policy, Pacific Bank was both its owner and its                  
          beneficiary.  On or about November 14, 1989, Pacific Bank changed           
          the beneficiary of the Crown life policy to petitioner’s spouse,            
          Rosemary J. Eckersley (Ms. Eckersley).                                      
               On October 28, 1992, petitioner resigned as chairman and               
          chief executive officer of Pacific Bank, but he remained as a               
          director and was appointed chairman emeritus of Pacific Bank.               
          Pacific Bank accepted petitioner’s resignation on December 15,              



               1As noted below, the policy matures on Oct. 25, 2019,                  
          approximately 22 years after its issuance.  The parties to the              
          employment agreement apparently use the term “5 year maturity” to           
          refer to the stated term of employment.                                     






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