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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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Last modified: November 10, 2007