SPLIT DOLLAR INSURANCE AGREEMENT
EXHIBIT
10.12
THIS
AGREEMENT,
is made
and entered into this ____ day of __________________,
2005,
by
and between Abington Bank, a Pennsylvania banking corporation, located in
Jenkintown, PA (the “Bank”), and ____________, an employee of Abington Bank,
residing at __________________________ (hereinafter referred to as the
“Employee”).
INTRODUCTION
WHEREAS,
Employee is an officer or other highly paid employee of the Bank.
The
Bank
is the owner of insurance policy or policies shown on Schedule “1” attached
hereto and incorporate herein by reference (hereinafter referred to as the
“Insurance Policy”), with the life insurance company or companies shown on
Schedule “1” (herein after referred to as the “Insurance Company” or “Insurer”),
on the life of the Employee.
The
Bank
desires to induce Employee to continue to utilize his/her best efforts on behalf
of the Bank by its payment of premiums due on the Insurance Policy, and share
with the employee the financial benefit the policy can achieve.
WHEREAS,
the
Bank is the owner of the Insurance Policy and wishes to endorse a portion of
the
death benefit of the policy to Employee.
NOW,
THEREFORE,
in
consideration of the mutual covenants contained herein, it is agreed between
the
parties hereto as follows:
SECTION
1: OWNERSHIP
OF INSURANCE:
The
Bank
is and shall continue to be owner of the Insurance Policy, the Bank may exercise
all the rights and ownership with respect to the Insurance Policy, and the
Bank
possesses all incidence of ownership with respect to the Insurance Policy,
except as provided in Section 4 of this Agreement. The Insurance Policy is
listed on Schedule “1” and Abington Bank may to the extent allowed by law
substitute and/or change the Insurer so long as Abington Bank fully complies
with the provisions of this Agreement to provide an Insurance Policy in the
amount and on the terms of Schedule “1”.
SECTION
2: PAYMENT
OF PREMIUMS:
The
Bank
shall pay each premium on the Insurance Policy to the Insurer on or before
the
due date of such premium or within the grace period allowed by the Insurance
Policy for the payment of such premium. It is anticipated that the Insurance
Policy will be a single premium modified endowment contract.
SECTION
3: RIGHTS
OF ABINGTON BANK:
Upon
the
occurrence of an event described in Section 5 of this Agreement, the Bank shall
be entitled to receive an amount equal to all death benefits less those
explicitly provided to the Employee’s beneficiary under Section 4 hereof (the
“Bank’s Policy Interest”). The Bank’s Policy Interest shall be payable as
provided in Section 5 of this Agreement. The Bank’s Policy Interest shall be
reduced by any amount borrowed against the Insurance Policy.
SECTION
4: RIGHT
OF EMPLOYEE:
4.1 The
Employee’s designated beneficiary shall receive a portion of the death benefits
of the Insurance Policy (the “Employee Death Benefit”) and the Employee shall
have the right to designate and change direct and contingent beneficiaries
(collectively, the “Beneficiary”). The Beneficiary designation shall be made on
forms provided by the Bank and in manner acceptable to the Bank, Employee’s
written designation of Beneficiary shall be conclusive proof of the Employees
Beneficiary designation and upon Bank’s payment to the designated Beneficiary
the Bank shall have no further liability to the estate of the Employee or
Beneficiary.
4.2 In
the
case of the Employee’s death before Termination of Employment, the Employee
shall have the right to designate the beneficiary (ies) of death proceeds in
the
amount of the Employee’s annual salary at the time of death multiplied by three
(to a maximum of $250,000.00), plus an additional $100,000.
4.3 Additionally
in the case of the Employee’s death after Termination of Employment, and
provided the Employee shall have attained age 65 before Termination of
Employment, the Employee shall have the right to designate the beneficiary
(ies)
of death proceeds in the amount of $100,000.
4.4 The
Bank
and Employee agree to cooperate and execute any other further documents that
may
be required to effectuate this Agreement.
4.5 Employee
Death Benefit defined in subsection 4.2 hereinabove shall be due and payable
by
the Insurance Company referenced in Schedule 1 and Employee agrees to look
solely to Insurance Company for payment. Employee agrees for himself/herself
and
his/her heirs, personal representatives, executors, administrators,
beneficiaries, successors and assigns hereby Releases Bank completely and fully
from any and all claims whatsoever whether known or unknown resulting from
this
Agreement. Payment as used herein shall be defined as presentment of an
Insurance Company check to the designated Beneficiary.
SECTION
5: DEATH
CLAIMS:
5.1 When
the
Employee dies, the Bank shall be entitled to receive from the insurance company
a portion of the death benefits payable under the insurance policy equal to
the
Bank’s Policy Interest the receipt of this amount by the Bank shall constitute
satisfaction of the Bank’s rights under Section 3 of this
Agreement.
5.2 When
the
Employee dies, the Beneficiary shall be entitled to receive from the insurance
company the amount of the death benefits equal to the Employee Death
Benefit.
SECTION
6: TERMINATION
OF AGREEMENT:
This
Agreement shall terminate on the occurrence of any of the following events
prior
to the death of the Employee.
6.1 Cancellation
of the insurance policy which the Bank has the absolute right to
do.
6.2 Cessation
of the Bank’s business which is not continued by Abington Bank or
Abington Bank’s
successor, if any.
6.3 Written
notice given by either party to the other.
6.4 Bankruptcy,
receivership or dissolution of the Bank.
SECTION
7: NON-TERMINATION
ON CHANGE OF CONTROL:
7.1
Notwithstanding the provisions of Section 6, in the event of and upon the
occurrence of a Change of Control as defined herein, this Agreement and
Employee’s right hereunder shall be absolute and non-terminable and shall not
terminate for any of the reasons set out in Section 6.1 - 6.4, inclusive, except
with Employee’s written consent. For purposes of this Agreement, a “Change of
Control” shall be deemed to occur when: (i) any “person” (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Bank representing 50% plus one
vote, or more, of the total voting power represented by the Bank’s then
outstanding voting securities entitled to vote generally in the election of
directors; or (ii) there is consummated a merger or consolidation of the Bank
with any other entity, other than a merger or consolidation which would result
in the voting securities of the Bank outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty percent (50%)
of
the total voting power represented by the voting securities of the Bank or
such
surviving entity outstanding immediately after such merger or consolidation,
or
(iii) there is consummated the sale or disposition by the Bank of all or
substantially all of the assets of the Bank; or (iv) there occurs any event
that
would be described in sections 7.1(i), (ii) or (iii) above if “Abington
Community Bancorp, Inc.” (the “Company”) were substituted for “the Bank”
therein. Notwithstanding the foregoing, no acquisition or ownership of
securities of the Bank or the Company by the Bank, the Company, any employee
benefit plan maintained for their employees or any person controlled (within
the
meaning of Rule 144 promulgated under the Securities Act of 1933, as amended)
by
either of them shall constitute a Change of Control for purposes of this
agreement.
SECTION
8: RIGHTS
UPON TERMINATION:
If
this
Agreement is terminated under Section 6 of this Agreement the Employee shall
forfeit all right to the death benefit specified in Section 4 and Abington
Bank
at its sole discretion may retain or terminate the Insurance
Policy.
SECTION
9: AMENDMENT
OF AGREEMENT:
Except
as
set out herein, the Agreement shall not be modified or amended except by a
writing signed by the Employee and Abington Bank. The Agreement shall be binding
upon the successors and assigns of each party to this Agreement.
SECTION
10: STATE
LAW:
This
Agreement shall be subject to and shall be construed under the laws of the
state
of Pennsylvania.
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the day and year first above
written.
| ABINGTON BANK | ||
| By: | ||
| Title: | ||
| By: | ||
