FORM OF SPLIT DOLLAR INSURANCE AGREEMENT
EXHIBIT
10.1
FORM
OF SPLIT DOLLAR INSURANCE AGREEMENT
THIS
AGREEMENT, is
made and entered into this 13th day of
November,
2007, by and between Abington Bank, a Pennsylvania banking corporation, located
in Jenkintown, PA (the “Bank”), and _______________, an employee of Abington
Bank, residing at ________________, Pa. (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 $150,000.00.
4.3 The
Bank and Employee agree to cooperate and execute any other further documents
that may be required to effectuate this Agreement.
4.4 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.
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ABINGTON
BANK
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By:
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Title:
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By:
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